Key Points
• UCT lecturer urges Nigeria and other African countries to adopt the UNCITRAL Model Law on cross border insolvency.
• Africa handles more than 90 per cent of its trade by sea but owns less than one per cent of the global fleet.
• Experts call for maritime specific provisions to protect distressed shipping companies and attract investment.
Main Story
A senior lecturer at the University of Cape Town, Dr Warren De Waegh, has urged Nigeria and other African countries to adopt the UNCITRAL Model Law on Cross Border Insolvency to help financially distressed shipping companies remain viable.
De Waegh made the call on Wednesday in Lagos during the 11th Lagos International Maritime Week (LIMWEEK), at a panel session examining legal frameworks for rescuing distressed shipping companies.
He said Africa’s dependence on maritime transport was not matched by its ownership of vessels, noting that more than 90 per cent of the continent’s imports and exports were transported by sea, while Africans owned less than one per cent of the global fleet.
The imbalance, he said, could become more significant as intra African trade expands under the African Continental Free Trade Area (AfCFTA).
De Waegh projected that cargo carried by African countries could rise from 58 million tonnes to 132 million tonnes by 2030, increasing the need for African owned vessels.
He said the projected growth would require investment not only in ports and logistics but also in legal systems capable of supporting companies facing financial difficulties without depending on government bailouts.
According to him, the UNCITRAL Model Law provides a coordinated mechanism for handling cross border insolvency by establishing a framework for cooperation around a single forum and applicable law.
He said 66 jurisdictions had adopted the Model Law, although 28 had included exemptions. South Africa, Kenya, Morocco and Ghana were among the countries that had incorporated such exemptions, while Nigeria was yet to adopt it.
De Waegh cautioned Nigeria against simply reproducing the legislation without considering the specific characteristics of the shipping industry.
He recommended provisions that would recognise the mobile nature of vessels, including an admiralty exception to protect secured creditors and vessel arrest procedures.
He cited Singapore and Australia as examples where such exceptions had helped support business rescue while protecting maritime claims.
The academic also proposed coordinated implementation across Africa through AfCFTA and ECOWAS, arguing that regional harmonisation could reduce duplication and make the sector more attractive to investors.
The Issues
African shipping companies operate within a sector where vessels, creditors and commercial interests can cross several jurisdictions.
Without compatible insolvency rules, the restructuring or rescue of a financially distressed shipping company can become complicated when assets and creditors are spread across different countries.
For Nigeria, adopting the Model Law with provisions suited to maritime operations could provide a clearer framework for dealing with distressed shipping businesses while protecting creditor interests.
What’s Being Said
“Policy without practice remains a document.” – Iroghama Ogbeifun
“Technology without skilled people cannot deliver results.” – Olimotou Malang
What’s Next
De Waegh urged Nigeria and other African countries to begin adopting the UNCITRAL Model Law while tailoring its provisions to the maritime sector.
The moderator of the panel, Mrs Lola Ikwuagwu of George Ikoli & Co., also called for urgent legal reform in Nigeria.
Ikwuagwu said the framework should balance creditor protection with the need to keep African owned shipping companies viable.
She warned that Nigeria could fall behind countries such as Kenya, South Africa and Ghana if it failed to act as AfCFTA trade volumes increase.
She said timely reform could help protect jobs, attract investment and improve Nigeria’s competitiveness in maritime transport.
Bottom Line
Experts say Nigeria’s absence from the countries that have adopted the UNCITRAL Model Law leaves a gap in the legal framework for rescuing distressed shipping companies. They are calling for its adoption with provisions specifically designed for the maritime industry.
