A Review of the Nigerian Energy Industry

Nigerian ports operation drops to 40%

apapa port
Apapa port

05 October 2015, Lagos – Activities at the nation’s seaports have reduced significantly to about 40 percent, THISDAY investigations have revealed.

Since the federal government’s economic reforms, which led to the concession of the nation’s seaports during the Olusegun Obasanjo’s administration in 2006, there has been a steady increase in cargo throughput and vessels call at the nation’s ports.

The exercise, which was initiated by the Bureau for Public Enterprises (BPE) divested the management of Nigerian Ports Authority (NPA) from the day-to-day running of the nation’s seaports. Since then, concessionaires have been in charge of cargo handling though NPA still collects royalty as the landlord.

THISDAY checks revealed the federal government’s policies on importation of staple commodities in the country such as rice, fish and poultry products such as frozen chicken and turkey have taken their toll on the operation of the nation’s seaports.

The worst hit, according to sources are the break bulk and roll-on, roll-off (RoRo) terminals. While the RoRo terminals were built with specialised equipment to handle vehicles, particularly used ones popularly called tokunbo or “Belgium” the bulk terminals were specially built to handle bulk cargoes such as wheat, rice, salt and sugar.

Other factors also contributing to the low volume of cargo are the implementation of the national auto policy, which has led to a significant drop in the volume vehicles imported into the country and the new Central Bank of Nigeria (CBN) policy on foreign exchange.

Many importers are now finding it difficult to source foreign exchange to bring in their imported goods into the country, a development, which has reduced operations of these terminals to only between 30 percent and 40 percent capacity.

Industry stakeholders attributed the low ports operation to reduction in the number of ships that call at the port due to the decline in the volume of imported cargo.

Prior to the implementation of these new policies, THISDAY gathered that an average of 100 vessels with different kinds of cargo berthed at the various terminals monthly at the Lagos pilotage district, which is the busiest in the country.

Presently, this has reduced to an average of 40 vessels monthly, prompting some terminals, with the capacity to handle three to four vessels simultaneously to be handling only one or two vessels in a week in the last four months.

Confirming the development, the Chairman, Seaport Terminal Operators Association of Nigeria (STOAN), Mrs. Victoria Haastrup said: “From the pilotage report, one can see that fewer vessels are now coming into Nigeria and there has been a reduction in the volume of cargo coming, particularly in the last few months. This is because government policies are having an adverse effect on cargo throughput coming into the ports”.

Haastrup who is also the Executive Chairman of ENL Consortium Limited, operators of Terminal C in the Lagos Port Complex (LPC), Apapa, Lagos noted that policies, such as restricted access to foreign exchange by importers of 41 selected items and quota system on the importation of certain goods, especially rice and fish, are to be blamed for the situation in the ports.

Her words: “A lot of terminals are operating at 30 to 40 percent of their usual capacity. The impact is that goods will be diverted to the Republic of Benin and that is exactly what is happening now. Ships containing rice and other cargo are being diverted to Cotonu ports and these cargoes will find their way back to the Nigerian market. The cost of some imported goods has gone up. These policies are creating a situation where these goods will become very expensive and unaffordable for ordinary Nigerians.”

A Lagos based importer, Mr. Michael Adebayo told THISDAY at the weekend that absence of economic direction by the Buhari’s government has led to a downturn in the volume of business in the nation’s seaports.


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