Lagos, Nigeria’s commercial nerve centre, is home to two major seaports namely, Apapa and TinCan Island ports. But both ports located in the Apapa area of Lagos have become a nightmare of sort to private sector operators. The seemingly intractable gridlock in that axis is taking a heavy toll on businesses, forcing many of them to either close or relocate, while the government is losing huge revenue. The mass exodus of residents from the area adds to the sad tale of an economic gateway in need of urgent rescue. Assistant Editor OKWY IROEGBU-CHIKEZIE reports.
The President, Lagos Chamber of Commerce and Industry (LCCI), Mr. Babatunde Ruwase, is seething. And he has been in such rage since the gridlock in the Apapa axis of Lagos State, Nigeria’s commercial hub, started taking a huge and debilitating toll on his members’ businesses.
The LCCI chief decried the perennial gridlock along the two critical roads, Wharf Road and Apapa/Oshodi Expressway, including other access roads to the ports, has imposed unbearable costs on businesses and reduced the revenue accruable to the government.
Ruwase’s lamentation: “The dysfunctional state of the ports and associated logistics for cargo clearing has become a nightmare. The cost to business is horrendous. This includes the astronomical increase in haulage cost, increased interest cost (borrowed fund) used for import transaction, high demurrage charges, and high insurance premium of vessels coming to Nigeria.”
The LCCI boss added that high shipping cost, low capacity utilisation due to problem of access to raw materials from the port, as well as traffic congestion, which has extended to the metropolis from the ports, have paralysed economic activities in the Apapa axis of the metropolis. “What we are witnessing is a reflection of the several years of neglect of our ports and other infrastructure,” he fumed.
The two critical roads, Wharf Road and Apapa/Oshodi Expressway, which lead to the nation’s major economic gateway, have become a nightmare to port operators, commuters, motorists and the public, following the gridlock on the roads. This situation has been blamed by Ruwase and indeed, other concerned stakeholders, on many years of neglect by both the Federal and Lagos State governments.
But it wasn’t the situation in the 1990s. Before now, Apapa was a place to be. It probably boasted of the largest concentration of Europeans, Asians and others. Home to Nigeria’s two major seaports and the popular Apapa Recreation Park, Creek and Wharf road, the Apapa axis of Lagos housed major companies. It was a beehive of commercial and social activities.
However, things have changed. No thanks to decrepit infrastructure and neglect by successive Federal and Governments. Today, Apapa is a shadow of its glorious past. The erstwhile Nigeria’s economic gateway has degenerated into a deplorable state, with its infrastructure and residents perpetually ensnared in intractable gridlock daily.
Expectedly, the situation has left bitter taste in the mouths of businesses and residents.The economic and social dislocation caused by the endless gridlock has forced not a few private operators to either close or relocate due to low patronage, following the mass exodus of frustrated residents, who abandoned their homes and relocated due to the traffic congestion. As a result, property prices have crashed, with many to-let vacancies dotting the landscape.
For instance, a shop owner, Iya Yinka, told The Nation that she relocated to Mushin because almost all the goods she bought expired in her shop as a result of lack of patronage.
“I live in Costain, and at a point, l was only coming to my shop to sleep. To cut my losses, l reduced my visit to my shop to only three days until l finally stopped going.
“It was out of necessity that l closed and abandoned my shop and for 18 months, the landlord has not been able to rent the apartment out to another person. I, therefore, appeal to the government to look at the plight of the common man and address the crisis.”
SMEs groan
Owners of Small and Medium Enterprises (SMEs) are also agonising over reduced patronage. Over 10, 000 people are said to have lost their jobs as a result of the crisis in the area. Worse hit are operators in the real estate sector where many people have changed their tenancy from Apapa, with many houses remaining empty and shops emptied by their owners.
Landlords, who are retirees, using their rentals as income are at a loss over what to do. For instance, Pa Adesina Debo, one of the landlords, said before now his rental income bridged the gap of the irregular and often delayed pension, but lamented that the gridlock has left him with no income.
He called on the government to urgently address the situation that has led to this ugly and pitiable situation and save him from starvation.
Outcry over declining productivity
It is easy to see why Ruwase and other private sector operators are agonising and pushing for the government, working in collaboration with relevant stakeholders, to address the crises and stem the huge losses. Apapa is said to account for more than 80 per cent of all import and export in Nigeria.
Besides, the ports, according to the LCCI Director-General, Mr. Muda Yusuf, accounts for about 70 per cent of the total revenue generation from import duties. Apapa is, therefore, seen as a major economic artery, hence, any obstacle in the magnitude of the gridlock will result in heavy economic loses both to businesses and the government.
Dangote Group President, Alhaji Aliko Dangote, put the situation in perspective when he lamented recently that the gridlock in Apapa was costing the government estimated N140 billion in revenue weekly. He also said the economy loses more than N20 billion daily.
