Nigeria’s economy lifted by N3.9trn through port concession

By Motolani Oseni

Not less than a whopping N3.9trillion ($8.5bn) has been injected into the Nigeria’s economy from cargo importers in the last 17 years through stoppage of long vessels waiting time at the seaports.

It’s worthy of note that before port concessioning exercise embarked upon by the administration of Ex- president, Olusegun Obasanjo in 2006, it was gathered that foreign shipping firms have slammed congestion surcharge on Nigerian bound cargoes due to long vessel waiting time at Nigerian seaports.

However, while speaking to journalists after a courtesy visit to her by the new country managing director of APM Terminals Nigeria, Frederik Klinke, the chairman, Seaports Terminal Operators Association of Nigeria (STOAN), Princess Vicky Haastrup, said the federal government’s port concession programme has stopped congestion surcharged paid to foreign shipping firm since the FG concessioned the ports to private operators.

Speaking on behalf of terminal operators operating at the nation’s seaports, the STOAN chairman, noted that, vessels waiting time have been reduced from 45 days before 2006 concession to less than three days in 2023.

The STOAN chairman also said, members of the association, who are the concessionaires, are ready to inject more funds into the port once pending concession agreements are renewed.

“Nigeria’s port concession programme has been a monumental success. Many African countries send representatives here to understudy our port concession regime and how we were able to substantially increase investment and efficiency within a very short period of time. It shows the can-do spirit of Nigerians.

“The port concession programme reduced the waiting time of vessels coming into our ports from an average of 45 days before 2006 to less than three days at present. It has helped in eliminating the notorious congestion surcharge, hitherto, imposed on our ports by major shipping lines under the aegis of the Europe-West Africa Trade Agreement (EWATA).

“The elimination of the port congestion surcharge has resulted in saving Nigeria’s trading community over US$500 million per annum. If you multiply that by the 17 years of port concession, that amounts to a savings of US$8.5 billion to date. In naira terms, that is a savings of more than N3.9 trillion to the Nigerian economy,” she said.

She noted that, in addition to the huge savings to the economy, terminal operators have also made significant investments running into billions of dollars at the six major seaports across the country through the injection of private capital into port development; which has helped free up government resources for other developmental purposes, eliminated port congestion and led to the modernisation of the country’s seaports.

Others benefits of port concession, according to her, include; improved availability of cargo handling equipment, increased competition among terminal operators, improved welfare and training of port workers and the institution of a condition of service for dockworkers.

Haastrup said, prior to the port concession regime, dockworkers were treated as casual workers without employers and condition of service.

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“This narrative has since changed with the introduction of the Collective Bargaining Agreement (CBA) through which we have created a condition of service for them and also created room for review of their remuneration every two years,” she said.

Haastrup urged federal government to speed up the process of port concession renewals to enable terminal operators inject fresh funds into the port to further boost the competitiveness of Nigerian ports.

“We are competing with other seaports in the sub-region so we cannot afford to stop investing. I believe that once the new port concession agreements are signed, terminal operators will readily inject more funds into the system to enhance the competitiveness of our ports. The more we inject private capital into the port, the more we’ll attract more business and create more jobs for Nigerians,” she noted.