BusinessDay
Nigeria's leading finance and market intelligence news report.

Negative economic implications of Apapa gridlock are too great to ignore

Constructing a rail line is a good start point

Challenges in Apapa and Tin Can ports have lingered for years now with severe implications on businesses, households and the Nigerian economy. Delay in addressing these issues will only worsen further the precarious state of the present economy with businesses and consumers bearing the ultimate brunt.

In ensuring recovery and sustained development in Nigeria post COVID-19, it is expedient that policy makers critically identify fundamental factors that will inhibit these objectives; else, Nigeria risks factors such as challenges in our ports weighing on the supposed benefits of critical reforms currently underway in other sectors on economic growth.

In a recent publication, BusinessDay identified a well-organised racket going on in Apapa and Tin Can ports which has perpetuated the gridlock going on in the premier port city. As a result, businesses, lives suffocate as corruption perpetuates Apapa gridlock. According to the report, to “fast-track” speedy call-up into the ports, truck drivers have to part away with N250,000 for a 20-foot truck and N350,000 for a 40-foot truck.

To put in context, the Lagos Chamber of Commerce and Industry (LCCI) states that 5,000 trucks seek access to Apapa and Tin Can ports daily, however, the ports can only accommodate 1,500 trucks. This means corrupt security agents and government officials could make at least N375 million on 20-foot trucks and N525 million on 40-foot trucks if 1,500 truck drivers decide to speed-up loading at the ports in one day.

These illegal monies are pocketed, hence, not recorded in the revenue books of the federal government. As a result, LCCI reported that Nigeria loses N600 billion in Custom revenue annually. Given the current revenue challenges and the need to diversify the revenue base of the federal government, losing so much in revenue annually to corrupt security and government officials isn’t the best option in a time like this.

More so, how does a country whose dollar reserve has been depleted given the COVID-19 induced slump in crude oil price get scarce foreign exchange when challenges in Apapa and Tin Can ports are frustrating exporters? The rackets going on in Lagos ports will only continue to increase the cost exporters incur and many would be forced to exit the market if they cannot keep up with these unnecessary and avoidable costs. Some exporters have their products spend weeks on Apapa Bridge before getting to the ports, risking products going bad before reaching destination countries.

Nigeria loses at least $10 billion in the non-oil export sector and N2.3 trillion in corporate earnings across various sectors due to the poor state of the Nigerian port. When exporters incur much cost in getting their products into Nigeria and off the ports, it reflects in increased prices on those goods, pressuring inflation, hence, the final consumer bears the brunt. It is worse-off in given shrinking wallets of consumers/households, unemployment rate on the rise and lower purchasing power.

Many see Apapa as an aberration and a contradiction. It is a metaphor for suffering, stress and pain. Apapa is an unsafe, loathsome destination and driving to the port city is a huge risk for which many – individuals, institutions and sundry businesses have chosen to avoid it as much as they can.

The congestion in Apapa and Tin Can ports is not a rocket science. Over the years, the challenges in these ports have defied all solutions. We suggest a different approach to permanently resolve these issues. One taskforce after another has tried to bring sanity on its roads and bridges, to no avail. Also, engineers have warned that it is not healthy and safe for trucks to be packed on bridges for days and weeks, explaining that such actions affect the stability of the bridges.

To fix this, we need critical reforms in that space. The FG must prioritise the construction of a rail line that would convey containers out of ports to the terminal. To stop the corrupt practises of security and government officials extorting truck drivers on a daily basis, the FG must reduce human interface in call-up by encouraging and establishing e-call-up systems. The economic cost of these activities is far too great to be ignored.

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