Business

Manufacturers Kick Against 15% Increment in Port Tariffs; Give Reasons

Many manufacturers who operate as tenants in NPA facilities will also face escalated costs, which could significantly disrupt the slight moderation in the mounting challenges that has bedeviled the manufacturing sector in recent times.

Published

2 months ago

February 9, 2025

OCHEFA

▪︎Segun Ajayi-Kadir, MAN Director-General

The Manufacturers Association of Nigeria (MAN), having consulted widely with its members across the country, expresses grave concern over the proposed 15% increase in port-related charges by the Nigerian Ports Authority (NPA).

In a position statement released by Segun Ajayi-Kadir, MAN Director-General, on Sunday, said that the proposed increment is coming up at a time when businesses are struggling with the rising cost of operations, high rate of foreign exchange, astronomical energy costs, and general economic uncertainties, imposing additional financial burdens on manufacturers through increased port tariffs will exacerbate the challenges faced by the real sector.

Port Operations and Their Impact on Manufacturing

Ports are the gateway to international trade and play a crucial role in the efficiency and cost-effectiveness of business operations.

According to the United Nations Conference on Trade and Development (UNCTAD) 80% of Nigeria’s traded goods are transported by sea, with 70% of total imports and exports in West and Central Africa destined for Nigeria.

This underscores the critical role Nigerian ports play in facilitating trade and industrial productivity.

For manufacturers, port-related charges constitute significant indirect costs, as most raw materials and industrial machinery are imported through these ports.

Any increase in charges will have a ripple effect, leading to higher production costs, increased inflationary pressures, and reduced competitiveness of locally manufactured goods.

The Economic Realities and Global Competitiveness

Nigeria’s current economic climate is characterized by rising inflation, foreign exchange challenges, and declining industrial capacity utilization.

Many businesses are experiencing worrying downturn due to unsustainable operating costs. Increasing port tariffs is therefore ill-timed and could signal a departure from government’s avowed efforts and commitment to the ease of doing business.

It is inevitable that this additional strain on industrial activities will ultimately lead to reduce capacity utilization and possibly job losses.

Furthermore, Nigeria must remain competitive in regional trade. Neighboring countries with more efficient and cost-effective ports will become far more attractive alternatives, leading to increased cargo diversion.

This will not only reduce revenue for the Nigerian government but will encourage smuggling and other untoward trade practices that weaken our economy.

Alternative Approaches to Revenue Generation

While we acknowledge the need for revenue generation, increasing port tariffs could be counterproductive in the long run.

The real issues affecting port revenue include:

Port congestion and inefficiency:

Reducing turnaround time for vessels and improving cargo-clearing processes can significantly boost revenue.

High demurrage charges:

Addressing bureaucratic bottlenecks that delay cargo clearance will ensure faster throughput and more efficient revenue collection. Infrastructure investment: Improving port infrastructure will enhance operational efficiency and attract more business, leading to natural revenue growth.

Competitive pricing strategies:

Instead of raising tariffs, aligning Nigerian port charges with global best practices will encourage more trade volume and increase overall earnings.

Our Appeal to the Nigerian Ports Authority

The Manufacturers Association of Nigeria’s implores the NPA to shelve the proposed 15% tariff increase and instead, collaborate with stakeholders to explore sustainable alternatives for revenue generation.

Increasing tariffs in the current economic climate will have dire consequences, including:

1. Increased cost of production, leading to higher prices of goods and fanning inflation.

2. Reduced competitiveness of Nigerian manufacturers in local and international markets.

3. Increased smuggling due to high costs at Nigerian ports compared to neighboring countries. 4. Decline in government revenue due to lower cargo turn out and manufacturing downturn.

Rather than imposing additional financial burdens on businesses, we propose a stakeholder dialogue to explore strategies for enhancing port efficiency, reducing operational bottlenecks, and creating a more business-friendly environment that will ultimately lead to increased revenue without undermining industrial growth and competitiveness.

We earnestly advocate for caution and deep reflection on the part of the NPA, as a key stakeholder in Nigeria’s economic development.

NPA’s consultation with key economic actors after it has decided on the increase is tantamount to putting the cart before the horse and does not demonstrate goodwill.

We call on NPA to rescind the planned increase in order to avert a monumental downturn in the fortunes of businesses in Nigeria.

The manufacturing sector can ill-afford such an increase at this time; it runs against the present administration’s efforts at making Nigeria a trading hub in the West African sub-region, and would definitely constitute a drag in the efforts of government to stabilize the economy in the year 2025.

Related Topics:Featured NPA port tariffs Ports tariff

Up Next

Buying Land in Lagos: Legal Considerations Every Investor Must Know by Dennis Isong

Don't Miss

General Hydrocarbons Limited Vs FBN: The Explainer GHL vs FBN: The Facts, The Half-Truths and The Fiction

Click to comment

Business

FG borrows N13.21trn from World Bank in 20 months

The country’s debt profile has hit N142 trillion, according to data published by the Debt Management Office (DMO).

Published

3 hours ago

April 2, 2025

OCHEFA

The World Bank has approved over N13.21 trillion ($8billion) as loans for different developmental projects for President Bola Ahmed Tinubu-led federal government in the last 20 months,

Daily Trust analyses of the various loans indicated that they were targeted at several interventions in various sectors of the economy with three fresh loans amounting to $1.1 billion approved between Friday and yesterday.

The country’s debt profile has hit N142 trillion, according to data published by the Debt Management Office (DMO).

The 2025 budget of N54.99tn has a debt service component of N14.32tn and N13.64tn for recurrent expenditure.

