Maritime Report

May 15, 2019

Stakeholders place cost of Apapa traffic at trillions of Naira

We warned about Apapa gridlock 18 years ago — Ports Council

File image of chaotic traffic situation on Apapa road.

Chaotic traffic situation on Apapa road

STAKEHOLDERS in the Nigerian maritime industry are putting figures together, calculating their losses due to the long-standing traffic gridlock in Apapa port area.

Apart from the man-hour losses, they also list the steady increase in the volume of Nigerian bound cargoes that are being diverted to ports of neighbouring countries.

Director General of the Lagos Chambers of Commerce and Industry, LCCI, Mr Muda Yusuf who refrained from giving a specific figure, told  Vanguard Maritime Report that the amount runs into several trillions of Naira.

LCCI, he said, had commissioned a report on the cost of the port crisis Nigeria saying that Nigerian ports remain as one of the worst in the world.

The report stated: “The economy is currently losing about N600 billion in customs revenue, estimated $10 billion for non-oil export and about N2.5 trillion corporate revenue in the industry on an annual basis.

“Capacity utilization stands at 38-40% and approximately 40% of businesses located around the ports communities have either relocated to other areas, scaled down operations or completely closed down.

“These developments have very huge adverse implications to tax revenue, job creation and real economic activities with downside effect of about three per cent on the country’s GDP.”

The report stated further: “Property market around Apapa (port community) has hit 60% vacancy rate. In addition, property prices in the area are now down by about 50%.

“For instance, a parcel of land which sold for N200 million in Apapa GRA now sells for between N80 million and N100 million in Apapa after an extended period of wait in the market.

Customs considering alternative transport mode for cargo delivery 

“It was confirmed that about 70% of buildings on major connecting roads in the port community such as Liverpool Road, Creek Road, Wharf Road, Point Road, Child Avenue, North Avenue and others have estate agents’ boards for let and sale.

“This implies that the impact of the ports crisis on real estate investments and other businesses located around the ports is phenomenal.”

Counting the losses, President of the National Council of Managing Director of Licensed Customs Agents, NCMDLCA, Mr Lucky Amiwero, said that apart from the revenue generation by Nigerian Customs Service, NCS, the freight component of the industry has also been lost to ports of other countries as a result of cargo diversion.

He explained that whenever there was a diversion, the freight components are also moved out adding that the freight component comprises the shipping companies charges, terminal handling charges, transporters’ charges, Licensed Customs agents’ fees and other auxiliary charges.

“When you put all these together, the loss to the economy runs into trillions of Naira.”

He disclosed that because of the situation in Nigeria, ports of neighbouring countries are updating their facilities with a view to keeping having Nigerian bound cargo diverted to their countries.

He stated: “That is why Niger, Ghana, Togo and Benin Republic are surviving on Nigerian cargoes.

“So when you put all these together, the loss to the economy is in trillions of Naira.”

He disclosed that more than 70 per cent of the businesses in Apapa have relocated adding that the remaining ones operating are doing so at a loss.

He also explained that apart from the traffic, the planlessness of the people that concessioned the ports is also contributed to the crisis currently bedevilling the port industry.

He disclosed that despite the absence of holding bays and trailer parks, terminal operators still collected fees and charges for holding bays that were no longer in existence, adding that the fee is in the cargo dues.

The Chairman of the Port Consultative Council, PCC, Otunba Kunle Folarin, said that the cause and effect of the entire traffic problem should be looked into.

Folarin agreed that the traffic gridlock affects the economy because the cost of haulage alone has more than doubled and this has its ripple effects on the cost of other goods and services in the country.

He stated: “If you are going to deal with the issue of the economy and the gridlock, you must deal with the cause and effect of the problem.

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“The city has built itself into the port; is this done anywhere in the world? Don’t you see brothels less than five minutes walk to the ports?

“The problem is that the port corridor has been congested by buildings that can’t be removed to create additional lanes.

“Don’t you see residential houses close to the ports? Don’t you see schools near the ports? Don’t you see Cinemas and brothels 500 meters to the ports; So what are we talking about.

“They have allowed buildings to be too near to the port,” he noted.

He suggested a dedicated corridor for the movement of trucks and other articulated vehicles without struggling with municipal traffic.