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AfCFTA: Problems and Prospects of Nigerian Ports

AfCFTA: Problems and Prospects of Nigerian Ports
By Kenneth Jukpor

Seaports are critical infrastructure which enable nations attract increased maritime trade and generally improve global trade and businesses. As a result revenue from custom duties and taxes are realized, while the connectivity of ports ensures timely delivery of goods to clients in a seamless and cost-effective manner. Cargo handling, stevedoring, freight forwarding, warehousing, haulage, insurance, among other services are attracted to the availability of seaports.

Nigeria is immensely blessed with long coastal lines and there are several seaports, but how are Nigerian ports rated in terms of efficiency, cost, timeliness, draft and other indices that make for ease of doing business.

With the emergence of the African Continental Free Trade Agreement (AfCFTA) which aims to boost intra-African trade by making Africa a single market of 1.2 billion people, the need for the optimization of Nigerian ports has become sacrosanct. Nigeria’s population of approximately 202million accounts of about 17% of Africa.

This need for efficient ports and terminals was aptly captured and extensively discussed at the 12th Nigeria International Maritime Ports and Terminal (NIMPORT) Conference and Exhibitions which held last week, with the theme; “Fostering Africa’s Global Trade Competitiveness and the Role of Ports”. What would the ports and terminals do to support growth of the African economies?

While the implementation of AfCFTA has been estimated to lead to an increase in intra-African trade by 52% by 2022 (compared with trade levels in 2010) and double the share of intra-African trade (currently around 13% of Africa’s exports) by the start of the next decade; Nigerian ports journey to efficiency is still ‘miles away from sleep’. Numerous challenges ranging from infrastructure deficits to gross negligence and corruption has left the port sector in dire need of overhauling.

At the event, the Executive Secretary of Nigerian Shippers’ Council (NSC) Mr. Hassan Bello stressed the need for Nigeria to appraise the determinants of competitiveness of ports and terminals.

Bello who was represented by the Deputy Director, Compliance and Monitoring Department, Mrs. Celine Ifeora, noted that appropriate and modern facilities, quality services hinged on standardization, efficiency, cost management are key factors in ensuring effective ports in the nation.

Bello who presented a paper titled, “Making Nigerian Ports Cost Effective And Globally Competitive” also highlighted customer relationship and good reputation as germane to having globally competitive ports.

He recalled that the main reasons for port concession in Nigerian in 2006 was to improve port efficiency in order to lower cargo handling cost and to enthrone free and fair competition into the system.

“The two key words here are “cost” and “competition”. Cost is an amount that has to be paid or spent to buy or obtain something. In this context, it is determining what a company will receive in exchange for its product or service rendered. Therefore, cost must be tied to service or product. Competition is the quality of being as good as or better than others of a comparable nature, relating to or characterized by competition. It is unfortunate that despite the port concession, Nigerian ports are still not competition, rather we have different monopolies” he said.

Highlighting some factors that could transform the nation’s port system, he stressed the need to put in place proper macro-economic policies both fiscal and monetary, streamline the multiple Customs units and frivolous interceptions, high number of agencies in the ports, automation, among others.

He also noted that there was need to encourage Public-Private Partnerships (PPP) in port operations and management, power supply, and other transport infrastructure.

“Nigeria must stay alert and flexible to share insights and adjust to global trends. Learn to look at the success stories around the world to learn how they got there, find out what led to the improvement of their port performance and cost effectiveness”, Bello said.

Meanwhile, the Managing Director of Nigerian Ports Authority (NPA) Ms. Hadiza Bala-Usman highlighted the role of railway as one of the critical components that would transform Nigerian ports and enable the country maximize the trade opportunities with the AfCFTA.

Usman, while delivering a paper on ‘Improving Port Logistics Connectivity, Imperative for Regional Trade Integration’ at the event, commended the Federal Government for the foresight to build standard guage rail lines across the thirty-six states and the Federal Capital.

“The most important for the port sector are the rail connections linking the dry ports in Kano and Kaduna to the seaports in Lagos. We need to have this kind of access and to allow them connect to the rail lines of Chad and Niger Republic who are land locked countries”, she said.

Usman, who was represented by the Assistant General Manager (AGM) Operations, Mr. Durowaiye Ayodele said that the railway projects and other transport infrastructure development in the country would see Nigeria better placed to benefit from AfCFTA.

She also lamented that the nation’s ports have been stretched beyond their capacities as a result of increased cargo traffic, noting that the deep seaports projects such as Lekki and Ibom couldn’t have come at a better time.

Despite Hadiza’s acknowledgement that the commencement of the Kano/ Lagos rail line, Lokoja-Itakpe, and other railway projects to the hinterland as germane connectivity projects in view of AfCFTA, the Nigerian Railway Corporation (NRC) lamented that Apapa port was the only major port with rail infrastructure.

Also speaking at the NIMPORT event, the Managing Director of NRC, Engr. Fidet Okhiria lamented that concession of the seaports led to the blockage of rail lines in the Apapa environs.

Okhiria, who was represented by the Deputy Director, NRC Operations Office, Mr. Ola Adeeyinwo made this observation even as beckoned on NPA to partner with NRC in order to make railway a more viable option for cargo evacuation at the ports.

The NRC boss stressed that port-rail connectivity is a strategic element of port development, both in economic and competitive terms and to reduce negative externalities on people and the environment.

“Not only does proper rail connectivity expand the port hinterland and so increase the capture of new value added freight and services for the port, it also promotes growth in capacity without affecting the port-city relationship, by linking spatially fragmented processes without congesting the urban environment surrounding the port” he added.

Meanwhile, as part of efforts to ensure Nigeria optimally harnesses the economic gains AfCFTA from the standpoint of standards, the Standards Organization of Nigeria (SON) assured that it had put all structures in place to ensure products made in the country meet the regional and global standards.

The Director General of SON, Dr. Anthony Aboloma gave this assurance while presenting a paper at the event, titled, “Meeting Exportable Standards: Key to Global Trade”.

Noting that the objective of AfCFTA is to boost regional trade, Aboloma stressed that it was important to understand the standards of the goods intended for export to curb the risk of rejection.

He stated that the Federal Government’s delay in signing the AfCFTA gave the agency ample time to fix all structures needed to ensure optimum standards of Nigerian goods and services, adding that “the cost of failure is greater than the cost of producing quality products and services.”

Speaking on influx of substandard products, the SON boss said, “I won’t hide under the popular complaint of porous borders because this problem is all over the world, it is only more publicized here in Nigeria. At SON, we have come up with a Market Surveillance strategy to go into the market periodically to take inventory of the products available. We have to know those bringing in the products, are they registered? Do they conform to standards? What’s the feedback from the consumers? We conduct opinion polls to get feedback from consumers”

Most of the cargoes at Nigerian ports are still transported by road, hence the need for optimal intermodalism. When all transport modes are developed for the transportation of cargo, it will go a long way in making Nigerian ports cost effective. The issues of human interference that breeds corruption should also be replaced with automation. All port agencies would also need to come under an umbrella for a Single Window platform to ease port transactions. With these, coupled with the upcoming deep seaport projects, the nation will be well placed to benefit optimally from AfCFTA.

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