The Nigerian Ports Authority (NPA) has announced plans to implement a 15% increase in its tariffs, marking the first adjustment since 1993. The NPA stated that the move has received all necessary approvals and is driven by the urgent need to modernize Nigerian ports, improve infrastructure, and enhance competitiveness on the global stage.
During a stakeholders’ engagement held in Lagos on Thursday, the Managing Director of NPA, Dr. Abubakar Dantsoho, explained that the tariff review is essential to reposition Nigerian ports in line with international standards. He emphasized that port authorities globally depend on revenue generated from operational activities to maintain and upgrade port facilities.
“This belated tariff review borne out of necessity constitutes a critical success factor in Nigeria’s quest to win back cargo handling business and its accompanying benefits, including job opportunities lost to maritime neighbours,” Dantsoho stated.
While the NPA maintains that the tariff increase is necessary for infrastructure development, port operators and stakeholders have expressed concerns about the potential economic impact. They warned that the 15% tariff hike would inevitably lead to higher costs of doing business nationwide, with the ripple effect likely to be felt in commodity prices.
Mr. Ukochukwu Nnadi, Head of the Department of Shipping and Terminals at the National Association of Government Approved Freight Forwarders (NAGAFF), remarked:
“Every kobo added to doing any particular thing will be passed on to the customers. The NPA’s tariff hike will ultimately increase the cost of doing business, and this cost will be transferred to the masses.”
Similarly, Mr. Riwane Amuni, National Protocol Officer of the Association of Nigerian Licensed Customs Agents, noted that although stakeholders seem quiet about the hike, it’s primarily because the tariffs haven’t been reviewed in decades.
“It’s an additional tax on the masses. Importers will factor in the extra costs, which will reflect in the final prices of goods and services,” Amuni explained.
Dr. Dantsoho clarified that the tariff adjustment aims to fund critical projects, including the reconstruction and modernization of port facilities. He cited the need to address infrastructural deficits, such as the collapsed Escravos breakwaters and challenges at Rivers, Onne, and Calabar ports.
Furthermore, the review will support the acquisition and deployment of an Information Communications Technology (ICT) backbone, essential for implementing the Port Community System (PCS) and the National Single Window (NSW). These systems are expected to streamline port operations, reduce bureaucratic bottlenecks, and improve transparency.
“A quick-win benefit of the NPA’s tariff review is the immediate boost it gives to fast-track port reconstruction and modernization plans,” Dantsoho noted.
While many stakeholders are concerned about the economic implications, some support the tariff review. Joshua Asanga, a participant at the stakeholder meeting, agreed with the increase, noting that inflation has significantly eroded the value of NPA’s existing tariffs over the past three decades.
Asanga pointed out that operational costs, including wages, fuel, and maintenance, have risen substantially without a corresponding adjustment in port charges.
“The value of NPA’s current tariff has been suppressed by inflation. An upward review is long overdue to ensure the authority can meet its obligations effectively,” he said.
To alleviate concerns, the NPA clarified that the upward tariff review would not affect specific item rates, including:
- Throughput and Lease Fees
- Rents on NPA Landed Properties
- MOWCA Levy
- Service Boat Operations
- Hourly Towage and Mooring Charges
The authority also emphasized that the overall port cost should not be confused with NPA charges, as port costs include fees from other government agencies operating within the ports.
As Nigeria navigates through economic challenges, balancing the need for infrastructure development with the cost implications on businesses and consumers remains a complex issue. The NPA’s tariff review is a bold step towards modernizing Nigerian ports, but its economic ripple effects will require careful management to prevent undue hardship on businesses and the general populace.
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