Naira appreciation boosts raw materials import, activity in seaports

After a very difficult 2016, operators at the country’s seaports are seeing their business pick up again, due to an increase in the volume of imported raw materials, spurred by appreciation of the naira.
Industry players have attributed a slow increase in import volumes and shipping traffic to the slight improvement in the stability of naira in the foreign exchange market since the Central Bank of Nigeria (CBN) started making marked efforts to improve dollar supply.
“The shippers who specialise in importation of industrial supplies are currently having foreign exchange allocation in piece meal from the CBN, to enable them bring in their raw materials,” said Jonathan Nicole, President, Shippers Association of Lagos State, in an interview with BusinessDay in Lagos.
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 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.”
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 of 2017, showing a significant increase of 57.3 percent from N1.454.0 trillion recorded at the end of the first quarter of 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.
Other categories of imports include base metals and articles of base metals; vehicles; aircraft and their spare parts; vessels; fuels and lubricants, including industrial supplies.
Simon Travers, managing director of Josepdam Port Services (JPS) Nigeria Limited, a concessionaire in charge of Terminal A of the Tin-Can Island port, confirmed to BusinessDay in Lagos that business activities in the port, judging from JPS terminal operations, have picked up, compared to the previous year.
Travers, whose terminal specialises in the handling of general, dry bulk and liquid bulk cargoes, said 1.9 million metric tons of cargo docked at the terminal in 2016 but based on current trends, they expect to handle over 2.2 million metric tons of cargo at the end of 2017.
“We had 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. We have made very tremendous improvement from what we had in 2016. Though, the throughput was down in 2016, but we have managed to encourage new customers to make use of our terminal,” he said.
But Tony Anakebe, managing director of Gold-Link Investment Limited, a Lagos-based clearing and forwarding company, said things could have been better if importers were getting the right amount of foreign exchange.
“The quantity of foreign exchange given to importers is still not sufficient enough to completely eliminate the scarcity problem. This is why it will take longer time for the impact of what CBN is doing today to be felt by importers,” he said.
Anakebe, who said that few importers are beginning to get busy, especially those in the manufacturing sector, said that there is need for the adoption of a more encompassing foreign exchange policy that would drive business activities in the economy and volume in the seaport.
He further expressed worry that the CBN paid more attention to BTA, medical tourism and school fees, which have no direct return on the economy, than making dollar available to the real sectors.

 

AMAKA ANAGOR-EWUZIE