NIMASA Cabotage Act
Compliance Guide 2025

By Calmwaters Maritime Team · Published January 2025

Nigeria's Coastal and Inland Shipping (Cabotage) Act 2003 — administered by the Nigerian Maritime Administration and Safety Agency (NIMASA) — restricts the carriage of coastal trade to Nigerian-registered, Nigerian-owned, Nigerian-crewed vessels. The law has significant operational and commercial implications for all vessel operators considering Nigerian coastal or port-to-port trades, and non-compliance carries substantial penalties including vessel forfeiture.

What the Cabotage Act Covers

The Cabotage Act applies to the carriage of cargo or passengers between Nigerian ports or between any Nigerian port and any point on Nigeria's inland waterways. This includes coastwise trade (e.g. Lagos to Port Harcourt), intra-delta movements, and supply vessel operations serving offshore installations within Nigeria's EEZ.

Cabotage Act Requirements

• —Vessel registration — Nigerian-registered under the Merchant Shipping Act
• —Nigerian ownership — majority Nigerian ownership of operating entity
• —Nigerian crew — minimum percentage of Nigerian seafarers (typically 100% for smaller vessels)
• —Nigerian flag — vessel must fly the Nigerian flag for cabotage trades
• —NIMASA licensing — valid cabotage trade licence from NIMASA

Cabotage Waivers — When and How

The Cabotage Act provides for waivers where no Nigerian vessel is available or capable to perform a required service. NIMASA administers the waiver process, which requires demonstration that a qualifying Nigerian vessel is not available for the specific trade or cargo type within a reasonable timeframe. Waivers are time-limited and cargo-specific — they do not provide blanket exemption for ongoing operations.

Obtaining a waiver requires engagement with NIMASA and, typically, documentation from Nigerian vessel operators confirming unavailability. Experienced port agents with NIMASA relationships are essential for navigating this process efficiently. Waivers have become more difficult to obtain as the number of qualified Nigerian vessels has grown.

Offshore Supply Vessel Operations

The offshore supply vessel sector — providing PSVs, AHTS, and crew boats to oil company operations in Nigerian waters — is subject to the Cabotage Act. International oil companies operating in Nigeria have progressively been required to use Nigerian-flagged and Nigerian-crewed vessels for offshore support roles, driving significant demand for local content compliance solutions.

Joint venture arrangements between international vessel operators and Nigerian companies — creating Nigerian-owned entities that can qualify under the Cabotage Act while incorporating international operational standards — have become the dominant structure for offshore vessel operations in Nigerian waters.

Cabotage Vessel Financing Fund

The Cabotage Act established the Cabotage Vessel Financing Fund (CVFF), funded by a 2% levy on the value of cabotage services rendered. The CVFF is intended to provide financing for Nigerian operators to acquire vessels — though its practical disbursement has been limited compared to the accumulated fund balance. Understanding CVFF contribution obligations is part of cabotage compliance for any operator in the coastal trade.

Penalties for Non-Compliance

Violations of the Cabotage Act carry serious consequences: fines, vessel detention, and — in the most serious cases — forfeiture of vessel and cargo. NIMASA enforcement has become more active in recent years, with offshore vessel inspections and port documentation checks. Operators who assume non-compliance will go undetected in Nigerian waters are taking significant financial risk.