Transforming Nigerian Economy with Deep Seaports

Maritime

With the inauguration of Lekki Deep Seaport  recently,  and with five other deep seaport  projects lined up, Nigeria stands as the  hub of maritime activities in the West and Central African region with huge economic benefits, writes Francis Ugwoke   

With the recent inauguration of the Lekki Deep Seaport, the coast is clear for others on the line, a development that signals enormous economic benefits for Nigeria.  The take-off of the Lekki Deep Seaport was one of the painstaking efforts of the promoters of national economic growth through public and private sector partnerships. Specifically, the  $1.6 bn project is a joint venture between the federal government, represented by the   Nigerian Ports Authority (NPA), the Lagos State Government, Tolarams Group (owners of the Lagos Free Zone), and China Harbour Engineering Company. A French company, CMA CGM Mozart, runs the seaport. The Chinese Ambassador to Nigeria, Cui Jianchun,  had described the deep seaport as simply a model of ‘five parties from four countries.’ To Jianchun,   the project, seen as filling the gap created by other ports in Lagos, considering their low draught,   was a way of taking advantage of the wisdom and strength of all parties.  

President Muhammadu Buhari, during the recent commissioning,    witnessed cargo handling operations performed by the   CMA CGM Mozart at the quayside. The excited Buhari   described the project as   “a game-changer that would redefine maritime activities in Nigeria and the entire West African sub-region.”

The seaport will accommodate ships that no Nigerian port has ever received. With increasing advancement in the shipping sector, conference liners are expected to visit the port with the Panamax model of ships with the capacity for over 20,000 TEUs (containers) in a single voyage.  This distinguishes the port from others that have remained a nightmare in recent years due to the gridlock in the Apapa environment. 

The commissioning was attended by the Governor of Lagos State, Babajide Sanwo-Olu, the Transportation Minister, Muazu Sambo, the Managing Director of the Nigerian Ports Authority (NPA), Mohammed Bello Koko, and chief executives of parastatals under the Ministry of Transport, all of whom were overjoyed that the deep seaport would be operational during their administration.

 Sanwo Olu did not hide his feeling in his speech; he told the President that it was a good development and that the project was happening during his administration.

He described the seaport as one in which “the size of the vessels that will berth at the port would be four times the size of vessels that currently berth at Apapa and Tin Can Island Port.”

He said,” We are excited that in your own time, something fresh has been birthed in this country, and it is going to generate thousands of direct and indirect jobs.”

Similarly, the Transportation Minister, Sambo,   commended the President for his approval to designate the seaport as Customs Port which, according to him, was contained in the Federal Government Gazette.

 He said,” The very fact that the letter of intent between the proponents of Lekki Deep Seaport and its financial partners was signed as recently as April 2019 and by January 2023, the wide-ranging impact project is already being commissioned is a testament to the tenacity of purpose of the Federal Ministry of Transportation through the Nigerian Ports Authority.

“ With Seaports being under the exclusive legislative list, the Nigerian Ports Authority’s provision of a sinking fund for Lekki Deep Seaport Federal Government’s equity contribution gave this project the necessary statutory cover and financial guarantee in line with the law.

“ Completing a project of the magnitude and impact of a deep seaport in a record time of 45 months shows the effectiveness of tenacious ministerial supervision, strict regulatory oversight, and strong presidential backing.”

The  Managing Director of NPA, Mohammed Bello-Koko, who spoke during the inauguration of the  Lekki Deep Sea Port, described it as Nigeria’s most profound and modern port.  Bello Koko said the seaport would be receiving bigger vessels and more cargo. The draught of the port is about 16.5 meters. 

Bello-Koko added,  “Therefore, the economics of scale would set in, and we believe that the cost of doing business in this country will be lower compared to other countries, and it will also provide employment opportunities, and it will be more efficient. It will also be a model for other upcoming deep sea ports in Nigeria.”

