IMPACT OF PORT CONCESSION IN NIGERIA

IMPACT OF PORT CONCESSION IN NIGERIA

CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

The entire world Technological advancement has brought about significant changes in A port is a location on the coast or shore with one or more harbors where ships can dock and transfer passengers or cargo to or from land. Port locations are chosen to maximize access to land and inland water, market demand, and to be protected from wind and waves. The sea has been used as a mode of transportation in Nigeria since the 15th century (1485), when the Portuguese sailed into Lagos with their ships to trade in artifacts in Benin City. From the days before independence to the present, the nation’s marine industry has been characterized by the dominance of foreign ships and/or carriers in developed market economies.

Western Europe and North America. To control this scenario, subsequent developments have resulted in the opening of ports in Apapa and Port Harcourt, as well as the establishment of the Nigerian Ports Authority (NPA) under the provisions of the Harbours Act 1954 to charge and discharge, as well as maintain and develop the ports (Njoku, 2009).

Port efficiency has increased by a factor of ten since the concession. There is no waiting time for ships as they arrive in Apapa; each docks immediately and begins the discharge, as opposed to what used to happen in 2004, 2006 until the improvement took effect (Barnabas, 2015) The majority of the few facilities handling NPA merchandise were defunct, forcing the transport companies to improvise. These facilities must be rented from the private sector, which incurs additional costs. The residence time of goods in ports was so long that cargo overflowed most active seaports, causing massive port congestion. The dockers’ unions were controlled by a mafia that had no qualms about providing less than the hand of paid work. Many local ports that could have been useful have been abandoned, leaving maritime companies with fewer options. Massive windows were the norm rather than the exception in highway port sections, and this did nothing to reduce the waste of working hours caused by the movement of snail-like goods to and from the ports. As a result of the resulting congestion,

shipments to be discovered as if they had vanished into thin air, and in such cases, NPA frequently appeared impotent to make the return of such cargoes fled, much to the chagrin of people ‘worker business.

As a result, porous entry points, also known as dangerous miscreants wharf rats swarmed ports, earn their daily bread, resulting in predictable misfortune stories on the part of responsible business people. As the clocks struck a new century, the maritime sector in Nigeria, which accounted for 70% of all seaborne trade in West Africa and supported the business needs of a fifth of the black race, was still richly delayed; and ports were classified as some of the most inefficient on the planet.

To be fair,

The federal government made no secret of the fact that the planned maritime system was hopelessly chaotic and inefficient. The government had long made sincere efforts to improve the entire harbor area, but something was missing. The previous situation, in which there were multiple port authorities and massive duplication of functions, was streamlined in 1955 with the establishment of the Nigerian Ports Authority (NPA). However, this reform has created its own issue: over-concentration and accountability of the government. As a result, inefficiency and corruption have increased.

However, prior to improving Apapa seaport, the Nigerian federal government implemented one of the most ambitious concession port programs ever undertaken at the end of 2004. This program’s success

is the result of the government’s vision and determination, as well as the need to address the massive gaps in the sector, which have severely hampered economic development (James et al 2007). The port of Apapa was one of these federally concessioned ports. The Apapa port, formerly known as the Lagos port complex, is Nigeria’s largest port. The port is the most important in terms of size and activity, with an annual cargo traffic of over 30 million tonnes representing approximately 55 percent of port activity in Nigeria and 25 percent of port activity in countries that are members of the West Total Economic Community of African States (Alan et al, 2007).

Nigerian port operations and development began in the mid-nineteenth century.

century, long after departing from the commercial origin sea. The establishment of the Lagos lagoon in the early 1900s was the first attempt to provide facilities for ocean-going vessels. The Apapa port in the southwest was designated for development in 1913, and work on the first four deep-water spaces 548.64m port began in 1921. The four berths were then extended downstream in 1948 by building an additional 762m of berth age. On the country’s east coast, the discovery of coal in Enugu prompted the construction of Port Harcourt, which opened in 1913.

