Nigeria: Lekki Deep Sea Port To Generate $361bn Revenue, 200,000 Jobs

Nigerian authorities have announced that the Lekki Deep Sea Port would generate over $361 billion for the Nigerian economy as well $201billion in revenue to federal, state government agencies from taxes, royalties and duties.

Also, aside providing over 200,000 jobs opportunities for Nigerians, the port would also improve turnaround time for cargo handling and clearance as well as effectively lower cost of imports.

President Muhammadu Buhari, has finally commissioned the $1.5billion seaport for commercial operation. Construction of the port started on June 15, 2020, and was completed on Monday, October 24, 2022.

The Lekki Deep Sea Port is the first fully automated and digitalized port in Nigeria.

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 delayed for many years because of poor infrastructure and mismanagement.

Although Nigeria 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 have assured that 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.

Ayotunde Abiodun, an economic analyst with the Lagos-based SBM Intelligence firm opined, “There is poor and underinvested rail network connectivity, and the roads are not in top-notch condition.”  

“Also, the automation of processes at the port must be prioritized,” Abiodun reiterated.

The Governor of Lagos state, Babajide Sanwo-Olu, disclosed that ships docking at the Lekki Deep Sea 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.

According to Cui Jianchun, the Chinese ambassador to Nigeria, the Lekki Deep Sea port project would drive economic development not just for Lagos but for the entire country.

“This is (the) engine of the economy not only for (the) Governor of Lagos but also for the Federal Republic of Nigeria. This is equity of investment. This is not a loan; this is not borrowing, this is investment.”

Cui Jianchun, the Chinese ambassador to Nigeria

Agriculture And Trade; Key Drivers Of Nigeria’s Economy

Agriculture and trade are key drivers of Nigeria’s economy, but widespread insecurity in the agricultural-rich north, dwindling foreign direct investments and widespread corruption have slowed economic growth amid reduced earnings from crude oil.

The government, therefore, 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.

Ayotunde Abiodun noted that the port has “immense potential” for the economy of Nigeria, which is battling a 33% unemployment rate and an ailing economy.

However, Abiodun added that industry players must work together for this to happen.

“There needs to be interagency engagement on important issues affecting industry operators. A more troubling challenge has been the focus of these agencies on revenue generation rather than on value service delivery. This needs to change.”

Ayotunde Abiodun

The Managing Director of the Nigerian Ports Authority (NPA), Mohammed Bello-Koko, disclosed that the NPA will be the regulator and had acquired the equipment needed for the provision of marine services for safe berthing of vessels at the sea port.

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