• To generate $361bn revenue, business impact on economy in 45 year –Lai Mohammed
All looks set for inauguration of phase 1 of Lekki Deep Seaport in Q4 2022. The port, which has 16.5 meters draught and 1,523 meters quay wall when on stream, would change the narrative of shipping business in the West and Central Africa and earns the country the status of the region’s Load Centre. PAUL OGBUOKIRI reports
The Lekki Deep Seaport
The port is located within the Lekki Free Trade Zone in Ibeju-Lekki, Lagos, which is being constructed on Build, Operate and Transfer (BOT) arrangement on 45 years concession.
The Lekki Port LFTZ Enterprise Limited is a special purpose vehicle which is being promoted by a private consortium of investors led by the Tolaram Group, holding 61.8 per cent. Other shareholders in the port are the Lagos State Government and Nigerian Ports Authority (NPA) which have 18.15 per cent and 20 per cent shares respectively.
According to information on the project’s website, it is being built as a multi-purpose deep seaport and, “will be one of the most modern ports in West Africa, offering enormous support to the burgeoning commercial operation across Nigeria and the entire West and Central African region.”
Speaking shortly after a tour of the port recently, Minister of Information and Culture, Alhaji Lai Muhammed, disclosed that on completion, the port will have $1.53 billion on fixed assets and $800 million on construction costs, adding that the aggregate impact has been put at $361 billion in 45 years, which will be over 200 times the cost of building it.
He said: “In addition, it will create 169,972 jobs and bring revenues totalling $201 billion to state and Federal Government through taxes, royalties and duties”. He added that, “the direct and induced business revenue impact is estimated at $158 billion in addition to a qualitative impact on the manufacturing, trade and commercial services sector.”
Regaining lost Hub Port status
By Nigeria’s big market and size of the population, its ports are supposed to be the transhipment hub for West and Central Africa but due to crisis like infrastructure and draught among other challenges that bedevilled the current nation’s seaports, especially the two busiest ports in Lagos, Nigeria lost its maritime hub status and trans-shipment cargoes to neighbouring countries.
Around the world, seaports with the best infrastructure turn to be a shipping hub port to support shipping and trade. But, unfortunately, Nigeria trans-shipment hub status was lost to Togo, Benin Republic, Cameroon and Ghana who have developed modern ports with infrastructure, such as deeper draught that can accommodate larger vessels.
While these countries can take a vessel with 16 meters draught, none of Nigerian seaports draught can go beyond 13 meters; this made it difficult for trans-shipment in the port or accommodate PANAMAX vessels with a capacity of about 8000 TEUs and 47.5 feet draft.
Unfortunately, the final destination of the content of the bigger vessels that call at neighbouring countries is Nigeria because of the large population and size of Nigerian market. For instance, while Nigerian ports draught was between eight and 13 meters, which cannot accommodate mega ships, the average draught in other neighbouring ports is 16 meters.
The draught of the neighbouring ports of Togo is 15.5 meters while Benin Republic has 15 meters, Ghana 19 meters while Cameroun has 16 meters draught level. With this larger draught, most Nigeria bound goods by mega ships were transshipped from these countries with smaller vessels.
But the Managing Director of Lekki Deep Seaport, Du Ruogang, has assured Nigerians that the Lekki Deep Seaport would change the economic landscape of Nigeria and become a hub in the West and Central African region.
Also, Muhammed said: “When the port begins operation in the last quarter of this year, it will make it possible for Nigeria to regain the maritime business that was lost to ports in Togo, Cote d’Ivoire and Ghana,” saying it is also a big boost to Nigeria in its quest to take advantage of the implementation of the African Continental Free Trade Agreement (AfCFTA).
He said: “A major advantage we have to leverage on is trans-shipment. With this port, Nigeria will become a trans-shipment hub and the revenue we are currently losing to our neighbouring countries will come here.” Lai Muhammed said that the Federal Government was not unaware of the poor access road into the port, saying it is being attended to.
The Minister further stated that the port’s facilities were first class, saying it would have seven ship to shore cranes and 21 RTG cranes, noting that presently, no port in Nigeria currently had such. He added that the excellent equipment is why the port can do 18,000 TEUs, which according to him, was more than four times the number that can currently be handled by other ports.
On his part, the Managing Director of the Nigerian Ports Authority (NPA), Mohammed Bello-koko, assured stakeholders of the preparedness of the government to carry out its responsibilities when operations at the port commences.
