- Ports’ Revenue to Drop by 75% in 2020 As Shipment Declines
The drop in demand for crude oil and the general decline in the volume of import shipment into the country due to the COVID-19 pandemic is expected to weigh on revenue from the seaports, according to Hadiza Bala Usman, the Managing Director, Nigerian Ports Authority (NPA).
The managing director, who spoke at an interactive session on Webinar titled, ‘Non-Oil Exports: Disrupting Nigeria’s Growth Cycle’, organised by BudgIT, said out of the 191 million metric tons of cargo exported from the nation’s seaports in 2019, 78 percent were crude oil cargo, while the remaining 22 percent was non-oil export. Suggesting that a decline in demand for crude oil would hurt the nation’s revenue from seaports as it constitutes 78 percent of its revenue.
“Nigerian crude shipment is tied to exportation and it contributes the highest revenue of the ports. This underscores the importance of diversification of the economy through non-oil exports in order to reverse the trend,” Usman said.
Usman explained that given the size of the nation, the government needs to encourage local investors and prioritize domestic investment so as to increase export of local production in order to improve new job creation, earn foreign exchange and stimulate growth from within.
Speaking on the importance of foreign direct investment (FDI), Yewande Sadiku, the Executive Secretary/CEO of the Nigeria Investment Promotion Council (NIPC), said FDI into Africa is expected to decline by 40 percent between now and 2021.
She, therefore, highlighted the importance of attracting foreign direct investment into the continent, saying increasing local production capacity would help grow the non-oil sector and boost exports.
Sadiku said despite the African continent representing 17 percent of the global population, it only attracts 3 percent of global FDI, while nations like the United States, China, Singapore, The Netherland and the United Kingdom lead.
“Whether oil or non-oil export, investors are looking for one thing, which is a conducive environment, financial return as well as sustainable and available asset,” she stated.
