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Competitive advantage: Repositioning Nigerian ports

Seaports are very important structures in the development of the economy of any nation because they are gateways for imports and exports.

The economic functions of seaports are to provide benefits to the original producers of the exports and the ultimate consumers of the imports which pass through the ports with globalisation, development of logistics and supply chains, the seaports role has been altered to integrate manufacturing and distribution systems into it.

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Although, ports around the world have been strategizing on ways of improving efficiency since the 80’s, institutional reform of seaports such as restructuring of port operations and management has been the major focus to ensure that stakeholders benefit from competition and efficiency, thereby ensuring the economic benefits flow to consumers, for example privatisation has been an approach adopted by governments in many countries in past decades to improve the operational efficiency of ports through competition and strategic management.

Nigerian ports have experienced concerted efforts by past governments and different stakeholders such as, federal government collaboration with private sector and development partners to reposition the nations ports for greater efficiency and global best practices over the last decade, for example over the last two years, the present administration has focused on repositioning the ports through the National Action Plan on cross border trading coordinated by Presidential Ease of Doing Business Council (PEBEC) and the series of Presidential Executive Orders targeted at ports efficiency.

Although, different governments in the past also made some efforts through different interventions such as the 2007 ports reforms led by Ngozi Okonjo-Iweala, which also attempted to resolve the challenges of infrastructure shortcomings, policy and regulatory inconsistencies, overlapping functions and duplication of roles among the MDAs, high incidence of corruption among port users, operators and government officials affecting the ease of doing business at the ports. With all this past and ongoing reform efforts notwithstanding, the Nigerian ports continue to lag behind its pairs in West Africa and other parts of the world. Trading across Border, a world bank indicator which measures the efficiency of ports, ranked Nigeria at 183 out of 185 countries in 2017.

Delay of import and export processes, unofficial charges, human interface, technical breakdown and security concerns remain predominant in our ports and classified among the worst ports in the world. This is the major reason why Port stakeholders such as importers and exporters prefer neighbouring Ports such as Cotonou, Cameroun, Togo and Ghana.

Nigeria recently ordered closure of its borders with Benin, as well as those with all other countries a recent move by this present administration to tackle smuggling and associated corruption, which can also spur growth in the domestic agricultural industry and other sector to encourage production and consumption of local products and to help boosts the economy.
Although, security is a very important to our nation at this time, we must balance it with the level of legitimate commerce and travel that will help create a higher degree of economic prosperity for our nation.

The Gross Domestic Product (GDP) of Nigeria was $397.30 billion in 2018 making it the biggest economy in Africa, corroborating the need for government to take urgent steps to reposition our Seaports through implementing and adopting modern strategies of boosting and achieving greater output and efficiency in the management of our seaports, for example Denmark’s strategic investments in offshore energy activities such as the investment in Ocean Wind farm was a laudable investment project that the government explored to generate 407 megawatts (MW) in its energy sector and was enough to cover the yearly electricity consumption of around 425,000 Danish homes.

Also, the need for Nigerian Ports Authority to look outside the box will go a long way if it wants to stay competitive globally, because the Port has all the potentials to be the busiest and most successful in Africa. There is need for Nigerian Ports Authority to have investments within and outside the Ports just like the example of the Shanghai International Port Group (SIPG) and the PSA Corporation at the Ports of Shanghai and Singapore respectively which have investments and businesses outside the Ports domestically and internationally.

Investments in other Ports will go a long way in the transfer of knowledge and growth if it invests in equity in other very efficient Ports globally, for example the 2009 deal of China’s COSCO Pacific signing a 35 year lease contract worth $4.2 billion to take over the management of the port of Piraeus in Greece and the ICTSI bid for Portek in June 2011 was a very strategic initiative and re-positioning strategy.

Reviewing the various concessions and leases entered into by Nigerian Port Authority with the various organised private sector will also ensure maximizing of the full benefits initiated by the government. This should also be critically analysed and reviewed, especially the obligations and responsibilities expected from the contracting parties with a view of identifying breaches and ways to remedy same.

Also, to be done is instituting recent and updated automated monitoring processes that will further enhance transparency, efficiency and operational excellence that can be translated to improved revenue generation to our economy and our nations ports at large.

 

FESTUS OKOTIE

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