MAN Raises Concerns Over Proposed 15% Increase in Port Charges
By Azeez Disu
The Manufacturers Association of Nigeria (MAN) has raised concerns over the Nigerian Ports Authority’s (NPA) plan to increase port-related charges by 15%. The association urges the agency to reconsider the proposed plan and engage with stakeholders.
According to MAN, in its position paper signed by its Director General, Segun Ajayi-Kadir, the move comes at a time when manufacturers across the country are grappling with an array of economic challenges, including rising operational costs, fluctuating foreign exchange rates, and exorbitant energy prices. The association argues that imposing additional charges on port operations could severely hinder the recovery and growth of the manufacturing sector.
MAN added that many businesses are struggling to maintain profitability amid unsustainable operating costs, and the proposed tariff increase could further exacerbate these challenges. It also warned that such an ill-timed increase could derail government efforts aimed at improving the ease of doing business in Nigeria, ultimately leading to reduced capacity utilization and potential job losses across the sector.
“For manufacturers, port-related charges constitute significant indirect costs, as most raw materials and industrial machinery are imported through these ports. Any increase in charges will have a ripple effect, leading to higher production costs, increased inflationary pressures, and reduced competitiveness of locally manufactured goods. Many manufacturers who operate as tenants in NPA facilities will also face escalated costs, which could significantly disrupt the slight moderation in the mounting challenges that have plagued the manufacturing sector in recent times,” it disclosed.
Furthermore, it explained that the country’s competitiveness in regional trade is at stake. Neighboring countries with more efficient port operations could become more appealing to businesses looking to import or export goods. If cargo is diverted to these alternative ports, the Nigerian economy could face significant setbacks, including reduced government revenue and an increased incidence of smuggling. This shift would not only undermine local industries but also weaken the overall economic landscape.
While acknowledging the necessity of revenue generation for the NPA, MAN argues that increasing port tariffs is counterproductive. The association outlines several real issues affecting port revenue, including chronic port congestion, high demurrage charges, and inadequate infrastructure. By addressing these challenges, the NPA could enhance operational efficiency and revenue generation without imposing additional burdens on manufacturers.
MAN proposes several alternative approaches for the NPA to consider rather than increasing tariffs. These include reducing vessel turnaround times, streamlining cargo clearance processes, and investing in port infrastructure. Such measures would likely lead to improved business operations and a natural increase in revenue without jeopardizing the competitive landscape for Nigerian manufacturers.
In a formal appeal, MAN urges the NPA to reconsider its proposed 15% tariff increase and instead engage in constructive dialogue with stakeholders. The association emphasizes that increasing tariffs during a period of economic uncertainty will have severe repercussions, including higher production costs, diminished competitiveness, and increased smuggling activities.
It added that a collaborative effort to enhance port efficiency and reduce operational barriers is essential to foster a conducive business environment.
“The manufacturing sector can ill afford such an increase at this time; it runs against the present administration’s efforts to make Nigeria a trading hub in the West African sub-region and would definitely constitute a drag on the government’s efforts to stabilize the economy by the year 2025.”
