Economic Crisis: Slump in Port Operations Puts 40,000 Jobs at Risk

The maritime sector is in turmoil as a significant drop in vessel calls to Nigerian ports threatens the livelihood of thousands. The ongoing forex crisis and inflation have exacerbated the situation, causing a severe decline in port operations.

Terminal operators, shipping companies, truckers, licensed Customs agents, and freight forwarders are among those most affected. The sharp decrease in vessel calls has forced these businesses to struggle for survival. Vessel calls to Nigerian ports have dropped by 4.5%, from 3,957 in 2022 to 3,778 in 2023.

The Nigerian Ports Consultative Council (NPCC) reported a 6.8% decline in container traffic, with figures falling to 1.56 million 20 Feet Equivalent Units (TEUs) from 1.68 million TEUs. Imports of cargo have decreased by 20%, containerized goods by 30%, and vehicle imports by 55%.

Customs Comptroller-General Adewale Adeniyi has acknowledged the severe reduction in cargo traffic, urging Nigerians to increase exports to support the naira. Adeniyi noted that many terminals in Lagos are now nearly empty, reflecting a significant drop in import trade.

President of the Association of Nigerian Licensed Agents (ANLCA), Emenike Nwokeji, highlighted the broader economic implications, noting the closure of a SHOPRITE outlet in Abuja as a sign of the deteriorating economic conditions. Nwokeji defended terminal operators considering staff reductions, citing the need for businesses to remain profitable.

Former ANLCA Vice President Kayode Farinto criticized the Central Bank of Nigeria’s (CBN) unstable exchange rates, which have exacerbated the decline in cargo volumes. He warned that without prompt government intervention, the situation would worsen, leading to further drops in import volumes and more job losses.

Farinto highlighted the unpredictable exchange rates as a significant barrier for importers, with bulk cargo imports dropping by 20%, containerized goods by 30%, and vehicle imports by 55%. He noted the dire consequences for freight forwarders, many of whom have lost their jobs or even their lives due to the economic hardships.

Asconio Russo, Managing Director of Port and Multi-Purpose Terminal Limited (PTML), attributed the challenges to naira devaluation and high inflation. Russo pointed out that vehicle imports, a major revenue source, have plummeted by 80% over the past two years, putting tremendous strain on financial resources.

If the exchange rate issue is not urgently addressed, over 40,000 jobs could be at risk across the port sector. This includes direct and indirect jobs among terminal operators, shipping companies, dockworkers, truckers, and clearing agents. Sources estimate that 25,000 direct jobs and over 15,000 indirect jobs could be jeopardized.

Maritime Workers Union of Nigeria (MWUN) President-General, Prince Adewale Adeyanju, described the situation as dire, with redundancies already beginning. He highlighted that some terminals, like Tin-Can Island Container Terminal, are considering significant staff reductions due to the drastic fall in container arrivals.

Despite the private sector’s struggles, the Nigerian Ports Authority (NPA) reported a 15.04% increase in cargo throughput in the first quarter of 2024, totaling 20.1 million metric tons compared to 17.4 million metric tons in the last quarter of 2023. However, industry experts, like Farinto, argue that this increase is due to the high exchange rate rather than actual growth in trade volumes.

In summary, the maritime sector’s downturn is a critical issue requiring immediate government intervention to stabilize exchange rates and support importers. Without decisive action, the sector faces significant job losses and further economic decline.