Post by Trade Coach on Jul 30, 2020 22:07:06 GMT 1
Apapa is an industrial hub that needs all the encouragement it can get from government because of its contribution to the country’s economy. For that to happen, the traffic gridlock which causes losses of revenue to the industrial hub of the country running into trillions of naira and denying the national economy that much in Gross Domestic Product (GDP), needs to be eradicated.
A major contributor to the gridlock is the deplorable state of the roads. This is set to worsen with the ill-timing of traffic diversion from the Third Mainland Bridge (TMB), as the bridge is due for maintenance. These are twin factors that are guaranteed to cost billions in man hours and cause excruciating delays at the ports. Interestingly, over 117,000 vehicles ply the TMB on a daily basis. Diverting such huge traffic to alternative routes including an already congested Apapa route is a only disaster waiting to happen. Apapa, which is already slow, is likely to grind to a halt.
Apart from accommodating Nigeria’s most vibrant and viable ports, Apapa is the Mecca of the maritime and export industries as well as the shipping and oil industries among many others. But unfortunately, the gridlock is stunting the potential of an area on which the country has depended for economic growth even before independence.
As a result of the gridlock, analysts said cargo dwell time at the ports has increased to 22 days. This is against the global best business practices in the maritime trade, as it is the longest in the West Africa sub-region. Comparatively, the Abidjan-Lagos Corridor Organisation said that cargo dwell time in Togo is nine days; 14 days in Benin Republic; and 15 days in Ghana. One report said “with a capacity of 3 million twenty-foot equivalent units (which is far less than South Africa’s volume of 5.5 million TEUs), the Nigeria Customs Service (NCS) should have realised as much as N1.25 trillion as against the N692 billion it made from 1.5 million TEUs in 2017.”
The scenario reduces the potential for job creation in the maritime, oil export and other sectors. Studies say the Lagos ports employ about 35,000 workers; it can be better without the gridlock. After all in South Africa, 700,000 people are employed at its ports.
The economy’s industrial capacity utilisation has also taken a hit; it stood at 53-60 per cent in 2015, but has since declined to 38-40 per cent in 2017, still owing to traffic gridlock.
It also diminishes the country’s export potential as observed above. For instance, 25 per cent of perishable products like cashew, which was being exported to Vietnam in 2017, rotted away after overstaying for weeks at the ports.
Summing up the self-inflicted losses, the Lagos Chamber of Commerce and Industry (LCCI) survey in partnership with the Nigerian Economic Summit Group (NESG), Manufacturers Association of Nigeria (MAN) and the Organised Private Sector (OPS) showed that Nigeria loses about N3.06 trillion (or $10 billion) on non-oil export and about N2.5 trillion corporate earnings across the sectors annually to the challenge.
Given the highly- deleterious scenarios above, a more logical approach for government would be first, to fix the roads in Apapa and other access roads as to make them world-class in line with Apapa’s contribution to the economy and then divert some traffic to it from the TMB. Suffice this to mean that government should mute maintenance work on the bridge until all other routes that are likely to have more traffic during the bridge’s closure to traffic are fixed.
Given that logic, stakeholders may have thought that was what government was up to when the minister of works promised last year that the roads in Apapa would be fixed before December this year. Government must redeem this pledge if it sincerely believes in boosting economic activity and in improving the ease of doing business. This has become an urgent priority.
Source: nationaleconomy.com/editorial/impact-of-apapa-gridlock-on-the-economy/
A major contributor to the gridlock is the deplorable state of the roads. This is set to worsen with the ill-timing of traffic diversion from the Third Mainland Bridge (TMB), as the bridge is due for maintenance. These are twin factors that are guaranteed to cost billions in man hours and cause excruciating delays at the ports. Interestingly, over 117,000 vehicles ply the TMB on a daily basis. Diverting such huge traffic to alternative routes including an already congested Apapa route is a only disaster waiting to happen. Apapa, which is already slow, is likely to grind to a halt.
Apart from accommodating Nigeria’s most vibrant and viable ports, Apapa is the Mecca of the maritime and export industries as well as the shipping and oil industries among many others. But unfortunately, the gridlock is stunting the potential of an area on which the country has depended for economic growth even before independence.
As a result of the gridlock, analysts said cargo dwell time at the ports has increased to 22 days. This is against the global best business practices in the maritime trade, as it is the longest in the West Africa sub-region. Comparatively, the Abidjan-Lagos Corridor Organisation said that cargo dwell time in Togo is nine days; 14 days in Benin Republic; and 15 days in Ghana. One report said “with a capacity of 3 million twenty-foot equivalent units (which is far less than South Africa’s volume of 5.5 million TEUs), the Nigeria Customs Service (NCS) should have realised as much as N1.25 trillion as against the N692 billion it made from 1.5 million TEUs in 2017.”
The scenario reduces the potential for job creation in the maritime, oil export and other sectors. Studies say the Lagos ports employ about 35,000 workers; it can be better without the gridlock. After all in South Africa, 700,000 people are employed at its ports.
The economy’s industrial capacity utilisation has also taken a hit; it stood at 53-60 per cent in 2015, but has since declined to 38-40 per cent in 2017, still owing to traffic gridlock.
It also diminishes the country’s export potential as observed above. For instance, 25 per cent of perishable products like cashew, which was being exported to Vietnam in 2017, rotted away after overstaying for weeks at the ports.
Summing up the self-inflicted losses, the Lagos Chamber of Commerce and Industry (LCCI) survey in partnership with the Nigerian Economic Summit Group (NESG), Manufacturers Association of Nigeria (MAN) and the Organised Private Sector (OPS) showed that Nigeria loses about N3.06 trillion (or $10 billion) on non-oil export and about N2.5 trillion corporate earnings across the sectors annually to the challenge.
Given the highly- deleterious scenarios above, a more logical approach for government would be first, to fix the roads in Apapa and other access roads as to make them world-class in line with Apapa’s contribution to the economy and then divert some traffic to it from the TMB. Suffice this to mean that government should mute maintenance work on the bridge until all other routes that are likely to have more traffic during the bridge’s closure to traffic are fixed.
Given that logic, stakeholders may have thought that was what government was up to when the minister of works promised last year that the roads in Apapa would be fixed before December this year. Government must redeem this pledge if it sincerely believes in boosting economic activity and in improving the ease of doing business. This has become an urgent priority.
Source: nationaleconomy.com/editorial/impact-of-apapa-gridlock-on-the-economy/