Towards as load centre for West, Central Africa
According to shipping experts, Nigeria by its population and size of its market, ought to be the load centre in West and Central Africa. In shipping terms, a load centre is simply a trans-shipment base for cargo vessels of all types and sizes. It is simply a point of convergence for vessels trading in a particular region.
Now, instead of bigger vessels having to take cargo to every port in the region, such vessels can simply deliver such cargoes to a trans-shipment base from where a small vessel takes the same cargo for final delivery to other neighbouring ports.
The quest for a load centre took over 16 years when the World Bank first sponsored experts to carry out a study in West Africa to find out which of the countries in the region should be chosen.
After that report which did not favour Nigeria even with her tremendous size of trade, no particular country has been named so far by the relevant international agencies and ship-owners as a trans-shipment base in the West African region. But the first report had cast aspersion on the present Lagos ports as likely load centre for obvious reasons.
Shipping experts say the coming of the Lekki Deep Seaport will effectively qualify Nigeria as the load centre of the region, saying Nigeria should take the two load centres the West and Central Africa is entitled to be quickly building the second deep seaport at Ibaka or Bonny.
This came as the current situation in the shipping industry is such that every country in the region wants to be a load centre. This explains the rush to build giant deep seaports across West and Central Africa. So far, Togo, Cote d’Ivoire, Ghana and Benin have completed their internationally accepted deep seaports.
Although these countries do not have a large sized market like Nigeria, the President, National Council of Managing Directors of Customs Agents (NCMDCA), Mr. Lucky Amiwero, said all these countries are targeting cargoes coming to Nigeria.
He noted that two load centres are needed in the region. He said the coming of the Lekki Deep Seaport will qualify Nigeria for the status of a load centre in the sub-region, saying the size of the country’s trade and excellent deep seaport infrastructure at Lekki will count for Nigeria.
Business impact of Lekki Deep Seaport
Meanwhile, as the promoters of the Lekki Deep Seaport set to complete the construction of the first phase of the port in readiness for its commissioning in the fourth quarter of this year, the Federal Government has disclosed that the port will have over $361 billion revenue and business impact on the Nigerian economy in the 45 years the concession will last.
Minister of Information and Culture, Lai Muhammed stated that the port is capable of generating $158 billion through direct and induced business impact. He said with this, the port would wrestle lost cargoes from West Africa countries, such as Ghana, Togo and Benin Republic—countries that had earlier completed construction of their own deep seaports.
Mohammed said while addressing newsmen on the benefits the port would attract to Nigeria that Lekki Deep Seaport will be “the game changer” in the maritime industry in West and Central Africa. He said: “The direct and induced business revenue impact is estimated at $158 billion in addition to a qualitative impact on the manufacturing, trade and commercial services sector.”
For Nigeria to be a load centre, a shipping expert, Mr. Lawrence Metuh, is of the view that Nigeria must study what happens in other advanced countries, adding that no seaport can overcome congestion without a good rail system. He argued that for Nigeria to be considered as a load centre, government must be ready to link the new Lekki deep seaport with rail.
This came as the Executive Secretary/Chief Executive Officer of the Nigerian Shippers’ Council, Emmanuel June, during the Minister’s tour of the Lekki Port, expressed fear of a repeat of the problem currently witnessed along the access roads to the seaport in Apapa.
Also, Ugochukwu Nnadi, a freight forwarder, said the Lekki deep seaport, upon completion, the location of the port could become another nightmare like the Apapa and Tin Can Island ports which have become a problem in Lagos. He called for rail connectivity, use of barges on inland water access and good access roads in and out of the port.
“These fears are not unfounded considering that upon completion; the Ibeju-Lekki-Epe axis will be home to huge traffic arising from the operations of the deep seaport and the Dangote Refinery among the other major projects sited in the Lekki Free Trade Zone.
I know it is not too late to include the rail in the project because adjustments are possible in any ongoing project.
That was as the MD Tolaram Group; Du Ruogang, called for government’s support in the cargo evacuation system of the port, noting that the roads connecting to the port are not satisfactory to the demands of the evacuation requirements of the port.
The General Manager/Head of Government Relations and Security, Lekki Freeport Terminal, Fubara Awanta, said with the draught of the port, which is the deepest in West Africa, Nigeria, should not lose the huge revenue that it would make from the port due to several bottlenecks.
He appealed to the government to ensure that the key roads connecting the port are completed to boost cargo evacuation as the short-term support, while for the medium term the government should assist in ensuring the movement of consignment through barging and rail.