The Nigerian Ports Authority has secured approval from the Federal Government, under the current administration of President Muhammed Buhari, for the designation of the Lekki Deep Sea Port as a customs port and approved wharf. All is set for commercial vessels across the world to berth and clear cargo at Nigeria’s first Deep Sea Port and first fully automated port at take-off.
Image from Lekki port
On Monday 1st of August 2022, the management of the Lekki Deep Sea Port via their official Twitter account disclosed that the project was at 95.65 per cent completion, in time to be fully operational by the end of the year 2022. Annual cargo tonnage is estimated at 4 million tonnes per year, while the annual container volume is set to reach 2.5 million TEU. Upon completion, it will have three terminals – a container terminal, a terminal for liquids and a terminal for bulk goods.
This is the first Deep Sea Port in Nigeria and the West African sub-region. Lekki Deep Sea Port through taxes, royalties and duties is set to generate an estimated $201 billion (Over N 83 trillion) for Lagos State and the Federal Government, while creating over 170,000 jobs.
This project is definitely a game-changer for Nigeria, boosting revenue generation, increasing the country’s gross domestic product (GDP) and expanding the economy. It will drive growth in domestic export, reducing the balance of the trade deficit. The extractives industry, agro sector and a host of other sectors will benefit from this monumental investment. Lekki Deep Sea Port will help promote international trade and attract Foreign Direct Investment (FDI); for Nigeria and the West African sub-region.
The Minister for Information and Culture, Lai Mohammed while touring the facilities ahead of the official launch at the end of the year, had stated ‘that the direct and induced business revenue from the Lekki Deep Sea Port is estimated at $158 billion, while the aggregate impact of this project has been put at $361 billion over the next 45 years which will be over two hundred times the cost of building the project’.
This is a massive project, with a $2 billion investment in the Lagos Free Trade Zone facilitated by Tolaram, a Singaporean company and constructed by China Harbour Engineering Firm. The project is jointly financed by a consortium of six banks, which include the African Development Bank (AfDB), the European Investment Bank (EIB), Standard Chartered Bank (SCB), RMB, Africa Finance Corporation (AFC), and Standard Bank. Lekki Deep Seaport is jointly owned and developed by the Tolaram Group, NPA, and Lagos State Government as equity investors, further highlighting the importance of partnerships, global or local as well as inter-ministerial and inter-sectoral collaborations as key drivers of development, especially in a blue economy.
Image from Lekki Port
The handling capacity of ports in Nigeria is put at 60 million metric tonnes, while demand and usage are about 100 million metric tonnes, with the potential of increasing due to population growth, emerging markets and urban expansion. The amount of cargo handled in the ports increased from 66,908,322 metric tonnes in 2009 to 74,910,282 metric tonnes in 2010, indicating a 12 per cent increase.
This clearly indicates that Nigeria needs larger, well-equipped port facilities to meet the demand of increased cargo traffic, for the country to compete globally. In line with the shift in trend in the global logistics industry, to larger, more economical vessels that require deeper harbour drafts, making the need for deep seaports crucial.
The Lekki Deep Sea Port, when fully operational, will reduce ship waiting time by about 50/60 per cent and vastly increase throughput and cargo handling capacity. Nigeria will become a trans-shipment hub, aiding the country in the optimization of the opportunities in the African Continental Free Trade Agreement (AfCFTA).
It is essential to have all supporting infrastructure, like the key roads connecting the port in place, to ensure efficient evacuation of cargo, as well as addressing the, sometimes, long, overdrawn bureaucratic processes to improve the ease of doing business in Nigeria.
The Presidential Enabling Business Environment Council (PEBEC) was set up in July 2016 by President Muhammadu Buhari, to remove bureaucratic constraints to doing business in Nigeria, and make the country a progressively easier place to start and grow a business. The political will to bridge the gap between policy-making and proper policy implementation is key to ensuring an enabling business environment.
The potential for growth and further development in this sector and across the coastal states and communities of the federation is enormous, and with the right strategies, stable government policies and funding, this could be the catalyst for a more sustainable, inclusive and robust blue economy to tackle poverty and unemployment in Nigeria.
By Rolake Bello
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