PORTANALYSIS

2019

LAGOS PORT COMPLEXBY I.VLAD SUTEA

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LAGOS PORT COMPLEX

Based in the Nigerian capital’s Apapa district, the Lagos Port Complex is Africa’s third biggest container port, second only

to Tangier (Morocco) and Abidjan (Ivory Coast)¹. Also known as the Premier Port or the Port of Lagos, the complex consists

of over 20 berths grouped in five private terminals. The port is essentially operated as a public-private partnership between

the Nigerian Ports Authority (NPA), which was established in 1954, and a myriad of private companies. The NPA acts as a

landlord and regulator for all of Nigeria’s six ports, including the two ports in Lagos (Lagos Port Complex and Tin Can-Island

Port Complex) and four ports in the East (Calabar Port, Rivers Ports, Onne Ports Complex and Delta Ports Complex). The lease

agreements vary from 10 to 25 years. The Lagos Port Complex is augmented by two logistics bases, Eko Support Services Ltd.

and Lagos Deep Offshore Logistics (LADOL), as well as eight jetties².

As the country’s main wealth generator, the Port of Lagos provides century-long experience in port operations and support for

seafarers. In 1909 colonial Nigeria opened its harbours to global seafarers. In 1919, authorities started work on the Apapa

port, building the first 550 meters long deep-water berth. By the late 1920s, the Apapa-based quays had become the nation’s

main export hub for agricultural products, transported by rail from northern and western Nigeria. While it is a relatively young

port on the international stage, Lagos has become a leading African destination for seafarers and is on track to become

West Africa’s gateway trade hub. In 2017, Over 1,154 ships made a port call in Lagos, generating 19,099,690 tons of cargo

throughput³.

P O R T A N A LY S I S

¹https://www.bigboxcontainers.co.za/blog/7-africas-biggest-container-ports-pictures ²http://nigerianports.gov.ng/lagos-port/ ³https://issuu.com/landmarine/docs/nigerianporthandbook2018

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According to a PwC report on African port attractiveness, Lagos-Apapa qualifies as a significant competitor for Abidjan, due

to Nigeria’s political stability, port performance and quality of superior inland connections4. However, in its quest for regional

hegemony, the Port of Lagos must tackle issues such as piracy (both at berth and at sea) and obsolete infrastructure, while

boosting overall efficiency.

Inefficiency is the port’s main ashore problem. Poor logistics performance leads to slow cargo clearance, which in turn

creates maritime gridlocks and delays. The Lagos Port Complex has a 76 percent average efficiency rating, the fourth in West

Africa behind Tema (91 percent), Abidjan (90 percent) and Lome (89 percent)5. These shortfalls cause a loss in annual revenue

of 2.5 trillion Nigerian naira (556 billion pounds) for Nigerian-registered businesses6. Transportation and logistics are at the

core of the port’s performance issues.

Lorries usually need hours, sometimes even days or a week, to enter and exit the Lagos Port Complex due to dramatic gridlocks

on the roads linking the harbour to the capital. A Lagos Chamber of Commerce and Industry Report from 2018 found that

around 5,000 trucks seek to access the Lagos Ports Complex on a daily basis, whereas the quarry and its transportation

infrastructure were designed to sustain a maximum traffic of 1,500 trucks per day7. However, the transportation problem is

not new. Port-paralyzing traffic deadlocks have been forecasted for years, as the Nigerian government failed to overhaul and

extend its railway infrastructure to the port. Absent transportation alternatives, trucking costs have quadrupled last year.

P O R T A N A LY S I S

4https://www.pwc.co.za/en/assets/pdf/strengthening-africas-gateways-to-trade.pdf 5https://www.researchgate.net/publication/276163363_Assessment_of_Port_Efficiency_in_West_Africa_Using_Data_Envelopment_Analysis 6https://www.tralac.org/documents/news/2287-costs-of-maritime-port-challenges-in-nigeria-lcci-september-2018/file.html

7ibidem

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A lorry transport from the port to the Lagos mainland now costs between 250,000 and 300,000 Nigerian naira, compared to

2017, when the fee averaged below 80,000. While the Government’s recent ad-hoc hodgepodge of road repairs8 might have a

short-term bandage effect, the repeated caps and ban on land-sea traffic will likely harm the port’s business in the medium to

long run.

