Nigerian Maritime Industry
- NB Media
- Feb 12, 2020
- 2 min read
The objective of the Cabotage Act in Nigeria is principally to reserve domestic coastal trade (“cabotage or cabotage trade”) within Nigerian Coastal and Inland Waters to vessels built and registered in Nigeria, wholly owned and wholly manned by Nigerian citizens.
However foreign owned vessels and companies are allowed to participate in cabotage trade within Nigerian waters, subject to obtaining a waiver and/or a licence from the Federal Ministry of Transport. The minister may grant waiver and/ or licence to foreign owned vessels or joint-venture owned vessels where he is satisfied that there is no wholly owned Nigerian vessel, which is manned by Nigerians and/or built in Nigeria, suitable and available to provide the services or perform the activity sought to be carried out. The foreign vessel must be eligible to be registered in Nigeria. All foreign-owned vessels or joint-venture owned vessels intended for use in cabotage trade within the Nigerian waters are required to be registered by the Registrar of ships in the special register for vessels and ship owning companies engaged in cabotage trade (“Cabotage Register”) at the Nigerian Maritime Authority (“NMA”). Such vessels seeking for registration to participate in cabotage trade are required to comply with the provisions of the Merchant Shipping Act (Cap. 224 Laws of Nigeria 1990), as well as obtain all other applicable permits from other relevant government agencies, such as the National Inland Waterways Authority. On the issue of the category of registration, a foreign owned vessel maybe registered under the registration of foreign-owned vessels. To be eligible for registration in the Cabotage Register under this category, foreign owned vessels are required to obtain a waiver and/or a licence for participation in cabotage trade from the Minister of Transport as indicated above.
Where the vessel is jointly owned by a Nigerian and a non-Nigerian registration maybe under the registration of joint-venture owned vessels, as the name implies, this category applies to the registration of vessels owned under a joint-venture arrangement between Nigerian citizen(s) and non-Nigerian(s). It is required that the equity shareholding of the Nigerian partner(s) in the vessel and/or the shipping company must be at least 60% held free from any trust or obligation in favour of the non-Nigerian(s). In addition, Section 27 of the Cabotage Act provides that foreign owned vessels presently engaged in cabotage trade, may be granted a temporary registration in the Cabotage Register for the duration of the contract for which the vessels are employed. This provision was applicable only to foreign vessels doing business before the commencement of the Act. Though the intention of the Cabotage Act is primarily to stimulate the development of indigenous capacity in the Nigerian Maritime Industry, no doubt this cannot be achieved without the injection of foreign investments in terms of technology, financing, and expertise; this is why the cabotage act has been designed to allow foreign participation in areas where Nigerians lack capacity.
ABOUT THE AUTHOR: Ms. Lasbery Nwaeze Blackfriars LLP is a first class Nigerian law firm with special expertise in trademarks registration and and patents prosecution, commercial Litigation, energy law, and capital markets transactions, respectively. A fundamental principle underpinning our success is our unshakeable conviction that the practice of law is a privilege that carries with it the solemn responsibility to apply our talents for the benefit of our clients.
Comments