Apapa Gridlock Undoing Economic Competitiveness

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Babatunde Raji Fashola

In its recent annual report, the World Economic Forum (WEF) ranked Nigeria 115 out of 140 countries in its 2018 Global Competitiveness Index. The WEF report noted that Nigeria moved 10 places upward from its 2017/2018 ranking of 125 out of 137 countries.
According to the report, Nigeria’s ranking improved in four of 12 ranking pillars, namely infrastructure, health, business dynamism and innovation capability.

It, however, pointed out that the country would require improvement in the areas of institutions, ICT adoption, macro-economic environment, skill, market size among others. One compelling area that holds the key to the country’s economy but which the WEF failed to mention is in massive port reforms.
It is estimated that over N803m is lost daily as a result of port congestion and a survey conducted by a private consultancy firm, Akintola Williams Deloitte revealed that the efficiency at the nation’s seaports had earlier saved the Nigerian economy an estimated $800 million annually in congestion fees alone.
How could a country loss such quantum of money daily and still expect to remain competitive on the global stage? What about the impact on its economy and how did we get to this sorry state?
In the mid- 80s before General Ibrahim Babangida took over government in a military coup and went ahead to introduce his Structural Adjustment Programme (SAP), as a young man moonlighting in Apapa industrial area to raise funds for higher education, the whole stretch of Creek Road up to the main Apapa Port gate was a beehive of activities.
The companies that were maintaining the engines of production in Apapa were Cadbury, manufacturer of Trebor sweets, peppermint, a pharmaceutical company was next, SCOA Motors, Niger Biscuit, Michelin, SGBN, Ibru Fisheries, Elf right up to the Federated Motors Incorporated (FMI) manufacturers of American brand trucks, Dizengoff W.A, Brian Munroe, SCOA Assembly which assembled 404 pickup vehicles and then PKN, manufacturers of glass products.

On Burma road were First Bank, Tarpaulin Industries, Lipton Tea, Union Bank, Borini Prono, CAP and several others that relied mostly on the petrodollars to import raw materials for their factories. Yet, Apapa roads were free, the ports were accessible and the cost of doing business was low, prices of goods and services affordable and the economy was stable.
Today, Apapa is a ghost of its former past, not only has it lost it productive capacity, virtually all the companies mentioned above have left for greener pastures. In their places, we now have tank farms, gas plants, tankers and trailers occupying every imaginable space and crippling movement to a halt.

Apart from ships waiting for months to berth and offload cargoes, importers are forced to pay huge sums in demurrage, transport cost and several other charges imposed by duplicitous agencies. In Apapa ports, it now takes over 30 days to clear a container and importers have to go through excruciating pains to clear their goods from the port.
Many industry operators complain seriously about lack of access to the ports because of bad roads, but that is just one side of the story. It has been discovered that apart from lack of access road which luckily Dangote Group is already addressing, most of the port operators are said to have converted the holding bays for trucks inside the ports to warehouses for containers thereby forcing the trucks on the roads.
It is a pity that each successive government has failed to creatively find ways to bring succour to Apapa basically because it has adopted the same approach to tackle an aged long problem. Unfortunately, the present administration has not shown a strong political will to address Apapa’s intractable traffic problems by wielding the big stick on these companies owned by such sacred cows like retired generals, highly connected politicians and big business owners who are milking the economy dry from their punitive actions.
In order to point the way forward by comparing port reforms in other climes to what obtains in the country, the Lagos Chamber of Commerce and Industry (LCCI) in its recent report titled ‘Cost of Maritime Ports Challenges in Nigeria’ acknowledged that the Netherland Port in Rotterdam, the largest port in Europe, also faced serious congestion in the port.
However, as part of reforms to decongest the port, the Port Authority allocated different terminals to the ships arriving based on their size and number of containers carried. This helped to free up main terminals for the vessels with high capacity; deployed efficient cranes to unload vessels with high capacity.
This made the processes associated with unloading of containers faster; expanded use of inland port facilities; riding on an efficient rail system and water tracks. This meant that containers meant for inland shipping were bundled at one location i.e. Uniport Terminal in the Waalhaven area. This allowed for the other terminals to be free for seagoing vessels.
Citing another example of Singapore as the shipping hub in Asia and at a time when there were congestions and other issues in the port, the country created a Research and Development Unit called The Maritime Innovation and Technology (MINT) with massive investment, about 150 million dollars was invested in the unit.

It noted that the Singapore straits are monitored by the Maritime Port Authority’s (MPA) port operations control centre, using Vessel Traffic Information System (VTIS) which has the capacity of handling up to 10,000 tracks at any one time. Annually, more than 130,000 ships call at Singapore with at least 1,000 vessels in the port at any one time. Every 2-3 minutes, a ship arrives or leaves Singapore. The report pointed out that although Singapore does not produce any oil, it is the top ship refuelling port in the world. In 2015, more than 45 million tonnes of bunkers were lifted in Singapore. Today there are more than 5,000 maritime establishments contributing about 7% to Singapore’s GDP, and employing more than 170,000 personnel.
It said Shanghai port in China currently stands as the busiest port in the world with an estimated 35.29m TEU annually. The performance of these ports was achievable by Government and Private sector participation in providing needed infrastructure and maintenance. An efficient good road network is crucial to improving productive manpower, which reduces clearing/delivery time for containers in and out of the ports.
Coming nearer home, it pointed out that the Ghanaian Government have recently authorised the cancellation of terminal handling charges by shipping lines at the ports. This act being put in place would improve the timeline to clear containers at the ports by eradicating delays and excessive charges on cargoes.
On the proliferation of security agencies in the port, a recent NPA report stated that there are six Government regulated agencies that are legally authorized to be at the ports and conduct all forms of inspection and certification. Unfortunately, we currently have more than twelve. The illegal excesses have to be investigated to encourage the ease of doing business at the port.
The results are already manifesting in nearby Ghana. With the introduction of the online vessel shipping system at the Ghanaian Ports, port activities are currently showing tremendous growth as shipping lines can conveniently apply for vessel space from the comfort of their homes. Currently, a vessel booking meeting is conveyed where shipping lines assemble for the allocation of berthing space for their vessels. This has however improved efficiency and service delivery at the port.

Which is why the implementation of the Nigerian Single Window trade is very crucial at this point is enhancing service deliveries across various port activities. This innovative concept provides port users with the opportunity to access all resources and standardised services from different Government agencies. This would further eradicate the unlawful charges and hitches associated with these agencies. Nigeria has the resources to achieve sustainable port reforms that would engender the ease of doing business but the present administration must muster the political will to do the needful even if it means stepping on powerful toes to free Apapa for all time.