NPA: Nigeria’s Low Export Volume Major Contributor to High Port Charges

•As NAFDAC says India, China responsible for high inflow of fake, substandard drugs, products

Dike Onwuamaeze

The Nigerian Ports Authority (NPA) has identified imbalance in trade, especially due to low volume of export goods, as one of the major factors responsible for high operational cost in Nigerian ports.

This was stated yesterday by the Managing Director of NPA, Dr. Abubakar Dantsoho, in his keynote presentation at the Lagos Chamber of Commerce and Industry (LCCI) Stakeholders’ Forum on Port Efficiency.

Dantsoho said: “A major contributor to port cost is the imbalance in trade. In shipping, operational cost constitute the bulk of operating a vessel. When the entire cost of voyage is spread only on import, the cost will definitely be higher compared to being spread also on commensurate volume of export.”

Dantsoho, represented by General Manager, Corporate and Strategic Planning, NPA, Mr. Seyi Iyawe Akinyemi, said the Authority has licensed five Export Processing Terminals (EPTs) in the Lagos area in its bid to improve on the export of cargo through the Nigerian ports.

He added that the establishment of the EPTs has seen Nigeria’s export grown overtime.

According to him, the NPA is re-engineering its work processes for improvement in productivity in order to optimise time and cost.

His words: “The sea port is the gateway through which international trade enters the nation’s economy. As a result of this, efficiency in operating our ports is significant in order to reduce port costs. Efficiency and cost reduction will enhance our competitiveness within the African Sub-Region.”

The Deputy Director of E-Clearance, Port Inspection Directorate of National Administration of Food, Drugs Administration and Control (NAFDAC), Mr. Ayankop Ayankop, stated that most of the fake and substandard products in the Nigerian markets are imported from India and China.

Ayankop said this has made NAFDAC to impose double issuance of Clean Report on Inspection analysis (CRI) that would be done in these countries and Nigeria and charge the importer for these services in order to eliminate the influx of fake products.

He said: “Let me give you a background of what happens in this scenario. NAFDAC has noticed that most of the faked and substandard products that come into this country come from India and China.

“The issue of giving CRI charges on services is actually a regulatory intervention to check that drift of sub-standard products.

“It will be amazing to hear that some Nigerians travel to India and tell them to prepare sub-standard products, fake drugs and send it to Nigeria so that they can sell them cheaper and make money.

“So, the policy on CRI only applies to India and China. We will not charge you CRI fees if you bring your products from Europe, Singapore and even Saudi Arabia because they have a standard system that is transparent.”

In his keynote address, the Executive Secretary/Chief Executive Officer of Nigerian Shippers’ Council (NSC), Dr. Akutah Pius Ukeyima, port efficiency goes beyond just moving cargo to ensuring that every step in the supply chain operates smoothly, predictably and at a cost-effective rate. 

Ukeyima, who was represented at the stakeholders’ forum by the Director of Regulatory Services, NSC, Mrs. Margaret Ogbonna, said that Nigerian ports face some of the highest costs in the West African sub-region, with port charges that are 30-40 per cent higher than the West African average.

He said: “Nigeria’s ports are currently plagued by inefficiencies that affect trade facilitation. While the country handles over 85 per cent of its trade through the ports, cargo dwell times in Nigerian ports remain exceedingly high – averaging 18-20 days, which is far beyond the global benchmark of 3-5 days. This inefficiency results in longer lead times, higher costs, and an overall negative impact on trade flows.”

To address these inefficiencies, the NSC is actively working on implementing measures like “the development of a Port Pricing Index, which will help monitor the fairness of tariffs, detect and prevent overcharging, and provide benchmarks for cost-effectiveness and efficiency,” he said. 

In his welcome address, the President of LCCI, Mr. Gabriel Idahosa, said that ports are critical determinant of a nation’s trade competitiveness and economic prosperity. 

Idahosa said: “Ports serve as the lifeblood of international trade, acting as conduits through which goods flow seamlessly across borders.

“Efficient port operations are synonymous with reduced transaction costs, expedited cargo handling, and enhanced global competitiveness. Conversely, inefficiencies manifest as bottlenecks, escalating costs, and diminished trade volumes, ultimately impeding economic growth.”

He added that Nigerian ports face a series of longstanding issues that significantly hinder their efficiency and economic contribution.

“One of the most pressing challenges is the persistent congestion and delays, particularly at the Apapa and Tin Can Island ports in Lagos.

“These facilities are frequently overwhelmed, resulting in extended cargo dwell times and high demurrage charges, which ultimately raise the cost of goods and undermine the competitiveness of Nigerian exports,” he said.