Despite these developments, a lack of a coherent policy framework hampered progress. Recognizing the significance of  Because of the importance of ports in Nigeria’s economic development and the need for a coordinated operation and management of port activities, the Nigerian Ports Authority (NPA) was established in 1954 to address some of the country’s infrastructural and institutional shortcomings. Essentially, the NPA was in charge of providing infrastructure services and support for the operation of Nigeria’s seaport as well as facilitating maritime transport in the country. During the first ten years, NPA worked to expand the two inherited ports, Apapa and Port Harcourt. He oversaw the addition of six 943m berths to the Apapa port’s existing facilities, as well as the addition of four berths with a total quay length of 506m to the Port of Port. However, with the advent of globalization, it has become clear that the government lacks the resources and management expertise required for a modern seaport to function properly. In addition, the Federal Ministry of Transport and the Bureau of Public Enterprises (BPE) organized a technical workshop in May 2000 in collaboration with the World Bank on increasing private sector participation in port service provision. His Excellency President Olusegun Obasanjo ordered the NPA’s privatization to be strengthened in 2001. The National Council on Privatisation (NCP), the country’s top political body on sector reforms, began the investment process involving the private sector and expertise in Nigerian ports in 2003, with the BPE as its secretariat.

of increasing port efficiency, lowering the cost of port services to end users, eliminating the flow of funds from limited government resources, stimulating activity and accelerating economic development, and making Nigeria the hub for freight and international trade in West Africa. This resulted in the port’s concession contract being fully implemented in 2006. (Marine International Business 2007).

Recognizing the new paradigm shift, NPA’s management has taken immediate action to provide the major infrastructure required to respond to pressures requiring the operation of port activities for maximum productivity and income generation. However, the government provides the necessary support for the brick walls of not understanding the situation of APM, as well as the fact that the incessant interference,

Politicking and corruption had made the organization vulnerable to abuse. Other challenges that drove house-reforms include: discouragement due to age and poor infrastructure / superstructure, which was due to the Authority’s difficulties in accessing funds for projects fixed assets; the factory and the insufficient availability of crafts; poor access to the port; vandalism aids to navigation port by undesirable elements; non-competitive environment leading to complacency in any respect; and bureaucracy and external interference in the process (Marine Business International, 2007).

1.2 THE PROBLEM’S STATEMENT

In the 1990s, Nigerian ports were extremely inefficient, resulting in long lead times for vessels and increased container residence time. It could take weeks to unload and reload.

In other regions, such as Asia, 48 hours is considered standard. Furthermore, the workforce was overburdened and unproductive, the cargo was subject to massive flight levels, and port fees were exorbitant. Worst of all, the port infrastructure required significant renovation and rehabilitation, which would necessitate significant external financial support, which the federal government was hesitant to provide given the sector’s existing operational inefficiencies.

Under a 2006 concession agreement with the federal government, three major operators manage Apapa Port Terminal, which handles over 90% of imports in the country. These operators are AP Moller, Dangote, and sunflower. Despite this, Nigerian ports appear to be performing below expectations, with cargo delays, congestion, and poor ship turnaround.

times. More than four years after the granting of full operating licenses to terminal operators in Apapa port for managing terminal operations, investment, and maintenance of the structure and equipment port, all performance indices can only be expected to improve.

PURPOSE OF THE STUDY

The study’s objectives are as follows:

1. To evaluate the impact of port concessions in Nigeria in relation to Apapa seaport.

2. To ascertain the role of management style in the administration of the apapa port after concession.

3. Evaluate the effectiveness of the concession in terms of freight compensation and the impact of port concession on port congestion.

4. To identify various options for mitigating the impact and avoiding future occurrences.

HYPOTHESES FOR RESEARCH

HYPOTHESES I

Ho: concession port improves cargo clearing efficiency

Ho: concession port does not improve cargo clearing efficiency.

TWO HYPOTHESES

Port concessions reduce port congestion.

Hello, port concessions do not alleviate port congestion.

1.5 THE STUDY’S IMPORTANCE

The study’s recommendations should help to make Apapa port more competitive in terms of better management and administration in the West African region. It is believed that the economy of most developing countries, such as Nigeria, is heavily reliant on maritime transport, and that it is also responsible for the development of a transportation system. This is due to the fact that an efficient port and cargo handling system will encourage shipping companies, importers, and exporters to make use of it.

full use of port facilities in the nation’s seaport. As a result, the concession is a worldwide phenomenon. It is frequently rooted in long-standing globalization; thus, Nigeria cannot afford to remain isolated from the global market, where capital goods are primarily channeled through ports.

1.6 STUDY SCOPE AND LIMITATIONS

This study work is only for the duration of the study. The study focuses on the effects of port concessions in Nigeria. As a result, the study is limited to the performance of Apapa port following the concession exercise. Furthermore, it will allow the researcher to complete the research in a timely manner, taking into account the time constraints and other constraints that may be encountered during the course of any future endeavor.

a wider scope. The researcher ran into some obstacles that limited the scope of the study. These constraints include, but are not limited to, the ones listed below.

a) RESEARCH MATERIAL AVAILABILITY: The researcher’s research material is insufficient, limiting the scope of the study.

b) TIME: The study’s time frame does not allow for broader coverage because the researcher must balance other academic activities and examinations with the study.