Maritime

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Economists expect Nigeria’s maritime industry to be a major contributor to the country’s Gross Domestic Product since 90% of world trade is by sea. In countries like Singapore, maritime is an important lifeline, contributing about 7% to its GDP.

The maritime industry involves moving of people and goods over the water. It ensures that Nigeria, a major crude oil exporting country partakes in international trade. It also includes off-shore activities such as fishing, underwater resources, towage; and on-shore ones such as shipping, ship and port construction and maintenance.

Despite accounting for 85% of the nation’s external trade—import and export passes through the nation’s seaport—Nigeria’s maritime sector’s competitiveness against global and continental contemporaries is weak.

A capture of the industry reveals it contributes on average 1.6% to Nigeria’s GDP. The sector has grown for an average of 3% in the last five years, with Q4 2016 8% growth as a highest in recent time. It grew by 1.87% in Q4 2019 just before COVID-19’s impact on international trade.

Several challenges plague the industry, many are man-made, which solutions like an executive order have been given to make things better, yet the slow growth still exists.

Apapa’s contention with logistics and congestion issues
One clear challenge with the industry is the cargo congestion at the Apapa port and worsening logistics incompetence.

Of Nigeria’s six seaports, the Lagos Port Complex in Apapa is the largest but massively congested because of inadequate infrastructure, particularly poor access roads and inadequate cargo scanners.

The 100% physical examination that goes on in the port also contributes to the congestion, an exact opposite to the 100% scanning of US-bound containers, where high capacity scanners can scan a maximum of 150 containers per hour. Customs’ officials have been accused of waylaying cargoes for cross-checking or extorting port workers thereby causing delays.

A shorter time in any port is a positive indicator that could signal the level of efficiency and trade competitiveness. But as of March this year, waiting time in the Apapa port ranges from 14 to 41 days, this is compared to a median time of 23.5 hours (0.97 days) that ships spent on a port across the world in 2018.

Indicators like this drives the World Bank’s assessment of Nigeria’s ability and quality of logistics services. For example, logistics competence dropped to a four year low (2.4 out of 5 possible marks) as of 2018–its latest logistics performance report. Clearance processes by customs agencies are also at the lowest efficiency level since 2007.

The timing and efficiency problems are heightened by the cost of shipping goods into Nigeria. Recent research reveals that Apapa port cost of shipment is nearly five times that of Durban, South Africa, and three times that of Tema, Ghana.

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