Lagos Port Still Bottlenecks Africa's Top Economy

Worker at Apapa Port

Published Apr 27, 2015 8:55 AM by Reuters

The road leading to the Lagos port, which handles nearly everything that Africa's biggest economy imports, is one of the most congested in a megacity whose traffic jams are legendary.

Wide enough to accommodate only two lanes on either side, along it move the goods that Africa's top crude producer uses its huge oil receipts to buy -- everything from designer wear to dried fish, champagne and shampoo.

The Apapa port is also one of the biggest bottlenecks in an economy throttled by power cuts and institutional dysfunction.

Reforms to this behemoth by President Goodluck Jonathan and previous administrations of his People's Democratic Party (PDP) brought huge improvements over the past decade, shippers say, but bad roads and extortion by officials in a tangle of government agencies continue to pile up traffic and costs.

"Apapa port is hell on earth," wrote commentator Tokunbo Oloke in The Tribune late last year. "A place where people groan, curse, sweat, get infuriated, experience unending pain and sorrow."

That is a problem for foreign firms looking to cash in on the incipient consumer boom in Africa's most populous nation, and Jonathan's successor as president, former military ruler Muhammadu Buhari, will need to crack down hard if he wants to keep a reputation as a man with zero tolerance for graft.

A Reuters trip to Apapa, a virtual city of piled up containers by a lagoon, took four hours past lines of fuel trucks. That was despite volumes being relatively low owing to a weaker naira and oil prices. Workers report much longer waits.

Abandoned Consignments

Companies have to bring perishable goods through the port, where bureaucratic delays can mean a shipment spoiling.

Privatising the port operators in 2006 eased congestion dramatically, and Finance Minister Ngozi Okonjo-Iweala in 2012 cut the number of government agencies allowed to inspect cargo.

"There were about 15 different agencies extorting money from importers, and each would do a separate inspection," former presidential adviser Sylvester Monye told Reuters.

"Now we have seven, and the president introduced a regime that all the inspections must happen simultanouesly."

Importers however, say that rule is not always followed, and those seven can still hold back shipments while they await bribes. A Reuters reporter saw a man in uniform hold up a truck for half an hour before the driver reluctantly handed over cash.

"They've all got a scam going, from the guy that wheels your trolley out to the senior customs officers," says an official at container company at Apapa who declined to be named.

He added that Nigerian authorities inspect 70 percent of cargo, compared with around 5 percent in the European Union.

"The reason is: that is the number that you find to be unclean," said Monye.

A spokesman for the Nigeria Customs Service did not respond to a request for comment, but the head of customs at Apapa, Eporwei Edike, was quoted in the local press last week as saying that "If we notice any irregularities anywhere, we tackle them immediately," and that "we are not sparing erring officers."

Monye said other improvements Jonathan introduced included making it a 24-hour operation instead of 9 to 5 and rebuilding the 30-year-old road with a foot of concrete underneath it.

But extortion remains the biggest gripe of importers.

Onyadinka, a durable goods importer from a small self-owned firm who declined to have his last name printed, told Reuters that once all the costs of shipping, formal and informal, are factored in, he needs to sell his second hand cars at four times the initial buying cost just to turn a profit.

The shipping and waiting charges are also huge because "Nigeria just exports oil, so many containers go back empty."

"The whole thing is a shake-down," he said. "If you don't pay, nothing gets done. Even if they find nothing untoward."

A fuel importer says every agency will ask for bribes.

"If you don't pay they will say, sorry sir, we're clearing your papers still, it may take a while," he said. "And they mean it will take an eternity. Your shipment will just rot there."

Monye said firms with proper paperwork had no problems.

"The problem is two dimensional," he said "And the other side is the bribe givers who don't do their documentation properly and are used to just paying their way out of trouble."

"The big companies operating in a straight and narrow way do not have these problems. Often they don't get checked at all."

Yet shipping agent Tolu Mustapha says long delays put everyone at a huge disadvantage, because it isn't long before the accumulated cost exceeds the consignment's value.

He said a client he worked for bringing in $25,000 worth of diapers gave up when demurrage took him over that threshold.

"A lot of people just abandon their goods. The port is full of abandoned consignments," he said, which authorities auction.

There is a long list of ills that Nigerians are hoping Buhari's incoming government will quickly address -- growing insecurity, an Islamist insurgency in the northeast and corruption in the oil sector.

But for Nigeria's dynamic and fast growing economy, finishing the job of port reform must be near the top.

Reporting by Tim Cocks