Private terminal operators at Nigeria’s seaports have invested over N538 billion to the country’s port development from 2006 when the ports were concessioned to December 2017, according to the Bureau of Public Enterprise (BPE).
The Director General of BPE, Alex Okoh, disclosed this during a webinar on public private partnership as alternative financing model in the maritime sector organised by the Nigeria-South Africa Chamber of Commerce and sponsored by SIFAX Group.
He said terminal operation at the ports was concessioned because of the need for efficiency.
Giving a breakdown of the terminal operators’ investment and contribution to the port, Okoh said N5.6 billion was invested as commencement fees; N196.4 billion as lease fees; N61.4 billion as throughput fees while N66.6 billion was spent on infrastructure.
He also disclosed that the terminal operators invested N139.9 billion on cargo handling equipment and paid N67.7 billion as tax to the government.
The BPE Director General made a case for increased private sector involvement in financing critical infrastructural development in the maritime sector in order for the industry to become a major revenue earner for the Federal Government. Citing the success of the port concession as a justification for more private sectors funding, wherein he revealed that the Federal Government’s revenue from the sector more than doubled ten years post-concession, Okoh posits that competing needs for government’s lean resources has also made public private partnership (PPP) a welcome option.
The BPE chief further revealed that the Federal Government has simplified the PPP process, which now allows for private sector players to scout for projects that can be financed through the model.
He said, “The Bureau of Public Enterprises has been entrusted with a significant part of the PPP responsibilities in Nigeria through the Federal Government’s circular of September 2020. What this means in effect is that players in the country’s maritime and other key sectors of the economy can identify and suggest projects to the government through the BPE or relevant MDAs.
“Once these projects are examined, approval will be given to the relevant parties to undertake an appraisal, feasibility study or outline of the business case, which will be scrutinised by the government. Thereafter, a tender will be published. The benefit of this is that the originator of the project will be allowed to provide a matching offer with that of the highest bidder and if the party is able to match this offer, they will be declared the preferred bidder.”
He urged the private sector to carefully identify the gap in transport infrastructures in the nation’s maritime sector and work towards providing solutions to these gaps.
Okoh noted that such investments in and around Nigeria’s ports will help reduce the high shipping charges and local transport to warehouse costs which will in turn make the nation’s ports more competitive and business friendly in comparison to other African countries.
In his remarks, Group Executive Director, Corporate Services, SIFAX Group, Bode Ojeniyi, said that the subject matter was timely and germane given the huge infrastructural deficit in the sector that could be addressed through PPP.
He, however, urged the government to do better in making the country more business friendly by removing the crippling bureaucratic bottlenecks that are currently making investments unattractive.