Port monopoly: A threat to Nigeria’s economic growth
Nigeria’s economy is paying a heavy price for its inefficient port operations. With the Lagos port handling over 80 per cent of imports, congestion and bureaucratic inefficiencies are stifling trade and economic expansion.
As the country loses an estimated N7.6tn annually due to port congestion, it is clear that decentralising port operations is no longer a luxury, but a necessity. Can Nigeria break free from its port monopoly and unlock its full economic potential?
In 2017, Hadiza Bala Usman initiated reforms to break monopolies by allowing importers to choose terminals freely. This move was part of broader efforts to liberalise free trade zones and enhance competition among port operators. However, despite these steps forward, the underlying issues remain unresolved.
The dangers of over-reliance on the congested Lagos port, bureaucratic inefficiencies, and skyrocketing business costs are severe. Notwithstanding Nigeria’s vast coastline, other ports remain underutilised, stifling trade and economic expansion. Decentralising port operations is not just necessary but urgent. A diversified port system would boost business efficiency, reduce regional disparities, and unlock new economic opportunities. However, political interests and infrastructure gaps stand in the way.
The Nigerian economy suffers significantly from inefficient port operations. According to recent analyses, poor infrastructure in Nigerian ports results in substantial economic losses. Reports have shown that the cost of doing business at Nigerian ports is among the highest in West Africa. Lagos ports, which handle over 80 per cent of Nigeria’s imports, continue to face severe congestion due to inadequate infrastructure and bureaucratic inefficiencies. For instance, the port stay duration for wet bulk cargo in Lagos increased to 4.3 days as of January 13, 2025, up from 3.8 days the previous week, reflecting ongoing delays and inefficiencies.
Despite the opening of the Lekki Deep Sea Port in Lagos, which aims to alleviate pressure on existing facilities, challenges persist as broader systemic reforms and investments remain insufficient.
Congestion not only disrupts supply chains but also imposes significant costs on businesses. They erode profit margins for businesses reliant on imports and stifle economic growth.
A 2020 World Bank report highlighted that Nigeria’s ports were ranked among the least efficient globally due to outdated facilities and logistical bottlenecks.
Nigeria loses an estimated N7.6tn annually due to congestion at Apapa and Tin Can Island ports, according to the Lagos Chamber of Commerce and Industry. Additionally, trucks queue for days waiting for access, costing the economy $55m daily in lost activities.
The LCCI has estimated that inefficiencies at Nigerian ports cost the business community over N2.5tn annually. With delays and administrative bottlenecks in the business community, this usually translates into a significant portion of Nigeria’s GDP being lost due to inefficiencies. This translates into substantial implications for tax revenue, job creation, and overall economic growth.
In 2025, challenges persist despite efforts like implementing a National Single Window aimed at reducing costs by up to 25 per cent. The proposed increase in port charges by 15 per cent has been met with resistance, manufacturers fear it will exacerbate production costs and inflationary pressures.
The Director General of the Manufacturers Association of Nigeria, Segun Ajayi-Kadir, expressed grave concerns over the tariff hike: “Imposing any additional financial burden on manufacturers through increased port tariffs would exacerbate the challenges being faced by operators in the real sector… This will not only reduce revenue for the Nigerian government but will encourage smuggling and other untoward trade practices that weaken our economy.”
A maritime expert, Joshua Asanga, noted that while inflation had eroded NPA’s current tariff value over three decades, there was scepticism about whether additional revenue would translate into better services or just more costs for businesses.
It does not just end with manufacturers; the economic impact of inefficient port operations in Nigeria is profound. There are also trade facilitation challenges like food insecurity. Inefficiencies at seaports exacerbate food insecurity by inflating food prices due to high tariffs on agricultural imports; a reason many Nigerians cannot feed thrice daily. It also leads to export competitiveness, because delays caused by multiple inspections and excessive documentation discourage participation in export businesses, reducing foreign exchange earnings from non-oil sectors.
The recent focus on the “blue economy” raises questions about its alignment with existing federal structures and potential impact on state rights. While this initiative aims at leveraging maritime resources for economic growth, it must be carefully integrated into existing frameworks without exacerbating regional disparities or legal ambiguities.
A call to action for policymakers to move beyond Lagos and unlock Nigeria’s full economic potential
Decentralising Nigeria’s ports is crucial for addressing congestion and inefficiency. Activating ports in Calabar, Warri, and other areas offers several benefits. Job creation is a significant advantage, as developing regional ports can provide employment opportunities beyond urban centres like Lagos. This helps distribute wealth more evenly and reduces migration pressures.
Reduced congestion is another benefit, as distributing cargo across multiple ports alleviates pressure on major hubs like Apapa. Faster clearance times reduce costs associated with delays and enhance operational efficiency.
Decentralisation also fosters regional economic development, stimulating local economies through increased trade activities. Studies support this approach by highlighting how decentralised management can minimise bureaucracy (Olukoju, 2006; Badejo, 2012). Aligning with global best practices in efficient distribution networks underscores the importance of this strategy for Nigeria’s economic health.
Ending Nigeria’s port monopoly is essential for sustainable economic growth. It demands a comprehensive approach that includes policy reforms, infrastructure development beyond Lagos, and ensuring new initiatives like the blue economy align with constitutional principles while fostering equitable development nationwide. This analysis connects past reforms with current challenges while emphasising the urgency of decentralising port operations for broader economic benefits.
Dr Mbamalu, a Jefferson Fellow and member of the Nigerian Guild of Editors, is the publisher of Prime Business Africa
X: @marcelmbamalu
