Nigeria’s new port of Lekki has doubled cargo capacity, but must not repeat previous failures

Nigeria's New Port Of Lekki Has Doubled Cargo Capacity, But Must Not Repeat Previous Failures

three quarters of the world is covered with water and up to 90% of world trade is done by sea. Seaports and maritime transport are essential to the conduct of global trade.

Africa has relatively few natural harbors which provide shelter and are deep enough to accommodate large vessels. Along the Atlantic coast of West Africa, for example, natural harbors exist only in Freetown and Lagos. Consequently, artificial harbors have been dug in the lagoon and river ports, which dot the coastline from Morocco to South Africa. Considerable capital and engineering know-how have been applied since the end of the 19th century to make African ports accessible to maritime transport.

Since the 1990s, African countries they are engaged in a “race for ports” to become the maritime hub of their region.

In this context, the recent completion of the US$1.5 billion deep-sea port of Lekki in Lagos, Nigeria, is significant.

Lekki is one of Africa’s top six ports. It is Nigeria’s first and largest fully automated port. It more than doubled the capacity of the ports in Lagos, which had remained the same for 25 years. It will host the largest in the world freighters and should reduce waiting times for goods from 50 days at two days.

Its modernity and efficiency should make Nigeria a regional hub and boost the country’s GDP. It is envisaged to generate 170,000 direct and indirect jobs, billions of dollars in tax revenue for Lagos State and the host community, and $361 billion in revenue over the next 45 years.

My work on the economic history of African seaports supports the view that the deep water port of Lekki could serve as a hub for local and regional development. The project is expected to have multiplier effects on trade, industry, agriculture and small businesses connected to them by various modes of transport.

A combination of factors will determine its success. These include its ability to meet the demands of maritime transport; its effectiveness and competitiveness in national and international contexts; policy coordination; how the modes of transport work together; the state of domestic economies; and the application of technology.

Nigeria’s Port History

In colonial Nigeria, a major port development took place between 1850 and 1950 for the economic benefit of Great Britain. Shipping was concentrated in a few ports during the World Wars and the Great Depression (1929-1933). But the increase in imports and exports in times of prosperity required more functioning ports to cope with the increased volume of trade.

Lagos and Port Harcourt grew in importance because they had rail links to the hinterland. Port Harcourt has been created as an outlet for coal exports from Udi, near Enugu in eastern Nigeria, and tin exports from the Jos plateau. Lagos had become the first port in West Africa following major port works between 1892 and 1914 when he welcomed his first ocean liner. He handled most of Nigeria’s foreign trade up to the period of independence.

The Civil War of 1967-70 forced the adoption of a port concentration policy in Lagos. Port congestion in Lagos was compounded by the demands of post-war reconstruction. Massive oil revenuesfollowing the Arab-Israeli conflict of 1973, financed massive imports.

Poor planning has burdened Nigerian ports with an armada of cement-laden ships in the late 1970s. Congestion imposed huge demurrage costs on the country. And containerization, which the existing seaports were not suited to handle, necessitated the expansion of the port of Apapa and the creation Tin Can Port in Lagos in 1977.

During the 1980s and 1990s, the growth of the national economy outmoded the installed capacity of Nigerian ports. At the same time, Nigerian ports hit growing notoriety for inefficiency, decaying infrastructure, uncompetitive tariffs and systemic corruption. Other West African ports offered better services – so traffic was directed there instead.

The Nigerian government finally adopted the proprietary port authority model in 2005: state control was replaced by a concession system. This improved port services, but did not bridge the gap between capacity and volume of container traffic. This is how the idea of ​​the Lekki Deep Sea Port was conceived.

Potential of Lekki Port

Lekki is expected generate direct and induced commercial revenues estimated at $158 billion, a qualitative impact on the manufacturing, commercial and service sectors, and a multiplier effect of more than 230 times the cost of construction. It will attract a massive influx of people, businesses and investments.

The new facility will support the industrial and petrochemical complex, including Dangote Refinery, the largest in the world, located in the Lekki Free Zone. He’s about to attract investment around US$20 billion in the first few years. With a nearby airport, the port will be part of a port city with logistics infrastructure of various kinds.

The port of Lekki is expected to reduce congestion in older ports in Lagos and help recover lost traffic from landlocked Chad and Niger, which had been diverted to more efficient ports in the sub-region.

The port is also positioning Nigeria to leverage the African Continental Free Trade Agreement.

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Weak points

However, it seems that the project suffered from some shortcomings in the planning. Arrangements for the evacuation of goods by rail are non-existent and the road infrastructure is inadequate for the expected traffic volume.

The other challenge is land encroachment around Lekki port and future congestion problem. Unless the state government takes drastic action under the Land Use Act to acquire land in the public interest for future port expansion, it will be a repeat of the problems of older ports beset by unplanned industrial, urban and commercial land use.

The project indicates that public-private partnership is the best way to plan and deliver landmark infrastructure projects. Port of Lekki LFTZ Enterprise Ltd was set up for this purpose, with investment from China Harbor Engineering Company Ltd, Tolaram Group of Singapore and the Nigerian government.

But it has the potential downside of unused capacity if the economic opportunities that prompted it do not materialize. Then the huge investment in the deep water port project would become a huge burden of unpaid debts.

Ayodeji OlukojuEmeritus Professor of History and Strategic Studies, University of Lagos