Inefficiencies at Nigerian seaports and multiple regulatory agencies are hindering Nigeria’s trade sector and worsening food insecurity, experts have said.
According to the World Trade Organization (WTO)’s Trade Policy Review, these inefficiencies, coupled with longstanding import prohibitions on agricultural products and high tariffs, could inflate food prices and discourage private sector investment in agriculture.
Nigeria’s port operations have long been plagued by congestion, erratic customs regulations, and delays in clearing cargo. The International Trade Administration describes operations at Nigerian ports as among the most expensive globally, citing corruption, high berthing costs, and a lack of space that forces ships to queue for weeks.
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The Lagos Chamber of Commerce and Industry (LCCI) has previously estimated that inefficiencies at the ports cost the business community over N2.5 trillion annually, with significant implications for tax revenue, job creation, and economic growth.
Economic Implications
Non-oil exports reached $2.7 billion in the first half of 2024, marking a 6.26 percent increase from the same period in 2023. The National Bureau of Statistics (NBS) said that exports accounted for 60.9 percent of Nigeria’s total merchandise trade in the second quarter (Q2) of 2024, with crude oil contributing 74.98 percent and non-oil exports comprising 25.02 percent.
Experts warn that the current bottlenecks at Nigerian ports could undermine the country’s potential to maximise benefits from the African Continental Free Trade Area (AfCFTA) and other trade agreements.
They called on the government to streamline export and import processes to foster a more efficient trade environment.
Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise (CPPE), said that the multiplicity of regulatory agencies increases costs and delays at the ports, negatively impacting the competitiveness of Nigerian exports, especially perishable agricultural products.
“Many of our exports are time-sensitive and perish quickly. The delays caused by multiple inspections and excessive documentation discourage participation in the export business and reduce our foreign exchange earnings from non-oil sectors,” he said.
“But if we look at the hazards and all these frustrations, we’ll not be able to attract more investors into the export business. So, the fewer the number of these agencies, the more efficient the whole process will be,” Yusuf explained.
Odewumi Samuel, former dean of the Faculty of Transportation and Logistics at Lagos State University (LASU), said the corruption and obstructionist practices within Nigeria’s trade and logistics sector hinder the trade sector.
“Many of these agencies are obstructionist in nature. They are not only slowing down trade but also harming investors, importers, and businesses. This issue is not new. Nigeria has tried to address it several times, but these agencies somehow find their way back,” he said.
Samuel, a professor, highlighted the critical role of automation in streamlining processes and eliminating human interference, which is often a breeding ground for corruption.
However, he alleged that some officials deliberately sabotage automated systems to maintain their relevance and personal financial benefits.
“You see, when we import machines to automate processes, there are instances where officials intentionally disable them. This ensures they remain in control, demanding illegal payments that increase the cost of goods and slow down logistics,” he explained.
Read also: EU, US urges FG to implement new policies to combat food insecurity amid inflation
Such practices, he argued, directly conflict with AfCFTA’s objective of minimising obstructions in import and export activities.
He emphasised that inefficiencies in Nigeria’s trade system result in significant delays, with clearance processes that should take no more than 48 hours often extending to seven or eight days. These delays, coupled with illegal fees demanded by corrupt officials, increase the cost of goods and create a ‘logistics nightmare’ for traders.
“The metrics for ease of doing business and trade facilitation are clear, but selfish interests continue to derail progress,” he said.
To address these issues, Samuel urged the government to enforce strict measures to ensure that automated systems remain operational and to hold agencies accountable for any sabotage.
“When the government is ready to adopt best practices and enforce directives, Nigeria will undoubtedly be better for it,” he stated.
Samuel Nzekwe, former president of the Association of National Accountants of Nigeria (ANAN), echoed these concerns, noting that overlapping roles of agencies such as the National Agency for Food and Drug Administration and Control (NAFDAC), Standard Organization of Nigeria (SON), and others create confusion and inflate costs.
“Streamlining the agencies and automating processes will save time, reduce corruption, and improve Nigeria’s trade competitiveness,” he said.
“So you see a lot of waste of time, waste of energy, waste of money. Nigeria needs to streamline all these processes,” he further said.
According to him, the high cost of clearing goods from the ports contributes to the rising inflation in the country.
To address these challenges, the Nigerian Ports Authority (NPA) approved the establishment of 10 Export Processing Terminals (EPTs) across the country, with five already operational.
Read also: Why food insecurity persists, says women farmers
These terminals serve as pre-gates where export goods are inspected, certified, and containerised before being transported to ports. This eliminates the need for additional inspections at the ports and boosts efficiency.
In addition, the Nigeria Export Promotion Council (NEPC) also approved 13 export warehouses to support the EPTs. Goods originating from these warehouses are granted streamlined access to the terminals, ensuring compliance and reducing the likelihood of backstage dealings.
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