50% of Foreign Vessels Exit Nigeria Causing Major Setback in Trading – Shipowners are raising concerns over the setbacks in trading in West Africa, particularly in Nigeria, due to rising insecurity and poor government policies. These factors have forced trading vessels to leave the country, causing a major setback in trading.
According to the President of the Nigerian Chamber of Shipping, Aminu Umar, not less than 50% of foreign vessels have exited Nigeria in the past year. This development has led to a scarcity of ships in the West African region, resulting in a 70% increase in freight rates.
Umar explained that there is a more robust market for vessels in Europe than in Africa, and many foreign-owned vessels trading within the West African sub-region, including Nigeria, have moved back to Europe. The scarcity created by this has caused the freight rate to rise by almost 70%.
The changes started in March 2022, and Umar noted that the reason foreign vessels won’t return is that the market is stronger in Europe due to the ongoing Russian-Ukraine war, and the environment is easier to trade in Europe compared to Africa. Additionally, there are fewer security issues in Europe, and vessels trading in West Africa still have to pay war risk insurance.
Overall, the exit of 50% of foreign vessels from Nigeria has caused a significant setback in trading, leading to a scarcity of ships and an increase in freight rates.