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Nigeria Loses Revenue To Shallow Channel Draught At Seaports

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The Nigerian economy is losing massive revenue due to shallow channels draught of all the nation’s seaports, LEADERSHIP has learnt.

According to maritime industry analysts, a deeper channel draught would lead to increased cargo throughput, contribute to Gross Domestic Product (GDP) and create massive employment.

LEADERSHIP recall that the shallow Nigerian channels draught have explained why the nation’s seaports are losing transit corridors for goods heading for landlocked countries in West Africa. Presently, Ghana, Togo, Benin, and Cote D’Ivoire provide a better route for moving goods to land-locked countries like Mali, Burkina, Niger, Chad than Nigeria, because of the overall cost.

According to sources, the revenue being lost is supposed to be generated from the Nigeria Customs Service (NCS), Standard Organisation of Nigeria (SON), National Agency for Food Drug Administration and Control (NAFDAC) and other revenue agencies operating at the nation’s seaports.

Also, the operators are expected to make increased revenues from handling and storage charges. Bigger vessels calling at the nation’s seaports would also lead to reduced handling costs and shipping cost due to lower operating costs for shipping companies. But, LEADERSHIP investigation over the weekend had shown that why ports of neighbouring countries can receive a vessel of 19,000 TEUs (Twenty-foot Equivalent Unit), Nigerian ports can only receive 4,900 TEU.

While Apapa, Tin-Can ports have 13.5 meters, the Eastern ports have a much lower channel draught with  the Port Harcourt port having seven meters channel draught, the Calabar ports having 6.4 metres whereas Ghana has 19 metres, Togo 16 metres, Cotonou 15 metres and Cameroon  has 16 metres.

Moreover, shipping experts have argued that for the nation’s ports to become an international standard maritime destination, it must attract huge vessels like the Very Large Crude Carriers (VLCC) and the Ultra Large Crude Carriers (ULCC). They argued further that the global shipping industry is now in an era where countries do 7,000-14,000 TEU capacity vessels.

But, for Nigeria to do that, maritime industry analysts said it will need to have deeper channels to be able to accommodate these bigger vessels (bigger tonnages) because shipping is about economics of size. Last year, it was reported that Nigeria’s ports dropped down the global ratings, basically due to bad infrastructures.

Nigeria’s major competitors in the West African region are the Port of Lome, Togo; Port of Dakar, Senegal; Port of Cotonou, Benin, who all deliver better efficient services than Nigerian ports. This has also been attributed as the cause of a downward trend of traffic experienced at Nigerian seaport since 2016, according to data released by the Nigerian Bureau of Statistics in March 2018.

However, at the moment, the size of ships that can come in at Lome, Togo are more than double the size of the vessels that are currently passing out in Nigeria.

In an exclusively interview with LEADERSHIP, a shipping expert, Dabney Shall Homa, said deeper channels mean more revenue for the federal government and operators. “A deeper draft mean larger vessels call, economies of scale and increased revenue for both government and operators. It means reduced handling costs and shipping cost due to lower operating costs for shipping companies. There should be a strengthening of our comparative advantage in marine transportation,” she said.

The Mediterranean Shipping Company (MSC) Lagos, managing director, Andrew Lynch, also said Nigerian ports have so much potential to be more regionally, but have infrastructural problems. According to him, “There’s a limit to the size of vessels they can accommodate and shipping, especially container shipping, is all about economies of scale. The larger vessels you use, the lower the cost of importing and exporting, and the lower the freight cost we can deliver.”

Also, the president, National Council of Managing Directors of Licensed Customs Agents (NCMDLCA), Lucky Amiwero, said Nigeria has lost its maritime leadership position to other countries not only because of security lapses but because of shallow draft. While Nigerian water is 13 metres deep, Ghana is 19 metres, Togo is 16 metres, Cotonou 15 metres and Cameroon is 16 metres.



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