Magazine article African Business

Ports Facelift Gathers Steam: The Recent Announcement That China Has Signed an $8.3Bn Contract to Develop a Rail Link between the North and South of the Country Comes as Very Welcome News to the Country's Business Community. but Greater Volumes of Trade Will Be Generated Only If Nigeria's Ports Are Also Modernised. Neil Ford Reports on Nigeria's Determination to Upgrade Its Ports Infrastructure

Magazine article African Business

Ports Facelift Gathers Steam: The Recent Announcement That China Has Signed an $8.3Bn Contract to Develop a Rail Link between the North and South of the Country Comes as Very Welcome News to the Country's Business Community. but Greater Volumes of Trade Will Be Generated Only If Nigeria's Ports Are Also Modernised. Neil Ford Reports on Nigeria's Determination to Upgrade Its Ports Infrastructure

Article excerpt

The grand plans devised for the regeneration of the Nigerian rail sector could have a massive impact on trade both within the nation and between the West African giant and the rest of the world.

[GRAPHIC OMITTED]

Yet the country's railways are only one part of a much wider transport network. Goods are carried to and from West Africa by international shipping lines, so the ports that act as an interface between Nigeria and the wider world have a vital role to play. Substantial progress has been made on implementing the port reform process but much more needs to be done before the port and rail network can act as a boon rather than a hindrance to investors.

Nigeria's poor transport infrastructure has long deterred investment, particularly from local companies. Trade between different parts of the country is limited by the cost in time and money of moving goods and people from one region to the next. This not only has economic ramifications but also a social and political impact, in that it pulls at the fabric of national cohesion. Trade between regions and between nations is the best antidote to conflict yet devised and the north and south of Nigeria do not trade nearly enough with each other.

[ILLUSTRATION OMITTED]

In October, months of promises of Chinese investment in the Nigerian rail sector finally seemed to come to fruition. China Civil Engineering Construction Corporation (CCECC) signed an $8.3bn contract to develop a rail line between Lagos and Kano. The 1,315km railway will form the centrepiece of the new rail network and will enable freight to be moved far more easily between north and south than on the country's overused and under-maintained road system.

Whether from private or public sources, new investment is expected to be made in many of the nation's ports over the next five years, partly to enable them to make the most of the new rail links.

Vastly improved rail freight services will have any number of benefits for Nigerian ports. They will encourage and enable trade, and so are expected to promote the use of any ports served by a modern rail station. Improved rail links will also enable goods to be moved in and out of each port, preventing overcrowding and minimising the amount of new storage capacity required, whether for dry bulk, container or any other form of freight.

The Nigerian port sector has long been controlled by the state-owned Nigerian Ports Authority (NPA). Despite the need for efficient ports to promote trade, the organisation was starved of funding by successive governments and efficiency at NPA ports was low. A combination of limited funding, low morale and outdated technology resulted in turnaround times--the time taken to unload and reload a ship--of many days, or even weeks. The most efficient ports in the world, in the Far East, Europe or North America, generally consider 48 hours to be standard.

While the Nigerian government has backed down on or delayed several key economic reforms, it has managed to proceed with implementing its port reform programme in the face of strong opposition, particularly from the trade union movement, because of fears over job losses.

Some ports have already been transferred to private sector control as a result of contract tenders. For example, APM Terminals, which took over P & O Nedlloyd earlier this year and which is owned by Danish shipping giant A.P. Moller, was awarded a 25-year contract to manage Apapa container terminal.

As with the country's other port operators, APM Terminals will be required to improve port facilities by investing in new cargo handling equipment and boosting overall port capacity. Given the poor track record of NPA, the private operators are unlikely to provide a worse service and are widely expected to reduce turnaround times through a combination of new investment and sound port management.

In addition, Abuja is likely to do well out of each concession. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.