The persistent scarcity of foreign exchange, which restricted importers’ purchasing power together with the economic downturn, has continued to take toll on the operational capacities of the nation’s seaports, leading to the sharp decline in the number of vessels calling Nigerian seaports as well as the low utilisation of berths by ships.
A visit to Apapa and Tin-Can Island ports, Nigeria’s two major ports, shows that berth occupancy rate, which measures the time that the berth is occupied relative to the total available time, has dropped to an average of 25 percent, signifying low ship calls to Nigerian ports. Owing to this, industry close watchers, say that most terminals at the port now operate below capacity due to the reduction in the number of ships calling the seaports.
The Nigerian Ports Authority (NPA) shipping position shows that formerly, an average of 100 vessels usually berths monthly with different kinds of cargo in the Lagos pilotage district and this keeps the berthing space busy on regular basis, but this number in the past 10 months, has reduced to an average of 25 vessels per month. The implication is that terminals that have the capacity to handle three to four vessels simultaneously now handle one or two vessels in one week.
“The ports generally are experiencing low berth occupancy rate due to low volume of business activities in the port. Our berth occupancy, which currently stands at less than 25 percent, was about 50 percent in 2014, when activities was a bit higher than it is presently,” disclosed John Jerkins, Group managing director of SIFAX Group in Lagos recently.
The SIFAX GMD observed that all the measuring indices for the Ports and Cargo Handling Services Limited (PCHSL), the port arm of SIFAX Group, stood at a negative point in the first half of 2016, when compared with same period last year, when the rate of berth activities and ship traffic were high. “Vessel operations, throughput figures and gate activities, all recorded a sharp decline in volume such that PCHSL recorded about 50 percent drop in the volume of general cargo, 10 percent drop in the volume of container business and 25 percent decline in all the business chain.”
Lucky Amiwero, an industry expert, who confirmed this, said that business activities are currently skeletal in Nigerian seaports including the major ports in Lagos, Apapa and Tin-Can Island ports that are the major economic gateways into the country. He said that activities are presently at surface level as the number of ships calling the port with consignment continued to drop.
A three-year operational statistics released by NPA, shows that Lagos Port (Apapa), had a berth occupancy rate of 65.1 percent in 2011; 63.9 percent in 2012 and 56.8 percent in 2013. Tin-Can Island recorded 71.1 percent in 2011; 70.8 percent in 2012 and 68.3 percent in 2013 while Rivers 61 percent in 2011; 62.3 percent in 2012 and 47.9 percent in 2013.
Others include Onne, which had berth occupancy rate of 36.8 percent in 2011; 32.4 percent in 2012 and 24.6 percent in 2013. Calabar 22.7 percent in 2011; 24.6 percent in 2012 and 36.7 percent in 2013 while Warri 10.2 percent in 2011; 15.4 percent in 2012 and 11.2 percent in 2013
“Business activities in Nigerian seaports have reduced drastically in the past 12 months and the number of ship calls with import commodities, have also dropped significantly. This is why virtually all the berths are left unoccupied due to low business,” said Tony Anakebe, a maritime analyst.
According to him, the situation was prompted by issues around lack of access to foreign exchange (FX) together with the Central Bank of Nigeria (CBN) restriction and ban placed on importers’ of 41 selected items from accessing FX official window. This development, he said, had negative impact on the volume of goods that comes into the country as many Nigerian importers were discouraged from investing in importation business due to high overhead cost.
Anakebe observed that most manufacturing companies are no longer importing the critical input needed for production as they used to when Naira was firm in the foreign exchange market. “Investors that used to import ship load of goods in the past are no longer doing that due to the current economic situation.”
“Port is business is at its lowest ebb such that terminals that used to handle four vessels in one day during the booming days, now finds it difficult to receive one vessel in four days and this is why berths are idling away It is only few importers that are taking the risk despite the odds because those set of importers believed that they can still sell the goods based on the rate at which they obtained the foreign exchange,” he added.
The economy, he said, has gone bad since the fall in price of crude oil, which till date remains is the nation’s major of foreign exchange dropped in the international market. “We believe that that this is the time for the government to properly harness the port so as to enable it yields the desired revenue. Nigerian maritime sector is worth close to $12billion annually yet it has remained untapped, and this if harnessed, can help to sustain the economy.”