Following high-level ministerial consultations, Nigerian President Buhari formed a task force in May 2019, in order to establish

law and order on the Lagos Port Complex9. In addition, the task force, which is chaired by Vice-President Osinbajo, will work

under presidential supervision to develop an efficient and effective management plan for the entire port area traffic. PwC

estimates that $10 billion investments in transhipment facilities, operational capabilities, stack capacity and land transport

connections are required to raise Lagos’ efficiency marker to the international benchmark and reach the 100 point score of

South Africa’s Durban (in comparison to Rotterdam’s 420 points score)¹0.

Piracy remains Nigeria’s main maritime threat. The seas around West Africa are still the world’s most dangerous seas with

regard to piracy. As the International Maritime Bureau’s (IMB) latest report shows¹¹:

•62 out of the 75 worldwide seafarers taken hostage onboard or kidnapped for ransom in the first half of 2019 were captured

in the Gulf of Guinea. This amounts to 73 percent of all kidnappings at sea and 92 percent of onboard hostage situations. In

2018, there around 112 inshore and ashore attacks reported in West Africa¹².

•The crews of two chemical tankers were among the victims as well as a tug that was then used in another attack. While most

attacks are against oil and chemical tankers, fishing vessels were also targeted.

•Eight of the nine vessels that were fired upon worldwide were located off the coast of Nigeria. Since the attacks took place

roughly 65 nautical miles off the Nigerian coast, they were classified as acts of piracy. Attacks were also reported up to 170

nautical miles off the Nigerian coast.

•In many incidents, pirates have hijacked vessels for several days and ransacked the vessels after stealing its cargo (mostly

oil).

The same report also notes a “welcome and marked decrease” in attacks in the region for the second quarter of 2019. While

pro-active maritime policing conducted by the Nigerian Navy played a key role, superior vessel hardening options such as

anti-boarding barriers likely had a deterrent and denial effect on pirates as well. Recent attacks have shown that the piracy

problem has already spread to neighbouring countries, such as Ivory Coast, Togo and Benin, which have limited maritime law

enforcement capacities and sparse counter-piracy experience¹³.

However, the Gulf of Guinea, like many other high-risk areas around the world has a piracy underreporting problem. Trading

companies are concerned over their reputation and shipping delays, that may occur from incident investigations conducted by

port or coastal authorities. Due to this practice, piracy numbers are higher than statistics show¹4. The International Maritime

Bureau estimates that up 70 percent of piracy-related incidents in the Gulf of Guinea are never reported¹5. As of 2017, the

economic cost of piracy in West Africa is estimated at over $800 million and continued to rise.

Despite having armed guards as well as fortifications and CCTV in place, Lagos Port Complex is also known for its unusual

“berth piracy” problem (port robberies). Moreover, it is illegal for private security contractors to carry or transport firearms in

any West African territorial waters. As the region will likely remain the hottest high-risk area in the immediate future, seafarers

have to take it upon themselves to apply the best non-lethal vessel hardening solutions, when venturing into the Gulf of Guinea

or attempting a port call in Lagos. Generally, all waters in and off Nigeria remain dangerous.

P O R T A N A LY S I S

8https://thenationonlineng.net/lagos-issues-traffic-advisory-on-apapa-shuts-ports-roads-for-three-day-palliative-work/

9https://www.channelstv.com/2019/05/22/breaking-presidency-orders-immediate-clearance-of-apapa-port-congestion/?utm_source=TW&utm_medium=ChannelsTV-+AutoPoster&utm_campaign=SNAP%2Bfrom%2BChannels+Television

10https://www.pwc.co.za/en/assets/pdf/strengthening-africas-gateways-to-trade.pdf

¹¹https://iccwbo.org/media-wall/news-speeches/seas-off-west-africa-worlds-worst-pirate-attacks-imb-reports

¹²https://www.bbc.com/news/world-africa-48581197

¹³https://web.archive.org/web/20140116074853/http://www.skuld.com/topics/voyage--port-risks/piracy/overall/piracy---gulf-of-guinea/general-information/

14http://oceansbeyondpiracy.org/sites/default/files/attachments/Underreporting.pdf

15https://www.maritime-executive.com/article/chronic-under-reporting-of-piracy