Importers seeking to send goods to Nigeria are increasingly turning to other West African nations to evade excessive port charges.
- Importers are turning to other West African nations to avoid high port charges in Nigeria
- Clearing costs across Nigerian ports have surged, putting pressure on importers and businesses
- Manufacturers in Nigeria are pushing back against the increase, fearing higher production costs and inflation
In less than a month, multiple government agencies, terminal operators, and shipping companies at Nigerian ports have raised their fees by nearly 100%, making cargo clearance unaffordable for many businesses.
The Lagos port, in particular, has seen a sharp decline in activity, undermining Nigeria’s ease of doing business agenda.
The Guardian Nigeria reports that clearing costs across Nigerian ports have surged, with the price of processing a 40-foot container rising from N18–20 million to N26 million, while a 20-foot container has nearly doubled from N10.5 million to N20 million.
As a result, Nigerian ports are rapidly losing their competitive edge, forcing importers to shift to Ghana, Togo, and Benin Republic, jeopardizing Nigeria’s historic role as the primary hub for West African-bound cargo.
According to Nigerian Ports Authority (NPA) Managing Director, Dr. Abubakar Dantsoho, the country’s ports now handle fewer than two million Twenty-Foot Equivalent Units (TEUs), despite being the intended destination for 70% of the region’s trade.
Nigerian Ports reviews charges
The Nigerian Ports Authority (NPA) recently announced the implementation of a 15% increase in port charges, marking its first tariff adjustment since 1993.
This move, led by Managing Director Dr. Abubakar Dantsoho, aims to enhance competitiveness and drive infrastructural development, aligning NPA’s facilities with global standards.
According to Dr. Dantsoho, the tariff increase is necessitated by the need to upgrade outdated infrastructure, modernize equipment, and expand port capacity to boost efficiency and competitiveness.
The NPA relies on operational revenue to fund critical initiatives, including infrastructure development, channel dredging, safe navigation, and investments in modern marine crafts, digital automation, port security, energy efficiency, and staff training.
The 15% upward review, applicable to all NPA rates and dues, underscores the authority’s commitment to improving Nigeria’s port facilities and maintaining optimal performance.
Stakeholders react
Nigerian manufacturers are pushing back against the Nigerian Ports Authority’s (NPA) decision to increase port charges by 15%.
The Manufacturers Association of Nigeria (MAN) argues that this move will drive up production costs, leading to higher inflation.
According to Segun Ajayi-Kadir, MAN’s Director-General, the timing of this increment was wrong, as businesses are already struggling with rising operational costs, high foreign exchange rates, and astronomical energy costs.
Ajayi-Kadir emphasized that imposing additional financial burdens on manufacturers will only exacerbate the challenges faced by the real sector.
This concern is shared by other stakeholders, who are worried that the increased port charges, combined with the recent introduction of a 4% Free On-Board (FOB) charge on imports by the Nigeria Customs Service, will have a devastating impact on businesses and the economy as a whole.
