HIGH PORT COSTS, CARGO DELAYS THREATEN NIGERIA’S BID TO BECOME WEST AFRICA’S MARITIME HUB

Nigeria’s ambition to establish itself as a leading maritime hub in West Africa is being undermined by high port-related charges, cargo delays and inefficient logistics processes, according to the Chairman of the Shipping Association of Nigeria and Senior Partner at Primera Africa, Boma Alabi, SAN.

Alabi, who spoke on the state of Nigeria’s maritime sector, identified congestion at major ports, particularly the Apapa and Tin Can Island ports in Lagos, as one of the biggest factors driving up shipping costs in the country. He said the challenge was not primarily a lack of quay capacity but procedural and logistics inefficiencies that slow down the movement and clearance of cargo.

According to him, cargo typically remains in Nigerian ports for between 18 and 21 days, significantly longer than the estimated five to seven days in Ghana and about four days in Cotonou. The prolonged dwell time, he explained, increases expenses related to storage, demurrage, trucking and financing.

Alabi said Nigeria’s logistics and clearance expenses are estimated to be about 30 per cent higher than those of several West African competitors. For some imported consignments, he noted, congestion and delays alone could increase the final landed cost of goods by between 20 and 30 per cent, depending on the commodity and financing arrangements involved.

He also pointed out that Nigerian importers and exporters generally face higher overall shipping-related expenses than their counterparts in countries such as Ghana and Côte d’Ivoire. While the basic ocean freight charged by shipping companies may not necessarily be higher, the additional costs incurred at ports and during inland transportation make the total bill considerably more expensive.

Alabi warned that these costs ultimately affect ordinary consumers because charges imposed along the supply chain are eventually transferred from shipping companies to importers, wholesalers and retailers before reaching the final buyer. In businesses operating on narrow profit margins, even relatively small additional charges can significantly increase the prices of goods on the shelves.

He further expressed concern that Nigeria’s high costs and prolonged cargo dwell times are making neighbouring ports more attractive to some shippers. According to him, cargo that could pass through Nigerian ports is increasingly being routed through Tema in Ghana, Lomé in Togo, Cotonou in Benin Republic and Abidjan in Côte d’Ivoire for transhipment and regional distribution.

The situation, he said, represents a major loss of potential maritime business for Nigeria despite the country having the largest market in West Africa. He also identified war-risk premiums and congestion surcharges as additional factors increasing the cost of calling at Nigerian ports.

The shipping executive also highlighted the difficulties facing Nigerian-owned shipping companies. He identified limited access to capital, high financing costs, foreign exchange challenges and regulatory uncertainty as major obstacles preventing local operators from taking a larger share of the country’s deep-sea maritime trade.

According to Alabi, large-scale container and tanker operations require substantial capital and long-term dollar-denominated financing. He noted that although the Cabotage Fund was established to support Nigerian operators, it has not been successfully deployed to the extent required to address the financing challenges confronting the sector.

He also criticised frequent changes in port charges, customs procedures and cabotage policies, saying such uncertainty weakens investor confidence and makes it difficult for local operators to plan their fleets and investments effectively. Global shipping companies, he added, have an advantage because of their integrated networks, digital platforms and door-to-door logistics capabilities.

On foreign exchange, Alabi said volatility and limited access to dollars increase freight costs and make the final landing cost of imported goods unpredictable. However, he noted that the recent improvement in the stability and accessibility of foreign exchange was a positive development that could support the maritime sector if sustained.

He also observed that Nigeria’s traditional imbalance between import and export cargoes is beginning to change, with more export cargo now leaving the country. He expressed optimism that the increase in exports would continue and help strengthen Nigeria’s position in international trade.

Despite the challenges, Alabi said Nigerian exporters were performing well but could become considerably more competitive if the country created a level playing field. He noted that high logistics expenses and lengthy processing times sometimes cause Nigerian exporters to lose orders to competitors in Ghana, Côte d’Ivoire and other countries that can offer cheaper delivered prices and more reliable transit times.

He described the situation as evidence that Nigeria is still underutilising its blue-economy potential, blaming agency bottlenecks and the slow adoption of reforms for some of the difficulties facing the sector.

Alabi acknowledged that recent investments, particularly the Lekki Deep Seaport, had produced measurable improvements. However, he said reforms involving systems such as B’Odogwu and the National Single Window were still experiencing early-stage challenges that needed to be addressed for their full benefits to be realised.

He estimated that, with stable policies, integrated logistics planning and appropriate incentives, Nigeria’s shipping industry could attract several billions of dollars in fresh investment over the next five years. Such investments, he said, could target terminals, inland dry ports, coastal shipping and logistics technology while creating tens of thousands of direct and indirect jobs across areas such as trucking, warehousing, stevedoring, ship agency, repair yards and other maritime services.

For Nigeria to capture cargo currently being diverted to neighbouring countries, Alabi argued that the government must look beyond building or upgrading ports and implement comprehensive end-to-end logistics reforms. These should include better road and rail connections, dry ports, simplified border procedures and a transparent and competitive charging structure.

He recommended two urgent reforms: rationalising port charges and agency levies through a single transparent tariff framework, and developing a rail-centred hinterland logistics system. He proposed increasing rail’s share of inland freight from its current estimated level of about one to two per cent to between 15 and 20 per cent over the next five years.

According to him, greater use of rail would reduce pressure on trucking, ease congestion on the roads, lower freight expenses and shorten transit times. He also argued that Nigeria must review fees embedded in legislation establishing maritime agencies, pointing to statutory charges collected by agencies including the Nigerian Maritime Administration and Safety Agency and the Nigerian Ports Authority.

Alabi expressed concern that some of these charges are collected in US dollars rather than naira, arguing that this contributes to the dollarisation of the economy and makes doing business more expensive.

He welcomed the emergence of the Nigerian Ports Economic Regulatory Authority and expressed hope that greater regulatory coordination would help streamline the activities of different government agencies. He said Nigeria must ensure that its port charges and operational processes remain competitive with those of other West African countries because the country is effectively competing for cargo with ports across the region.

He stressed that the maritime sector could become one of the major drivers of Nigeria’s economic growth if its potential is properly harnessed. Beyond shipping, he said the blue economy offers opportunities in fisheries, coastal development and the protection of Nigeria’s territorial waters from illegal activities.

Alabi ultimately called for a concerted effort by the government to reduce tariffs, streamline regulations and improve logistics efficiency, arguing that a more competitive maritime environment would attract cargo, increase investment, create jobs and help Nigeria capture a larger share of regional maritime trade.