Imports decline sharply as ship traffic drops 63%

The volume of goods imported into Nigeria is witnessing a sharp decline, causing a drop in cargo ship traffic in the nation’s seaports, as the devaluation of the local currency begins to exert pressure on the sector.

Kayode Daniels, commercial officer, Lilypond Container Terminal Ijora, Lagos, said the dip in business activities at the nation’s sea ports was due to a drop in the volume of cargo imported into the country, resulting from the devaluation of the naira, the fall in the price of crude oil and uncertainty in the political arena.

“The market is slow. We have done extensive market research and found out that the market is not moving. Importers are complaining that their warehouses are still stocked with goods, because people are not spending, and when people don’t spend, it will be difficult to bring in imports,” he said.

Also,a recent shipping traffic report from the Nigerian Port Authority, shows that the number of oceangoing vessels bringing both containerised and break-bulk goods into the country’s seaports has dropped by 63 percent in the last three months.

Read also: Sell-offs, investor apathy bedevil stock market

Nigeria, which is Africa’s biggest economy by GDP, depends largely on crude oil export for government revenue. The tumbling of oil prices to about 60 percent in the international market, instigated the devaluation of its currency, creating a ripple effect that has impacted adversely on the volume of imported commodities.

According to some economy watchers, the drop in the number of ships visiting Nigeria’s  seaports implies that there is importation apathy in the country, as fewer Nigerian importers are investing in international trade.

Statistics published in the Nigerian Ports Authority (NPA) Shipping Daily Position, reveal that the Apapa Port, which handles about 60 percent of the nation’s total cargo throughput, started witnessing a decline in the volume of ship traffic in the month of December 2014.

A breakdown of this shows that about 71 ships visited Apapa port in December 2014 as against 130 ships recorded in December 2013, this shows a drop of about 45. 39 percent.

In January 2015, the number of oceangoing vessels that brought goods into Apapa port dropped further by 43.48 percent from 92 ships that visited the port in January 2014 to 52 ships.

The ship traffic at the port under review further recorded a continued decline in February to about 40 from 108 ships recorded the same period of 2013, representing a drop of 62.96 percent.

“Devaluation of the nation’s currency is expected to affect imports, because importation is an international business, which means that importers require more naira to buy the dollar,” said Bismarck Rewane, managing director of Financial Derivatives Company Limited, speaking at the monthly economic review of the Lagos Business School.

BusinessDay further discovered that the revenue generated by the Nigeria Customs Service (NCS) into the Federation Account is also on the decline, owing to the drop in the volume and number  of imports and importers that pay duty before taking delivery.

For instance, the Lilypond Command of Customs, which has a monthly revenue target of N1.9billion, collected only N852 million in January and has so far collected N198 million in February.

Mustapha Atiku, Area Comptroller of the command, who expressed doubt over the command’s ability to generate, in February, the amount collected in January, affirmed that his terminal had been hard hit ,as only very few containers were now being stemmed at the facility.

“Previously, port business used to boom in the first quarter of the year, due to spin-off of imports from the festive period (November-December) but the decline in volume that started in December 2014, never allowed this to happen,” said Tony Anakebe, a maritime analyst.

Anakebe explained that the drop in volume was as a result of the economic uncertainty and apprehension created by the coming 2015 general elections, which was recently postponed by the Independent National Electoral Commission.

Amaka Anagor