Some state governments and private sector investors are pumping over $10 billion into the construction of new deep and river seaports.
However, there are concerns from the declining ship traffic and import volume into Nigeria.
The shrinking volume of port business – caused by weaker naira, FX instability, and volatile exchange rate for clearing – is threatening the viability of about seven new port projects currently under different stages of development.
Despite economic headwinds being responsible for a lull in business activities at the ports, state governments and private investors are still betting on the new ports, putting billions of dollars into building them.
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Some of those new port projects in Nigeria are: the 300,000 twenty-foot equivalent unit Benin River Port promoted by the Edo State government; the $4.2 billion Ibom Deep Seaport and Free Trade Zone; and the $462 million Bonny Deep Seaport with 500,000 TEUs capacity.
The Ondo State is also backing the development of the $1.5 billion Ondo Port and Industrial City, while the $2.59 billion Badagry Deep Seaport and the $974 million Snake Island Port are expected in Lagos. This is in addition to the proposed Escravos Seaport Industrial Complex in Delta State.
“With the dip in the economic activities, Nigeria cannot generate import and export cargo to drive businesses in those new port projects. The existing ports, especially those outside Lagos, are grossly underused based on the annual cargo volume,” said Tony Anakebe, a maritime expert.
He said existing seaports such as Rivers, Warri and Calabar ports have been less competitive due to low patronage by shippers.
Anakebe said the government needs to pay more attention to reviving existing ports in the Eastern part of the country by making them competitive.
“We need to consider how to move patronage and operations from the existing port facilities to the new ports,” Anakebe noted.
BusinessDay findings show that a total of 1,566,162 TEUs of containers were brought into the Nigerian seaports in 2023, representing a 6.8 percent decline in volume compared to the 1.68 million recorded in 2022.
Ship traffic into Nigerian ports also witnessed a decline of 4.5 percent to 3,778 vessels in the period under review compared to 3,957 vessels that visited Nigerian ports in 2022.
Also, the number of ships that called at the nation’s ports in the first half (H1) of the year declined by 8.7 percent to 251 from 275 recorded against the same period in 2023, according to data obtained by Vanguard from the Nigerian Port Consultative Council (NPCC).
The volume of vehicles imported into the country declined by 61 percent to 10,991 from 28,024 units in 2023.
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Confirming the declining import volume, Adewale Adeniyi, comptroller-general of the Nigeria Customs Service (NCS), said the volume of Single Goods Declarations (SGDs) processed by the NCS in the H1 of 2024 dropped 39 percent to 620,467 against 1,016,508.20 SGDs processed the same period in 2023.
A single goods declaration is an official document that gives details of goods that are either imported or exported. It indicates the wish of the exporters to place goods under a given Customs procedure.
Meanwhile, Bolaji Akinola, chief executive officer of Ships and Ports Communication Company, said that building 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, will be an overkill.
He said rather than pour billions of dollars into mega ‘white elephant projects with taxpayers’ money, state governments should put efforts together with the Federal Government to address the shortcomings of the Calabar Port, which includes shallow draft, to attract business and enable it to compete with other ports.
He said it’s not economical for a state government to spend close to $2 billion in building breakwaters, quay walls, quay apron, terminals, acquiring cargo handling equipment, and other port equipment in a new port that might not add value to the state’s economy.
Jonathan Nicole, former president of the Shippers Association of Lagos State told BusinessDay that, “With the rising threat of domestic insecurities and the numerous government interferences in business, some shipping lines are gradually exiting Nigeria to other African ports. The Port of Cotonou and Togo are serving as transit to the landlocked countries like Niger. Ghana is one of the preferred and safe destinations.”
According to him, Senegal and Ivory Coast are receiving modern infrastructural developments due to friendly government regulatory regimes.
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“This means that some of our ports will be abandoned as cargo will be discharged at ports with reasonable cost offerings. Our ports will be monuments without enough cargo other than seasonal export cargo,” he said.
Nicole further said that the exit of major manufacturers from Nigeria to other African countries such as Togo, Ghana, and Senegal is also compounding the problem.
He added that unfriendly regulatory regimes are depleting the trade volume by the informal sector and may result in newly developed seaports being less busy or remaining unused.
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