$360m CVFF: Nigerian Shipowners Face Financing Hurdles as Banks Demand Contracts, 135% Collateral

Maritime Business | Nigeria | October 29, 2026

Nigeria’s long-awaited effort to strengthen indigenous shipping operators is facing renewed scrutiny as shipowners seeking access to the Cabotage Vessel Financing Fund (CVFF) reportedly encounter stringent bank lending conditions, including existing cargo contracts and collateral valued at 135 per cent of the loan amount.

The requirements have raised concerns among maritime industry stakeholders who argue that the financing scheme, designed to help Nigerian operators acquire vessels and expand their fleets, could remain inaccessible to many of its intended beneficiaries.

The dispute highlights a central challenge in Nigeria’s maritime industry: shipowners need financing to acquire vessels, but banks want evidence of secured business before committing funds to those acquisitions.

Only Two Applications Reportedly Clear Banking Stage

According to LEADERSHIP, Adakole Ejegbudu, Managing Director of Flotilla Academy of Marine Technology, disclosed that just over 20 companies had completed their applications and submitted them to participating banks, but only two had reportedly secured bank approval and been forwarded to the Nigerian Maritime Administration and Safety Agency (NIMASA).

Ejegbudu argued that requiring established cargo contracts before financing is approved could disadvantage smaller operators that need funding to acquire vessels and secure commercial opportunities.

He maintained that Nigeria has potential demand for tankers, anchor-handling tugs, platform supply vessels and barges, particularly around oil and gas operations, offshore projects and the Dangote Refinery.

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Why Banks Are Demanding More Security

Banks are responsible for assessing whether applicants can repay their loans. From a lender's perspective, an existing cargo or service contract can provide evidence of future revenue, while additional collateral offers protection if a borrower defaults.

However, shipowners argue that these requirements create a financing cycle: operators need vessels to compete for contracts, yet they may need contracts before banks will finance the vessels.

The reported demand for collateral worth 135 per cent of the loan amount adds another potential barrier for operators with limited assets. The latest report does not establish that every participating bank applies identical conditions to every applicant.

NIMASA Responds to the Allegations

NIMASA Director-General, Dr Dayo Mobereola, reportedly said he was unaware of any participating bank requiring cargo guarantees as a condition for CVFF financing.

He maintained that shipowners should use established business arrangements to satisfy lending requirements and said applications would be processed once applicants met the necessary conditions.

The differing accounts from industry stakeholders and the regulator point to the need for greater clarity about the actual requirements being applied by individual banks.

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Implications for Nigeria's Maritime Industry

The controversy extends beyond access to loans. Delayed financing could affect several areas of the economy:

• • Indigenous shipping: Local operators may struggle to acquire modern vessels and expand their fleets.
  • Employment: Slower fleet development could constrain opportunities for Nigerian seafarers, marine engineers and maritime support workers.
  • Trade competitiveness: Continued reliance on foreign vessel operators could limit the growth of domestic shipping capacity.
  • National carrier ambitions: Industry stakeholders argue that a viable national shipping line requires a strong foundation of Nigerian-owned vessels, skilled personnel and supporting infrastructure.

The CVFF was established under the Coastal and Inland Shipping (Cabotage) Act of 2003 to support indigenous participation in coastal and inland shipping. The government renewed efforts to facilitate disbursement in 2026, including increasing the number of participating lending institutions to 12.

What Needs to Happen Next?

Industry stakeholders are calling for a review of lending conditions, clearer communication between NIMASA and participating banks, and mechanisms to help eligible shipowners demonstrate commercial viability.

Proposals include accepting credible letters of intent or other evidence of market demand instead of insisting on existing cargo contracts in every case. A formal cargo-assurance arrangement involving major cargo owners could also help address concerns about future revenue.

At the same time, banks need safeguards to ensure public funds are used responsibly and loans can be repaid. The challenge is to balance prudent lending with the CVFF's original objective of building indigenous shipping capacity.

Note:

Nigeria's maritime financing challenge is no longer simply about whether funds have been made available. It is also about whether eligible shipowners can satisfy the conditions required to access them.

The reported demand for cargo contracts and 135 per cent collateral raises an important policy question: How can Nigeria build a stronger indigenous shipping industry if operators must already possess substantial commercial capacity before obtaining financing intended to help them grow?

A transparent review of lending conditions, application outcomes and the responsibilities of participating banks and NIMASA would help establish whether the CVFF is delivering on its intended purpose.

Sources for verification

• LEADERSHIP — Original report on CVFF lending conditions.
• BusinessDay — Background on cargo contracts and vessel financing.
• Voice of Nigeria — Government's position on accelerating CVFF disbursement.