The Impact Of The Cabotage Act On Local Capacity Development: A Study Of Selected Indigenous Shipping Companies

Project and Seminar Material for Transport Management Technology

The Impact Of The Cabotage Act On Local Capacity Development: A Study Of Selected Indigenous Shipping Companies


In 2003 the cabotage law was enacted with provisions to empower local investors to take control of the domestic shipping trade and from it develop enough muscle to assume the right of place for Nigeria as a maritime nation in the movement of her import/export cargoes including crude oil to and from international markets. The implementation/enforcement of the provisions of the Act needs to be constantly monitored to ensure that the goals and objectives of the law are pursued with vigor and accomplished. Thus, the object of the study is to verify the alleged unabated dominance of the coastal services by foreign flag operators; the impact on the Cabotage Act 2003 on local capacity development in terms of tonnage, human resources and cargo support. The research made effort to highlight peopleโ€™s views that are relevant to the study and this formed the literature review. The major instrument used for the study is a set of questionnaires served on a population of 55 industry stakeholders out of which 27 responded. The data obtained were statistically analysed with the chi-square model and pie chart for presentation as explanatory model. The findings of the study revealed factors hindering the achievement of the objectives of the Acts such as lack of funds, failure on the part of NIMASA to process the applications for the cabotage vessel finance fund loan for tonnage expansion; lack of commitment by NAPPIMS and PPMC to guarantee cargo support to indigenous operators; NIMASA lukewarm attitude in enforcing the provisions of the Act. The study also noted that most of the cabotage vessels operated by most indigenous shipping companies are below specified standards and are un- seaworthy. Also it was noted that there was a growing lack of seafarers particularly qualified and certified marine engineers and navigators to operate the few available cabotage vessels. The study recommended strategies to enhance indigenous participation and reduce the foreign dominance. For example, NMASA is urged to make the cabotage vessel finance Fund/loan facility accessible to local operators for fleet expansion and to make solid arrangements for cadet-ship sea-training to enhance proficiency and avoid importation of manpower. PPMC and NAPPIMS should guarantee long time charter of the fleet as a kind of incentive against idle moment. On the other hand local operators should try to present standard and seaworthy vessels for optimal cabotage operations and clean sea assurances.

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