Dangote, who lamented the gridlock and its implications to the economy at a media forum, said: “Apapa is both an embarrassment to the country and a huge loss of close to N140 billion to the government weekly.
‘’The economy loses more than N20 billion daily, because the state of the roads affects businesses across the country. All our operations in the hinterlands such as Ilorin, Kano and other areas are operating at 40 per cent maximum capacity.”
Yusuf also regretted that the pace of cargo evacuation is being affected by the state of the roads in and around Apapa, which has resulted in high demurrage charges, high rental costs by the terminal operators and high cost of freight. He expressed fears that with the near shutdown of the ports, the shock on the economy will be much.
Former LCCI President Alhaji Remi Bello also lamented the collapse of transportation logistics and access to the major ports in the country – Apapa and Tin Can Island Port complexes, saying this has brought about an urgent need to relocate the tank farms to the outskirts of the city.
Bello said getting to the ports had become an unprecedented nightmare; moving out of the ports is even a greater nightmare. He said the system had become dysfunctional and delivery of empty containers and the evacuation of cargo has become a terrifying experience.
Customs Service takes the hit
The Nigerian Customs Service (NCS), The Nation learnt, generated N898 billion and N1trillion as revenue for the Federal Government in 2016 and 2017. This was less than the N904 billion the NCS made in 2015.
This reduction, according to a reliable source, was due to difficulty in accessing foreign exchange and the removal of the 41 items, which forced down the level of activities within the ports. Incidentally, the bulk of revenue generated by Customs yearly comes from the two ports in Apapa.
Decline in non-oil export
earning imminent
The persistent difficulty in accessing the major seaport is taking its toll on movement of non-oil exports and may affect the earnings for this year. The Nation gathered that on the average, 15-container load of solid minerals valued at $18,500 each is expected to be exported monthly.
However, since the beginning of April this year, half of the containers have been in the queue on the road to Apapa, unable to access the port.
The situation, according to the LCCI Export Group Chairman, Mr. Bamidele Ayemibo, had affected the loading of fresh cargoes because the trucks that were supposed to pick them were in the queue waiting to enter the port and discharge the cargoes.
Agricultural and other fragile exports are said to be faring very badly as the time spent on the queue to get into the ports does a lot of damage to the freshness and market value of the products.
Federation of Agricultural Commodities Association of Nigeria President, Dr. Victor Iyama, lamented that the situation had been having huge and negative impact on the earnings of operators in non-oil export.
He said goods that were supposed to spend two weeks in the country before being exported end up spending as long as seven weeks. By the time they get to the port, they cannot be exported. The value of the goods is already gone by the time they get out and buyers would not buy them.
Asked about the volume of goods the sector targets to export this month, Iyama said the operators were not even looking at meeting any target but to just get their goods out.
“I pray there will be a solution to the problem because it is really impacting negatively on our earnings and the costs are becoming too high for us. It is a complete setback to trading across borders and the ease of doing business.”
National Council of Managing Directors of Licensed Customs Agents President, Mr. Lucky Amiwero, also lamented that trucks spend weeks to access and exit the ports, which resulted in delays and rejection of most of the fragile export products at the international markets.
Amiwero said the Nigerian Ports Authority (NPA) is no more in port operation, and that the percentage collected from the seven per cent port development levy should be used for the development of the trailer parks and port access roads.
While pointing out that the condition of the Apapa Wharf access road constitutes a challenge to the movement of people and goods to and from the ports, he expressed fears that non-oil export earnings from Nigeria may witness a sharp drop this year as a result of the situation.
Cashew Farmers Association of Nigeria National President, Mr. Tola Faseru, was, perhaps, more specific when he lamented that exporters were losing about $10 billion yearly to the gridlock.
Faseru, who is also a cashew exporter, added that the development was affecting export delivery time in addition to hindering exporters’ ability to fulfill commitments on time and making forwarding and shipment very expensive.
He commended the Federal Government’s efforts in ensuring that normalcy returned to Apapa Road in Lagos, but appealed for stiffer measures to quicken the intervention.
A new dawn in the offing?
The Nation learnt that repairs of the failed and dilapidated portions of the Tin Can and Apapa Ports axis of the Apapa/Oshodi Expressway were in progress. However, the exercise, according to some residents, is being hampered by the usual traffic build-up and confusion on the road.
But the Federal and Lagos State governments appear undeterred. For instance, Acting President Yemi Osinbajo was said to have met with private sector stakeholders and gave the Ministry of Power, Works and Housing, and the NPA directives on clearing the traffic.
Transportation Minister, Mr. Rotimi Amechi, has also promised that work will begin on the Apapa corridor of the Lagos-Ibadan Rail project.The Federal Government has approved N72.9 billion for the reconstruction of the road from Apapa to the Toll Gate on Lagos-Ibadan Expressway.
