Economic Crisis: Slump in Port Operations Puts 40,000 Jobs at Risk — Investigation
LAGOS — A significant reduction in vessel calls at Nigeria’s ports has thrown the maritime sector into turmoil, with businesses suffering due to the ongoing foreign exchange (forex) crisis and inflation. Terminal operators, shipping companies, truckers, licensed customs agents, and freight forwarders are among the most affected.
Key Findings:
- Drop in Vessel Calls:
- Vessel calls decreased by 4.5% from 3,957 in 2022 to 3,778 in 2023.
- Container traffic declined by 6.8% to 1.56 million 20 Feet Equivalent Units (TEUs) from 1.68 million TEUs in 2023.
- Cargo imports dropped by 20%, containerized goods by 30%, and vehicle imports by 55%.
- Economic Impacts:
- Terminal operators and shipping companies struggle to stay afloat.
- Comptroller-General of Nigeria Customs Service, Mr. Adewale Adeniyi, noted a drastic drop in cargo traffic and encouraged more exports to bolster the naira.
- President of the Association of Nigerian Licensed Agents (ANLCA), Mr. Emenike Nwokeji, highlighted the severe economic crisis, including the closure of businesses like SHOPRITE in Abuja.
- Challenges in the Sector:
- Unstable exchange rates set by the Central Bank of Nigeria (CBN) have further reduced cargo volumes.
- Freight forwarders and importers are struggling with the fluctuating exchange rates, resulting in significant drops in import volumes for bulk cargo, containerized goods, and vehicles.
- Asconio Russo, Managing Director of Port and Multi-Purpose Terminal Limited (PTML), blamed the economic situation on naira devaluation and high inflation rates.
- Potential Job Losses:
- Over 40,000 jobs are at risk across the port sector, including direct and indirect staff such as terminal operators, shipping companies, dockworkers, truckers, and clearing agents.
- President-General of the Maritime Workers Union of Nigeria (MWUN), Prince Adewale Adeyanju, emphasized the severe impact on port activities, with redundancies already taking place.
- NPA Cargo Throughput:
- Despite private sector struggles, the Nigerian Ports Authority (NPA) recorded a 15.04% increase in cargo throughput in Q1 2024 compared to Q4 2023.
- Apapa port recorded the highest cargo throughput, followed by Lekki Port and Tin-Can Island port.
- Revenue Considerations:
- Kayode Farinto, former Vice President of ANLCA, criticized the CBN’s handling of exchange rates, urging for a predictive exchange rate for customs purposes to stabilize import operations.
- Farinto also noted that the increase in revenue for the Nigeria Customs Service (NCS) is due to the higher exchange rate rather than an increase in actual cargo volume, cautioning against celebrating this “technical” increase.
In summary, the maritime sector in Nigeria is facing a severe crisis due to economic challenges, leading to a significant drop in port operations and posing a risk to thousands of jobs. Urgent measures, including stabilizing exchange rates and boosting exports, are essential to mitigate the impact on the sector and the economy at large.
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