Economic cost of Apapa gridlock – Punch

Day by day, the business environment in Apapa, Lagos, where Nigeria’s foremost seaports are situated, is getting progressively worse. The hubbub is being fuelled by the grinding traffic and delays arising from inefficient port operations. A new report by the organised private sector paints a chaotic picture and confirms how the economy is haemorrhaging with the government clueless about how to end the mess.

Not surprisingly, a Lagos Chamber of Commerce and Industry survey — a collaboration with the Nigerian Economic Summit Group, Manufacturers Association of Nigeria and other OPS outfits — states that Nigeria loses “about N3.06 trillion (or $10 billion) on non-oil export and about N2.5 trillion corporate earnings across the sectors annually” to the fiasco. For a country that is barely out of recession, it is an absurdity.

The report echoes the woeful conditions of the access roads to the Tin Can and Apapa ports. Apart from factories, bonded terminals and other corporate organisations, 27 tank farms operate there. This creates traffic lockdown for exporters and importers desirous of meeting deadlines to supply or take delivery of their products. The residents are not spared the harrowing ordeal either.

Tankers and trailers have hijacked the roads and bridges. Stationary traffic stretches from the ports to Fadeyi on Ikorodu Road, a distance of about 20.8 kilometres. Five thousand tankers/trailers invade Apapa daily for business, the report says. Every effort by the government to end the bottleneck has failed woefully, principally because the roads are decrepit and observance of the law is in breach.

So, cargo dwell time at the ports has increased to 22 days. This is against the global best business practices in the maritime trade, as it is the longest in the West Africa sub-region. Comparatively, the Abidjan-Lagos Corridor Organisation says that cargo dwell time in Togo is nine days; 14 days in Benin Republic; and 15 days in Ghana. “With a capacity of 3 million Twenty-Foot Equivalent units (which is far less than South Africa’s volume of 5.5 million TEUs), the Nigeria Customs Service should have realised as much as N1.25 trillion as against the N692 billion it made from 1.5 million TEUs in 2017,” the report states.

It causes massive economic and job losses. For instance, 25 per cent of perishable products like cashew, which was being exported to Vietnam in 2017, rotted away after overstaying for weeks at the ports. For employment, it is disastrous: the Lagos ports employ about 35,000 workers; in South Africa, 700,000 people are employed at its ports. Industrial capacity utilisation, which stood at 53-60 per cent in 2015, declined to 38-40 per cent in 2017.

Operational ineptitude in which cargo clearing is delayed because facilities like scanners are obsolete or non-existent, multiple/illegal charges, breakdown of security, corruption and muscle flexing by Ministries, Departments and Agencies, encumber the ports from delivering on their potential (to generate revenue). According to the LCCI, there are 14 MDAs currently operating at Apapa. This is outmoded.

In comparison, the International Monetary Fund says that maritime operations contribute 1.4 per cent to South Africa’s GDP; 3.0 per cent to Kenya, but is just 0.05 per cent of Nigeria’s GDP. This is ridiculous. The Minister of Finance, Zainab Ahmed, should streamline the MDAs there; with the enabling environment, the ports can generate revenue optimally.

It is stupefying that the Muhammadu Buhari government is treating the protracted mess with levity. In 2017, Aliko Dangote, Africa’s richest man, raised the alarm that Nigeria was losing N140 billion weekly to the debacle. This ought to have provoked a swift government response. Over a year after, the government has remained indifferent.

The truth is that the Buhari administration does not see Apapa as a priority. Change will come when government implements the President’s Executive Order on the promotion of transparency and efficiency at the ports proclaimed in May 2017. Additionally, it needs an action plan to reconstruct the roads, say in the next one year. This will save the vital economic assets like bridges, which could collapse because of deadweight trailers on them.

The plan should include decentralisation of the tank farms and bonded terminals. Efficient ports operations are anchored on modern rail services, as can be found in Antwerp, Belgium. The transport initiative, therefore, should incorporate rail services out of the ports. Government should revamp and build more holding bays to keep tankers/trailers away from the roads.

The government cannot shy away from the modern trend of outsourcing ports operations to reputable international companies. In 2017, Nigeria’s neighbour, Benin Republic, went this route when it signed a contract with Port of Antwerp International (Belgium) to expand its capacity and manage its operations. This is in direct competition with Nigeria. Already, cargoes meant for Nigeria are being diverted to Cotonou and other West African ports.

Aiming to expand and modernise operations and perhaps compete with Nigeria, Cameroon and Ghana have also opened up their ports in Kribi and Jamestown respectively to Chinese investment. Therefore, the Buhari administration should act swiftly.

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