A senior lecturer at the University of Cape Town, Warren De Waegh, has called for the wider adoption of the UNCITRAL Model Law to ensure the survival of African-owned shipping companies facing financial distress.

Mr De Waegh made the call on Wednesday in Lagos at the 11th Lagos International Maritime Week (LIMWEEK), during a panel session on the legal framework for business rescue of shipping companies.

The UNCITRAL Model Law is a model piece of legislation developed by the United Nations Commission on International Trade Law (UNCITRAL) to guide countries in developing, reforming, and harmonising their national laws in specific areas of international commercial law.

He said more than 90 per cent of Africa’s imports and exports moved by sea, while Africans owned less than one per cent of the global fleet, creating a significant structural imbalance.

The academic projected that under the African Continental Free Trade Area (AfCFTA), cargo carried by African countries would increase from 58 million tonnes to 132 million tonnes by 2030, creating greater demand for locally owned vessels.

He, however, said the projected growth would depend on increased investment in port infrastructure, logistics and legal frameworks that supported business rescue without relying on government bailouts.

Mr De Waegh said the UNCITRAL Model Law on Cross-Border Insolvency provided a coordinated framework for rescuing financially distressed companies through a single forum and applicable law.

He said 66 jurisdictions had enacted the Model Law, with 28 incorporating exemptions, including South Africa, Kenya, Morocco and Ghana.

He noted that Nigeria had yet to adopt the law.

The lecturer cautioned against a “copy-and-paste” approach to its enactment, recommending flexibility to reflect the mobile nature of the shipping industry.

He also proposed an admiralty exception to protect secured creditors and vessel arrest procedures.

According to him, Singapore and Australia provide examples of jurisdictions where admiralty exceptions have helped improve business rescue outcomes by ring-fencing maritime claims while allowing broader restructuring to continue.

Mr De Waegh also recommended a regional approach under AfCFTA and ECOWAS to harmonise implementation of the model law.

He said such coordination would reduce duplication and help attract investment into the African shipping sector.

He urged Nigeria and other African countries to adopt the model law, with provisions tailored to the maritime sector to safeguard the viability and competitiveness of African-owned shipping companies.

The moderator of the panel, Lola Ikwuagwu of George Ikoli & Co., also urged Nigerian policymakers to urgently adopt the UNCITRAL Model Law with provisions tailored to shipping.

Ms Ikwuagwu said business rescue frameworks should strike a balance between protecting creditors and ensuring the viability of African-owned shipping companies.

She said Nigeria could not afford to lag behind countries such as Kenya, South Africa and Ghana, especially with the expected rise in AfCFTA trade volumes by 2030.

She said early legal reform would help secure jobs, attract investment and strengthen Nigeria’s competitiveness in the maritime sector.
(NAN)