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Nigerian Agro-Cargo Terminals: Analyzing Economic Benefits

Nigerian Agro-Cargo Terminals: Analyzing Economic BenefitsBy Okuneye Moyosola

In 2013, thirteen airports were designated as perishable cargo terminals to transform the aviation sector into a major revenue earner for Nigeria. Six years after these airports were designated as perishable cargo airports by the Federal Airports Authority of Nigeria (FAAN); the project is yet to become a reality as most of the facilities are yet to kick-off at the designated airports.

Perishable cargoes are cargoes that deteriorate over a given period of time or when exposed to adverse temperature, humidity or other environmental conditions. In some cases, the term “perishable cargoes” will cover shipments which are also classified as “live animals” which could be crabs, shrimp, and fish. The speed, reliability, cost effectiveness and controlled conditions of carriage by air also provides the ideal method for exporters and importers of perishable commodities to service existing markets and develop new ones. However, perishable cargo calls for specials attentions to packaging, handling and other aspects of the transportation process.

FAAN had also promised to develop the standard of these perishable cargo facilities to meet global best standards and enhance their operations. The thirteen cities which were designated for the project are Abuja, Akure, Calabar, Ilorin, Jalingo, Jos, Kano, Lagos, Makurdi, Minna, Owerri, Port Harcourt and Uyo. However, only the Murtala Muhammed Airport in Lagos is operating the perishable agro- cargo venture with the approval of the Nigerian Aviation Handling Company (NAHCO) and Skyway Aviation Handling Company (SAHCO).

Other African countries like South Africa, Benin, Cote d’Ivoire, Ghana, have greatly participated in the exportation of these commodities. However, the giant of Africa, Nigeria, which produces these goods in abundance, seems to be backward as a result of lack of proper infrastructure across airports.

It is important to note that billions of naira has been lost as a result of the neglect of this project as it is an avenue to increase the gross Domestic Product of the country. Similarly, there is also an increase in the demand of fresh goods such as pumpkin leaves, fresh ginger and garlic, white and red sweet potatoes outside the country. This shows that a lot of money could be made if only this project will be given the attention that it needs.

Experts say Nigeria could be could make an estimated amount of $52 billion annually from the United Kingdom alone, if the full potential of the perishable cargo export industry is properly utilized.  The perishable agro-cargo venture will also help the country to improve its Economic Free Trade, Export Processing Zones, cargo airports as well as other agro-allied industrial clusters.

The project which was commissioned during the previous administration and was inherited by the current administration has been neglected as the federal government seems to be paying more attention to ensuring the safety and operations of airports rather than focusing on the income that would have been generated via the project.

During an interview with MMS Plus, a major consultant in the aviation industry, Mr. Chris Aligbe revealed some of the reasons why the project has been jettisoned.
“There are two different governments to look at as we talk about this project. The project was commissioned by the previous administration which had its own policy. This present administration has its own policy of developing airports and aviation and that is their priority. When governments change, the priorities change particularly when the governments are of different parties. The current administration is targeting development and that is what they are pursuing. Nobody said they are not prepared to develop it”
“In terms of how they listed what they want to do, they said that they want to concession the airports, create a metropolis, do a cargo and bring in a national carrier. These are some of their programs and they have listed them out step by step. They also want to bring in an MRO for repairs and maintenance of air craft. All these programs come under different priorities so each governments work along its priority”, he said.

Although the government is focusing on other aspects of aviation, there should be no reason why this big project that could put the aviation industry into lime light should be abandoned. Indeed the government needs to set its priorities right.

Meanwhile, the President General of National Association of Government Approved Freight Forwarders, Mr. Adeyinka Bakare spoke extensively on the issue as he believes that there would be need for incentives at such facilities to encourage patronage.

“There is no port that you want to compare with Murtala Muhammed Airport when it comes to frequency and accessibility and that is why they are the only one operating. In the Nigerian port as a whole, we are not really taking them serious as a business venture. We are all looking at them as a government entity and there are so many opportunities to be tapped in these agro cargo airports.”

“Nigeria should have a situation where all these ports (land, sea and air) compete so that they will give incentives and the competition would bring about the best from the operators. Nevertheless, we have a system where the members of staff of the respective agencies at the airports aren’t concerned about the economic activities of the ports,hence, there would be no improvement.

“If we have a cargo plane that is coming to Lagos, and probably the landing cost is at N5 and if you go to Calabar, the landing cost is N2.50k, business men would rather make use of the cheaper one. However, if incentives are given, it would attract more patronage” he said.

Bakare also expressed worry on the recent return of Nigerian exported agro-produce.

“Another issue is how acceptable are the agro-products at the other end. We have issues of Nigerian dry fish and hibiscus flower been returned on a daily basis. These days we hardly see Nigerians shipping hibiscus to Mexico. What is government doing about this issue? If I am taking 1000kg of green from Nigeria to Rotterdam and I need to spend up to N400,000 to move it and the same kilogram to Rotterdam from Ghana costs N150,000, it would be better for me to go to Ghana. So the government has to address this issue because it has discouraged exporters”

Also speaking about the operational level of the agro-cargo ports at the Murtala Muhammed Airport in Lagos, he said that the ports are functioning but has not achieved a lot , calling on the  Federal Government to focus more on this aspect.

Agriculture contributes immensely to the economy and these airports would create a window for exportation of agro produce, thereby creating more value for the local farmers and generating more revenue for the state and nation at large. These farmers would also have access to the international market through the state, thus making the country a hub for agro exports while the country shores-up its foreign exchange earnings.

Similarly, farmers would not have to haul their produce over long distances by road, in order to find a market for them as they would be transported through air which would ensure that it reaches the markets both in and outside the country on time.

Wastage of food crops recorded while trying to get them to several markets round the country would also be reduced as these agro cargo ports would have cooling systems which will help preserve the crops for a longer period of time.

This will also reduce the numbers of unemployed youths in the country as more jobs will be created through this avenue. There is no doubt that there is a lot benefit in this agro cargo project.

MMS Plus therefore calls on the Federal Government to continue the project in other 12 locations across the country designated for the venture in order to harness the full potential in both aviation and agriculture.

Although, the target was for Nigeria to leverage the over N250 billion  annual air freight export market out of Africa where the country was recording zero participation policy discourse around the project since after its launch have gradually gone down. But while countries like Kenya, South Africa, Benin, Cote d’Ivoire, Ghana, Senegal, Ethiopia, Tanzania and Egypt are heavily participating in trading in commodities like fruits, fresh fish, vegetables and flowers and earning millions of dollars annually from the trade, Nigeria, which also produces these produce in abundance lacks the requisite infrastructure to compete. 

So far, Nigeria has watched helplessly as European, Asian and American cargo aircraft continue to freight into country daily huge tonnes of cargo, but fly out empty with no cargo from Nigeria.

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