…Say Move is Counterproductive

By Yinka Kolawole

The Manufacturers Association of Nigeria (MAN) has criticized the proposed 15 percent increase in port charges by the Nigerian Ports Authority (NPA), warning that the move will worsen the challenges faced by the manufacturing sector.

The NPA recently announced that it had secured approval for the tariff hike to enhance the competitiveness of the nation’s ports.

In a statement yesterday, MAN’s Director General, Segun Ajayi-Kadir, expressed concern over the potential negative impact of the increase. He highlighted that the hike would result in higher production costs, increased inflationary pressures, and reduced competitiveness of locally manufactured goods.

Ajayi-Kadir stated:

“At a time when businesses are struggling with the rising cost of operations, high foreign exchange rates, astronomical energy costs, and general economic uncertainties, imposing additional financial burdens on manufacturers through increased port tariffs will exacerbate the challenges faced by the real sector.”

He emphasized the importance of ports as gateways for international trade, which play a crucial role in business efficiency and cost-effectiveness.

“For manufacturers, port-related charges constitute significant indirect costs, as most raw materials and industrial machinery are imported through these ports. Any increase in charges will have a ripple effect, leading to higher production costs, increased inflationary pressures, and reduced competitiveness of locally manufactured goods,” he added.

Ajayi-Kadir warned that manufacturers who operate as tenants in NPA facilities would also face escalated costs, potentially disrupting the sector’s slight recovery from previous economic challenges.

He identified key issues affecting port revenue, including port congestion and inefficiency, high demurrage charges, insufficient infrastructure investment, and the need for competitive pricing strategies.

“While we acknowledge the need for revenue generation, increasing port tariffs could be counterproductive in the long run,” he concluded.