LCCI to NPA: Spread port tariff hike to 5% annual increment for three years

The Lagos Chamber of Commerce and Industry (LCCI) has proposed a 5 percent annual increment for three years as an alternative to the 15 percent port tariff increase announced by the Nigerian Ports Authority (NPA).

NPA announced the 15 percent increment on February 6, saying it secured the required approvals to increase its tariffs to enhance infrastructure and upgrade equipment.

In a statement on Tuesday, Chinyere Almona, LCCI’s director-general (DG), called for a balanced approach, noting that the tariff hike carries significant economic implications that must be addressed.

Almona said the LCCI’s proposal would allow businesses to plan for the additional charges over the coming years.

“The convergence of a high interest rate at 27.50 per cent, inflationary pressures raging at above 34 per cent, a comparatively weak currency exchange at about N1500 to a dollar, and a reduced per capita income at a low of $835 poses a high burden on businesses,” she said.

“We need to consider a spread of any additional but necessary cost burden on businesses at this time.

“While the proposed tariff increase by the Nigerian Ports Authority (NPA) aims to modernise port facilities, it carries significant economic implications that must be addressed.

“One major concern is the increased cost of doing business, as higher port charges will raise operational expenses for companies relying on imported raw materials and machinery.

“This, in turn, may lead to increased production costs, which could be passed on to consumers, driving inflation upward.

“While the NPA argues that Nigeria’s port tariffs remain among the lowest in the region, port competitiveness depends on more than just tariffs.

“Factors such as operational efficiency, number of procedures, and unforeseen fees play a crucial role in determining the overall cost of using Nigerian ports.”

‘NIGERIA CAN LEARN FROM NATIONS WITH LOWER PORT CHARGES’

Almona said Nigeria can learn valuable lessons from countries with lower port charges, adding that improving efficiency by reducing process delays and optimising port operations can lead to significant cost savings.

“Continuous investment in infrastructure is essential to modernise equipment and facilities, ensuring smoother operations and attracting more transactions to our ports,” she said.

“Also, maintaining a transparent and predictable tariff structure allows businesses to plan effectively, fostering a more stable and competitive trading environment.”

Almona advised NPA to actively engage stakeholders, including the business community, to discuss potential impacts and explore solutions to mitigate negative effects.

She said rather than focusing solely on tariffs, efforts should be made to enhance port efficiency, reduce avoidable process delays, and eliminate unforeseen costs that burden businesses.

“The NPA should benchmark its operations against leading ports globally and adopt best practices that have been effective in reducing costs and improving service delivery,” she said.

“Deployment of technology to automate our port operations and transactions will reduce time loss and curb undesirable tendencies.

“While the LCCI understands the NPA’s reason for the tariff increase, it is imperative to adopt a balanced approach that considers the potential economic impact on businesses and consumers.”

Almona added that Nigeria can achieve its maritime trade goals by focusing on strategies to enhance port efficiency and competitiveness.