Macroeconomic Review 2024…Maritime: Emerging blue economy

Although, the maritime industry had its fair share of the unintended backlashes from the implementation of the Federal Government’s bold but necessary economic reforms in 2024, stakeholder collaboration aimed at positioning Nigeria as a leading maritime hub in West and Central Africa gained significant traction, apparently encouraged by the sector’s widely acknowledged vast potential that could transform it into the cornerstone of the nation’s economic growth and sustainable development in the coming year.

For instance, naira depreciation which forced the exchange rates to skyrocket, significantly impacted the maritime sector, as import duties, calculated at dollar rates, became prohibitively expensive, leading to reduced import activities and a downturn in port operations. This, in turn, negatively affected ancillary services such as haulage and clearing agents, triggering job losses. The fuel subsidy removal and the floating of the Naira took toll on port users, including importers, clearing agents, and exporters operators.

However, on the strength of some proactive and innovative measures put in place by the Ministry of Marine and Blue Economy, under Adegboyega Oyetola as Minister, to enhance the fortunes of the maritime sector, operators have been able to weather the storm to some extent and are even looking forward to a more promising and rewarding maritime sector next year. Some of the measures include digitisation and automation of port operations, and addressing infrastructural decay at ports, among others.

At the core of the initiatives that appear to have put operators and other stakeholders in the maritime industry in an optimistic mood, according to Oyetola, is the need to enhance safety, security, and efficiency as well as performance optimisation to reduce costs and increase reliability. The adoption of innovative practices also raised hopes of propelling the industry toward sustainable development.

Oyetola said the President Bola Tinubu administration is intentional in investing heavily in port modernisation to reduce inefficiencies, lower operational costs, and improve safety in the nation’s ports, including building capacity to ensure Nigeria remains competitive in the global arena of seaborne trade. According to him, this process is being financed through Public-Private Partnerships (PPP) arrangements.

The maritime sector in 2024 also witnessed upgrading of seafarer certifications to international standards, revival of dormant funds like the Cabotage Vessel Financing Fund (CVFF) and the empowerment of indigenous ship-owners to enhance the sector’s global competitiveness.

Operators and experts, however, harped on the need to prioritize addressing infrastructural decay at ports, promoting the use of eastern ports, and ensuring the financial stability of regulatory bodies like the Council for the Regulation of Freight Forwarding in Nigeria (CRFFN), for sustained growth, including strengthening safety protocols for inland waterways, enforcing regulations on wreck removal, and curbing illegal fishing activities to unlocking the full potential of Nigeria’s maritime resources.

The Nigerian Ports Authority (NPA) also made steps to negotiate a $700 million loan from the Citibank to rehabilitate the Apapa and Tin-Can Island Ports, Lagos, to facilitate trade and boost efficiency. Also, the authority in the year, opened discussions with another funding agency to secure fund for the upgrading of Calabar, Warri, Onne and Rivers ports as well as the reconstruction of Escravos breakwaters.

The move was taken in order to increase container traffic by over 70 per cent from the current two million containers per year to over seven million Twenty Equivalent Units (TEUs) at the nation’s seaports. NPA Managing Director Dr. Abubakar Dantsoho stressed the need for advanced infrastructure, technology integration and stakeholder collaboration to position Nigeria as a leading maritime hub in West and Central Africa.

In addition, the NPA also rolled out plans to link the Export Processing Terminals (EPTs), with the Domestic Export Warehouse (DEW) to create pathways for Small and Medium Scale Enterprises (SMEs) and facilitate Port-Hinterland connectivity to boost domestic economy. Dantsoho made this known at the 2024 Lagos International Trade Fair, where he said the EPTs are to be linked with DEWs in partnership with the Nigerian Export Promotion Council (NEPC) and relevant partners.

While the Nigerian maritime industry faces significant challenges in 2024, the challenges highlight both its resilience and the urgent need for comprehensive reforms going forward. The consensus is that the sector’s potential remains vast, but only with coordinated efforts, strategic policymaking, and effective regulation can it truly become a cornerstone of the nation’s economic growth.