Nigeria: Creating Jobs Through Ports Development
Ports are the gateway to trade, and an important node in the global supply chain. No country can produce everything that its citizens need or want, but by opening its borders to international trade a country gains far more than basic resources and exotic luxuries. Trade allows a country to concentrate production and specialize on those things that it does well, while buying in more cheaply those things that it does less well, in line with the principle of comparative advantage. The import and export traffic that a nation’s trade generate pass through the ports laden on merchant ships in what is known as ‘cargo throughput’.
Ports play an important part in societies such as trade enablers, employers and centres of technology. Ports are even more critical in developing economies like Nigeria, where they can facilitate economic growth and promote social development and prosperity. Efficient terminals promote economic development through higher cargo capacity and increased productivity. Trade produces a positive impact on many areas of development across the society, as it provides easier access to goods and services, technologies and knowledge.
Since 2006, ports in Nigeria have taken on a new outlook in terms of ownership and management structure. While the Nigerian Ports Authority (NPA) retained its status as owner/landlord of all public ports, it divested itself of the responsibility of handling cargo and passed same over to private operators/investors in order to engender efficiency in operations. Indeed, private sector participation became the centre point of port privatization whose wind had begun to blow across the maritime world since the 1980s.
Given the fact that globalization had increased world trade in geometric proportion over the decades, with a large percentage of world trades being in manufactured goods and transported by sea on ever larger vessels, the ports needed to respond commensurately in terms of capacity to handle the influx of cargoes efficiently. Apart from divesting itself of the responsibility of handling cargoes, the Nigerian Ports Authority realizing the need to keep the ports in ship shape condition has from time to time outsourced sensitive technical responsibilities that aid port development to competent firms to handle.
One such task is the port and harbour dredging works which are being carried out across ports in the country. Notable amongst these are the remedial works at the Escravos Channel which the involve replacement of aids to navigation and dredging of the Escravos Channel; also the maintenance dredging of the Bonny River Channel. The expertise displayed by the contractor Dredging International Services Nigeria Ltd (DISN) in carrying out the aforementioned tasks is a testament to its world-class experience in marine and waterway solutions which span over one hundred and forty years across all continents .
These projects will lead to opening up of the Delta Ports and have to a large extent helped to deepen and clean up Nigeria’s important waterways, and have by extension assisted Ports development by making Nigerian ports more attractive to traffic from ever larger deep sea ocean-going vessels.
As catalysts of development, ports create direct and indirect jobs in very innovative ways. Firstly,large ports are an ideal location for industries that are dependent on imported bulk raw materials such as steel works and the petrochemical industry to enjoy locational advantage. Clusters of related industries emanate to form around the primary industry. Storage and distribution centres tend to be located in or near to ports providing an opportunity to add value to the basic imported or exported goods. Added value activities include packaging, re-packaging, labelling, testing, tracking and tracing goods in transit and participation in organisational information flow. Ports that are dedicated as free zones, like the Onne Port to Onne Oil and Gas Free Trade zone (OGFTZ) particularly attract foreign investors who set up industries in the Zone to take advantage of duty-free import on raw and intermediate materials in order to manufacture, package and export goods made from them, also duty-free. These port-centric industries create hordes of direct and indirect jobs.
Port operators, under the present concessioning arrangement are under obligation to invest in port equipment whilst the port authority invests in infrastructure.Since ports serve as terminals for arriving and departing ships, provisioning and husbanding the ships create job opportunities for numerous service provider companies. These companies which are mostly private, render ancillary services to the ships and to other parties having interests in the cargo that the ships convey, including the terminal operators, charterers, Prevention and Indemnity (P&I) clubs, port and customs authorities, as well as other statutory agencies within the ports precinct. The providers cut across a spectrum of services including:freight forwarders, customs brokers, hauliers, cargo and marine surveyors, ship chandlers, marine security firms, ship brokers and managers, maritime lawyers and notary public firms, banks and related financial institutions, insurance brokers and loss adjusters, ship repair and maintenance firms, and ICT solutions providers to mention a few.
As the ports attract bigger tonnage due to deeper drafts, so are more patronages created for these service providers and hence more job opportunities for the numerous professionals, who will in turn employ more hands to work with, and to impart knowledge and skills, thus closing the unemployment gap that has become rampant in the country.
It goes without saying that for a port to create jobs as mentioned supra, its capacity to take on large tonnage vessels must not be compromised.Over the past 20 years, container vessels have grown globally from 6,000 TEUs (twenty-foot equivalent unit) capacity to 19,000 TEUs capacity and are still growing. In Nigeria’s major ports,over the same period, vessels carrying 1,700 TEUs capacity were common. This has however changed with the deepening of the ports channels and berths through dredging activities, such that today container vessels with capacities in excess of 7,000 TEUs and counting are calling the ports.
As larger vessels patronize the ports, the gains of economies of scale of deploying larger ships will reduce freight costs for industrial shippers and enhance their productive capacity.This will lower cost of manufacturing and lead to increased output, which in turn will attract large-scale employment generation both to meet increased production and to distribute the finished goods produced.Ultimately, the lower unit cost of goods improves the standard of living of citizens and adds to the economic growth indices.