High exchange rate of the naira to dollar, unending gridlock on access roads to seaports in Lagos – Apapa and Tin-Can – as well as poor evacuation of cargoes have been identified as the major challenges that hindered the growth of Nigerian port business in 2020.
In addition, the problem of congestion within the port terminal, which limited the capacity of Nigerian ports to discharge ships with laden containers, outbreak of deadly coronavirus (COVID-19) infection coupled with the lockdown and the nationwide #EndSAR protest against police brutality that made cargo evacuation near impossible, also impeded growth in the port industry.
Industry stakeholders, who took turns to appraise business activities in 2020, said the volume of importation as well as revenue generated into Federal Government purse dropped slightly due to challenging business climate in the country during the period under review.
Tony Anakebe, managing director of Gold-Link Investment Limited, said there was low importation into the country as importers could not have access to sufficient foreign exchange needed to do their businesses.
According to Anakebe, the exchange rate of dollar to naira, which skyrocketed in the cause of the year, affected several industries and also limited the purchasing power of both importers and manufactures that needed huge amount of naira to exchange for dollars.
“Several industries that depend on seaport for the importation of chemicals and other critical inputs needed for their production did not find it easy to bring in the quantity of raw materials required due to low purchasing power,” said Anakebe in an interview with BusinessDay.
Apart from foreign exchange, he said, the poor condition of access roads to the ports also helped to impede the growth of business activities at the port.
“For instance, it has not been easy for trucks to go in and out of the Tin-Can Island Port in the past four months such that the haulage cost got to its utmost peak in 2020. Importers and their agents loaded containers from Tin-Can to warehouses in Lagos as much as N1.5 million and more. All these things affected the business environment in 2020,” Anakebe explained.
On his part, Jonathan Nicol, president, Shippers Association of Lagos State, who pointed out that the bad state of the access roads to the ports was a major issue, said not much happened in the port industry in 2020 largely due to the bad roads and traffic that made it difficult for evacuation of goods not to happen as expected.
To Nicol, imports, especially containers, were trapped such that exports were equally trapped on the roads as well as inside the port terminals.
He said at a point, over 40 vessels awaiting berth were stuck at the Nigerian anchorage because of lack of space in the terminals to discharge goods.
“There was absolute neglect of major infrastructures in the Port and that was why the roads became bad. Export trade that should have supported the economy became threatened due to the road situation. Goods got trapped unexpectedly for many months due to failure to evacuate them from the port,” Nicol said in a phone interview.
Emma Nwabunwanne, a Lagos-based importer, told our correspondent that most of the importers could not have access to dollars at the official exchange rate and through the official window.
“Many importers had to rely on black market to access dollars needed for importation, and this affected the cost and market prices of goods they brought into the country. It also contributed to the high inflation rate recorded in the country in the cause of the year because importers must recover the capital invested in bringing the goods and also make profit,” he said.
Meanwhile, Anakebe also said port business was also seriously affected this year by the outbreak of Covid-19 and its resultant lockdown, after which the nationwide #EndSAR protest that took place in October, which later became violent, helped to discouraged several importers from investing in new businesses.
“Nigeria’s economy that slipped into recession in the last quarter of the year contributed its quota to the challenges experienced in the port industry this year, because Nigerian ports supposed to have more cargoes come in than we are recording today,” he said.
