Declining import volume in Nigerian seaports signals slow economic growth

Slow economic growth in Nigeria has started taking its toll on the nation’s seaports as the volume of imported commodities and business activities has been on the decline from the second quarter of the year till date.

The drop in import volume started with the political and economic uncertainties created by the national election that took place earlier in the year as well as the emergence of new government. This also resulted to the declined in the number of ocean-going vessels calling Nigerian seaports as very busy terminals that usually receive an average of one vessel per day, now receives one vessel in four days.

Confirming this, the National Bureau of Statistics (NBS) in its second quarter report states that the total value of Nigeria’s merchandise trade during Q2, 2015, stood at ₦4.372 trillion, representing (₦2.287trn) less or 34.3 percent drop in comparison with the corresponding quarter of 2014.

The NBS report further states that the value of Nigeria’s imports stood at ₦1.493 trillion during the quarter under review, showing a decrease of 24.5 percent (N484trn) when compared with the volume of import trade with that of the corresponding quarter of 2014.

“Things are very down this year and our terminal is already 20 percent down from capacity. There are a number of shipping lines that have withdrawn their alliance and left Nigeria for the time being,” said John Jerkins, managing director, Ports and Cargo Handling Services Limited (PCHSL), in an interview with BusinessDay.

January of 2015, according to him, was good because there were spin over from last year’s imports after which, the terminals started recording slowdown in importation, which initially could be attributed to the election and its postponement continued to drag the slowdown.

The delay in the appointment of ministers, he stated, also allowed the uncertainty in the marketplace to continue, making 2015 a year of uncertainty, but we believe that things will bounce back by the second quarter of next year.

Statistics show that the drop in the volume of business is not peculiar to Nigeria, as global shipping liners have started recording poor business volume due to what analysts described as global recession, which Nigeria is the worst hit.

Nils Andersen, Maersk Group’s CEO, said recently that the container shipping market had deteriorated beyond the Group’s expectations, especially in the later part of quarter three and the Group did not expect market recovery in 2015.

According to him, Maersk Line has over the years taken steps to ensure a cost effective and resilient operation, but the current deterioration in the container shipping market is impacting on their business, which has led the Group into adjusting its 2015 result expectation.

Tony Anakebe, a maritime analyst, told our correspondent that there was a total slow moment in the port owing to the fact that many importers could not import due to the Central Bank of Nigeria (CBN) foreign exchange restriction policy, which had arrested the purchasing powers of the importers.

“The economic situation in the country has drastically reduced the quantity of containers and goods coming into the port. Business has been difficult in the year because the year started with election, which brought about mixed feelings among investors as regards to the economic and political stability of the country,” said Anakebe.

He noted that many investors withdrew from investing in Nigerian business between the period of election and after the emergence of the new government without clear-cut economic policy in place.

“The few people doing business now can be described as risk takers that is why there are few persons bringing in cargoes into the country, such that sometimes, shipping lines have to align with each another to make up for a trip,” he said.