Controversy trails NIMASA’s revenue-sharing deal with private firm

A proposed 15-year revenue-sharing agreement between the Nigerian Maritime Administration and Safety Agency (NIMASA) and a private firm, Royal Diadem Consults Ltd, has triggered sharp internal dissent and raised serious questions over its long-term financial and operational implications.

The agreement, now awaiting Federal Executive Council (FEC) approval, would see Royal Diadem receive 13.5% of NIMASA’s total revenue over the next decade and a half.

In return, the company proposes to invest N7.54 billion in the development and deployment of a Maritime Electronic Management System (MEMS)—a digital platform that promises to automate and streamline the agency’s regulatory functions.

According to Royal Diadem, MEMS will drive a 30% revenue increase within three years, achieve 95% regulatory compliance, reduce maritime pollution by 20%, and create 1,000 jobs.

The company claims 75% of its investment will come via loans, while 25% will be equity-funded.

However, the deal has sparked intense criticism from within NIMASA and the broader maritime industry.

Insiders and industry experts argue that the financial arrangement is lopsided, offering the private firm enormous returns with minimal risk and limited investment.

NIMASA’s 2022 annual report shows the agency generated over N129 billion in revenue. Under the proposed terms, Royal Diadem would collect over N17.4 billion annually—translating to more than N261 billion over 15 years. If revenue remains steady or rises—especially given that a large portion is dollar-denominated—the actual payout could be far higher.

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For context, NIMASA earned $296 million and N3.4 billion in 2022, which would convert to roughly N497 billion today. At 13.5%, Royal Diadem could earn an estimated N67 billion yearly—recovering its initial investment nearly nine times over in just one year.

“This is a glorified ERP [Enterprise Resource Planning] system,” one staff member told reporters. “Its functions can be covered through standard software licenses and support agreements. There’s no justification for handing out 13.5% of all revenue for 15 years.”

Another staffer likened the proposal to a “financial Trojan horse,” warning that it lacked operational safeguards or performance benchmarks. “Even if revenue stagnates, they still get their cut. It’s an unbalanced deal with no clear deliverables or enforcement tools.”

Critics also allege that the proposal bypassed key internal procedures. Several NIMASA employees noted that no cross-departmental review committee was convened to assess the project, as would be standard practice for such a far-reaching initiative.

“It came as a shock to many departments,” said a senior official familiar with the matter. “Normally, legal, finance, operations, and technical units would be involved in evaluating such a deal. This process lacked basic institutional due diligence.”

Veteran staff who worked on capital-intensive projects like the Deep Blue maritime security initiative and the Sage X3 ERP implementation questioned why NIMASA could not fund the MEMS project independently, as it had done in the past.

“There’s no investment in surveillance or enforcement in this MEMS proposal. It’s all backend software, yet they’re asking for a huge revenue slice. It doesn’t add up,” one staff member said.

In response to the backlash, NIMASA issued a public statement defending the MEMS initiative. The agency said it had undertaken a comprehensive internal review of its operational systems and concluded that enhanced digital infrastructure was critical for improved performance.

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“MEMS provides real-time visibility into vessel movements, operational logs, and regulatory interactions,” the statement read. “With features such as smart invoicing, automated alerts, and centralized data integration, the system will enhance traceability, improve compliance, and increase revenue transparency.”

NIMASA further stated that the platform would enable digital tracking and billing of waste offloads—an area where it claims revenue leakages have historically occurred. It emphasized that MEMS was designed to reduce operational bottlenecks and ensure that government funds are safeguarded from private diversion.

However, the agency’s response did not address the core issues raised by staff: the high cost of the revenue-sharing model, the absence of performance benchmarks, and the lack of infrastructure or operational risk for the private firm

The controversy raises broader concerns about public-private partnerships in critical government sectors.

Experts warn that without clear performance metrics, transparent approval processes, and reasonable risk-sharing, such agreements could become avenues for resource diversion rather than public service improvement.

With mounting opposition from within and outside the agency, the fate of the MEMS agreement now lies with the Federal Executive Council. Whether the FEC will approve the deal in its current form—or demand a renegotiation—remains to be seen.