Lekki deep sea port promises $360 bn benefits

Sopuruchi Onwuka

Cumulative economic benefits of the Lekki deep sea port would topple whopping $360 billion, but players in the nation’s maritime industry fear that meeting the economic target might be stalled by channel occlusions that currently plague existing ports in the congested coastal Lagos.

Analysts in the nation’s maritime sector called on the promoters of the project which was commissioned on Sunday by outgoing President Muhammdu Buhari to look beyond the delivery of key cargo handling facilities and envisage difficulties that might arise from evacuation of consignments.

Economic analyst with the Lagos-based SBM Intelligence, Ayotunde Abiodun, is quoted in report by Associated Press as pointing at “poor and underinvested rail network connectivity” and poor condition of the the roads connecting to the new quay.

The Oracle Today reports that $1.5 billion harbor infrastructure is a joint venture among two foreign firms from Singapore and China in collaboration with host Lagos State government and the federal government.

The dockside would be operated by Singapore-based Tolaram Group and the China Harbor Engineering Company. Both foreign companies own a majority stake of 75% in the project.

The Lekki port, according to the promoters now becomes one of the biggest in West Africa. It is conceived to ease discharge of cargoes from the state where all roads leading to the existing quay facilities are traditionally blocked by haulage trucks.

Over 80% of the country’s imports are handled by just two of the ports in Lagos, where congestion has led to a massive loss in revenue as cargoes are often diverted to other West African nations.

Although Nigeria has six major seaports along its coastal lines, policies and programmes that govern the maritime sector have made it difficult for ports and maritime facilities in the Eastern parts of the country to receive import cargoes, a situation that contributes to significant escalation in the cost of imported goods as all imported must be hauled from Lagos State.

The Oracle Today reports that the Nigerian haulage industry for goods and petroleum products is run on road transport vehicles, causing slow logistics flow and congestion at the nation’s import reception points concentrated in Lagos State.

Also, the reliance on inefficient road haulage system for flow of imported goods from the wharfs is exacerbated by poor condition of existing roads and lack of investments in development of new ones.

Rail transportation in the country is equally challenged by limited tracks and coaches, worsening security situation and obsolescence.

There have been numerous calls to decongest coastal Lagos State which already has two vibrant but inadequate ports, jetties and sundry maritime facilities for production and maintenance of marine vessels and structures.

The Lekki deep sea port is perceived as huge economic development venture by the Lagos government to consolidate the status of the state as the nation’s marine hub and expand the ranking of the state as West Africa’s largest economy and commercial centre.

According to facility data, the port’s container terminal holds capacity to handle over 2.5 million 20-foot standard containers per year.

Governor Babajide Sanwo-Olu said the Lekki quay facilities would create hundreds of thousands of and also ease cargo congestion that costs billions of dollars in annual revenue. He noted that the new seaport would divert traffic from the congested Apapa ports.

Although the Nigerian interest in the facility is just 25 percent, Governor Sanwo-Olu calculated the expected revenue and non-revenue economic benefits to be in excess of $360 billion.

However, the economic benefits would only materialize on the back of efficient operations at the facility; and experts contend that the economic targets call for additional investments in bridging smooth flow of goods from all ports to inland destinations.

China’s ambassador to Nigeria, Mr Cui Jianchun, stated that the seaport holds the potential to accelerate economic development of the country, explaining that the investment does not come with debt obligations on the country but a tap into the vast markets of the country.

He said the investment is essentially a patronage to the Nigerian economy.

“This is equity of investment. This is not a loan, this is not borrowing. This is investment,” Mr Jianchun explained.

The Oracle Today reports that the Chinese funded $1.5 billion deep seaport is conceived to help grow the nation’s ailing economy which has been rolling downhill since the administration of President Muhammadu Buhari took inception in 2015.