Why Nigeria’s Eastern Ports Remain Unattractive To Importers
Fred Omotara, Lagos
As you know, Nigeria is the largest country in Africa and one of the world’s top five most populous nations. Quenching our import desires is an important task. Fortunately for us, a good part of Nigeria is surrounded by water which is a natural advantage for importing goods.
Nigeria has six major seaports: the Apapa and Tin Can in Lagos; Onne and Port Harcourt in Rivers; Warri in Delta; and Calabar in Cross River. But despite the port distribution (two in the west and four in the east), 70% of imports come through the west—the Lagos ports.
In contrast, 80% of the country’s outward cargo, which is crude oil, goes out via the Onne port in Rivers state. But when we look at trade statistics holistically, the cargo activity of our imports are almost two times higher than exports. According to the latest National Bureau of Statistics (NBS) data which compiles trade activities, outward going cargo (goods carried on a ship) from Nigeria account for only 36% of the total traffic.
Imports make up the larger portion of trade activity and are skewed to the Lagos ports due to several factors.
WHY LAGOS PORT?
INSECURITY: The preference for Lagos’ ports is due to the poor infrastructure, such as the road network (which Lagos also has) connecting eastern ports. But part of what makes shipping companies avoid the east is the danger that lurks on eastern water routes. The global statistics for travellers that got kidnapped for ransom while aboard a ship in 2019 is 75. But, 62 of them got captured in the Gulf of Guinea—off the coasts of Nigeria, Guinea, Togo, Benin and Cameroon. These eastern water routes are part of the world’s most dangerous piracy location.
Presently, shipping companies bound for the eastern zone, rent private vessels operated by naval personnel to escort their vessels into and out of Nigerian waters. This usually comes at a high cost to the vehicle operators, as maritime security personnel earn an average of $15 per hour. The insurance premiums for their journey is also more costly because of the security risks.
SHALLOW DRAFT: Aside from the security challenge, ports in the east, especially Calabar and Delta ports, have shallow water depths and limited space. This makes it hard for big ships or multiple ships to berth at the same time in most of the eastern ports.
To encourage the use of these eastern ports, the Nigerian Ports Authority (NPA) announced a 10% discount on harbour dues for certain categories of ships. However, the worsening congestion in Lagos shows that the incentive is yet to sway users.
Despite the proximity of ports such as Calabar, Rivers and Delta to eastern and northern markets, importers from the east believe Lagos is better for receiving their consignments.
Unlike Lagos, the Calabar port suffers from a shallow draft of water that prevents large vessels from berthing (mooring a ship in its allotted place). These days, large vessels (ships) need water bodies as deep as 17 metres. However, the Calabar port is between six and seven metres deep compared to the 12 to 13.5 metres of the Apapa seaport.
To make the water deeper, the government has awarded several dredging contracts. But most of the awardees have started and stopped the job halfway or absconded with the funds, leaving the port’s draft (the depth of water needed to float a ship) shallow.
Last year, while speaking with newsmen, Akin Ricketts, NPA’s Board Chairman, explained that the draft of the Calabar port could barely take a modern-day ship. “The Calabar channel has not been dredged for a while now, and vessels these days need drafts above 10 metres, and you cannot find that around that corridor. I think the port needs to be revamped and the channels dredged. The same goes for the Warri (Delta) port as well.”
QUAY LENGTH: The depth of eastern waters is just one challenge. The quay length is another. A quay is the shore of a harbour where ships can dock to load and unload cargo. Think of it as a parking space, but for ships. The Apapa and Tin-Can ports have a combined quay length of 1730 metres and located along the coastline, leading to other west African countries.
The length is why we can have as many as ten ships berth at Lagos ports at the same time. The location is also a huge plus. Multiple ships bound for Benin Republic, Togo, Ghana, and even Abidjan berth in Lagos, unload their cargoes and can proceed their journey to these other countries along the coastline. But if the ships have to berth at the eastern ports, this could slow down their turn around time.
Imagine that these ships berth in a port like Delta (Warri) with a quay length of 572 metres or Onne with 750 metres. These ports would struggle to accommodate as many as five ships, making it difficult to turn around other countries’ shipments quickly.
So whenever importers need to transport their cargoes to the east, the alternative is to the first ship to Lagos, and then the shipping company would use smaller flatbed vessels to ship down to the east. But this method adds to the cost.
For instance, it cost an average of $3,000 and $4,000 as freight charge on 20 feet and 40 feet containers to come from China to Lagos, but it would cost an importer about $4,500 to $6,000 to bring the same sizes of containers from China to any ports in the east. After berthing in Lagos, the shipping company has to hire another vessel, security personnel and procure insurance to transport the goods to their final destination.
Little wonder that over 70% of cargo coming to Nigeria end up in either Tin Can or Apapa (the western ports), even when the importers may not be from that zone. The east-based importers have always preferred to import through Lagos ports and pay an extra ₦300,000 or more to truckers to bring their containers down to their base state.
BAD ACCESS ROADS: Another challenge hindering the attractiveness of eastern ports are the roads that link to and away from these ports. There is hardly any highway interconnecting the eastern port areas.
Nigeria can solve this problem using intermodal transport systems. In developed countries, the rail systems complement the ports while the roads complement the rail. But not much thought has gone into planning these infrastructures around Nigeria. Systems such as rail lines that functioned in the past are only just being rehabilitated or completely overhauled.
GOVERNMENT EFFORT: In the hope to see more shipments in the eastern ports, the NPA says it is working with the ministry of works to make the roads linking these eastern ports more passable. Efforts to ramp up the rail lines are also underway. Last week, the minister of transport inaugurated a railway line at Ujevwu community, near Warri. According to Ibrahim Musa, Chairman, Governing Board of the Nigerian Railway Corporation (NRC), the railway line would aid the transportation of processed steel to the port in Warri.
Lagos’ Apapa is witnessing something similar. Train tracks linking Lagos ports to other parts of the country are nearing completion and should commence operations very soon