50% foreign vessels exit Nigeria, freight hike looms – Shipowners

The President of the Nigerian Chamber of Shipping, Aminu Umar, says rising insecurity and poor government policies have forced about 50 per cent of trading vessels to exit Nigerian waters in the past one year.

He said that the development had led to a scarcity of ships in the West African region, adding that the situation had pushed up freight rate by 70 per cent.

According to him, there is a stronger market for vessels in Europe than in Africa due to the ongoing Russia-Ukraine war.

Umar, who is also a former President of the Nigerian Indigenous Shipwoners Association, said, “About 40 to 50 per cent of vessels plying the Nigerian waters have gone back to Europe between 2022 till date. So 40 per cent of the capacity has moved back to Europe. The truth is that these are foreign-owned vessels trading within the West African sub region which includes Nigeria. So what it means is that it has created scarcity which will increase the freight rate. So the freight rate has gone up by almost 70 per cent due to this. There is 70 per cent increase in freight rate, it went up to 100 per cent before but it has reduced to 70 per cent.”

While noting that the changes started in March 2022, the shipping expert further said, “The reason they won’t come again is that the market is stronger in Europe, there is a stronger market in Europe due to the Russian-Ukraine war and then the environment is easier to trade when you compare the trading restrictions in Africa as well as policies in the West African region. Also, don’t forget the security issues. We have fewer security issues in Europe than we have in Africa. Up till now, any vessel that is trading in West Africa has to pay war risk insurance, it is still on, so they don’t want to pay that.”

He however explained that despite the fact that these vessels bring wet and dry cargoes to Nigeria, the country would not experience scarcity of the products.