‘Nigeria has not fully explored ports potential’

China still nation’s biggest import partner
Nigeria is said to still posses huge potential that are yet untapped in the maritime sector, as stakeholders demand new policy initiatives, which could further deepen its impact on the economy.

The initiatives, according to a new report by Akintola Williams Deloitte, will further facilitate international trade (both import and export) and enhance the nation’s non-oil contribution to Gross Domestic Product (GDP).

Meanwhile, the value of imported goods in 2016, was estimated at N8.818trillion with more than 50 per cent of the imports being manufactured goods.

Quoting from the Nigerian Bureau of Statistics, others imports included oil products, raw materials, agricultural, solid mineral and energy goods make up 28.6 per cent, 10.7 per cent, 7.4 per cent, 0.6 per cent and 0.0001 per cent of imported goods respectively, while China remained the nation’s largest import partner.

The report also said the foresight of the Federal Government to concession the container terminals has had a very positive impact on the economy particularly in the area of job creation, skills transfer and development, contribution to GDP, increased business opportunities in and around the ports, among others.

Increased use of the terminals creates a multiplier effect across the value chain with impact on other services such as freight forwarding, insurance, and banking, haulage and logistics services and a host of others.

According to Akintola Williams Deloitte, the efficiency at the ports have saved the Nigerian economy an estimated $800 million annually in congestion fees alone, while an average of 30,003 containers were transferred everyday to support local businesses and manufacturers.

Besides, it noted that an estimated 1 million jobs had been created directly and indirectly in communities across Nigeria, both for skilled and unskilled workers including local businesses, manufacturing firms, trucks drivers, among others.

The report emphasised the need for more business -friendly policies that would aid optimisation of the huge shipping potential.

“Revitalising and transforming the ports sector into a fast, modern and efficient port has direct benefits to the government. Larger vessels with reduced transit delays at the ports will lead to increased throughput and higher trade volumes for both import and export of goods and services thereby increasing revenues earned by Nigerian Ports Authority (NPA) on throughput fees, shipping charges, custom duties and taxes.

“A continuous 24 hours port system with adequate government support in terms navigation and tug services, dredging of channels, customs clearance, electric and power supply, good access roads and adequate security in and around the ports will increase productivity at the ports, increase employment, generate more revenue to government and increase the sector’s contribution to GDP.

“Extension of adequate support to the terminal operators will further attract international investors, as this will signify that the Federal Government of Nigeria is open to mutually beneficial Private Public Partnership (PPP) arrangements between the private and the public sector.

“Impact on terminal operators’ increased terminal and port efficiency directly reduces costs, which would have been lost to inefficiencies in the system. This will also make Nigerian ports more attractive for use to the other West African countries.

“Increased efficiency and consequently increased speed of service delivery will attract more vessels and in turn more cargo, which will positively increase the throughput volumes and therefore revenue for the investors,” it stated.

Meanwhile,  the foreign exchange challenges that Nigeria faces is further pronounced for terminal operators as a large part of their capital expenditure, capex, and operational cost are in U.S. Dollars.

“These costs include equipment and maintenance costs, lease fees to the NPA among others. 83 percent of terminal operators’ revenues are received in naira from clearing agents.

“Terminal operators have to constantly source for the dollars through the parallel market at very high rates in order to meet its statutory and operational cost obligations. Charges offered by the terminal operators to store their imported goods at the terminal as opposed to off-site warehousing facilities that charge as much as N60,000 per day. This leads to congestion at the terminal and hinders the productivity and storage capacity of the terminal.” it stated.