DEVELOPMENT - 29 JUN 2018

The problem with Nigeria's ports

The problem with Nigeria's ports
Apapa Port alone, is the 4th busiest cargo port on the continent

For a country trying to diversify its exports and foreign exchange earnings, Nigeria’s seaports are seriously deficient. 

According to the Nigerian Ports Authority (NPA), the country has six seaports: Apapa and Tin Can in Lagos, the Onne and Port-Harcourt ports in Rivers State, the Warri Port, and the Calabar Port. But, by many accounts, only the Lagos ports are operating anywhere near full capacity. 

The Apapa and Tin Can Ports account for 70% of imports on average. NPA data shows that the Onne port handled about 80% of Nigeria’s export cargos between 2012 and 2017 – but this is because the Onne port is located in an Oil & Gas Free Zone and most of Nigeria’s exports are oil & gas products. Thus, the dispersion of imports across the ports paints a fairer picture of the performance of each one. 

A quick visit to the Port Harcourt port would reveal a surprising level of inactivity. A few people are milling about, but most of them are security personnel, one of whom disclosed that the number of ships docking at the port had decreased over the years. In the past, ships waited for days for space to dock, but now, there are days when no vessels dock at all.

It isn’t immediately clear what happened to the Port Harcourt port. Some have blamed the poor functionality of the ports in the South on insecurity, as militancy and piracy increase the cost and risk associated with transporting goods through these areas. This is a view sometimes pushed by the federal government, and it has some merit. At the height of a militant uprising driven by frustration at perceived exploitation by the government and international oil companies, kidnapping expatriates was a popular and lucrative activity and remains a moderate threat to this day. This has greatly discouraged foreign investment in the area. Although amnesty was granted to the militants in 2009, latent insecurity clouds the region.  

Others peddle the narrative that the Lagos ports are most active because it is the economic capital of the country. While this is true, and many importers would prefer to receive their goods in Lagos, some of Nigeria’s largest markets are in the East, which makes it bizarre that such little activity is directed to ports closer to the region. 

Part of the problem may be structural. Petroleum imports account for roughly 20% of Nigeria’s imports, and most of this comes in through the Lagos ports. The absence of a strong network of pipelines for transport and depots for storage have effectively rendered the other ports useless in this situation.  

But this is Nigeria, and ethnic politics is never far away. Unsurprisingly, one conspiracy theory suggests that the ports in the South-South have been allowed to deteriorate as part of a ploy between Yoruba and Hausa leaders to weaken the region’s economy. Another fingers an ongoing rivalry in Rivers State between APC and PDP. Most states in the South are non-APC states, whereas the centre – and most other states– are APC-led. Yet, neither of these stories add up. The deterioration of the Southern ports dates back several years, spanning different presidencies, governors, and leaders at the NPA. It is unlikely that any single individual or group could coordinate a joint venture of neglect here. Moreover, the APC is a relatively new party.  

In 2006, the Obasanjo administration introduced a port reform which forced the NPA to relinquish its active cargo holding responsibilities to private operators. The part-privatization permitted the NPA to retain its responsibility for infrastructure, regulation, and monitoring, but handed duties such as cargo handling, maintenance, and security to port terminal operators. 

The concession was supposed to make the ports more efficient, but the opposite has happened. In 2015, during a performance review of the Nigerian Ports, the Chairman of Seaport Terminal Operators Association of Nigeria, Vicky Hasstrup, pointed out some of the successes and failures of the port reform. She noted that while the reform had increased productivity due to strict monitoring of labour, control of extortion and reduction of damages to cargo, it had led to weaker vessel security and longer customs delays. 

Not having efficient seaports is a more significant problem than you would think. For one, roughly 99% of Nigeria’s trade goes through its sea borders, meaning the fate of the country’s trade rests on port efficiency. Also, inefficient port activity has an impact on the surrounding area – just ask the people who have to deal with traffic in Apapa where shipping trucks line the side of the road. 

The Apapa problem can partly be addressed by diverting more cargo to the ports in the South. Apapa may be congested, but as the security guard would tell you, there is plenty of room in Port-Harcourt. 

 

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Noelle Okwedy

Noelle Okwedy

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