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Nigeria loses N3.46tn annually to port inefficiency – Survey

Nigeria loses N3.46tn annually to port inefficiency – Survey

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Anna Okon

The Nigerian economy is losing an estimated annual revenue of N3.46tn as a result of the current crises of poor infrastructure, poor policy implementation and corruption at the ports, according to the result of a recent survey carried out by the members of the Organised Private Sector and the Centre for International Private Enterprise.

A breakdown of the losses show that N600bn is lost in Customs revenue, $10bn in non-oil exports and about N2.5tn in corporate earnings across the various sectors of the economy.

The report noted that due to the persistent traffic gridlock in the Apapa area, industrial capacity utilisation currently stood at 38 to 40 per cent, while 40 per cent of businesses located around the port communities had either relocated to other areas, scaled down operations or completely shut down.

According to the report, about 5,000 trucks seek access to Lagos ports on a daily basis along an access road designed to take only about 1,500 trucks daily.

Also, about 60 tank farms are located around the ports, most of which were located without recourse to the original design of the ports, traffic consideration or the volatility of the products in the tanks, it added.

This result in trucks spending more than one week sometimes to access the ports from Lagos mainland due to traffic gridlock, the report added.

“These developments have very huge adverse implications for job creation, tax revenue and real economic activities, with estimated downside effect of about three per cent on the country’s Gross Domestic Product,” the President, Lagos Chamber of Commerce and Industry, Mr Babatunde Ruwase, noted during the unveiling of the report in Lagos on Tuesday.

He pointed out that the 2017 positioning of Nigeria as number 183 out of 185 countries in terms of trading across borders (a major indicator for measuring a country’s ports effectiveness) on the World Bank Ease of Doing Business ranking did not reflect efforts of the present administration on repositioning the ports through series of interventions targeted at improving port efficiency.

“Operators and users of Nigerian ports are increasingly faced with bureaucratic red tape, limited access to the ports due to traffic congestion, constant delays, illegal charges, technical and security breakdown, leading to high cost of operations and competitiveness,” he added.

The LCCI president noted a worrisome level of deliberate resistance by some Ministries, Departments and Agencies of government to implement enabling regulations, including the 2017 Presidential Executive Orders relating to the ports.

He said the report also noted that fights for supremacy, conflicts of interest and revenue ambitions that conflicted with trade facilitation objectives were common issues among the MDAs.

“The report underscored the fact that only 10 per cent of cargoes are cleared within the set timeline of 48 hours, while majority of the cargoes take between five to 14 days, and some take as long as 20 days; deliberate delays induced by MDA officials currently account for approximately 65 per cent and 80 per cent of import clearance and export processing time, respectively,” he said.

The LCCI sought swift intervention in terms of policy reforms, including the single window platform, the enforcement of the Executive Order, reduction in the number of MDAs and security formations at the ports, passing of enabling reforms by the National Assembly and upgrade of rail infrastructure, truck parks and pipeline for movement of wet cargoes, among others.

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