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Nigeria Loses Fortunes to Over-dependence on Lagos Ports

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  • Nigeria Loses Fortunes to Over-dependence on Lagos Ports

The over-dependence on the Lagos seaports may be doing the economy more harm than good, as investigations revealed that Nigeria is losing fortunes to the underutilisation of other ports across the country.

The huge concentration on Lagos ports being the commercial nerve centre of the country may be limiting the maritime sector’s contribution to national earnings, which contributes as much as 30 per cent of Nigeria’s gross domestic product (GDP).

According to report, the diversion of cargoes to Lagos has impacted significantly on the ageing infrastructure at the Apapa and TinCan Island ports due to overwhelming cargo handling.

With dilapidated facilities, unfriendly environment and poor ports access roads, more importers are now seeking solace in neighboring countries, while the landlocked countries such as Chad and Niger, shun Nigerian seaports.
The fact that the TinCan Port earns over N1.2 billion and Apapa Port over realizes N220 billion yearly, show that the Federal Government is loosing fortunes for failing to promote other seaports.

This is because the more active the ports are, the higher the ability to create employment opportunities for the teeming youths and development of integral facilities that would fast-track economic development, as seen in the Chinese examples.

Statistics obtained from the Nigerian Ports Authority (NPA) showed that Lagos ports complex claimed 97 per cent of the containers that are berthed in Nigeria in 2016.

The Container traffic provisional figure of NPA showed that TinCan Island port received 179,443 Twenty-foot Equivalent Units (TEUs), while Apapa Port had 136,543 TEUs. Rivers port had 2,053TEUs. Onne had 44,961TEUs; Delta had 1,961TEUs while Calabar recorded zero container traffic in 2016. Calabar is currently handling only liquid cargo, due to shallow water challenges.

Stakeholders blamed the concentration on Lagos ports on shallow waters, long channel of other ports, politics and industrialisation, which necessitated the choice of Lagos as the port of destination for most cargoes.

Acting President, National Association of Government Approved Freight Forwarders (NAGAFF), Increase Uche, told The Guardian that the concentration on Lagos Ports is the architecture of the government’s political strategies on wealth control.

He also blamed lack of political will and distance from the ocean to low patronage of the Eastern ports, noting that although Lagos ports are prioritised because they are close to the ocean than other ports. They also have longer river channel, and as such, government needs to strategise to boost operations in other ports in order to have balanced trade across regions.

Over concentration on Lagos ports, according to him is posing unnecessary migration into the Apapa area and resulting to overwhelming pressure on the infrastructure facilities.

“The reason people give is that the Lagos and Port Harcourt ports are very close to the ocean, other ports are far from the ocean. It, therefore, takes longer time for the vessels to move from the anchorage at the high sea to other ports, but here in Lagos, it takes less time for any vessel to access that area.

“Owners of vessels will prefer Lagos ports to the other ports, but one will be tempted to ask, what if the ports in the eastern part are the only one we have in the country? How will the economy survive? We need to put all hands on deck to ensure that those ports are not wasted, because most of those structures are now rotting away because they are not put to use, while the ones in Lagos are over used and then it becomes generic problems,” he said.

The Speaker, House of Representatives, Yakubu Dogara, recently said Nigeria was losing N1 trillion yearly due to bad roads in the country, where the Federal Government is estimated to have spent about N73 billion on roads maintenance and repairs last year.

Stakeholders believed that the huge burden on the roads created by haulage of imported goods from Lagos to other parts of the country are taking toll on the longevity of the roads, thereby necessitating high expenditure on maintenance.

Meanwhile, businessmen from the eastern part of the country are irked about the need for them to import through Lagos and incur additional expenses coupled with the risk involved in transportation.

An Onitsha-based businessman and Managing Director, OkayGod Investments Limited, Augustine Okechukwu, said the situation is worrisome and have a huge impact on the cost of production, coupled with the risk of transporting the goods through terrible roads from Lagos to Onitsha.

He said: “We all imported through the Port Harcourt ports before, but we decided to change to Lagos as our port of destination because clearing goods from Port Harcourt seaport is very hectic and cumbersome. You cannot get your goods easily from Port Harcourt. I think it is deliberate so as to make people patronise Lagos than other ports.”

On the cost of clearing and transporting the goods between the Lagos and Port Harcourt ports, Okechukwu said: “Cost of transportation from Lagos is high and it is affecting businesses here. But we still prefer it because if you import through Port Harcourt, it takes two to three months to clear, meanwhile, it take a few weeks to clear in Lagos. Although, there is the risk of an accident due to the bad roads, but we are compelled to use Lagos ports because we see it as a better alternative.”

The President, National Council of Managing Directors of Licensed Customs Agents (NCMDLCA), Lucky Amiwero, said the components that determine the choice of port such as freight cost, the draft and cargo destination do not favour other ports, hence the use of Lagos ports.

“Why you are having more traffic in Lagos ports is because most of the cargoes are consumed around Lagos area, while the other places don’t have many industries. Many of the ships that are coming to Lagos are based on the request by the importers, who are businessmen around Lagos.

“If you want your cargoes shipped to the East, you might not see a ship going to the East, besides, the freight to the East is too expensive and it is not as requested as Lagos, because Lagos has a concentration of market,” he said.

The General Manager, Public Affairs, NPA, Effiong Etim Nduonofit, assured that NPA is putting machinery in place to promote the use of all the ports, but added that the choice of cargo destination is determined by the importer.

