Nigeria Banks On $1.5bn Chinese-Funded Port To Drive Economic Growth
LAGOS JANUARY 24TH (NEWSRANGERS)-Nigerian President Muhammadu Buhari has marked the opening of a $1.5 billion, Chinese-funded deep seaport in the commercial hub of Lagos that authorities hope will help grow the West African nation’s ailing economy.
The Lekki Deep Sea Port is one of the biggest in West Africa and will create hundreds of thousands of jobs in addition to easing cargo congestion that costs billions of dollars in annual revenue, Lagos Gov. Babajide Sanwo-Olu said Monday.
The port — whose container terminal is able to handle at least 2.5 million 20-foot standard containers per year — will be operated as a joint venture between the Nigerian government, Lagos state, Singapore-based Tolaram Group and state-owned China Harbor Engineering Company. Both foreign companies own a majority stake of 75% in the project.
Nigeria is Africa’s largest economy but growth has been stalled for many years because of poor infrastructure and mismanagement. Although it has six major seaports, more than 80% of the country’s imports are handled by just two of the ports in Lagos, where congestion has led to a massive loss in revenue as cargoes are often diverted to other West African nations.
Authorities say the new deep seaport on the eastern edge of Lagos would divert traffic from congested ports and shore up earnings, with expected economic benefits of more than $360 billion.
Experts, however, argue it would make a “minimal difference” if existing pitfalls are not removed, including ensuring connections between ports and inland areas.
“There is poor and underinvested rail network connectivity, and the roads are not in top-notch condition,” said Ayotunde Abiodun, an economic analyst with the Lagos-based SBM Intelligence firm. “Also, the automation of processes at the port must be prioritized.”
As the port begins to operate with the first commercial vessel arriving Sunday, the Lagos governor said ships docking at the port “could be up to four times the size of vessels that currently berth at both Tin Can and Apapa ports,” the other two ports in Lagos.
The project would drive economic development not just for Lagos but for the entire country, according to Cui Jianchun, Chinese ambassador to Nigeria.
“This is (the) engine of the economy not only for (the) governor of Lagos but also for the Federal Republic of Nigeria,” Jianchun said. “This is equity of investment. This is not a loan, this is not borrowing — this is investment.”
Agriculture and trade are key drivers of Nigeria’s economy, but widespread insecurity in the agricultural-rich north, dwindling foreign direct investments and endemic corruption have slowed economic growth amid reduced earnings from crude oil.
The government has turned to international lenders and funders to help grow the economy through critical projects, among them China, whose footprint are on some of Nigeria’s most important infrastructure such as rail networks and airport terminals.
The port has “immense potential” for the economy of Nigeria, which is battling a 33% unemployment rate and an ailing economy, said Abiodun, the analyst who added that industry players must work together for this to happen.
In the maritime sector, “there needs to be interagency engagement on important issues affecting industry operators,” Abiodun said. “A more troubling challenge has been the focus of these agencies on revenue generation rather than on value service delivery. This needs to change.”
AP
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Posted by News Rangers
on Jan 24 2023. Filed under Business, National.
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