Ship traffic into Nigerian ports falls 77.8% on economic downturn

The number of oceangoing vessels bringing imports, including finished goods and raw materials into the country declined by 77.8 percent in the first quarter of 2016 compared to the same period in 2015 with cargo volumes dropping from about 62million Gross Tonnage (GT) to about 35million GT.
This highlights the extent of the economic downturn and the cascading effect across sectors including manufacturing.
A recent report by the Nigerian Ports Authority (NPA) reveals that ship traffic recorded a significant drop in number, as 1,131 oceangoing vessels with a total GT of 34,754, 258 called on Nigerian ports in the first quarter of 2016, compared to 5,139 vessels with 61,990,999 GT that called the ports same period in 2015.
Consequently, imported container throughput declined by 12.6 percent to 194,304 Twenty Equivalent Units (TEUs) which refers to 20 foot containers, from 222,363 TEUs in the previous year.
The first quarter operational report of 2016 shows that the level of activity in Nigeria’s six sea ports (Lagos, Tin-Can, Warri, Onne, Rivers and Calabar) dropped significantly when compared with the same period of 2015. The commodity analysis revealed that though all cargo types declined during the period under review, container and general cargo traffic contributed significantly to the overall drop in cargo throughput, confirmed the NPA report.
In Apapa, the improved environment and the near-absence of traffic congestion which had become a permanent feature of the two major routes to the ports—Apapa-Oshodi Expressway and the Apapa-Ijora Bridge—underscore the decline in maritime and business activities at the ports.
Marine and oil and gas-related activities had led to the degradation of the Apapa environment when the ports were active, causing the collapse of roads in and around Apapa.
“Apapa is a metaphor for government’s failure in infrastructure maintenance and management”, noted Ibikunle Ogunbayo, a consulting engineer, when Apapa was under siege by tankers and trailers that came to the ports to convey goods to locations across the country.
The choking impact of these activities forced many businesses and residents out of Apapa, leading to a high vacancy rate and a significant drop in the value of property in the area which Chudi Ubosi, an estate surveyor and valuer, estimated at 40 percent. But sanity is gradually returning to the environment.
Recently, the federal government, following the collapse of the Apapa-Ijora Bridge, ordered the closure of the bridge. Concerns were high as to the impact of that closure on motorists, but surprisingly, that closure has not changed the traffic situation in Apapa which further underscores the decline in activities at the ports. “This would have been unimaginable in those days when the ports were active because it would have led to another siege on Apapa by trucks”, observed Emmanuel Ameke, a port worker who commented on the closure of the bridge.
Other stakeholders who appraised the port business in the past seven months of the year, blamed the persistent scarcity of the dollar and high exchange rate, aggravated by the global economic downturn, as reasons for a sharp decline of business activities at the ports.
“If we look at six months behind us, it was months of real hardship for shippers. We don’t have the foreign exchange, oil revenue depleted and it made the budget unrealistic. It has been very challenging and in my own view, we would not have the usual Christmas rush that is fueled by people shopping. Rather, many would be going to Benin Republic to buy commodities and bring back to Nigeria,” said Jonathan Nicole, president, Shippers’ Association of Lagos State, in an interview with BusinessDay.
According to Nicole, the second half of the year used to be a rush period but the high cost of the dollar to the naira limited people’s purchasing power. “For instance, exchanging the naira at N313/$, means that when an importer needs about $30,000 to bring in a container, it will require about N9,390,000 to do so, and that is huge. This amount is less duty, shipping, terminal and other charges, and how is the importer going to recover such investment?”
Nicole further observed that if the downturn continues, many more jobs would be lost because the shipping liners will have fewer containers to bring into the country, just as the terminals will lose volume. “The importers on the other hand, would decide to go to Cotonu, where there is less government interference. This will not only fuel smuggling because the market is here but will push corruption to its peak because people will be looking for any means to survive.”
Analysing the business performance at his company’s port terminal for the first six months of the year (January to June), John Jenkins, group managing director of SIFAX Group, said recently that all the measuring indices for the company’s business in the first half of the year stood at a negative point when benchmarked against the same period last year.
“Vessel operations, throughput figures and gate activities, all recorded a sharp decline in volume, such that the port arm of the business recorded about 50 percent drop in the volume of general cargo, 10 percent drop in the volume of container business and 25 percent decline in all the company’s business chain,” Jenkins explained.
Mohammed Bulangu, acting managing director of Ports and Cargo Handling Services Limited (PCHSL), predicted that in the second half of the year, “ will be friendlier and more conducive, compared to the first half. The signs are already showing and we intend to increase our market share with an aggressive marketing strategy. We expect to see a recovery from the sharp decline in our business volume.”