How the Nigerian Ports Affecting Export BusinessesAbbakin
How the Nigerian Ports Affecting Export Businesses. NOTHING betrays the contradictions in the Federal Government’s avowed policy of non-oil exports promotion more than the lack of an enabling environment for the attainment of this noble national aspiration.
With the prices of oil in the international market becoming increasingly unpredictable by the day, wise counsel demands that the government should embrace an alternative means of earning income, other than oil which currently provides over 70 per cent of government’s income and foreign exchange earnings in excess of 90 per cent.
But while the government continues to pontificate on the need for diversification of the economy, the stiff challenges exporters face in the course of attempting to get their goods to the outside world make achieving that goal a daunting task.
Government’s lack of enthusiasm in streamlining the process of doing business in the country only confirms the belief in some quarters that it is only paying lip service to non-oil exports promotion.
Besides many bottlenecks encountered by exporters, including the absence of access roads to the hinterland for the evacuation of agricultural products, which for now constitute the bulk of the non-oil exports, the conditions at the seaports, the gateway to the outside world, leave a lot to be desired.
Of particular note is the neglect of all the main seaports, especially the Apapa and Tin Can Island, which are responsible for over 70 per cent of maritime trade in Nigeria.
While the ports in Calabar, Port Harcourt, Warri and Onne remain underutilised, the Port of Lagos in Apapa has become virtually inaccessible because of the deplorable state of the roads leading there.
The situation is such that trucks bearing goods meant for export spend upwards of three weeks on roads within the immediate neighbourhood of the port before gaining access to the terminal, according to reports.
The corollary is that, due to the prolonged delay, the quality of most of the goods depreciates before they get to their destination. This explains why many Nigerian goods are usually rejected for failing to meet the required standards, as they are usually perishable goods with limited lifespan.
Lamenting the situation recently, Tola Faseru, the President, National Cashew Association of Nigeria, said, “Export warehouses are filled with commodities; instead of being promptly shipped out, they are rotting away.”
This is nothing short of a national embarrassment, which ought to have attracted the attention of the appropriate authorities.
Those who have taken bank loans to finance their export business face an uphill task in meeting up with their loan servicing obligations, just as those who may not have the resilience to weather the storm easily give up; and what could have been a lofty dream for many a budding businessman easily goes up in flames.
But the response of the government to these bottlenecks, at best, has been lukewarm. Besides a few platitudinous utterances and Executive Order banning some government agencies from the ports premises, nothing concrete has been done.
Many businesses that used to operate from Apapa have had to relocate, due to the loss of man-hours arising from gridlock. The same goes for residents, who have had to look for some other more hospitable areas.
This is why Africa’s richest man, Aliko Dangote, whose business has also been badly affected, has offered to give the government a helping hand in mending parts of the roads. Dangote, who tried to put a figure to the loss to the country said, “The economy loses more than N20 billion daily; it affects businesses across the country.”
This translates to N7.3 trillion per year, an equivalent of Nigeria’s full year budget. Just imagine what that amount could contribute to the economy in terms of job creation and even infrastructure development.
Although a piecemeal rehabilitation work has started on the roads leading to the port in Apapa, the challenges have been compounded by years of neglect.
In fact, the cost of doing business has been driven up more than 400 per cent, according to a recent report quoting port users. This is also happening at a time when the government is trying to improve Nigeria’s Ease of Doing Business rating, which the World Bank puts at 169th out of 189th countries surveyed.
Needless to say, this is also damaging for an economy in dire need of a boost that can only be delivered by an infusion of Foreign Direct Investment.
Rather than be a nightmarish experience, Nigerian ports should be the hub of business activities, as is the case in other countries, including some oil producing ones.
The Khalifa Port in the United Arab Emirates is a good example of how a seaport can become a country’s investment and business hub.
The port, operated by Abu Dhabi Ports Company, just signed a $300 million deal with some Chinese concern to turn it into a hub for manufacturing, logistics and trade, according to reports.
The deal signed in August, will see China creating a Free Trade Zone in Abu Dhabi as part of its Maritime Silk Road that will connect a network of Chinese-run ports and investment route from China to Europe.
The port will attract investment from all parts of the world. Besides the $300 million going directly to Abu Dhabi, the Chinese investment will also serve as a catalyst for the growth of other projects within the area.
Factories are expected to spring up to boost job creation and local supplies business. This is what managers of Nigerian ports should be targeting.
Aside from fixing the roads, the government can tackle the transport problems around the ports by shifting emphasis to the rail system to ease the pressure on the roads. Doing so will get the heavy lorries off the road. In the United States, for instance, coal is the single biggest cargo and over 70 per cent of coal transport is by rail.
The government should also come up with plans for the other ports outside Lagos, as this will reduce pressure on the Lagos ports.