Since the Federal Government, through the Minister of Transportation, Mu’azu Sambo, announced the approval of $2.5bn for the Badagry deep seaport project after the Federal Executive Council meeting on Wednesday, industry players have been reacting. In this piece, ANOZIE EGOLE looks at the economic benefits of the project
With two major functional seaports in Lagos including Apapa and TinCan Island ports, and also the Lekki Deep Seaport which has been billed to start operation in September, many would have thought that the approval of $2.5bn for the Badagry Deep Seaport projects by the Federal Government last week is a misplaced priority.
Many industry players rather seem to be on the side of the government as they have lauded the move, saying that the project is likely going to help Nigeria recover its lost glory in some neighbouring countries.
A few weeks ago, the nation’s maritime industry was thrown into celebration following the arrival of the first ship at Lekki Deep Seaport, weeks later, the contractors of the project announced that it is over 90 per cent completed, an indication that the project is ready for the September commencement date.
In what seems like the Federal Government is paying attention to the project, the President, Major General Muhammadu Buhari (retd.), late last month (July), approved the designation of Lekki Deep Seaport as a customs port and approved a wharf.
Although arrangements have yet to be made concerning cargo evacuations out of the ports, that still poses a very big logistics threat to the residents of that axis in particular and Nigeria as a whole.
Shippers, freight forwarders and logistics experts have opined that until the issue of cargo evacuation out of Lekki Deep Seaport is addressed, a repetition of the traffic chaos experienced in Apapa is likely to be inevitable in Lekki.
Though the government has been coming up with explanations that work is underway to address this, Nigerians have yet to witness any of it.
With all these issues begging for answers, especially on the cargo evacuation out of Lekki port, the Federal Government last week approved the sum of $2.59bn for the Badagry Deep Seaport projects, with so many commendations from industry players.
The Federal Government, last week, approved the sum of $2.59bn for the development of the Badagry Deep Seaport project under a Private-Public Partnership.
The Minister of Transportation, Mu’azu Sambo, disclosed this to State House Correspondents shortly after the Federal Executive Council meeting chaired by President Buhari, at the Council Chambers of the Presidential Villa, Abuja.
Sambo explained that, under a Build-Own-Operate-Transfer delivery system, the port would be operated by the private sector for 45 years, after which it would be reverted to the government.
He noted that the project would generate $53.6bn in revenue and create about 250,000 jobs while making Nigeria a maritime hub in West Africa.
The minister said, “I presented a memo today at council with respect to the development of the Badagry Deep Seaport under the public-private partnership arrangement, where the private sector will inject money for the development of the port, and at the end of the concessionary period, the port reverts to the Federal Government of Nigeria through the Nigerian Ports Authority.”
It is expected that this project, if properly and thoroughly executed, has the capacity to make the country a transshipment centre, enabling the country to unlock the numerous opportunities in the sector.
Speaking to The PUNCH, the Chief Executive Officer of the Centre for the Promotion of Private Enterprise, Muda Yusuf, lauded the government for the move, saying that there was a need for more investments in maritime and port infrastructure.
He said there was a need for a solid port infrastructure to be able to unlock the numerous opportunities in the sector.
“It is a good development because we need more investments in maritime and port infrastructure. The Apapa and TinCan ports are already overstretched. We have the Lekki port, but there can’t be too many of them because there are so many opportunities in the maritime sector and we need a very solid port infrastructure to be able to unlock these opportunities.
Since it is an approval from the FEC, it is for the investors to take their positions, and the investors must have done their due diligence to determine if it is worthy of undertaking or not. It is the investors that will go into the details of the risk and opportunities in the investment. If they see that it is worthwhile, then they will invest their money. That is the way I see it. “
Nicodemus Odolo, a member of the board of trustees of Shippers Association Lagos State, stated that the arrival of the Badagry Deep Seaport would bring competition, lowering the cost of doing business in Nigerian ports.
“For sure, if there were more ports, that would mean there would be more spaces and there would be a quick turnaround of ships. Which means when you place an order — and before now, some orders take up to three months before you can get your shipments to Nigeria, so that means within a month, the ship can bring in your consignment because there is a quick turnaround?
