SPECIAL REPORT: Nigeria’s seaports of oligarchs and monopoly czars


By Jude Kwayindagami

Beginning in the military era, Nigeria’s seaports are de facto run by oligarchs and monopoly czars who emasculate technocrats and regulatory officials in the fullest expression of political capture.

From one successive government to another, the ports like golden geese are ceded from an old landlord to a new one; each of who came with the rent-seeking mentality to take out as much as possible from the system without plowing back – before the next landlord takes over.

The domino effect is that while Nigeria’s contemporaries in the 1970s – Brazil, Indonesia, Malaysia and South Africa – have turned their seaports into economic superstructures, Nigeria is still operating on obsolescent structures and systems unfit to support any grand national development plan or industrialization agenda.

Port congestion, political interference, corruption, resistance to system automation, demurrages, bad road networks, a collapsed railway system and infamous rankings in global Ease of  Doing Business have killed many business ventures; sometimes their owners.

The expansion and modernization that Nigeria failed to do, was what Bénin Republic carefully implemented in its own national development goals, turning its seaport into a sub-regional attraction.

Meanwhile service delivery remains take-it-or-leave-it at Lagos ports.  The opposite is the case at Cotonou port just 108 kilometres away. Bénin wooed Nigerian importers with low rates and good port facilities. Legion of these importers and customs brokers voted with their feet, with Cotonou port witnessing an annual freight volume of over 11 million tonnes.

To attract even more Nigerian freight, Bénin in 2018 began a new phase of expansion and modernization of its deep water port. Brimming with confidence the port authorities said this:

“Our ambition is to make the Port of Cotonou an innovative, secure and reliable logistics platform for international trade and ensure efficient management for sustainable socio-economic development in Bénin and the sub-region,”

Rice cargoes remain the game changer for Cotonou – a port which has witnesses a fivefold increase in transit traffic over the past 10 years. Since 2013, Nigeria is only allowing in foreign rice through its ports, imposing a tax of 70%. The move was intended to curb import, save scarce foreign exchange and encourage local rice production.

A year after Nigeria increased tariff on rice import to 70%, Bénin Republic lowered its tariffs on rice imports from 35% to 7%. This made it even cheaper for the Indian cartels to import rice – a staple in every household in Nigeria – through Bénin. Though Bénin will never want to be seen as giving state support to organized crime groups, it needs the revenues that come with it.

Data from the Thai Rice Exporters Association shows that in 2017 for example, rice import from Thailand to Cotonou port jumped to 1.85 million metric tonnes from 1.4 million metric tonnes in 2016. The same data shows that rice imports from Thailand to Lagos port dropped from 1.1 million metric tonnes in 2012 to barely 95,000 metric tonnes in 2017. Thailand is the world’s second-largest producer of rice.

If all the rice from Thailand was meant for Bénin people, then each of Bénin’s 11.5 million citizens – including babies – would have had to consume at least 150kg of rice; the equivalent of six 25kg bags of rice per person a year. Something else further shows that all the Thailand rice imported to Cotonou port have Nigeria as the final destination. Thailand rice is parboiled rice. And Nigeria is the only country in West Africa that eats parboiled rice. French-speaking West African countries do not eat parboiled rice.

Bénin Republic is not the only country preying on Nigerian freight. Inspired by Bénin’s obvious resourcefulness, next-door neighbor Togo has also been transshipping cargoes – mostly used automobiles, footwear and textiles – to Nigeria. Togo which also transships to landlocked Niger Republic, Burkina Faso and Mali is forever in fierce competition with Bénin for a market share of the lucrative Nigerian freight. However, proximity to Nigeria gives the Cotonou port a natural advantage.

Unwillingly to trail behind any longer, Togo – a country of eight million people – pulled off a modernization reform that made its Lomé port the only deep-water port on the West African coast that can accommodate 3rd generation ships. Beginning 2017 when West Africa returned to economic growth, shipping lines scaled up with larger vessels to meet the corresponding freight volumes as foreign goods demand increased. Ports in West African now needed to adapt to handle these larger vessels.

With a depth of 16.60 meters, the Port of Lomé – with its attraction of 3rd generation ships – becomes West Africa’s leading port with a capacity of 1.1 million TEU. TEU stands for Twenty-Foot Equivalent Unit which can be used to measure a ship’s cargo-carrying capacity.

According to the most recent port ranking for West Africa – published by Netherlands’ leading consulting firm, Dynamar – the Lomé port is now the most important transshipment hub in West Africa, displacing Nigeria, the region’s leading economic power.

Nigeria was the highest-ranked West Africa country in 2015 but is now down to fifth in terms of liner connectivity. Without deep-sea berths for large vessels, Nigeria is steadily losing its relevance in the sub-region. Over a dozen West African ports so far can receive vessels larger than 10,000 TEU. Nigeria is not one of them. The biggest ships that can berth in Lagos port are of 4,600 TEU.

Over the past decade, growth in the volume of West Africa’s container trade has exceeded that of any other global region – doubling to almost 5 million TEUs. This expansion, fueled by rising incomes in the region, is also contributing to increased congestion at most ports which require a few deep-water ships to handle than too many smaller ones crowding the berths. This is what Togo’s port is pioneering. But only 15 percent of cargoes coming into Port of Lomé are for domestic. A large part of 85 percent is destined for the Nigerian market, according to the Dynamar report.

