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Thursday, July 18, 2024

DECONGESTING LAGOS PORTS: LACK OF FUNDING AND APATHY AMONG INVESTORS HINDER $8.5 BILLION DEEP SEAPORT PROJECTS.

Three deep seaport projects in Akwa Ibom, Badagry, and Ondo have been stalled due to funding issues, investor apathy, and inability to articulate commercial viability. State governments rely on private-sector funding, but Chinese companies resist.

Lekki Seaport, a significant player in Nigeria’s shipping industry, faces political challenges in developing deep seaports. Nigeria’s lack of competitive seaports hinders its status as Africa’s maritime hub. State governments struggle to attract investors.

Ibom, Badagry, Ondo, and Bonny Deep Seaports receive FEC approval and ICRC Full Business Case Certificate, but real-time construction stalled due to setbacks and funding constraints.

The state government established a technical committee for a deep seaport project, with Bollore Africa Logistics as the preferred bidder. However, investors dropped out, leaving only the Ministry of Special Duties and the technical committee. Governor Oluwarotimi Akeredolu has discussed funding with Dubai Port and China Harbour.

The Badagry and Bonny Deep Seaports, worth $2.59 and $462 million respectively, are awaiting FEC approval for construction. The Badagry port is expected to generate $53.6bn in revenue and create 250,000 jobs. However, the Chinese Export-Import Bank’s inability to provide 85% of its counterpart funding has stalled the project’s commencement.

Bonny Deep Seaport, funded by 85% Chinese loan and government 15%, seeks alternative funding mechanisms through commercial laws, subject to review by Finance, Budget, and National Planning.

Investors are discouraged by the port’s location and cargo volume, and worry about return on investment. Lekki port was made possible by French shipping company CMA CGM. Other deep seaports may not be established soon, as approval from the Federal Government is required. Ports are often built based on politics, with concessionaires aligning with shipping companies that attract vessels.

Lamsam Intercontinental Company Nigeria Limited’s Chairman Samuel Njoku states importers prefer Lagos ports over eastern ones due to high container clearance costs, large population, and infrastructure.

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