FG Unlocks $700m Cabotage Fund, Offers Nigerian Shipowners Up to $25m Each

After more than two decades of inactivity, the Federal Government has begun the process of unlocking Nigeria’s $700 million Cabotage Vessel Financing Fund (CVFF), with qualified Nigerian shipowners eligible to access loans of up to $25 million each to acquire vessels.

The move could mark a major turning point for Nigeria’s indigenous shipping industry, which has struggled for years to compete with foreign operators because of limited access to affordable, long-term vessel financing.

Minister of Marine and Blue Economy, Adegboyega Oyetola, said the government expects the programme to create more than 30,000 direct and indirect jobs across the maritime sector if the financing is successfully deployed.

But the minister made clear that the money is not a government giveaway. Successful applicants will receive loans and must satisfy the required financial and technical conditions before funds can be released.

“After more than 20 years, we are finally moving to unlock the Cabotage Vessel Financing Fund for Nigerian shipowners,” Oyetola said.

He said the programme was designed to strengthen Nigerian ownership of vessels, create employment and ensure that a greater proportion of the wealth generated from activities in the country’s maritime space stays within Nigeria.

The CVFF was established under the 2003 Cabotage Act to provide financing for Nigerian operators seeking to acquire vessels and build capacity in domestic shipping.

The fund is financed through a levy imposed on qualifying coastal shipping activities and has accumulated to approximately $700 million over the years.

Yet despite its size and its original purpose, the fund has remained largely inaccessible to Nigerian shipowners for more than 20 years.

That long wait is now being tested by a new application and disbursement framework being implemented by the Nigerian Maritime Administration and Safety Agency (NIMASA) and participating financial institutions.

Under the financing arrangement, a successful applicant can receive up to $25 million to acquire a vessel, subject to regulatory and banking approvals.

Officials have indicated that the facility will carry an interest rate of about 6.5 per cent over an eight-year repayment period, while applicants are expected to contribute approximately 15 per cent equity.

The structure is intended to provide Nigerian shipowners with access to longer-term financing than is typically available through conventional commercial lending.

To widen access to the scheme, the government opened a digital application portal in Lagos on January 22, 2026.

The number of participating banks, known as Primary Lending Institutions (PLIs), has also been increased from five to 12.

The government says the expansion is intended to improve the speed and efficiency of the assessment and financing process.

So far, NIMASA has received 92 applications from prospective beneficiaries.

Of those applications, 20 have been forwarded to the approved banks for further assessment, while one application has reportedly completed the review process and been sent forward for approval.

President Bola Tinubu has authorised the disbursement of the fund, while Oyetola has directed NIMASA and the participating banks to accelerate the process.

The directive comes amid growing frustration within the maritime industry over delays in accessing the long-awaited financing.

Applicants had been told that the process could take roughly 90 days, but industry reports in August indicated that no beneficiary had yet received a disbursement.

That delay has placed pressure on the government to demonstrate that the latest effort will result in actual financing reaching Nigerian operators rather than another prolonged administrative process.

For the government, the economic argument is straightforward: Nigerian-owned vessels could capture a larger share of the freight and service revenues currently earned by foreign operators.

Oyetola said the programme could generate more than 30,000 direct and indirect jobs, particularly in shipyards, marine engineering, vessel maintenance, maritime logistics and other related industries.

The figure, however, is a government projection and does not represent jobs already created by the programme.

The financing could also stimulate demand for local maritime services by increasing the number of Nigerian-owned vessels operating in the country’s coastal waters.

Foreign-flagged vessels currently account for a significant share of maritime activities connected to Nigeria, while local operators have repeatedly identified the cost of acquiring and maintaining vessels as one of the biggest barriers to expansion.

For Nigerian shipowners, access to affordable long-term finance could therefore determine whether they are able to build larger fleets and compete more effectively for domestic and regional shipping contracts.

The CVFF is intended to address precisely that financing gap.

However, the biggest test for the programme will be whether the promised money actually reaches qualified operators.

With 92 applications received, 20 already sent to banks and one reportedly at the approval stage, attention is now shifting from the size of the fund to the speed and transparency of its disbursement.

If successfully implemented, the programme could help Nigeria expand indigenous vessel ownership, create new maritime jobs and retain more shipping revenue within the domestic economy.

It could also provide a long-awaited boost to Nigeria’s ambition of developing a stronger blue economy and reducing the dominance of foreign operators in its maritime space.

For now, the $700 million fund represents an opportunity rather than a completed transformation.

The real measure of success will come when approved Nigerian shipowners begin receiving financing, acquiring vessels and putting them to work on Nigerian waters.