An appeal has gone to the management of the Nigerian Ports Authority, NPA, to shelve the proposed 15% increase in port-related charges and instead, collaborate with stakeholders to explore sustainable alternatives for revenue generation.
The Manufacturers Association of Nigeria, MAN, which made the appeal in a position paper to the media, argued that an increase in tariff at a time when businesses are struggling with rising cost of operations, high rate of foreign exchange, astronomical energy costs, and general economic uncertainties, imposing additional financial burdens on manufacturers through increased port tariffs will exacerbate the challenges faced by the real sector with dire consequences on the nation’s economy.
According to MAN, the tariff increase if implemented will increase cost of production, leading to higher prices of goods and fanning inflation; reduce competitiveness of Nigerian manufacturers in local and international markets; increase smuggling due to high costs at Nigerian ports compared to neighboring countries; as well as result in a decline in government revenue due to lower cargo turn out and manufacturing downturn.
MAN said the real issues affecting port revenue in Nigeria include:
Port congestion and inefficiency: Reducing turnaround time for vessels and improving cargo clearing processes can significantly boost revenue.
High demurrage charges: Addressing bureaucratic bottlenecks that delay cargo clearance will ensure faster throughput and more efficient revenue collection.
Infrastructure investment: Improving port infrastructure will enhance operational efficiency and attract more business, leading to natural revenue growth.
Competitive pricing strategies: Instead of raising tariffs, aligning Nigerian port charges with global best practices will encourage more trade volume and increase overall earnings.
MAN further maintained that rather than imposing additional financial burdens on businesses, a stakeholder dialogue to explore strategies for enhancing port efficiency, reducing operational bottlenecks, and creating a more business-friendly environment that will ultimately lead to increased revenue without undermining industrial growth and competitiveness has become highly imperative .
It called for caution and deep reflection on the part of the NPA, as a key stakeholder in Nigeria’s economic development, noting that NPA’s consultation with key economic actors after it has decided on the increase is tantamount to putting the cart before the horse and does not demonstrate goodwill, hence the advise to the NPA to rescind the planned increase in order to avert a monumental downturn in the fortunes of businesses in Nigeria.
For the Director General of MAN, Segun Ajayi-Kadir mni, the manufacturing sector can ill-afford such an increase at this time since it runs against the present administration’s efforts at making Nigeria a trading hub in the West African sub-region, and would definitely constitute a drag in the efforts of government to stabilize the economy in the year 2025.