Cargo Traffic Soars at Nigeria Ports on Benin Border Closure
Cargo Traffic Surges at Nigeria Ports After Benin Border Closure
The operator of Nigeria’s largest container terminal is expanding operations to deal with a sharp rise in cargo traffic since the government closed the border with Benin.
In August, President Muhammadu Buhari ordered a partial shutdown of Nigeria’s land borders with its neighbors to curb the smuggling of rice and two months later restricted the trade of all goods in an effort to bolster local production. Buhari also wanted to halt smuggling of Nigeria’s heavily subsidized fuel products.
About 80% of all imports into the port of Cotonou, Benin’s commercial capital, were destined for its much bigger neighbor, according to the World Bank.
Today, the volume of cargo cleared at the two commercial Lagos ports has increased significantly, with imports surging 50% in October compared to the previous year, said Concepción Boo Arias, a spokeswoman for AP Moller-Maersk A/S. Its unit APM Terminals manages the container terminal at Nigeria’s main port of Apapa in Lagos.
APM Terminals is spending $80 million to double the number of cranes at Apapa and expand capacity, according to Boo Arias. The Nigerian Ports Authority, which granted the company its concession in 2006, has complained about the inadequacy of its cargo handling equipment and the resulting delays, according to ThisDay newspaper. A spokesman for the NPA declined to comment.
The high level of inefficiencies at Apapa ports has been a headache for successive Nigerian governments, which have failed to fix decaying infrastructure, reduce red tape and tackle corruption. Apapa’s performance “has plummeted from already dismal levels over the past two years,” Cheta Nwanze, lead partner with Lagos-based risk consultancy SBM Intelligence, said by email.
Problems such as government agents and crumbling highways, which are beyond the control of APM Terminals, make onward travel of goods into Nigeria’s interior slow and expensive. The customs service’s role as a revenue generating agency “provides incentives for them to disrupt the flow of trade,” Nwanze said.
While Lagos’s ports handle about 80% of all shipping traffic, a new facility is under construction 65 kilometers (40 miles) to the east of the city, which should ease the gridlock.
Delivering goods to Apapa is significantly more expensive than sending them to the ports of Durban in South Africa and Tema in Ghana, according to SBM Intelligence. Elevated shipping and terminal charges, as well as local transport prices, means Apapa’s costs are five times higher than Durban’s and three times higher than in Tema, it said in a note published this month.
To contact the reporter on this story: William Clowes in Abuja at firstname.lastname@example.org
To contact the editors responsible for this story: Anthony Osae-Brown at email@example.com, Pauline Bax
©2020 Bloomberg L.P.