If the wishes of investors trying to build new deep seaports come true, Nigeria risk having too many deep sea ports that will not be able to compete for amount of potential cargoes coming into the country.
Already, five State Governments are perfecting plans to invest close to $10 billion in the development of five new deep seaports in their states in partnership with private investors. But operators in the marine sector have expressed fear that the nation’s economy lacks the capacity to generate the import and export cargoes, to drive businesses into those ports.
Currently, there is a gross under-utilisation of the existing ports outside Lagos including Delta, Rivers, Onne and Calabar ports that handle about 25 percent of the annual cargo throughput compared to ports in Lagos that handle greater chunk of the import and export cargoes, estimated at about 75 percent.
BusinessDay understands that as an equity investor, the Lagos State Government is currently pushing with strong determination, for the successful completion of $1.53 billion Lekki Deep Seaport, which is the only deep port project that has made significant progress and the Badagry mega-port.
Also, the Ondo and Ogun State Governments have also been championing the course of the joint development of the Olokola deep seaport while Akwa Ibom State Government, has also joined the race with the proposed Ibaka or Ibom deep seaport. The Cross River State Government has also had in its 2018 budget a N500 billion provision for the Calabar deep seaport, even though the existing Calabar port, idles away, due to lack of cargo to sustain business activities at the port.
Five new seaports in Nigeria in addition to the existing Rivers Port, Calabar Port, Onne Port, Delta Port, Lagos Port Complex Apapa and Tin-Can Island Port is overkill, operators in the marine sector say. This is because there is simply no market to sustain such projects and there would not be sufficient cargo for them in another half a century,” Bolaji Akinola, chief executive officer of Ships and Ports Communication Company, said recently while analysing the commercial viability of the proposed deep seaport projects in Nigeria.
Akinola believes that rather than establish these mega “white elephant projects,” with tax payers’ money across these five states, that the governments of Akwa Ibom and Cross Rivers States for instance, should put efforts together with the Federal Government to address the shortcomings of the Calabar Port, which include shallow draft, in order to attract business and to enable the port compete with other ports in the sub-region.
He pointed out that it lacks economic sense for a state government to spend close to $2 billion dollars in building breakwaters, quay wall, quay apron, terminals, acquiring cargo handling equipment, information technology for a new port that might not yield good returns or add value to the economy of the state.
Citing example with Batangas International Seaport in Philippines, which was built 12 years back to take congestion off Port of Manilla at a time the port was heavily congested, Akinola said that in the first two years of operation of the new port that no ship called at Batanga and till date, the port handles less than 10 percent of Manilla’s cargo despite several government incentives such as reduction in wharfage, berthing fees and other vessel-related charges to attract businesses to the port.”
However, sources in the Akwa Ibom Government say that the Ibom deep sea port is situated in a location that has 17.3 metres natural drought and will therefore not suffer from silting compared to other deep seaports being proposed. They its natural location also makes a good place for trans-shipment operations in the Gulf of Guinea.
But Emma Nwabunwanne, a Lagos based importer, believe that that the existing ports in Lagos will run out of capacity in the next five years. He agrees that Nigeria would require a new deep port but not five, to complement the existing ones as container throughput at Lagos ports alone is expected to grow to 2 million twenty-foot equivalent units (TEUs) by 2020, which would be an over stretch for the existing ports in Lagos.
Statistics shows that the two major seaports in Lagos are the most viable compared to others as both ports, have without strong competition, handled larger portion of the total volume of cargo that come to Nigerian ports annually. The four other ports have been suffering from shortage of business, making them less competitive.
Recent figures released by the National Bureau of Statistics (NBS), shows that in 2017, a total of 43,019,889 metric tons of cargoes were handled in the six Nigerian ports. Out of the total number, Apapa handled 17,523,313; Tin-Can handled 14,623,239; Rivers handled 2,332,967; Onne handled 1,947,347; Calabar handled 2,078,542 while Delta handled 4,514,481.
Also in 2016, the cargo throughput handled in the six ports totaled 43,381,114 metric tons. A breakdown of this showed that Apapa recorded 17,714,959; Tin-Can recorded 14,384,944; Rivers recorded 2,559,973; Onne recorded 1,665,731; Calabar recorded 2,273,939 while the remaining 4,741,568 metric tons were recorded in Delta Port.
“There is need for government to pay more attention to reviving existing ports in the Eastern part by making them competitive rather than building new ones. Those building new ports need to consider how to move patronage from the existing port facilities to the new port especially moving the operations of freight forwarders, importers and exporters to the new ports,” Jonathan Nicole, president, Shippers Association of Lagos State, said in an interview with BusinessDay.
According to him, government support is required to make new ports work but it is also important to have a strong gateway cargo to sustain the new ports rather than depending on trans-shipment cargo for other countries that might not come.
He further noted that Nigerian ports are losing business to other West African ports due to adverse government policies and cargo clearing bottlenecks, which may pose serious challenge to generating cargo for the new ports.
AMAKA ANAGOR-EWUZIE
