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NIGERIAN MARITIME INDUSTRY:
FOREIGN PARTICIPATION IN
CABOTAGE TRADE
July 2009 Vol. 22: Issue 7
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
©Blackfriars LLP 2010. All rights reserved. This document is for general guidance only. Definitive advice
should be sought from counsel if required. Blackfriars LLP, The Penthouse Floor, Itiku House, 28-30
Macarthy Street, Lagos. Tel: +234 1 739 0397; +234 1 736 9797; +234 1 736 9795; Fax: +1 646 536 8978.
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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
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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.
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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

For further information, please contact:

Ms. Lasbery C. Nwaeze

Email: Lasbery@blackfriars-law.com
Tel: + 234 1 739 0397
Fax: +1 646 536 8978

©Blackfriars LLP 2010. All rights reserved. This document is for general guidance only. Definitive advice
should be sought from counsel if required. Blackfriars LLP, The Penthouse Floor, Itiku House, 28-30
Macarthy Street, Lagos. Tel: +234 1 739 0397; +234 1 736 9797; +234 1 736 9795; Fax: +1 646 536 8978.
http: www.blackfriars-law.com Email: info@blackfriars-law.com