Dry ports as economic stimulus

By Martins Nwamadi

The contribution of the transportation sector to Nigeria’s gross domestic product in 2021 was rather insignificant, a paltry 0.01 per cent. Africa is resource-rich in minerals, mining, agricultural products and aquatic splendor, and, with good resource husbandry, Nigeria and other African countries could develop infrastructural deficit to the envy of so-called advanced economies. In fact, the low level of the transportation sector’s contribution to the economy is a function of poor business climate and poor governance.

Dry ports globally are engines of trade facilitation and equally accelerate economic growth. The development of dry ports in Nigeria came on stream in 2006 when the Federal Ministry of Transport approved the establishment of six inland container depot projects across the six geo-political zones of the country on a public-private partnership basis.

The projects were to be facilitated and supervised by Nigerian Shippers’ Council, an interventionist agency and transport advisor of the Federal Government.

The approved ICDs were Kaduna Inland Container Depot, Funtua Inland Container Deport in Katsina state, Ibadan Inland Dry Port, Dala Inland Dry Port, Kano, Heipang Inland Dry Port, Jos, and Isiala Ngwa Inland Dry Port, Abia State.

Dry ports were, therefore, conceived as part of the 2006 Federal Government Port Reform Programme to not only facilitate efficient cargo delivery to the hinterland but also provide access to port services and boost export and import activities. This was well encapsulated by President Muhammadu Buhari in January 2018 when he launched the first inland dry port in this part of the globe, the Kaduna Inland Dry Port.

Kaduna Inland Dry Port was constructed with an initial capacity to handle 20,000 tonnes of cargo, and equipped to render full port operations for the hinterland and other land-locked neighbouring countries that have no access to seaports, like Niger and Chad republics. Kaduna Inland Dry Port has standard container yards that could accommodate between 1,000 TEU, modern examination bay with a 4,000sqm of modern warehouse, expansive trailer park, asycuda connectivity to main customs server for seamless clearing of cargo.

Kaduna Inland Dry Port was designated as port of origin and final destination for exports and imports in a Federal Government official gazette No. 60, vol. 102, dated May 26, 2015.

Recently, another feat was achieved when the Federal Government in its drive to unbundle the transportation sector formally designated the Dala Inland Dry Port as port of origin and also port of destination. Dala Inland Dry Port in Kano is another landmark inland intermodal terminal directly connected by road or rail to a seaport, thereby operating as a centre for the transshipment of sea cargo to inland destinations. As we await the official inauguration of Dala Inland Dry Port of which Kano State government has invested a N2.8 billion, it is already at 95 percent completion stage. Other upcoming and hitech dry ports are Ibadan Dry Port, which is being constructed by a Chinese investor, Heipang Inland Dry Port, Jos, Funtua Inland Dry Port, Katsina, which is nearing completion, and Isiala Ngwa Dry Port that is bogged down by Abia State Government bureaucracy.

One of the fastest-growing ICDs in the world is that of Lat Krabang ICD, Thailand, that is operated by six private companies, with a designed full capacity of 500,000 TEU but currently handling 1.7m TEU with a high speed rail connection to port at an average of 26 trains per day. This is quite an economic enabler.

Commenting on the benefits of dry ports to the Nigerian economy, the Minister of Transportation, Alhaji Muazu Jaji Sambo, while designating Dala Dry Port as port of origin and port of destination, emphasized that ICDs have direct benefit to the economy. Apart from improving on the ease of doing business in the maritime sector, it replicates port services in the hinterland. It encourages the establishment of agro-allied industries for the export of semi-processed and manufactured agricultural products, consequently, reducing dependence on oil.

According to Sambo, ICDs reduce transportation costs and improve supply chain logistics, while adding value to market players. It attracts various infrastructural and regional development projects as well as improving the internally generated revenue for the host state governments. Apart from creating employment opportunities and other related socio-economic benefits, the multiplier effect of these dry ports in our economy are too numerous as both the federal and sub-national governments as well as host communities benefit from its contribution to economy.

In his assessment on the state of dry ports and its positive impact to the economy Barrister Emmanuel Jime, executive secretary/CEO Nigerian Shippers Council, whose agency is supervising the projects and ensuring that global standards are met, says, as the Nigerian economy expands and trades with neighboring African countries, Nigerian Shippers’ Council will continue to build partnerships, create unique, innovative trade solutions that will ensure seamless trade relationship with other countries thereby reducing trade imbalance. 

Today, trade deficit in Nigeria is expected to hit a whopping $2.43 billion in 2022. According to research by World Integrated Trade Solution figures, Nigeria is currently 54th largest goods trading partner with $ 7.8 billion in total goods trade during 2019. Goods exports totaled $3.2 billion, goods imports totaled $ 4.6 billion. The research further revealed that US goods trade deficit with Nigeria was $ 1.4 billion in 2019 while imports from China was 1,290,118.75 and imports from India was 1,059,952.14. The import product share percentage of 10.70 percent while Indias import product share percentage was 18.59 percent. With these trade deficits, it becomes propitious for the Federal Government to vigorously pursue the completion of all the Dry Ports in Nigeria as they will add value and also buoy the economy to a sustainable growth.

This Jime emphasized when he said that all the Dry Ports in Nigeria when fully operational will link our hinterlands  to international corridor for a robust trading activities. It will reduce the extreme high cost of moving goods thereby curbing inflation, stimulating agro – processing industries to new market frontiers.

“A better – connected Nigeria with multiple, universally accepted commodities would invariably mean a robust, financially healthy country that will attract foreign investors to set up shops in the country once a viable transportation system is assured”, Jime noted.