Manufacturers lament return of congestion to Lagos ports
They said the resurfacing challenge will lead to delays in the clearance of manufacturing inputs and machinery while resulting in high demurrage.
They expressed concern that the challenge could increase the cost of production and slow down trade facilitation in the country.
Recall that there was a brief relief when the Nigerian Ports Authority (NPA) introduced the electronic call-up system, which commenced on February 27, 2021. The system was widely hailed as a possible solution to the perennial gridlock around the ports.
One month into the e-call system, the roads have become inaccessible as truck and tanker drivers have returned to their old habits.
The President of MAN, Mansur Ahmed, who spoke in a chat with newsmen, revealed that 82 per cent of the chief executive officers of manufacturing firms have complained that the congestion at the ports has a significant negative impact on production.
The MAN boss revealed that the traffic congestion to and within the Lagos ports is a concern for every manufacturer operating in the country’s manufacturing sector, as it hinders them from getting raw materials on record time.
He said improved port infrastructure is critical to prompt availability of imported inputs.
He warned that manufacturers would have no option other than to downsize to cut costs if the situation continues.
He said: “The persistent gridlock remains a huge challenge to trade facilitation in the country. This development has often led to delays in clearance of manufacturing inputs and machinery as well as high demurrage, which increases the already high cost of production.
“Although the situation had earlier improved, the hiccup has gradually returned. This, therefore, calls for support policies to attract private sector investments into trade facilitation infrastructure development to resolve this persistent challenge.
“Our survey shows 82 per cent of the CEOs interviewed agreed that congestion at the ports significantly affects productivity negatively, while eight per cent disagreed. Consequently, there is the need for a comprehensive review of all the contributory factors to port congestion to produce a sustainable solution to the difficulty in accessing ports.”
According to him, the port challenges result in rising debt and cost of loan servicing, high demurrage, huge revenue losses, the rising cost of production, logistics/transport challenges among others.
The industrialist noted that manufacturers have warned that unless there are improvements in port infrastructure this year, they would lay off workers.
Ahmed further added that some local manufacturers’ large shipments of raw materials that were imported into the country are currently trapped at the ports, with many of their production lines idle.
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