“So for sure, it will benefit the shippers. Secondly, in any business where only one or two organisations are involved, there is the tendency to monopolise the business. Also, the shipping lines are monopolising Nigeria’s shipping industry. So if there are more ports, automatically more shipping companies will come up to compete for the business, and that will make charges for both importation and exportation be at a reasonable level. The cost of doing business will reduce when there is competition. “
Odolo, however, expressed fear that the contract might not see the end of the day, adding that it may be influenced by foreigners.
“But because of the level of corruption in the country, they awarded a contract. That’s what we hear. Let’s see the project coming up. Some of these foreign counterparts, through the help of some Nigerians, outsmart the government or people of Nigeria by intentionally omitting clauses that are supposed to be signed so that when the project starts, it will be the Nigerian government that will be at fault. Go to any court and the government will lose the case. Because it is an intentional thing, that is one of the problems. You can see the refineries for years and nothing is happening. “
Also speaking, the founder of the Association of Registered Freight Forwarders of Nigeria, Frank Ukor, said, “It is a move in the right direction because it will decentralise Apapa and TinCan ports because these two ports are congested and with the condition of the road it is getting worse. But if they do the Badagry Deep seaport, attention will move from the Apapa and TinCan ports to that side. So it is a good thing. “
The acting national president of the Association of Nigerian Licensed Customs Agents, Kayode Farinto, said the approval was timely adding that some neighboring countries were actually taking jobs away from Nigeria because of the shallow draft of our waters.
“Apapa is not a deep seaport; let me tell you if there is approval for a deep seaport, it is better for us because Cote d’Ivoire is actually taking the market away from us because some of these vessels can’t come to our waterways. Go and look at the depth of our waters; they are not more than 12 metres. So if there is approval for the deep seaport, it is a good thing. Once it is a deep sea project, it will definitely be deeper to receive big vessels provided they work according to the guidelines. “
The president of the African Association of Professional Freight Forwarders of Nigeria, Frank Ogunojemite, said that the move would create more jobs for working Nigerians.
“The approval is not bad if the rationale behind it is positive and there will be transparency in the process. It’s highly important to decongest the Apapa and TinCan ports so we can achieve prompt clearance time for our cargoes. It will also create jobs and facilitate trade. Don’t forget, the population keeps increasing while the country needs to be developing as well. We can’t remain stagnant forever. Also, other ports in the eastern part of the country need to be considered for improvement and provide resources to attract importers to use them too. “
According to a freight forwarder, Ojo Akintoye, “Personally, I don’t see anything bad in that because if these people do not do this, at the end of the day, the money may go somewhere else where no one can account for it. So using this kind of money to impact the lives of other Nigerians, I won’t object to it. It will also help us in the area of neighbouring countries to attract the business hub to our country instead of people going to other countries. All our businesses going to Seme can even come directly to us and we can do better business. “
Meanwhile, the founder of the National Council of Managing Directors of Licensed Customs Agents, Lucky Amiwero, said that the government should remove themselves from such approvals.
“I am not too comfortable with that approval; the government should not be involved in such development at this time. What they are supposed to have done is to approve the area where people can go and develop the port. All these arrangements will put Nigeria into a very big mess because of those developments.
Amiwero said that the country is approving too many ports with not enough cargo.
“What we need is just one seaport that can accommodate what they can transshipment centres. Nigeria just needs a good port. It is not about developing seaports in Badagry, Epe, or TinCan amongst others; Nigeria as a country needs one food transshipment centre. Most of the vessels now carry almost 40, 000 Twenty Equivalent Units, which we have a lot of in the world today, owned by some of these big shipping companies. They cannot come to Nigeria. What they do is they go to other ports, which are called the millennium ports. They are ports that can accommodate bigger ships. So the approval is uneasy; we have a port in mind for which we are considering concessions. If we must approve a port, it should be a joint venture just like what happened in Ghana and any other place. I think we are approving too many ports for this country and we are not having enough cargoes,” he concluded.
