How port concession saved Nigeria’s economy N3.91tr capital flight
The Chairman, Seaports Terminal Operators Association of Nigeria (STOAN), Vicky Haastrup, has said the Federal Government’s port concession programme saved the country about $8.5 billion (N3.91 trillion), which was hitherto paid to foreign shipping lines as congestion surcharge.
The STOAN boss also said members of the association, who are the concessionaires, are ready to inject more funds into the port once pending concession agreements are renewed.
Haastrup, while addressing journalists at the weekend after a courtesy visit to her by the new Country Managing Director of APM Terminals Nigeria, Frederik Klinke, said in addition to the huge savings to the economy, terminal operators also made significant investments running into billions of dollars at the six major seaports across the country.
“Nigeria’s port concession programme has been a monumental success. Many African countries send representatives are here to understudy our port concession regime and how we were able to substantially increase investment and efficiency within a very short time. It shows the can-do spirit of Nigerians.
“The port concession programme reduced the waiting time of vessels coming into our ports from an average of 45 days before 2006 to less than three days at present. It has helped in eliminating the notorious congestion surcharge hitherto imposed on our ports by major shipping lines under the aegis of the Europe-West Africa Trade Agreement (EWATA).
“The elimination of the port congestion surcharge has resulted in saving Nigeria’s trading community over $500 million yearly. If you multiply that by the 17 years of port concession, that amounts to a savings of $8.5 billion to date. In naira terms, that is a savings of more than N3.91 trillion to the Nigerian economy,” she said.
Haastrup said port concession also led to the injection of private capital into port development, which has helped to free up government resources for other developmental purposes, eliminated port congestion and led to the modernisation of the country’s seaports.
Others benefits of port concession, according to her, include improved availability of cargo handling equipment, increased competition among terminal operators, improved welfare and training of port workers and the institution of a condition of service for dockworkers.
She said prior to the port concession regime, dockworkers were treated as casual workers without employers and conditions of service.
“This narrative has since changed with the introduction of the Collective Bargaining Agreement (CBA) through which we have created a condition of service for them and also created room for review of their remuneration every two years,” she added.
Urging the Federal Government to speed up the process of port concession renewals to enable terminal operators inject fresh funds into the port to further boost the competitiveness of Nigerian ports, she said: “We are competing with other seaports in the sub-region; so we cannot afford to stop investing. I believe that once the new port concession agreements are signed, terminal operators will readily inject more funds into the system to enhance the competitiveness of our ports. The more we inject private capital into the port, the more we’ll attract more business and create more jobs for Nigerians.”