Slow in taking critical decisions to transform the fortunes of its seaports, Nigeria has found itself mercilessly exploited, first by Bénin and then Togo. A third country, the landlocked Niger Republic, has joined the sub-regional racket of what is basically: selling snow to an Eskimo.

Despite having no ocean or deep draft river ports, Niger Republic operates a ports authority. For its uranium concentrates exports and other overseas trades, Niger relies on the port of Cotonou and to a lesser degree Togo.

Lately, however, Niger began to receive imports far exceeding its domestic needs. What’s more, many of the goods flooding Niger are even alien to its local consumption. The excess cargoes, about 85 percent of the goods received from Bénin and Togo, are then re-exported or transshipped to Nigeria with the owners of the goods paying customs charges and tax to the Niger Republic.

Industrial raw materials, textiles, cosmetics, household items, tobacco, spirits, beverages, and other containerized and breakbulk cargoes are trucked a long distance from Cotonou or Lomé port to Nigeriene towns of Konni and Maradi, close to the Nigerian border. These are goods that should have arrived Lagos seaports, buoying customs revenue as oil prices slump.

From cotonou, the trucks travel about 700 km on the RNIE2 Road to Malanville, the last Beninoise town. About 10 minutes across a bridge and the truck is in Gaya in Niger Republic.

Malanville in Bénin and Gaya in Niger are 10 kilometers apart and separated by the Niger River.

Every day, hundreds of trucks ply the 700-kilometre RNIE2 Road. In the last five years, many of these trucks are laden with items on Nigeria’s import prohibition list.

They include furniture, foot wears, bags and suitcases, carpets, used tyres, soaps and detergents in retail packs, banned pharmaceuticals, fruit juice in retail packs, vegetable oils and second-hand clothes. Some trucks are transporting goods ineligible for Foreign Exchange – and thus are import restricted in Nigeria.

In this category are items such as rice, margarine, canned fish, roofing sheets, enamelware, wire mesh, steel nails, wooden doors, toothpicks, kitchen utensils, textiles, woven fabrics, clothes and cellophane wrappers. Gaya, a town bordering three countries – Bénin, Niger and Nigeria – is a magnet for second-hand clothing trade mainly for re-exports to Nigeria.

Both Gaya and Malanville are replete with large warehouses and Nigerian importers wanting to transport large stocks of clothing originating from the US and Europe. This trade is dominated by about 20 big traders from Niger, the Igbo from Nigeria and a small number of Tunisians and Lebanese, some of whom had come to Gaya from Cotonou, Lomé or Burkina Faso. The Igbo merchants who re-export secondhand clothing to Nigeria, to a lesser extent also re-export to Burkina Faso, Cameroon, Chad and Mali.

The second most visible import item at Gaya is used automobile. Second-hand vehicles cross the border at Malanville-Gaya at a rate of 200-300 per day, or an average of 1,000 vehicles a week.

With the exception of vehicles destined for Niger, which are issued with transit documentation called “carnet de tire”, all vehicles coming into Gaya are subject to formal re-export procedures.

The taxes levied by Niger on such movements account for the major portion of customs revenues for this landlocked country.

But here in Gaya, official and smuggling activities run parallel. Daredevil transporters choose convoluted back roads to convey cargoes like rice and automobiles from Gaya to Kamba, a town in Nigeria’s Kebbi state and on to Birnin Kebbi, Zamfara, Ilorin and God-knows-where-else.

The vast majority however follow the official route from Gaya, 162 kilometres to Dosso, a junction town that leads left to the capital Niamey. The trucks turn right to Dogondoutchi, and on to Konni, the last Nigeriene town on that route. Like Gaya, there are large warehouses at Konni. Just across the border is Illela in Sokoto State.

Most of the trucks from Bénin or Togo do not terminate at Konni.They turn right at Konni and proceed to Maradi, towards Jibiya in Katsina State. Maradi, a dusty and once sleepy town is today one of the busiest transit hubs in the Sahel region. Maradi is to Niger what Seme is to Bénin Republic.

Transshipment to Nigeria has created tertiary sector jobs such as banking services, transport services, communication services, restaurants, nightlife and warehousing and storage. It takes seven days for a truck to journey from Cotonou to Maradi. Every day, about 400 trucks are stationed in Maradi as workers offload containerized goods into warehouses or load them, layer by layer, in waiting trucks until they have created a spectacle so high it is nicknamed “2-storey”.

All kinds of things pass through Maradi. And all the trucks, laden to high heaven, are going to Kano. A host of banned and legit goods keep the trucks groaning. But the tobacco, building materials and brand new textiles from China belong to one man – a billionaire tycoon from Katsina who also owns an airline in both Nigeria and Niger Republic.

He hobnobs with Presidents – including those of Bénin and Niger. His pact with the Chinese in large-scale smuggling of textiles is responsible for the death of the textile mills in Kano, Kaduna and Lagos. The Big Man’s trucks travel in convoys, mostly at night. And sometimes under military escort –depending on the nature of cargoes.

 His convoy, sometimes a stretch of over 60 trucks, is waved on at the Jibiya border control without any checks or customs duties. Asian factory owners and the Lebanese community in Kano rely on him to bring in their imports from Cotonou instead of facing the horrors of Lagos port.

This investigation was carried out under the Collaborative Media Engagement for Development Inclusivity and Accountability Project of the WSCIJ, with funding from the MacArthur Foundation

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