He said the management is giving incentives in terms of rebate to promote the eastern ports, adding: “Also, the Authority is giving preference to rehabilitation of infrastructure such as the quay apron, maintenance of the channel and provision of navigational aids to guide the vessels sailing to those ports.

“Besides, the management has emphasized that they are going to promote operational efficiency at those ports to ensure that turnaround time is reduced to the barest minimum as well as ensuring that other key performance indicators are in charge.

“Over time the management has continued to do both maintenance and capital dredging of the ports in line with international best practices to encourage operations at those ports,” he said.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Lafarge Africa Board Proposes N30.60bn Dividend, Lower Than Previous Year

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Lafarge Africa - Investors King

Lafarge Africa’s Board of Directors has recommended a dividend payout of N30.60 billion for the year ended December 2023, a reduction from the previous year’s dividend.

The proposed dividend translates to N1.90 per unit of shares and awaits approval from shareholders at the upcoming Annual General Meeting (AGM) of the company.

In a corporate announcement filed with the Nigerian Exchange Limited, Lafarge Africa disclosed that the proposed dividend is payable from the Pioneer Reserve to shareholders registered as of March 28, 2024.

Despite the lower dividend proposal, Lafarge Africa recorded an increase in revenue to N405 billion, marking an 8.6% rise from the previous year’s N373 billion.

However, the company’s post-tax profit experienced a 4.7% decline, amounting to N51.14 billion, attributed mainly to the devaluation of the naira.

Lolu Alade-Akinyemi, the Chief Executive Officer of Lafarge Africa, expressed confidence in the company’s performance despite economic challenges.

He highlighted the growth in revenue and an improved operating margin, despite pressures from inflation and currency devaluation.

Looking forward, Lafarge Africa remains optimistic about the construction sector’s growth in Nigeria, despite prevailing economic challenges.

The company aims to leverage its market opportunities while maintaining a focus on sustainability and stakeholder value.

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South African Billionaire Christo Wiese Predicts Return of Major Players to Nigeria Despite Recent Exodus

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Christo Wiese

South African billionaire Christo Wiese remains optimistic about Nigeria’s economic prospects, predicting the eventual return of major players despite a recent exodus from the West African nation.

In an interview with Bloomberg TV, Wiese explained that it is impossible to ignore Nigeria’s large and growing population, “how do you ignore an economy like this?”

Wiese, the former chairman of Shoprite Holdings Ltd., acknowledges the challenges faced by businesses in Nigeria, where recent currency woes and policy missteps have contributed to an exodus of international companies.

Procter & Gamble Co. and Shoprite are among the global conglomerates that have announced their departure from Africa’s most populous nation.

However, Wiese sees the recent exits as temporary setbacks rather than a long-term trend. He believes that the allure of Nigeria’s vast consumer market and its economic potential will eventually draw major players back.

Despite the current uncertainty, Wiese remains confident in Nigeria’s future, emphasizing the need for governments to adopt correct policies and for investors to exercise patience.

While acknowledging Nigeria’s single-commodity economy vulnerabilities, Wiese highlights the resilience of the nation’s economy and its potential for growth and development.

He suggests that foreign investors, including South African ones, are adopting a wait-and-see approach, anticipating a time when the economy stabilizes and favorable policies are in place.

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Appointments

Seplat Energy Names Udoma Udo Udoma as Independent Non-Executive Chairman, Bello Rabiu as Senior Independent Non-Executive Director

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Seplat Energy Plc - Investors King

Seplat Energy, a prominent Nigerian energy company listed on the Nigerian Exchange Limited and the London Stock Exchange, has made significant changes to its board leadership.

In a recent announcement, the company revealed that Udoma Udo Udoma has been appointed as the new Independent Non-Executive Chairman, succeeding Basil Omiyi, who is set to retire on March 31, 2024.

Udoma Udo Udoma, a distinguished lawyer and seasoned board administrator, brings a wealth of experience to Seplat Energy.

He holds degrees from St. Catherine’s College, Oxford, and has had a remarkable career spanning various sectors, including petroleum, energy, and natural resources.

Udoma has served on numerous large-sized company boards, including UAC Nigeria Plc and Union Bank Plc, and held key public sector appointments, such as Chairman of the Corporate Affairs Commission and Minister of Budget & National Planning.

In addition to Udoma’s appointment, Seplat Energy announced the selection of Bello Rabiu as the new Senior Independent Non-Executive Director, effective April 1, 2024.

Rabiu, a seasoned professional with extensive experience in the petroleum industry, holds multiple degrees and has served in various capacities at the Nigerian National Petroleum Corporation (NNPC).

The appointments come as part of Seplat Energy’s commitment to upholding strong corporate governance practices and ensuring a smooth transition of leadership.

Both Udoma Udo Udoma and Bello Rabiu are expected to play pivotal roles in guiding Seplat Energy as it continues to expand its operations and consolidate its position as a leading energy company in Nigeria and beyond.

In a statement, Basil Omiyi, the outgoing Chairman of Seplat Energy, expressed confidence in the newly appointed leaders, emphasizing their capabilities to steer the company towards further growth and success.

The appointments underscore Seplat Energy’s dedication to fostering excellence and innovation in the energy sector while meeting the evolving needs of its stakeholders and contributing to Nigeria’s energy transition efforts.

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