Business

Women make up 15% of 288 new billionaires in 2025

One of the most striking trends among the newcomers is the high percentage of self-made billionaires.

Published

4 hours ago

April 2, 2025

OCHEFA

The newcomers come from 33 countries and territories, marking a significant rise from the 265 additions made in 2024.

Forbes’ 2025 World’s Billionaires list has welcomed a record 288 new billionaires, pushing the total number of billionaires to 3,028 globally.

This group, which includes entrepreneurs, investors, and heirs, is collectively valued at nearly $680 billion, averaging $2.4 billion per person.

The newcomers come from 33 countries and territories, marking a significant rise from the 265 additions made in 2024.

The United States remains the dominant force, contributing the most new billionaires with 103 additions this year.

Among the top names is Marilyn Simons, widow of quantitative hedge fund founder Jim Simons, whose net worth is estimated at $31 billion.

She stands alongside Lyndal Stephens Greth, the daughter of oil magnate Autry Stephens, who holds $25.8 billion following her father’s passing in 2024.Germany ranks second in terms of new entries, with 37 individuals joining the list, including Johannes von Baumbach. At 19 years old, he becomes the youngest new billionaire globally, with a fortune of $5.4 billion.

Along with von Baumbach, 14 other heirs to the Boehringer Ingelheim pharmaceutical empire also made their debut on the list.China and Hong Kong together contributed 32 new billionaires, with jeweller Xu Gaoming being one of the notable additions, valued at $8.2 billion. India saw 17 new billionaires, while Russia accounted for 15.

One of the most striking trends among the newcomers is the high percentage of self-made billionaires.

Of the 288 newcomers, 196 (approximately 70%) built their wealth from the ground up, rather than inheriting it.

The wealthiest self-made newcomer is Saudi Arabian entrepreneur Sulaiman Al Habib, whose fortune stands at $10.9 billion. Al Habib’s success is a notable achievement as Saudi Arabia has seen a resurgence of billionaires on the list for the first time since 2017.

Alexandr Wang, the 28-year-old co-founder and CEO of Scale AI, is the youngest self-made billionaire this year, valued at $2 billion.

(BusinessDay)

Business

House Public Accounts Committee Recovers Additional $14 Million from Oil Companies

Published

3 days ago

March 30, 2025

Charles Flames

The House of Representatives Public Accounts Committee (PAC) said on Saturday that it has successfully recovered an additional $14.2 million (N21.4 billion) from four oil and gas companies as part of its ongoing investigation into financial discrepancies in the sector.

This latest recovery follows an earlier announcement on March 16, 2025, of recoveries amounting to ₦28.7 billion ($19.24 million), bringing the total recovered so far to $33.44 million (₦50.1 billion).

In a statement by Akin Rotimi Jr, House Spokesperson, the breakdown of the latest recoveries is as follows:
✓ Platform Petroleum Ltd: $1.9 million (N2.9 billion)
✓Midwestern Oil and Gas Ltd: $1.578 million (N2.3 billion)
✓Universal Energy: $523,845 (N785.7 million)
✓Aradel Energy Ltd: $10.3 million (N15.5 billion)

Speaking on the recoveries, the Chairman of the Committee, Rep. Bamidele Salam, credited the successes recorded to the unwavering support and leadership of the Speaker of the House, Rt. Hon. Abbas Tajudeen, PhD., GCON.

He noted that the Speaker’s firm commitment to legislative oversight and accountability has ensured that committees operate effectively, free from undue interference, and with a clear mandate to safeguard public resources.

“Under the leadership of Speaker Abbas, the House of Representatives has reinforced its commitment to fiscal transparency and good governance.

The independence granted to committees like ours has enabled us to carry out our mandate diligently, ensuring that public funds are properly accounted for.

This approach has been instrumental in our ability to recover these substantial sums, and we remain steadfast in our mission to strengthen financial accountability in Nigeria,” Rep. Salam stated.

In addition to the recovered funds, the Committee has issued a 20-day ultimatum for four companies to remit a total of $23.2 million (N34.8 billion).

Failure to comply within the stipulated timeframe will result in the enforcement of appropriate sanctions, including the public naming of defaulters in national newspapers.

The companies and their required payments are as follows:

Total Energies: $2 million within 7 days
Seplat Energies (SPDC): $6.036 million and N1.5 billion within 7 days
Aradel Energy Ltd: $12.1 million within 7 days
Network Exploration: $3.1 million within 7 days
Rep. Salam emphasised the Committee’s commitment to enforcing compliance, warning that companies that fail to meet their financial obligations will face the full weight of legislative oversight.
The Committee also expressed concern over several companies that have disregarded invitations to appear before it.
The following firms are now under heightened scrutiny and may face further actions if they continue to evade accountability:
Frontier Oil and Gas
Conoil Producing
Walter Smith Petrochemical
Bilton
Energia Ltd
Aiteo Petroleum Ltd
Pillar Oil Lt
Additionally, First E & P Oil Company has been directed to reconcile an outstanding balance of $90 million with the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and is expected to appear before the Committee on April 16, 2025, to finalise the matter.
The actions of the Public Accounts Committee reflect the House of Representatives’ increasing resolve to ensure transparency, accountability, and financial discipline in the Nigerian oil and gas sector.
Ongoing investigations are expected to uncover more discrepancies, with the Committee continuing its public hearings on the 2021 Auditor General’s report, which indicated that over ₦10 trillion in payments remain outstanding to the Federation Account from industry operators.
“The era of impunity and financial recklessness in the oil and gas sector is coming to an end.
We are determined to recover every kobo owed to the Nigerian people and ensure that public funds are managed with the highest level of integrity,” Rep. Salam reaffirmed.