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Background to the Study

Cabotage is a legislative tool restricting access or reserving maritime or aviation trade within a country’s territorial jurisdiction to the local capacities. The Nigerian Maritime and Cabotage was introduced by the Nigerian Government following calls by prominent maritime specialists and operators on the need for government to make concerned effort towards harnessing the indigenous maritime capacity and utilizing the abundant opportunities in the sector for the benefit of the Nigerian people in order to reverse the trend where it still has its maritime trade both territorial and extra territorial dominated by foreign operators.

The government’s intention in introducing the cabotage regime is to encourage the development of the maritime industry by an interventionist scheme aimed at boosting the growth of the local capacity in the face of choking external competition and domination.

Cabotage is a practice worldwide that is over 60 years old, a contemporary economic approach which justifies intervention of this nature to induce some determined result (as against the classical economic approach of free market forces), as an acceptable tool to achieving some set economic goals, especially where competition is unfair and dominance is prevalent. It has been observed that this practice worldwide both in maritime and aviation has been induced by diverse factors including reserving all, or part of the national market opportunity to national flag ships or aircrafts either for political, economic or security reasons. Other reasons for this protective policy practiced around the world are to develop indigenous human and capital capacity. These are some of the major aims of the Nigerian maritime cabotage.

And as for the scope of the cabotage Act, the Coastal and Inland Shipping (cabotage) Act, 2003 covers the carriage of goods and passengers by vessels and any other mode of transportation, mineral, other natural resources, and any marine transportation or activity of commercial nature within Nigeria’s territorial waters as prescribed by the Exclusive Economic Zone Act CAP 116, laws of the Federation Republic of Nigeria, 1990. The Act seeks to restrict the use of foreign vessels in domestic coastal trade and consequently enhance the development of indigenous tonnage.

It is now two and half years since the enactment or one and half years of implementation of the cabotage policy. Nigerian’s are yet to notice significant change. The cabotage trade is still dominated by foreigners. From the perspective of the target group i.e. Nigerian Shipping Companies, the question remains: to what extent has cabotage delivered its intended opportunities? Considering that out of 320 or more private members’ bills introduced in the House of Representatives between 1999 and 2003, only ten crossed the Legislative Rubicon to become laws: why is it that the same forces have not succeeded in ensuring a mere robust and determined implementation of the cabotage policy? What factors are responsible for the very slow take-off of the programme? What are the problems? Are they associated with the very nature of the politics of shipping development, the process or policy, or a combination of these forces? What are the impacts of the cabotage laws or of what benefit is the cabotage to the Nigerian entrepreneur? These and more are some of the issues to be analyzed by the researcher in the course of writing the dissertation.

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