Maritime transport is the most common cross-border freight; about 80% of global commodities are conveyed via ships. This evidence spotlights maritime transport as the core of international trade, providing a beneficial, dependable, and cost-effective means of conveying bulk goods between locations. However, in Sub-Saharan African countries like Nigeria, inefficiencies like capacity shortfalls are experienced, and this stomps the ports’ potential, resulting in trade declines. The country’s economic growth is also impacted as, despite having the potential to contribute about $44 billion annually to the country’s Gross Domestic Product (GDP), the Nigerian maritime sector’s contribution to the GDP remains insignificant between 0 and 0.05%. These capacity shortfalls, the result of bottlenecks in the form of vehicular and shipment congestions, the poor state of access roads, high transaction costs, safety and security concerns, delays in shipment processes, etc., cause the Nigerian port to be among the worst ports when ranked globally.
To ensure efficiency and maximise the utilisation of a country’s port, authorities must implement effective port management alongside adequate seaport infrastructure and superstructure—one of the key shortcomings in Nigeria’s case. This insight, therefore, aims to discuss the state of Nigerian ports and their performance under the Nigerian Ports Authority (NPA) of the federal government, juxtaposing this against Chinese ports under local authorities. As such, we draw lessons from China, highlighting measures and initiatives that could be implemented to rectify the shortcomings of Nigerian Ports.
Current State of Nigeria’s Ports
Nigeria has seven major ports: the Apapa Port, Tincan Island Port, Lekki Port, Calabar Port, Warri Port, Onne Port, and Port-Harcourt Port. The NPA is charged with facilitating international trading activities and advancing the Nigerian seaport handling capacity in line with international standards. However, despite the NPA’s oversight and responsibilities, seaport performance has not improved. For example, the Nigeria container port throughput was reported to be merely 1.5 million twenty-foot equivalent container units (TEUs) in 2022.
Source: CEICDATA (2021)
A contributing factor to the low TEUs recorded was cargo diversions to ports in neighbouring countries, which cost Nigerian ports an estimated ₦130 billion annually. Nigerian ports are also plagued by the duplication of MDAs and security agencies, causing bureaucratic bottlenecks within the port management system that often result in delays in clearance times, illegal and exorbitant charges, unreasonable documentation requirements, and administrative barriers.
The delays in clearing and processing times at the Nigerian ports hamper business activities in sectors with time-sensitive output, such as the agricultural sector. Some farm produce exports get to their destination spoilt, stale, or falling short of sanitary requirements, resulting in post-harvest losses from rejections by the importers or receiving discounted payment offers than initially agreed. All these not only reduce the handling capacity of the ports but also dissuade importers and exporters from engaging in trading activities at Nigerian ports, thereby reducing trade outputs and the revenues that accrue. These inefficiencies increase business costs and reduce Nigeria’s chances of competing in the global market.
China Ports’ Model
According to the World Shipping Council's Top 50 container ports ranking, seven out of the first ten top ports in the world in 2023 were in China. In 2023, China recorded a container port throughput of about 268 million TEUs.
This massive throughput could be attributed to their decentralised system of port management, which swung into full action following the implementation of the 2004 Port Law of the People’s Republic of China. Before that, China recorded a container throughput of about 37 million TEUs in 2003. This decentralisation transitioned ownership and control from the central government—ending its role as regulator and operator—to locally and provincially integrated port management. This approach encouraged private investments, eliminated the duplicity of government agencies overseeing the seaports, and strengthened cooperation and coordination among China's ports.
The decentralisation of ports in China also caused several ports to be moved to new sites to accommodate expansion. This transition increased logistics and production activities, revitalising the city centres and promoting economic development. In addition, human capital was also developed through training programs, performance-based bonuses, and accessible communication channels. Under the new system of management, these ports were able to address processing delays and eliminate administrative inefficiencies through digital innovations and automation that enabled increased efficiency of the timely achievement of port tasks, resulting in lower trade costs and higher throughput aimed at improving port competitiveness. The Economic Times recently reported that several ports in China incorporated AI tools like Deepseek to enhance port efficiency by automating processes and reducing human intervention. The decentralised system also allowed for the diversification of funding, achieved by establishing joint ventures responsible for attracting foreign direct investment.
Key Recommendations from China’s Model
The success of the decentralisation initiative of ports in China highlights possible reforms Nigeria could adopt to bring its ports closer to realising their true potential. Decentralising port management and operations in Nigeria could encourage private investments and improve port infrastructure, resulting in better service delivery, enhanced trading activities, and more significant economic development. Automating processes will mitigate post-harvest losses from the spoilage of agricultural products, reducing export costs and improving export efficiency, thus increasing Nigeria’s competitiveness in global trade. However, a key step toward achieving this would be amending the Nigerian constitution to transfer port management from the Exclusive Legislative List to the Concurrent List, allowing subnational governments to oversee port activities and improve efficiency.
Limitations to Adopting China’s Model
While drawing lessons from China’s model, it is necessary to acknowledge the differences between these two countries that may pose a challenge during implementation. The Chinese governance system comprises political centralisation and administrative and economic decentralisation. The centralised political system allows the Chinese government to implement decisions quickly and efficiently without the delays and intergovernmental interference evident in the Nigerian federal system. Nigeria’s infrastructural deficit of over $2.3 trillion and infrastructural stock of only 30% of its GDP could undermine the adoption of China’s model and its performance. China's success with this model was due to its investments in infrastructure, which Nigeria severely lacks. This shortcoming could be fixed by using different types of financing, such as the public-private partnerships (PPP) model, to lower the costs of building infrastructure, which requires a lot of money.
Another determinant of the success of adopting China’s model is Nigeria's consumption rather than production style, which makes the country import-dependent. In contrast, China is heavy on manufacturing and export-reliant, hence the investment in their model, as that is the only way to maximise efficiency and benefits. To consider port decentralisation in Nigeria, there must be increased trading activities to sustain these ports’ activities and achieve maximum benefits.
