The Shipping Association of Nigeria (SAN) has expressed deep concern over the excessive use of the US dollar for transactions in the nation’s maritime sector, warning that it is negatively impacting the economy. Mrs. Boma Alabi, SAN Chairman and Senior Advocate of Nigeria, highlighted these issues during a press conference held over the weekend at the Lagos Yacht Club in Victoria Island.
Dollarization of the Economy
Alabi emphasized that many challenges in Nigeria, particularly in the maritime sector, stem from the disparity between the naira and the US dollar. She criticized the practice of collecting payments in dollars, stating that it depletes the country’s foreign exchange reserves and exacerbates economic instability.
“Stop dollarizing our economy. Why are you collecting in USD in Nigeria? Why is the Nigerian government collecting in USD? The shipping lines will collect payment in naira; they will source dollars to buy,” Alabi said. She argued that this practice places unnecessary pressure on the naira and undermines the local currency.
Call for Port Expansion and Competitive Pricing
Alabi also called for the expansion of Nigerian ports, noting that high operational costs are making the ports less competitive. She stressed that reducing the cost of doing business is essential for attracting more cargo and boosting the maritime sector’s contribution to the economy.
Echoing her sentiments, Mr. Ramesh Saraf, Deputy Managing Director of CMA CGM Shipping Company, urged the government to support shipping companies to remain competitive. He highlighted the disparity in cargo volumes between Nigerian ports and those in neighboring countries, such as Ghana.
Saraf revealed that Meridian Ports Service Ltd., which operates Terminal C at Tema Port in Ghana, recorded 1.9 million twenty-foot equivalent units (TEUs) in 2024, compared to 1.2 million TEUs at Nigerian ports. He attributed this difference to lower port charges in Ghana, which make its ports more attractive to shippers.
Challenges at Lekki Deep Sea Port
Saraf also pointed out the high operational costs at the Lekki Deep Sea Port, which began operations in April 2023. He noted that the port’s charges are triple those of other ports globally, leading to reduced activity at the facility.
“The cost of operation in Lekki Deep Sea Port is triple the port charges in other ports across the world,” Saraf said. He emphasized the need for competitive pricing to attract more cargo and ensure the port’s viability.
A Call for Government Intervention
Both Alabi and Saraf called on the Nigerian government to address these challenges by implementing policies that reduce the reliance on the US dollar, lower port charges, and improve infrastructure. They argued that such measures would enhance the competitiveness of Nigerian ports, attract more shipping lines, and ultimately boost the nation’s economy.
The concerns raised by the Shipping Association of Nigeria underscore the urgent need for reforms in the maritime sector. Addressing the dollarization of the economy, reducing port charges, and expanding infrastructure are critical steps toward making Nigerian ports more competitive and ensuring the sector’s sustainable growth. As stakeholders continue to advocate for these changes, the government’s response will play a pivotal role in shaping the future of Nigeria’s maritime industry.