The Nigerian Ports Authority (NPA) has highlighted the issue of low export volume as a significant factor contributing to high port charges in the country. This imbalance in trade, particularly the disparity between import and export volumes, results in increased operational costs at Nigerian ports. Dr. Abubakar Dantsoho, the Managing Director of NPA, emphasized the need for a more balanced trade flow to alleviate the financial burden on port operations.
Speaking at the Lagos Chamber of Commerce and Industry (LCCI) Stakeholders’ Forum on Port Efficiency, Dr. Dantsoho underscored the impact of operational costs on vessel operations. He explained that concentrating costs solely on imports escalates overall expenses, making port charges substantially higher compared to scenarios where costs are distributed across both import and export activities. To address this challenge, NPA has licensed five Export Processing Terminals (EPTs) in Lagos to boost cargo exports through Nigerian ports.
The establishment of these EPTs has shown promising growth in Nigeria’s export activities over time. NPA is also revamping its operational processes to enhance productivity, reduce time inefficiencies, and ultimately lower costs. Recognizing the pivotal role of seaports in facilitating international trade, Dr. Dantsoho stressed the importance of operational efficiency for enhancing Nigeria’s competitiveness within the African Sub-Region.
Mr. Ayankop Ayankop from the National Administration of Food, Drugs Administration and Control (NAFDAC) shed light on the influx of fake and substandard products in Nigeria, attributing a significant portion of these goods to India and China. To combat this challenge, NAFDAC has imposed stricter regulations, including double issuance of Clean Report on Inspection analysis for products originating from these countries. This regulatory intervention aims to curb the entry of counterfeit goods into the Nigerian market.
Highlighting the broader implications of port efficiency, Dr. Akutah Pius Ukeyima, the Executive Secretary/CEO of Nigerian Shippers’ Council (NSC), emphasized the need for seamless supply chain operations at cost-effective rates. He noted that Nigerian ports face elevated operational costs compared to other West African countries, with charges exceeding regional averages by 30-40%. Cargo dwell times in Nigerian ports are considerably higher than global benchmarks, leading to extended lead times, increased expenses, and disrupted trade flows.
To address these inefficiencies, NSC is implementing strategies such as the development of a Port Pricing Index to monitor tariff fairness, prevent overcharging, and enhance cost-effectiveness. Mr. Gabriel Idahosa, President of LCCI, underscored the critical role of ports in driving trade competitiveness and economic growth. He emphasized that efficient port operations are essential for reducing transaction costs, streamlining cargo handling, and bolstering global competitiveness.
However, Nigerian ports continue to grapple with longstanding challenges, notably congestion and delays at key ports like Apapa and Tin Can Island in Lagos. These bottlenecks lead to extended cargo dwell times, demurrage charges, and increased costs for goods, hindering the competitiveness of Nigerian exports. Addressing these issues is crucial for enhancing port efficiency, reducing operational costs, and facilitating smoother trade flows in Nigeria.
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