LCCI STATEMENT ON NIGERIAN PORTS AUTHORITY’S 15% TARIFF INCREASE
The Lagos Chamber of Commerce and Industry (LCCI) acknowledges the Nigerian Ports Authority’s (NPA) recent announcement of a 15% upward review in port tariffs, marking the first adjustment since 1993. The NPA has cited the necessity of aligning Nigeria’s port infrastructure and equipment with global standards to enhance competitiveness as the primary reason for this increase.
The convergence of a high interest rate at 27.50 percent, inflationary pressures raging at above 34 percent, a comparatively weak currency exchange at about N1500 to a Dollar, and a reduced per capita income at a low of $835 poses a high burden on businesses. We need to consider a spread of any additional but necessary cost burden on businesses at this time. While the proposed tariff increase by the Nigerian Ports Authority (NPA) aims to modernize port facilities, it carries significant economic implications that must be addressed.
One major concern is the increased cost of doing business, as higher port charges will raise operational expenses for companies relying on imported raw materials and machinery. This, in turn, may lead to increased production costs, which could be passed on to consumers, driving inflation upward. While the NPA argues that Nigeria’s port tariffs remain among the lowest in the region, port competitiveness depends on more than just tariffs. Factors such as operational efficiency, number of procedures, and unforeseen fees play a crucial role in determining the overall cost of using Nigerian ports.
Nigeria can learn valuable lessons from countries with lower port charges. Improving efficiency by reducing process delays and optimizing port operations can lead to significant cost savings. Continuous investment in infrastructure is essential to modernize equipment and facilities, ensuring smoother operations and attracting more transactions to our ports. Also, maintaining a transparent and predictable tariff structure allows businesses to plan effectively, fostering a more stable and competitive trading environment.
The Chamber therefore recommends that the NPA should actively engage stakeholders, including the business community, to discuss potential impacts and explore solutions to mitigate negative effects. More so, instead of focusing solely on tariffs, efforts should be made to enhance port efficiency, reduce avoidable process delays, and eliminate unforseen costs that burden businesses. The NPA should benchmark its operations against leading ports globally and adopt best practices that have been effective in reducing costs and improving service delivery. Deployment of technology to automate our port operations and transactions will reduce time loss and curb undesirable tendencies.
While the LCCI understands the NPA’s reason for the tariff increase, it is imperative to adopt a balanced approach that considers the potential economic impact on businesses and consumers. By focusing on comprehensive strategies to enhance port efficiency and competitiveness, Nigeria can achieve its goal of becoming a preferred destination for maritime trade in the West African sub-region.
In recognition of the fact that this review is happening after a 13-year freeze, the Chamber recommends that the increment be phased into three years of 5 percent each to reduce the burden on businesses and reduce the pass-through effect on inflationary pressures in the economy. This also helps businesses to plan for the additional charges in the coming years.
Dr. Chinyere Almona, FCA
Director-General
Lagos Chamber of Commerce & Industry
Tuesday 25th February 2025
