‘Poor infrastructure impedes Nigeria’s GDP growth, attainment of hub port status’
Executive Vice Chairman, SIFAX Group, Dr. Taiwo Afolabi
Transport and maritime stakeholders have said that the inability of the Nigerian government over the years to develop the critical infrastructure that aid economic growth was primarily responsible for the low growth of the Gross Domestic Product GDP.
The country is currently grappling with serious poor infrastructural base occasioned by the near absence of good roads, multi-modal transport system, lack of electricity and other basic amenities, a development that negatively affects the growth and development of every segment of her economy.
Executive Director, SIFAX Haulage and Logistics Limited, an arm of the Port and Cargo Handling Services Limited and member of the SIFAX Group, Major Henry Ajetunmobi rtd., who delivered a keynote address at the second edition of the Taiwo Afolabi Annual Maritime Conference, organised by the Maritime Forum of the Faculty of Law, University of Lagos, also said that the lack of adequate infrastructure in the country was partly responsible for the non-attainment of hub port status in the West and Central African sub-region.
The theme of this year’s conference is ‘Developing Critical Port Infrastructure Through Public– Private Partnerships PPP’.
According to him, a number of factors favour Nigeria’s seaports not only to emerge as the preferred ports in the sub-region, but also to make the leading ports on the African continent, some of which include her vast and extensive natural maritime endowment base comprising a coastline of over 800kms, an Exclusive Economic Zone EEZ of over 200 nautical miles, with a potential to accelerate the growth of her GDP and ultimately lead to economic development beyond current over-dependence on crude oil revenue earnings.
Others include vast inland waterways resource estimated at nearly 3,000 kilometres comprising over 50 big and small rivers that can support a vibrant intra-regional trade, a unique location on the coastline corridors of the Gulf of Guinea and the Bight of Benin, with eight of her 36 states having littoral status as well as a vast and growing population and market that confers ability to generate huge indigenous tonnage and capacity, among others.
He however regretted that there has been a serious disconnect especially in terms of her natural maritime and economic endowments, being the biggest importer and exporter in the sub-region cargo throughput, including oil and gas far outweighs of other seaports in the sub-region put together, as she is yet to assume her pride of place.
Available statistics show that seaports in smaller neighbouring countries pose a serious challenge to the Nigeria’s emergence as the leading ports in the sub-region, a preferred choice of destination for cargoes bound for the sub-region, as most goods meant for her local market are diverted to these smaller ports as a result of encumbrances in her port system occasioned by the poor infrastructure, complicated and cumbersome clearing processes with the attendant high cost of doing business.
He listed port infrastructure to include all those activities and facilities that support and enhance the maritime transport industry, making it efficient, productive, safe and environmentally friendly and reinforced by an effective regulatory framework with a view to making the industry deliver on its fundamental objectives.
Seaport infrastructure, he also said can be broadly considered to include ports, terminals, cargo handling equipment, channels and harbours, warehouses, ports access roads, whether tolled or non-tolled, including tunnels, bridges, intermodal transport systems involving rail and roads interfacing with ships and badges, utilities – which include power or electricity, water, wastewater, Information Communication Technology, deep seaports and scanners etc.
In order to address this gross infrastructural deficit, he said: “The way to go is increased and sustains investments in port infrastructure coupled with introduction of progressive and innovative changes in the way we do business”.
The SIFAX ED, who made a strong case for the adoption of a PPP arrangement in the funding of the development of port infrastructure, given the huge financial burden of the Federal Government said that the PPP scheme is a contractual framework or structure in which public and private entities come together to deliver a project or service that is traditionally provided by the government or the public sector.
Some of the structures or models of the PPP include Service Agreements or outsourcing, Joint Ventures, Concessions, as was adopted by the government in 2006 when private entities (concessionaries or private terminal operators) were brought in to take over cargo handling aspect of terminal operations.
Some of the benefits of the PPP include maintaining or improving upon service level, leveraging on private sector skills and competencies in project execution and service delivery through improved skills, technologies and innovation, unlocking access to capital and cost efficiencies, maintaining safe and secure operations, freeing government funding for other sectors of the national economy, other than to port development and port renewal.
The elements of port infrastructure are many and varied. A number of them have been outlined above, but the list is far from exclusive. This is so because the industry itself is an extremely complex business environment. The maritime space is populated by many different types and mix of activities involving different classes of industry players who often adopt varying business strategies. For time consciousness, we shall closely examine a few key ones.
He listed the elements of poor port infrastructure in the country to include lack of intermodal transport, which remains a major challenge to port efficiency, and may in fact actually be the Nigerian seaport terminal operator’s worst nightmare.
“Efficiency in port operation is best achieved when the three modes of transport – sea, rail and road are seamlessly brought together in a sustainable manner. Intermodalism not only confers speed on terminal operation; it readily qualifies port terminals that enjoy its easy access to classification and recognition as modern and efficient terminals in the comity of their industry peers. Speed and efficiency of operations manifest in short vessel turn – around time which itself is largely determined by how fast import cargo is discharged from the vessel and export cargo loaded into vessel alongside. The current low level of development of the entire intermodal transport value chain in the Nigerian port sector is caused by underfunding. This can be addressed through focused and sustained encouragement of potential private sector investors, both domestic and foreign, to see intermodal transport as a remarkably attractive investment choice”, he said emphatically.
Other elements include decayed port access roads, saying it is challenging enough to the maritime industry that Nigeria has over the years neglected the wisdom in intermodalism when it chooses to focus majorly on just one mode of transport (road), to the near total neglect of the other two vital modes-rails and barges.
Meanwhile, the Executive Vice Chairman of the SIFAX Group, Dr. Taiwo Afolabi, while delivering a welcome address at the annual event, called on the Federal Government to as a matter of urgency take steps to address the poor infrastructural base in the country, especially using the PPP window.
He argued that moves by the government to enhance ease of doing business at the ports, which led to the sacking of some government agencies and issuance of two Executive Orders by the acting President Yemi Osinbajo would be counterproductive if this challenge was not addressed.