The Nigerian maritime sector is facing a critical challenge stemming from excessive dollar charges, a concern voiced by the Shipping Association of Nigeria (SAN). This reliance on the US dollar for transactions within the country’s maritime industry has created a detrimental financial strain, ultimately hindering the sector’s growth and competitiveness. SAN Chairman, Mrs. Boma Alabi, a Senior Advocate of Nigeria, emphasized the severity of this issue, highlighting the widening gap between the naira and the dollar as a primary driver of the problem. The persistent demand for dollars in port operations, she argued, is actively depleting the nation’s resources, a consequence directly linked to the unfavorable exchange rate. Her plea to “stop dollarizing our economy” underscores the urgency of addressing this dollar dependence and fostering a more naira-centric approach within the maritime sector.
The crux of the issue, as identified by Mrs. Alabi, lies in the pervasive practice of collecting payments in US dollars within Nigeria. This practice, she argues, is counterproductive to the nation’s economic interests. Shipping lines, by collecting payments in naira, would be compelled to source dollars through legitimate channels, thereby contributing to a more regulated and stable exchange market. The current system, however, allows for dollar accumulation outside the normal financial flows, potentially facilitating illicit financial activities and weakening the naira. This insistence on dollar transactions not only adds unnecessary complexity but also increases costs, ultimately impacting the competitiveness of Nigerian ports on the global stage.
The call to abandon dollar-denominated transactions is not merely a matter of financial prudence; it represents a fundamental shift in economic policy. By prioritizing the naira in local transactions, the Nigerian government can strengthen its own currency, reduce its reliance on foreign exchange, and foster greater control over its financial landscape. This transition would necessitate a collaborative effort involving the government, the maritime industry, and financial institutions to create a seamless system that facilitates naira-based transactions without undue burden on businesses. The ultimate goal is to establish a more transparent and equitable system that benefits all stakeholders.
Beyond the dollarization issue, another crucial factor affecting the Nigerian maritime sector is the need for port expansion and modernization. Mrs. Alabi emphasized the link between port capacity and competitiveness, arguing that inadequate infrastructure directly contributes to higher costs. This view was corroborated by Mr. Ramesh Saraf, Deputy Managing Director of CMA CGM Shipping Company, who pointed out the significant disparity in cargo volume between Nigerian ports and more efficient facilities like the Tema Port in Ghana. The stark contrast in TEU (twenty-foot equivalent unit) figures highlights the urgent need for investment in Nigerian port infrastructure to accommodate growing trade demands.
The case of Lekki Deep Sea Port provides a compelling example of the challenges facing Nigerian ports. Despite being a relatively new facility, Lekki has experienced operational difficulties and significantly lower cargo volumes than anticipated. Mr. Saraf attributed this underperformance to the exceptionally high operating costs at the port, which are reportedly triple the global average. This exorbitant cost structure not only deters shipping lines from utilizing the port but also underscores the systemic inefficiencies that plague the Nigerian maritime sector. Addressing these cost issues is paramount to attracting more cargo and maximizing the potential of Lekki and other Nigerian ports.
The testimonies of Mrs. Alabi and Mr. Saraf paint a clear picture of the urgent need for reform within the Nigerian maritime sector. Moving away from dollar-denominated transactions, investing in port infrastructure, and streamlining operational processes are crucial steps towards creating a more competitive and efficient maritime industry. These reforms will not only benefit the sector itself but will also have positive ripple effects throughout the Nigerian economy, fostering growth, creating jobs, and enhancing the nation’s standing in global trade. The government must take a proactive role in implementing these necessary changes, working in concert with industry stakeholders to build a sustainable and prosperous maritime future.
