Cargo Distribution Should Follow Competition, Not Quotas — NPERA
The Nigerian Ports Economic Regulatory Agency (NPERA) has said equitable cargo distribution among Nigerian ports should be driven by competition, efficiency and commercial considerations rather than administrative allocation or politically imposed cargo quotas.
The Director-General of NPERA, Barrister Pius Akutah, stated this at a conference organised by the League of Maritime Editors in Lagos.
Akutah, who was represented at the event by the Acting Director, Regulatory Services, NPERA, Adaora Nwobu, said the newly established agency would continue to engage stakeholders extensively as the transition from the Nigerian Shippers’ Council (NSC) to NPERA progresses.
Eastern Ports Must Become Commercially Viable
Speaking on the underutilisation of the Eastern ports, Akutah said several factors were responsible for the situation, stressing that infrastructure alone could not guarantee equitable cargo distribution.
He noted that Nigeria’s dependence on an efficient port system was critical to the movement of imports and exports, the supply of industrial and consumer goods, and the connection of Nigerian businesses to regional markets.
However, he observed that the concentration of cargo in a limited number of ports, particularly the Lagos port complex, had created significant challenges, including congestion, pressure on road infrastructure, increased logistics costs, longer cargo dwell time and higher costs of doing business.
Akutah added that the concentration of cargo also deprived communities around underutilised ports of economic benefits associated with port activities, including employment, logistics services, warehousing, manufacturing and investment opportunities.
According to him, the development of facilities such as Lekki Deep Seaport, alongside existing ports in the Eastern and Western regions, presents an opportunity for Nigeria to develop a more balanced and competitive multi-port system.
He, however, stressed that the government should not compel shipping lines or importers to allocate a fixed percentage of cargo to specific ports.
“Cargo follows commercial logic,” he said, explaining that importers consider factors such as proximity to markets, port charges, vessel accessibility, terminal efficiency, Customs processes, road and rail connectivity, security, cargo-handling capacity and overall logistics costs when choosing a port.
He said the objective should therefore be to promote competitive cargo distribution rather than impose mandatory cargo allocation.
Akutah explained that equitable cargo distribution should ensure that no port is deliberately disadvantaged by discriminatory commercial practices, while importers and exporters should have genuine choices among viable ports.
Ports Must Compete on Service and Cost
The NPERA boss also called for transparent and predictable port charges and service standards, stressing that ports should compete on service quality, efficiency, connectivity and cost rather than privilege.
He said the regulatory mandate of the former Nigerian Shippers’ Council, now NPERA, includes promoting fair trade practices, protecting shippers’ interests, regulating economic activities at the ports, encouraging competition, monitoring service standards and creating a predictable environment for trade.
Akutah explained that when a port is expensive, unpredictable, congested or difficult to use, cargo owners and shipping lines would naturally seek alternative ports.
Where viable alternatives are unavailable, however, they would continue to use congested ports despite the additional costs, which are eventually passed on to consumers.
Port Charges Must Reflect Services Rendered
Akutah also criticised arbitrary economic charges imposed on port users, insisting that fees should be reasonable, transparent, properly disclosed and linked to services actually rendered.
He said the agency frequently receives complaints from stakeholders over payments made for services that were allegedly not provided.
“Charges, fees and payments must be commensurate with the services rendered,” he said, referring to the principles of the World Trade Organisation’s trade facilitation framework.
Using container cleaning as an example, he argued that cleaning fees should not automatically become statutory charges where the service is not required for every container.
Eastern Ports Need Commercial Incentives
On the underutilisation of Eastern ports, Akutah said increasing their utilisation was essential for balanced national development, particularly as port activities could stimulate economic growth across the Southeast, South-South and neighbouring regions.
He identified Port Harcourt, Calabar, Delta and other emerging ports as having the potential to serve regional cargo markets.
He stressed that merely directing shipping lines to use Eastern ports would not solve the problem, noting that the facilities must provide commercially compelling reasons for cargo owners and shipping lines to choose them.
Such factors, he said, include navigational accessibility, adequate channel depth, modern cargo-handling equipment, efficient Customs and regulatory processes, effective terminal operations, reliable road and rail connections, security, competitive charges and regular shipping services.
“You don’t declare a hub; you earn it,” he said, stressing that Nigerian ports must earn their position through efficiency, connectivity and quality service.
Akutah further warned that developing new ports without adequate connectivity could simply create new centres of congestion.
He said ports must be integrated with road, rail and inland waterway networks to ensure efficient cargo evacuation and avoid a repeat of the congestion challenges experienced around existing port locations.
