• Friday, March 29, 2024
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Apapa: How congestion, gridlock deny port city of business hub benefits

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Unlike port cities around the world, Apapa, Nigeria’s premier port city, is not making the most of its position compared to port cities around the world.

Major port cities of the world, including London, Amsterdam, Shanghai in China, Rotterdam in Holland and Singapore, are business hubs where thriving business activities lead to increased construction and industrial production, wealth generation, job creation, and high property values.

Ports play a substantial role in the economies of metropolitan areas. BusinessDay checks show that in Rotterdam, for instance, port-related activities accounted for 74,000 direct jobs and 13 percent of total metropolitan GDP in 2007. In Shanghai, the number of jobs related to port activities reached 840,000 in 2012, up from 347,000 in 2002. Shanghai’s port accounted for 7.6 percent of the city’s GDP in 2012.

Ports are not operating efficiently in Nigeria where maritime activities account for a paltry 0.05 percent as against 3 percent in South Africa, 7 percent in Singapore, 10 percent in China and 13 percent in Holland, according to Organization for Economic Cooperation and Development (OECD).

OECD notes that while maritime activities contribute so much to economic output in these countries, Africa’s biggest economy loses about N20 billion daily to the perennial Apapa gridlock, threatening the country’s diversification efforts to boost non-oil revenue.

Before now, Nigeria and Brazil were at par in terms of port development. But now, unlike Nigeria, Brazil has recognised the need to improve its port infrastructure with US$3 billion allocated to port investments under the government’s Growth Acceleration Programme, and another US$14 billion earmarked for port upgrade, leading to wealth generation and job creation.

Emmanuel Ameke, a port operator, notes that unlike other port cities, the number of jobs that has been lost since Apapa became what it is over 10 years ago and how that impacts negatively on Lagos economy can only be left to the imagination.

Today, Apapa as a port city with N20 billion a day economy is as good as ‘dead’. Besides property value which, according to Uche Chiejina, an estate manager, has fallen by over 50 percent in both residential and commercial segments, many businesses in the port city have been forced to close down, throwing many of their staff back to the labour market.

Wharf Road and Commercial Road used to be the ‘Central Business Districts’ of this port city where high net-worth firms and banks had their offices and branches, respectively. A walk through these ‘districts’ shows that most of the banks have either relocated or have the number of their branches reduced.

On Wharf Road alone, more than 10 banks and two eateries have shut down their branches due to the pain and difficulty in accessing these branches, leading to loss of substantial customers in the area.

Unity Bank, for instance, which used to have four branches, now has two. Ecobank with eight branches has reduced to four and Access Bank with seven branches also cut down to four.
Tetrazini, an eatery, has shut down; Tantalizers with three outlets has reduced to one, and the only Mr Biggs eatery in Apapa on Creek Road is now out of the market. Film House Cinema inside Apapa Mall has also shut down.

Property value has come down to a point where a buyer can easily get 2,500 square metres of land for as ‘low’ as N150 million and according to Chiejina, house rents have also dropped significantly from N5 million per annum two years ago to between N3 million N2.5 million per annum. “And that is if you see tenants,” he said.

Rotimi Steven, broker at International Estate Partners, affirms, stressing that “a significant number of residential properties in Apapa are empty, with vacancy rate well above 50 percent”.
“Owners slash rent as much as 60 percent to lure buyers, yet interest is poor; where a property has a price tag of N3 million in Ikeja GRA, the same property struggles to sell for N1 million in Apapa,” he said.

The Apapa story simply validates a recent report by PricewaterhouseCoopers (PWC), a consulting and advisory firm, which estimates that Nigeria holds at least $300 billion or as much as $900 billion worth of dead capital in residential and agricultural real estate alone.
Though the report titled ‘Bringing Dead Capital to Life: What Nigeria Should be Doing’ refers to dead capital as an economic term relating to property that are informally held, and not legally recognised, this correlates with the waste of assets and loss of values in Apapa as a port city.

“In Apapa, you can’t compare the situation now and how it was before. No one has been to hell and heaven but from this experience, we can liken the situation to hell. Apapa used to be a place for good businesses,” noted Ruwase Babatunde, president, Lagos Chamber of Commerce and Industry (LCCI).

Najeeb Adeyemi, head of business development at Lagos-based real estate firm, Ewenla & Mustapha Limited, says Apapa as a port city is an eyesore.

“Over 80 percent of Nigeria’s trade goes across sea borders, implying that the fate of the country’s trade is determined by how effective our ports are,” Adeyemi said.

He reasoned that what is lost in Apapa is gained in locations such as Ikeja GRA, Victoria Island and Lekki, which are home-seekers and businesses’ next destination after exiting the port city, thereby mounting pressure on the inadequate amenities in those locations while property value there soars.

 

CHUKA UROKO & ISRAEL ODUBOLA