Transporting a container cargo from Nigeria’s busiest seaport in Apapa to Lagos mainland, a 20km trip, costs about $4,0000, a new report has revealed.
It would cost almost the same amount to ship a 40ft container from Shanghai to Lagos according to the Shanghai Containerised Freight Data index.
A Financial Times report has beamed its spotlight on the declining state of the country’s ports sector whose mode of operation has remained stagnant since 1997, making the output nearly impossible to meet the demands of Nigeria’s population which has tripled overtime.
“The government has been talking about the ease of doing business but if there’s one sector we have not felt the government’s effort, it’s in the ports where practically nothing has changed” Muda Yusuf, Director-General of the Lagos Chamber of Commerce and Industry (LCCI) told the newspaper.
Kunle Falerin, Chairman of the Nigerian Ports Consultative Council on his part attributed the outrageous interstate fares to economic slump caused by COVID-19 pandemic, while speaking with the outlet. He listed other contributing factors to include overcrowding or port congestion, ageing infrastructure, poor rail network and lack of automated procedures.
“During the pandemic, there was a lockdown and then curfews, so dock labour could resume work as scheduled. That lowered productivity and extended the long stay of the vessels,” said Mr Falerin.
Port congestion is compounded by border closure and delay of ships which spend at least four weeks at the coast before they are allowed to offload cargo.
It would take the same four weeks for a Lagos-bound ship from China to reach its destination.
A senior executive at a logistics company told Financial Times that importers have devised a means to bypass the delay by paying spot prices to fleet operators who charge about N1.5 million to transport a 40ft container from Tin Can to warehouses on the Lagos mainland.
These sharp witted importers would rather pay the high fares than risk their cargoes sitting idly at the coast, waiting to be allowed entry to the docks while accruing exorbitant storage charges.
The report stated that using Apapa ports is presently cheaper as current rates are about N700,000 which includes road access charges and petty bribes. The amount however doesn’t cover storage fees.
These charges influence the outrageous hike in prices of imported goods which deepens the suffering of the common man, the consumer who purchases the products.
Former head of Nigeria Ports Authority, Hadiza Bala Usman, had disclosed that NPA was working towards digitising processes of containers, urging major stakeholders to also invest in the sector.
Recently, Aliko Dangote of the Dangote group signed an agreement to repair a 35km road around the port in exchange for a ten-year tax waiver agreement.
Meanwhile, Nigeria’s unending maritime struggle has led to its displacement from first to third position among the West African countries running successful shipping services, according to Netherlands leading consulting firm, Dyanmar in 2019. It has dropped even further to fifth position in 2021.
“Nigeria is definitely behind the curve. What you’re seeing in Lagos..I don’t recall seeing anything like it anywhere else in the world” lamented Darron Wadey, a senior analyst at Dyanmar.
Akinwumi Adesina, president, African Development Bank (AfDB) confirmed the Dyanmar report in his speech at the mid-term ministerial performance review retreat in Abuja on October 11.
The AfDB president said that “the leading ports for West Africa are in Cote d’Ivoire, Ghana, Togo, and the Benin Republic. All these countries have modernised their port management systems, leaving Nigeria far behind,” adding that decongestion of seaport “must start with cleaning up administrative bottlenecks, most of which are unnecessary with multiple government agencies at the ports, high transaction costs or even plain extortions from illegal taxes, which do not go into the coffers of the government.”