Nigeria losing $500m annually to unregulated shipbroking framework

Friday, August 8, 2025 - Maritime stakeholders have raised alarm over the country’s annual loss of over $500 million due to the absence of a regulated shipbroking framework in the country’s vessel chartering system. They called on the government to formalise shipbroking practices to curb leakages, enhance compliance, and drive revenue within the maritime sector.

The Chairman of the Nigerian Chapter of the Institute of Chartered Shipbrokers (ICS), Sesan Ajayi, addressing journalists in Lagos, attributed the loss to widespread use of unqualified individuals in the shipbroking space — a development he said is undermining trade reliability, logistics efficiency, and national revenue targets.

He said: “There are fewer than 40 certified shipbrokers in Nigeria today, yet the market is flooded with untrained individuals carrying out key responsibilities without the professional expertise required.

“This not only puts cargo transactions at risk but also jeopardises our potential to fully benefit from trade frameworks like the African Continental Free Trade Area (AfCFTA).”

He noted that shipbroking plays a critical role in matching cargo with vessels, ensuring contract compliance, vetting vessel seaworthiness, and providing market intelligence to optimise operations. However, the informal and unregulated nature of chartering in Nigeria has led to revenue leakages and trade inefficiencies.

Ajayi warned that the lack of structured oversight, particularly regarding the implementation of the two per cent cabotage surcharge on vessel contracts, is a major source of the fiscal drain.

“The logistics cost in Nigeria is currently 23 per cent of GDP, almost double the global average of 12 per cent. This inefficiency is largely tied to poor shipping practices, which professional shipbrokers are trained to fix,” he added.

While commending the Federal Government for creating the Ministry of Marine and Blue Economy and launching the National Blue Economy Policy, Ajayi stressed that the real impact of such policies would only be felt when matched with strong enforcement and deliberate investment in manpower development.

“Shipbroking is still green in Nigeria. But if done right, it can revolutionise how cargo moves, how vessels are sourced, and how contracts are structured locally,” he said.

Also speaking, maritime expert Capt. Tami Adu noted that the lack of compliance monitoring in vessel chartering is costing the country dearly. He said that trained shipbrokers could help close this gap by ensuring every chartering transaction is properly documented and remitted.

“If the government handed this process to trained shipbrokers, we would ensure every transaction is documented and remitted properly. Right now, what we are losing annually exceeds $500m,” Adu said.

He explained that shipbrokers play a vital role in the maritime value chain by linking cargo owners with vessel providers, while also ensuring technical vetting, legal compliance, and access to accurate market intelligence. However, due to poor regulatory enforcement, Adu said critical tools like the cabotage tax, a two per cent levy on vessel contracts, are poorly tracked.

According to him, the failure to adopt globally recognised shipbroking practices is undermining the nation’s potential to optimise maritime earnings. He pointed out that the Institute of Chartered Shipbrokers (ICS), headquartered in London, provides certification and technical capacity for professionals globally, yet many Nigerian operators bypass the standards, leading to poor contract execution and vessel underperformance.

A senior ICS member, Abdulrasak Arije, described the institute as the gold standard in maritime professionalism. He emphasised ICS’s role in training and certifying experts in shipbroking, vessel sales, cargo logistics, and chartering, in line with global best practices.

“At ICS, we uphold the gold standard for maritime professionalism. We train and certify shipbrokers, chartering agents, vessel sales experts, and cargo specialists to operate ethically and efficiently across global markets,” Arije said.

Stakeholders agreed that with maritime’s contribution to GDP still below one per cent, professionalising shipbroking and enforcing compliance would significantly improve Nigeria’s trade infrastructure, raise investor confidence, and position the country for regional dominance in maritime logistics.