LCCI recommends 5% annual port tariff to reduce inflationary pressures

The Lagos Chamber of Commerce and Industry (LCCI) has recommended a five percent annual port tariff for three years to reduce the burden on businesses and reduce the pass-through effect on inflationary pressures to Nigerians.

The Lagos chamber stated this while acknowledging the Nigerian Ports Authority’s (NPA) recent announcement of a 15 percent upward review in port tariffs, marking the first adjustment since 1993.

LCCI said that the recommended 5 percent port tariff will help businesses plan for the additional charges in the coming years.

Recall that the NPA disclosed a 15 percent increment in port tariffs and cited the necessity of aligning Nigeria’s port infrastructure and equipment with global standards to enhance competitiveness as the primary reason for this increase.

“While the proposed tariff increase by the Nigerian Ports Authority (NPA) aims to modernise port facilities, it carries significant economic implications that must be addressed,” Chinyere Almona, director general of LCCI, said in a statement

She that the nation needs to consider a spread of any additional but necessary cost burden on businesses at this time.

Read also: How to apply for NELFUND 2024/2025 student loan

Almona stated that the chamber’s major concern is the increased cost of doing business, as higher port charges will raise operational expenses for companies relying on imported raw materials and machinery.

“This, in turn, may lead to increased production costs, which could be passed on to consumers, driving inflation upward.

“While the NPA argues that Nigeria’s port tariffs remain among the lowest in the region, port competitiveness depends on more than just tariffs,” she said.

She noted that factors such as operational efficiency, number of procedures, and unforeseen fees play a crucial role in determining the overall cost of using Nigerian ports.

The chamber also recommended that the NPA should actively engage stakeholders, including the business community, to discuss potential impacts and explore solutions to mitigate negative effects.

“More so, instead of focusing solely on tariffs, efforts should be made to enhance port efficiency, reduce avoidable process delays, and eliminate unforeseen costs that burden businesses.

“The NPA should benchmark its operations against leading ports globally and adopt best practices that have been effective in reducing costs and improving service delivery,” the chamber said

According to the chamber, the deployment of technology to automate the country’s port operations and transactions will reduce time loss and curb undesirable tendencies.

Almona added that while the LCCI understands the NPA’s reason for the tariff increase, it is imperative to adopt a balanced approach that considers the potential economic impact on businesses and consumers.

“By focusing on comprehensive strategies to enhance port efficiency and competitiveness, Nigeria can achieve its goal of becoming a preferred destination for maritime trade in the West African sub-region,” she said.