 Lekki deep seaport has  13 quay cranes for a capacity of 2.5 million TEUs on a 1.2-kilometre quay with a depth of 16 meters. It can operate vessels with a capacity of up to 15,000 TEUs and become one of the largest in West Africa. The port’s wet cargo terminal has the power to handle vessels with  45,000    dead weight tonnage (DWT); according to the management of the port, the terminal can be expanded to reach a capacity of 160,000 DWT. In the case of the dry bulk cargo terminal case, the port has a quay length of 300m, which can take a  Panamax class vessel (75,000 DWT).

The Chinese Ambassador also described the project as a good business model, explaining that four countries, China, Nigeria and, Singapore, France, were involved.

 Expectations 

 With the inauguration of the seaport by the President, expectations are high that the federal government will provide the necessary infrastructure to smoothen operations for shipping service providers and shippers.  The first thing many expect is the need to link the seaport with rails. What is certain for now is the deployment of barges for cargo movement. This follows the concerns that trucks may lead to gridlock in the Lekki area where the seaport is located, as has been the case in the Apapa port area. 

However, there are also concerns about the cost implication of the use of barges in the movement of cargo. The NPA is under the strict directive that trucks will not be allowed into the seaport to pick cargoes like what obtains in Apapa to avoid gridlock.

 Emerging   Deep Seaports 

With the completion of the Lekki Deep Seaport,  expectations are equally high that attention will now shift to other deep seaport projects. Like the Lekki Deep seaport, the NPA will coordinate the development of other deep seaports and other river ports across the country. Some seaports include Ibom Deep Seaport, being championed by the Akwa Ibom State government, Bakassi Deep Seaport, by the Cross River state government; and  Badagry Deep seaport, by the Lagos state government. There are also Bonny Deep Seaport in Rivers and   Ondo Deep seaport. The Edo State government is also championing the Benin river port. In all, the NPA, the landlord of the port system, remains a strategic partner.   Ibom,   Bakassi, and Badagry deep seaports are age-long projects whose take-off has been slow for the perhaps necessary concretization of agreements between partners.   The Cross-State Government recently said it will still proceed with the deep seaport project.

Similarly, others are still believed to be going ahead with the projects.  What happens to most of these projects is expected to be clear after the 2023 election, when a new administration will assume office. But the federal government has inaugurated a committee that will advise it on the Ondo Deep seaport and  Edo river port.  According to the Permanent Secretary of the Ministry of Transportation, Dr. Magdalene Ajani, who inaugurated the committee on behalf of the Transportation Minister, Alhaji Muazu Sambo, members of the steering committee include the Managing Director of NPA, representatives of the Federal Ministries of Finance and Justice, National Inland Waterways, Nigerian Shippers’ Council, Infrastructure Concession Regulatory Commission, and others.

The committee has since begun work with the goal of completing its report before the end of this administration.

Benefits of  Deep  Seaports 

The development of seaports in Nigeria has the advantage of boosting the nation’s economy. It will multiply economic and commercial activities in specific areas apart from the revenue being generated for the government.  According to the Transport Minister, Sambo.,  Lekki’s deep seaport would generate 170,000 jobs when operations commence.

It would be recalled that Bello-Koko had said that the Authority was determined to leverage  Nigeria’s status as Africa’s biggest economy to ensure the country becomes maritime hub status in the  West African region. He said this would be through investments in modern deep seaports, attracting huge merchant vessels with multiple socio-economic benefits. To Bello Koko,  this will, in turn, boost ports’ revenue performance.

At a retreat with the theme  “Expanding the Frontiers of Service Excellence,” he said new direction and measures had been put in place to actualise the aspirations of the NPA.

 He said, “Nigeria accounts for about 70 percent of cargoes imported into West and Central Africa, and the country controls an impressive stretch of the Atlantic Ocean. Nigeria’s rich aquatic endowments and her border with landlocked nations make developing deep seaports a huge potential revenue earner “. 

Many believe that the completion of these deep seaports project places Nigeria as simply the hub of maritime activities in West and Central Africa with huge economic benefits.