The shipping industry is a vital part of any nation's economy, serving as the backbone of global trade and domestic logistics. In Nigeria, maritime activities play a crucial role in facilitating the movement of goods and services, connecting businesses to international markets, and supporting key sectors such as oil and gas, agriculture, and manufacturing. As Africa's largest economy and most populous nation, Nigeria relies heavily on its ports and waterways for import and export of goods and services.
Acquiring a vessel in Nigeria is a capital-intensive venture that often requires industry players to seek financing from lenders and financial institutions. However, in today's increasingly volatile maritime industry and financial sector, the challenges faced by distressed vessels and struggling ship owners have become more prominent. The fluctuating foreign exchange rates have put many ship operators/owners in a difficult position, making it hard for them to run their vessels optimally. This crisis has emerged as a pressing concern within Nigeria's blue economy. Factors such as mounting debt, insufficient operational capacity, and structural inefficiencies are threatening the viability of many maritime businesses in Nigeria. In many cases, banks are forced to make tough decisions in their efforts to recover bad debts.
In response to this growing crisis, Olisa Agbakoba Legal (OAL), partnered with Captain Nicholas Bernard, Managing Director of NBC Maritime Ltd and Director at ABC Maritime, to host a pivotal Breakfast Meeting themed "Ship Management: A Commercial Strategy for Business Rescue." This high-profiled gathering brought together vessel owners, financial institutions, regulators, and shipping professionals to discuss how effective ship management can serve as a viable lifeline for distressed maritime assets. The discussion also focused on the benefits of adopting commercial strategies for business rescue within the ship management sector.
At the core of this discussion lies a bold yet practical idea: using professional ship management as a strategic tool for business recovery. Captain Nicholas Bernard, an experienced ship manager and "ship rescuer," proposed a compelling framework in which third-party managers take over the operation and restructuring of vessels on behalf of distressed owners and lenders. This approach not only helps keep vessels operational but also ensures they are run profitably, creating a win-win situation for ship managers, vessel owners, and financiers alike. As Bernard aptly put it, "Ship management encompasses everything from crew and technical maintenance to regulatory compliance and class requirements," all of which are essential for operational success.
Yvonne Ezekiel, Managing Partner at OAL, stressed the importance of a shift in perspective, urging, "Let's start viewing ship management as a business tool, rather than just a safety net." The maritime sector in Nigeria has long struggled with challenges such as limited access to finance, high-interest rates, and poor maintenance practices. As a result, many shipowners find themselves with idle vessels – ships that are arrested and left in the ocean or sea, exposed to harsh weather conditions that contribute to wear and tear. Concurrently, banks are grappling with increasing losses. To address these issues, there's a more effective approach: reimagining ship management as a viable business strategy that benefits all involved. The solution may be simpler than it appears: hiring a professional ship manager can transform these vessels into revenue-generating assets. Ultimately, this is a commercial decision that holds the potential for significant and transformative change in the industry.
Dr. Olisa Agbakoba, SAN, a Senior Partner at OAL, provided valuable legal and strategic insights during the discussion. Drawing from numerous briefs received from banks, he remarked that many distressed vessel cases result not from vessel defects but from a lack of technical and operational expertise. "When we analysed the situation," he shared, "we discovered that the issues often relate to the technical ability to manage the vessels, rather than defects in the vessels themselves." This observation highlights why Captain Bernard's proposition is both timely and necessary, bringing expertise, structure, and commercial sensibility into vessel operations.
The forum also highlighted the financial realities of the sector. Sunny Eja from the Ship Owners Association of Nigeria disclosed that some shipowners have felt compelled to reduce daily charter rates by as much as 40%, significantly affecting their profitability. Meanwhile, the anticipated disbursement of the Cabotage Vessel Financing Fund (CVFF) continues to stall. Against this backdrop, professional ship management offers not just cost optimisation, but access to economies of scale. Bernard explained that even with his management fees included, NBC Maritime clients often experience lower operational costs than those who attempt to manage their fleets independently.
Wale Mesioye, who heads the Project Finance and Advisory division at Fidelity Bank, spoke on behalf of the banking sector about the challenges involved in financing maritime assets. He pointed out that "vessel financing is a niche and intricate process," noting that lenders typically seek stable, long-term agreements, experienced operators, and a solid financial history before granting credit facilities.
Similarly, Otumba Adewunmi, the head of the Nigerian Shipowners Association (NISA), echoed concerns about financing gaps and systemic bottlenecks affecting the industry. He recounted his own experience in which his firm received less than 50% of a $2.3 million state-supported loan. This shortfall forced him to rush into a partnership with an overseas company, ultimately leading to the loss of the ship. Adewunmi also criticised the overlap in regulatory oversight, stating, "Multiple agencies, from quarantine to customs, carry out nearly identical inspections." This redundancy not only increases costs but also deters potential investors from entering the market.
The message is straightforward: if you're a vessel owner with an underutilised ship, a ship manager facing financial difficulties, or a financier holding onto a distressed maritime asset, adopting structured ship management can be a strong and practical commercial strategy for recovery. With more than 33 vessels currently managed by NBC Maritime, Captain Bernard has already proven that this concept works. His approach effectively bridges the gap between lenders and vessel owners while protecting the future of ships that might otherwise be grounded or scrapped.
OAL's commitment to organizing this forum reaffirms our belief in connecting industry stakeholders with practical commercial solutions that are profitable for ship owners. By facilitating this conversation, we are helping to engineer a more resilient maritime industry, the kind where legal innovation, financial restructuring, and operational excellence intersect. Our goal is to enable stakeholders to unlock trapped value, reposition assets, and foster sustainable growth in the Nigerian maritime sector.
To vessel owners, financiers, and ship managers across Nigeria and West Africa: the time to act is now. Ship management should no longer be seen as a response to crisis but rather as a proactive strategy for ensuring business continuity, recovering profits, and revitalising the industry. Collaborate with professionals to restructure and rebuild a stronger maritime future, one vessel at a time.
Originally published April 18, 2025
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