Amaechi said the contractors had been directed to return to site to resume work from Apapa as part of efforts to bring about a solution to the perennial gridlock. He promised that as soon as the challenges of reaching an agreement with some communities on access on their land and a decision on whether to build or demolish some bridges are taken, the challenge of the gridlock would be over.
Amaechi said: “The Federal Government had commenced construction of the Lagos-Ibadan railway and the focus was more on the Ibadan and Abeokuta axis because we had challenges in Lagos, which included utilities and not much with the communities.
“I have to commend the communities that allowed us to use their land, though; we would pay compensation but not much. So, we are grateful to all the communities from Lagos to Ibadan. However, we have utility challenges with both gas pipes and water and beyond the gas pipes; we also have challenges with bridges to either build or demolish.”
The minister stated that while the Federal Government was working hard to ensure that the rail was delivered by the end of the year, it had awarded the contract to deal with the road between Apapa and Tin Can to enable it evacuate cargos freely, which is an addition to the rail. The Lagos State Government and the Nigerian Navy have also weighed in, ordering the trucks to quit the bridges. The heavy duty vehicles have been sitting idly on top of these bridges, blocking the major road arteries of the metropolis.
Governor Akinwunmi Ambode commended the Federal Government for approving the reconstruction of the Apapa-Oshodi Expressway as part of efforts to finding a lasting solution to the gridlock.
He said: “We want to use this platform to thank the President and the Federal Executive Council for approving the reconstruction of the Tin Can-Apapa-Oshodi Expressway up to the Toll Gate. This is in continuation of our efforts at finding a permanent solution to gridlock in the Apapa axis.
“We just want to reiterate our commitment to collaborate with the Federal Government to ensure that we reduce the sufferings of Lagosians. I am happy that we have emerged from this meeting with the Federal Ministry of Transport to ensure that this rail project is delivered within the next six to 12 months.” However, some observers have called for a strict implementable traffic law for the state, frowning at a situation where commercial drivers drive against traffic and park indiscriminately on the road. They also tasked the government on the need to construct and maintain roads around the metropolis, especially those leading to key infrastructure such as the ports. They frowned at a situation where private businesses are destroyed as result of failure of governance especially in infrastructural provision.
OPS reacts
Manufacturers Association of Nigeria (MAN) President, Dr. Frank Udemba Jacobs, applauded the Federal Government’s response to fix the access roads to the ports. While pointing out that the poor state of the roads requires urgent reconstruction, he called on the government to create alternative routes for traffic diversion.
He said: “They (governments) must create alternative route; we need the road to be rebuilt because of its poor conditions; the kind of road they want to build is welcomed, it is good for the economy and manufacturing. We can’t dictate to them how long the reconstruction should last, but we feel that the shorter the duration,
the better for all stakeholders.”
Yusuf also commended the government for the planned reconstruction of the road. He said the LCCI wants the government to create alternative routes and even direct use of rail to drag out containers outside the ports to where they are needed. “We should avoid a total shutdown of the port; it will cripple the entire economy,” he warned.
For Bello, fixing the problem entails an urgent need to relocate the tank farms to the outskirts of the city. “Location of the tank farms is a major factor in the huge traffic congestion. They also constitute a serious safety hazards to citizens. There is an urgent need to revive the rail system for the purpose of evacuating cargo from the Lagos ports,” he said.
That is not all. Bello also said there is urgent need to make the refineries functional to reduce petroleum products imports, which will reduce the convergence of tankers at the various ports. Besides, he said there is need to improve the reliability, safety and integrity of pipelines across the country as a means of moving petroleum products.
“This (pipeline) is, in fact, the most efficient and cost effective mode of transportation of petroleum products,” he pointed out, noting that the movement of petroleum products through tankers has been taking a huge toll on the private sector and the entire economy.
Bello cited the frequent accidents resulting from fallen containers in transit because of the state of the roads and the high demurrage resulting from the slow evacuation of cargo. He said charges by haulage vehicles had increased astronomically because of the long travel time as well as turnaround time, high demurrage by terminal operators and shipping lines, resulting from the slow pace of cargo evacuation from the ports. The former LCCI boss added that the paralysis of other businesses along the axis because of reduced patronage due to reduced access by customers has left sour taste in the moths of operators.
Bello also said the perennial gridlock has had profound adverse impact on the welfare of citizens that are resident in these locations and posed a serious risk to the many bridges and flyovers along the axis which carry heavy load of stationary vehicles, including tankers for several hours.
Will these interventions and recommendations by stakeholders salvage the situation? While answer remains a matter of conjecture, what is clear is that unless and until the gridlock in Apapa is removed via the collaboration of the private and public sectors, the social dislocation and financial hemorrhage will continue for private operators and the government.