Seaports activity up on back of FX liquidity

After a very difficult 2016, operators in Nigeria’s seaports are seeing an uptick in business, due to an increase in the volume of imported raw materials, spurred by the appreciation in the value of the naira and availability of foreign exchange.
Data from Josepdam Port Services (JPS) Nigeria Limited, a concessionaire in charge of Terminal A of the Tin-Can Island port in Lagos, show that it expects to handle over 2.2 million metric tons of cargo at the end of 2017, a 15.7 percent increase, compared with the 1.9 million metric tons of cargo that docked at the terminal in 2016 based on current trends.
“We had an about 23 percent drop in cargo throughput in 2016, but in the first half of 2017 we have actually exceeded the throughput figure for the comparable period of 2015 and 2016,” Simon Travers, managing director of Josepdam Port Services (JPS) Nigeria Limited, whose terminal specialises in the handling of general, dry bulk and liquid bulk cargoes, told BusinessDay.
The Nigerian Ports Authority (NPA) made a revenue projection of N16 billion in the first quarter of 2017 but exceeded it by N102 billion, making N118 billion within the period, according to Hadiza Bala Usman, the managing director.
Similarly, the Nigeria Customs Service (NCS) recorded a revenue figure of N486 billion from January to June, as against the N385 billion it realised in the same period in 2016, said Joseph Attah, Public Relations Officer of NCS in Abuja recently.
Apapa Customs made N165.74 billion in the first half of 2017against the N120.97 billion collected the same period in the previous year. This shows that the revenue profile increased by N44.77 billion, representing 27.01 percent increase over the previous year. Tin Can Island Command, Lagos, generated N130 billion between January and June, 2017.

Industry players ascribe the uptick in import volumes and shipping traffic to the slight improvement in the stability of the naira in the foreign exchange market since the Central Bank of Nigeria (CBN) started making clear efforts to improve dollar supply.
Frank Jacobs, president, Manufacturers Association of Nigeria (MAN), confirmed to BusinessDay that factories are now getting an increased flow of raw materials, on the back of naira appreciation and relatively improved dollar supply.
Jacobs, however, said, “There is a need to fix the congested Apapa roads, which are routes through which raw materials get to the factories.”
The Purchasing Managers Index (PMI) for manufacturing and non-manufacturing activities, stood at 52.9 and 54.2 index points in May and June 2017, respectively, from 52.7 and 52.5 index points in May 2016, indicating an expansion for the third consecutive month, data from the CBN show.
Data from the National Bureau of Statistics (NBS) show that Nigeria’s import trade stood at N2.286.5 trillion at the end of quarter one (Q1) 2017, an increase of 57.3 percent from N1.454.0 trillion recorded at the end of Q1 2016.
According to the report, Nigeria’s import trade was dominated by the imports of mineral products, which accounted for 33.6 percent of the total value of import; boilers; machinery and appliances; spare parts, chemicals and products for allied industries.
“I think dollar rate has improved for some manufacturers, but the challenge we still have is that we have to bid four to five times to get about $20,000,” said Michael Ola Adebayo, chairman of MAN Gas Users Group.
“Another downside is that the money we used to import four containers pre-2016 is now what we use to import one or two,” Adebayo, who is also a director at Haffar Industrial Company Limited, producer of sewing and embroidery thread, said.
Manufacturers were hard hit by naira devaluation and severe dollar shortages in 2016, as factories struggled to import inputs, packaging materials and machinery within the year.
According to a report by NOI Polls Limited and the Centre for the Study of Economies of Africa, 50 manufacturing companies and 222 SMEs shut down within the year, with about 180,000 jobs lost.
Jonathan Nicole, president, Shippers Association of Lagos State, said shippers who specialise in importation of industrial supplies were currently having foreign exchange allocation in piecemeal from the CBN, to enable them bring in their raw materials.
Nicole forecasts a significant rise in the volume of cargo from September to December 2017, if the CBN sustains its intervention in the foreign exchange market, saying, “It would boost importers’ confidence in the nation’s economy and many would be encouraged to do more business.”
Nicole further said the availability of foreign exchange and stability of the naira, now allow importers to bid for foreign exchange for goods that require exchange transfers through the CBN, and for imports that require payment to suppliers after 90 days of receipt of goods.
“It has not been like this in the past, but we expect this new move to have sufficient impact on volume by last the quarter of 2017,” he said.

 

ODINAKA ANUDU & AMAKA ANAGOR-EWUZIE