Stimulating Nigeria’s economy through dry ports development

Martins Nwamadi, a media practitioner, has a deep interest in maritime affairs.

The contribution of the transportation sector to Nigeria’s gross domestic product (GDP) in 2021 was rather insignificant at just a paltry 0.01 percent. The African continent is resource rich both in minerals, mining, agricultural products with aquatic splendour; and with good resource husbandry, Nigeria and other African countries could develop its infrastructural deficit to the envy of advanced economies. Infact, the low level of contribution of the transportation sector to the economy is a function of poor business climate and poor governance.

Dry ports globally are engines of trade facilitation and equally serve to accelerate economic growth. The development of dry ports in Nigeria came on stream in 2006 when the federal government through the Federal Ministry of Transport approved the establishment of six Inland Container Depot (ICD) projects across the six geo-political zones of the country on a public-private partnership (PPP) basis.

The projects are to be facilitated and supervised by the Nigerian Shippers’ Council, an interventionist agency and transport advisor to the federal government.

The approved ICDs were Kaduna Inland Container Depot, Funtua Inland Container Depot in Katsina State, Ibadan Inland Dry Port, Dala Inland Dry Port in Kano, Heipang Inland Dry Port in Jos, and Isiala Ngwa Inland Dry Port in Abia State.

Dry ports were therefore conceived as part of the 2006 federal government port reform programme to not only facilitate efficient cargo delivery to the hinterland but provide access to port services and boost export and import activities. This was well encapsulated by President Muhammadu Buhari in January 2018 when he commissioned the first ever Inland Dry Port in this part of the world, the Kaduna Inland Dry Port.

Kaduna Inland Dry Port was constructed with an initial capacity to handle 20,000 tonnes of cargo and also equipped to render full port Operations for the hinterland and other landlocked neighbouring countries that have no access to seaports like Niger and Chad Republics. Kaduna Inland Dry Port has standard container yards that could accommodate between 1000 TEU, modern examination bay with a 4000 sqm of modern warehouse, expansive trailer park, asycuda connectivity to main Customs server for seamless clearing of cargo.

Kaduna Inland Dry Port was therefore designated as ‘Port of Origin’ and ‘Port of Final Destination’ for exports and imports in a Federal Government Official gazette No 60 vol. 102 dated 26th May 2015.

Recently, another feat was achieved when the federal government in its drive to unbundle the transportation sector formally designated the Dala Inland Dry Port as ‘Port of Origin’ and also ‘Port of Final Destination’. Dala Inland Dry Port in Kano is another landmark inland intermodal terminal directly connected by road or rail to a sea port, thereby operating as a centre for the transshipment of sea cargo to inland destinations. As we await the official commissioning of Dala Inland Dry Port of which the Kano State Government has invested a whopping ₦2.8 billion, it is already at 95 percent completion stage.

Other upcoming and hitech dry ports are, Ibadan Dry Port, which is been constructed by a Chinese investor; Heipang Inland Dry Port, Jos; Funtua Inland Dry Port, Katsina, which is nearing completion; and Isiala Ngwa Dry Port that is bugged down by Abia State Government bureaucracy.

One of the fastest growing ICDs in the world is the Lat Krabang ICD in Thailand that is operated by six private companies with a designed full capacity of 500,000 TEU but currently handling 1.7 million TEU with a high speed rail connection to port at an average of 26 trains per day. This is quite an economic enabler.

Commenting on the benefits of Dry Ports to the Nigerian economy, Mauzu Jaji Sambo, the minister of transportation, while designating Dala Dry Port as Port of Origin and Port of Destination emphasised that ICDs have direct benefit to the economy. Apart from improving on the ease of doing business in the maritime sector, it replicates port services in the hinterland. It encourages the establishment of agro-allied industries for the export of semi-processed and manufactured agricultural products and consequently reducing dependence on oil.

According to Sambo, ICDs reduce transportation costs, improve supply chain logistics while adding value to market players. They attract various infrastructural and regional development projects while improving the internally generated revenue for the host state governments. Apart from creating employment opportunities and other related socio-economic benefits, the multiplier effect of these dry ports in our economy are too numerous as both the federal and sub national governments, as well as host communities, benefit from their contribution to the economy.

In his assessment on the state of dry ports and their positive impact to the economy Emmanuel Jime, executive secretary and chief executive officer, Nigerian Shippers’ Council, whose agency is not only supervising the projects but also ensuring that global standards are met, says that as the Nigerian economy expands and its trade now oriented to neighbouring African countries, Nigerian Shippers’ Council will continue to build partnerships, create a unique, innovative trade solutions that will ensure seamless trade relationship with other countries, thereby reducing trade imbalance.

As of today, the trade deficit in Nigeria is expected to hit a whopping $2.43 billion in 2022. According to research by World Integrated Trade Solution figures, Nigeria is currently 54th largest goods trading partner with $7.8 billion in total goods trade during 2019. Goods exports totalled $3.2 billion, goods imports totaled $4.6 billion. The research further revealed that the US goods trade deficit with Nigeria was $1.4 billion in 2019, while imports from China was $1,290,118.75 and imports from India was $1,059,952.14. The import product share percentage of 10.70 percent while India’s import product share percentage was 18.59 percent. With these trade deficits, it becomes propitious for the federal government to vigorously pursue the completion of all the dry ports in Nigeria as they will add value and also buoy the economy to sustainable growth.

This is what Jime emphasised when he said that all the dry ports in Nigeria, when fully operational, will link the hinterlands to the international corridor for robust trading activities. It will reduce the extreme high cost of moving goods, thereby curbing inflation, stimulating agro-processing industries to new market frontiers.

This quote from Jime puts in clear perspective what the ICDs would really mean for Nigeria and its economy: “A better-connected Nigeria with multiple, universally accepted commodities would invariably mean a robust, financially healthy country that will attract foreign investors to set up shops in the country, once a viable transportation system is assured.”