The Manufacturers Association of Nigeria has stated that the planned implementation of the 15 per cent port tariff hike by the Nigerian Ports Authority might increase cargo diversion to neighboring countries.

MAN added that the new tariff would have a ripple effect, leading to higher production costs, increased inflationary pressures, and reduced competitiveness of locally manufactured goods.

The Director-General of MAN, Segun Ajayi-Kadir, disclosed this while speaking during a stakeholders’ engagement for the approved 15 per cent NPA tariff increment.

Represented at the event by the Vice Chairman of MAN, Apapa, Mr Cyprian Orakpo, Ajayi-Kadir stated that manufacturers who operate as tenants in NPA facilities would also face escalating costs, which could significantly disrupt the slight moderation in the mounting challenges that have bedeviled the manufacturing sector in recent times.

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

According to him, the new tariff will not only reduce revenue for the Nigerian government but will encourage smuggling and other untoward trade practices that weaken the economy.

Ajayi-Kadir maintained that 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.

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

The MAN DG mentioned that Nigeria’s current economic climate is characterised by rising inflation, foreign exchange challenges, and declining industrial capacity utilisation.

Ajayi-Kadir pointed out that many businesses are experiencing worrying downturns due to unsustainable operating costs.

“Increasing port tariffs is therefore ill-timed and could signal a departure from the government’s avowed efforts and commitment to the ease of doing business. Inevitably, this additional strain on industrial activities will ultimately lead to reduced capacity utilisation and possibly job losses,” he said.

He highlighted that while MAN acknowledges the need for revenue generation, increasing port tariffs could be counterproductive in the long run.

Ajayi-Kadir appealed to the NPA to shelve the proposed 15 per cent 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.”

He advised that instead of implementing the 15 per cent tariff hike, the NPA should work on reducing turnaround time for vessels and improving cargo clearing processes adding that addressing these issues can significantly boost revenue.

He insisted that the NPA should also address the bureaucratic bottlenecks that delay cargo clearance to ensure faster throughput and more efficient revenue collection.

“Improving port infrastructure will enhance operational efficiency and attract more business, leading to natural revenue growth. Instead of raising tariffs, aligning Nigerian port charges with global best practices will encourage more trade volume and increase overall earnings,” the DG advised.

Ajayi-Kadir warned that the new tariff will increase the cost of production which will lead to a high cost of goods thereby fanning inflation.

“Reduce competitiveness of Nigerian manufacturers in local and international markets, increase smuggling due to high costs at Nigerian ports compared to neighboring countries. It will also lead to a decline in government revenue due to lower cargo turnout and manufacturing downturn,” he warned.

He emphasised that rather than imposing an additional financial burden 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,” he said.

On Friday, The PUNCH reported that the Nigerian Ports Authority said it has secured necessary approvals for an upward review of its tariffs by 15 per cent, stressing that this was last reviewed in 1993. It said the move was necessitated by the urgency of bringing Nigerian ports up to speed with its peers in terms of infrastructure and equipment to ensure competitiveness at the ports.


https://punchng.com/15-tariff-hike-nigeria-bound-cargoes-will-be-diverted-warns-man/