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How can the Nigerian ports industry overcome obstacles after oil shocks?

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Albert Otesile of Sealandair.

Albert Otesile of Sealandair.

How can the Nigerian ports industry overcome obstacles after oil shocks?

By Albert Otesile*

The Nigerian economy has been buffeted in the past year as a result of depressed oil prices, since the economy is heavily dependent on oil revenues. It is quite significant also that the current period coincides with the new political regime of President Buhari.

The current backdrop is that the challenges of the Nigerian ports industry will need to take centre stage.

A major challenge is the plethora of governmental regulatory agencies, which appear to work at cross-purposes – hence it is difficult to have a streamlined approach to business operations.

The existing legal framework has established the Nigerian Maritime Administration and Safety Agency Act (NIMASA) for the promotion of indigenous commercial shipping in international shipping trade. The Act also regulates maritime safety and security in Nigerian territorial waters.


The oil shock has left a massive gap in the government’s budget, and there is now a realisation that the economy needs to diversify in real terms. However, poor transport links and energy shortages are the biggest obstacles to a flourishing economy, and other basic bits of infrastructure are falling apart. The main ports in Lagos are overcrowded and inefficient. Cargoes can take weeks to be unloaded and moved from the port area.

Nigerian Ports Authority ro-ro terminal.

Nigerian Ports Authority ro-ro terminal.

Private investors:

Despite the obstacles, private investors have entered this market. Construction is underway at Tin Can Island, West Africa’s largest shipyard, for a $300m joint venture between Samsung Heavy Industries and Ladol. There are plans underway to build a dry dock close by, the first in West Africa, that will allow Nigeria to repair ships and oil rigs that would otherwise have to travel to Cape Town, South Africa. Other investors are waiting to pour billions of dollars into port and other infrastructure.

Some challenges:

1] Provision and maintenance of marine craft to ensure efficient pilotage service.

2] Human capacity development – training and certification of pilots.

3] Security of waterways.

Reform of the port sector:

Nigeria’s ports remain a bottleneck to the country’s development, and this is not simply about Infrastructure investment. Technical and management services improvements need to be made and could be done with lower investment by working through strategic Nigerian partners. A simple step change to improvements has seen Nigeria Customs Service put in place the information technology platform to move documentation online and this is gradually proving more effective.

Container ports as an effective trade hub:

The World Bank, governments (particularly China) and logistics firms such as Bolloré have expended investments to tackle the issue of decrepit and inefficient container ports. Good ports are perhaps more important to Africa than any other region. Ports are an effective trade hub whereby goods can be regulated and taxed for country income.

According to the World Bank, in 2011 shipping a container from Africa was typically twice as time-consuming as getting one shipped from India and about six times as slow as doing it through an American port.

On average, containers sit waiting in African ports for three weeks before being taken to their final destination – compared with a week in other emerging markets. There is an opportunity to improve efficiency and profit since perhaps 80% of containers leave Nigerian ports empty.

Investment opportunities in the maritime sector:

1] Cargo operation/stevedoring services: the on-going port reforms in Nigeria have liberalised dock labour services thereby opening up opportunities for private participation in the provision of modern stevedoring services.

2] Marine services: opportunities abound for the provision of critical services e.g.  towage and pilotage. hydrography, navigational aids, nautical services, salvage operations, admiralty services, etc.

3] Short sea services: the Nigerian market accounts for over 60 percent of total inbound and outbound seaborne traffic into West and Central Africa. There are incentive-based measures, principally structured to provide adequate and effective support to shipping operators registered to trade in Nigeria.

* Albert Otesile is managing director of Sealandair and is a certified Customs and clearing agent with Nigeria Customs & Excise Board.  Sealandair is a Nigeria-based company that provides shipping and haulage services to Nigeria. The company is a corporate member of the Lagos Chamber of Commerce and Industry and a best practice organisation. http://sealandairng.com/

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Gboyega Awokoya July 24, 2016 - 10:11 AM

Definitely appreciate the brevity of this article since it tackles (head-on) a specific sector of the Nigerian Maritime sector. It highlights that improvements can be made through step-changes delivered in the technical and service aspect without high capital investment. Well done!

Lekan Otesile October 20, 2016 - 11:40 AM

Sincere thanks Mr. Awokoya for the kind comments. Nigeria’s Maritime sector is currently passing through a difficult phase; it nonetheless remains one of the most profitable sectors in the nations economy though yearning for appropriate investments.


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