Business activities at the nation’s seaports have slowed down since the first quarter of the year as importers are waiting for the handover to the new government before making major business decisions.
The controversial naira redesign policy of the Central Bank of Nigeria (CBN), the general elections, economic slowdown and political uncertainty were cited as major reasons for the lull in the port business.
To port users, slow activity is not peculiar to the ports as many businesses are currently trading with caution to avoid major losses should there be changes in fiscal and other economic policies.
Statistics from the Nigeria Customs Service show that the volume of imported cars declined in the first quarter of the year to a total of 51, 782 units of vehicles from 97,132 units of vehicles that were imported same period in 2022.
According to the shipping position, a publication of the Nigerian Ports Authority (NPA), only about 21 ships were scheduled to discharge consignments including containerised goods, bulk cargo such as wheat, frozen fish, oil, sugar, and gas, among other industrial raw materials in the ports in Lagos between April 27 and May 4, 2023.
This is low, compared to when over 30 vessels visited the port within the same timeline.
“The first quarter of the year was very slow; there was a low volume of goods that were coming into the port. This was caused by the elections, the naira policy and the uncertainty in the economy. By my estimation, the volume of imports has dropped by 25 percent,” said Tony Anakebe, a Lagos-based maritime expert.
He said there is a lull in business activities at the ports currently because the economic situation in the country is also affecting port business.
According to him, the situation has not improved even in the second quarter of the year because many importers are in a ‘sit and wait mood’, waiting for the inauguration of the new government to be able to make business decisions.
He said there is every probability that things would start to turn around after the inauguration of the new government because that would come with new fiscal policies that would determine the direction of the economy.
Anakebe said that the upbeat in port business would not be immediate because it would take time for the new government to appoint Ministers and for them to start releasing policies.
“Importers, who do not want to get their fingers burnt by investing in a particular import, stay put from doing further business until the Federal Government decision is known. This is part of the reasons business is still slow,” Anakebe added.
Felix Odogwo, an Italian-based Nigerian importer, told our correspondent that he has not been able to bring a single container to Nigeria this year due to the political and economic uncertainty in the country.
He said: “By this time of the year, I ought to have brought in over five containers when business is moving on well. This year started with elections and the naira crunch caused by the controversial Central Bank of Nigeria’s new naira policy that intended to phase out the old N200, N500 and N1,000. This policy coupled with the uncertainty surrounding the general elections made it almost impossible for many of my Nigerian-based customers to raise funds for buying goods.
“They are Nigerians who are into the business of buying and selling foreign products but they cannot travel to Europe to buy goods rather they give importers like us money to buy items for them. I also use that opportunity to buy items that I can sell on my return to Nigeria to take delivery of the consignment.”
Odogwo said there were even items that he had been able to buy since October 2022, which he will be bringing into the country after the inauguration of the new government.
He said that business is usually slow in an election year, but this year is exceptionally slow as a result of the unfavourable economic situation in Nigeria and the world generally.
On her part, Sandra Omo, a Customs-licensed agent, told BusinessDay that she has not been to the port for weeks now due to a lack of clearing jobs to do.
According to her, clearing agents are seriously affected by the low business activities at the port currently.
“The number of ships bringing vehicles and containers to the port has reduced drastically in recent times due to the economic situation, port business is also being affected by the high tariff being paid at the port on imported containerised consignments and vehicles,” she said.
Citing an example, Omo said one of her importers was recently given an import duty of about N6.5 million on a 40-foot container of supermarket items.
She said the cost implication was very heavy on the importer because the import duty is just one leg of the payments he or she would be required to make in addition to shipping and terminal charges.
“I am saying that the Customs duties, levy and demurrage paid on imported items are making the business unattractive to many because the cost in the end, eats deep into the bottom line, and adds to the already high inflation. This is why market prices of items are also high,” she said.