As West Africa’s leading Trade hub, Nigeria is facing a major setback as importers increasingly divert their cargo to neighbouring countries due to escalating port charges. Over the past month, multiple government agencies, terminal operators, and shipping companies have nearly doubled their fees, making cargo clearance highly expensive. This sharp increase is causing a decline in activity at Lagos port, once the busiest in the region, raising concerns about the country’s commitment to improving its ease of doing business. The cost of clearing goods at local ports has increased, with the price of processing a 40-foot container rising from ₦18 to 20 million to about ₦26 million.
Similarly, a 20-foot container, which previously cost ₦10.5 million, now costs ₦20 million. These high increases have forced businesses to seek more cost-effective alternatives in Ghana, Togo, and the Benin Republic, severely undermining Nigeria’s traditional dominance in regional trade. The Nigerian Ports Authority (NPA) recently announced a 15% hike in port charges in response to mounting concerns over outdated facilities and inefficiencies. This marks the agency’s first tariff adjustment since 1993 and is intended to boost infrastructural development and align Nigeria’s port facilities with global standards.
Stakeholders expressed concerns over the rising charges.
According to NPA Managing Director Dr. Abubakar Dantsoho, the tariff increase is essential for upgrading outdated infrastructure, modernising equipment, and expanding port capacity to enhance efficiency. The Revenue generated will fund critical projects, including channel dredging, improved port security, digital automation, and investments in modern marine crafts. The NPA aims to transform the local ports into world-class facilities capable of handling growing trade demands and improving operational efficiency. However, the increase in port charges has not been well received by the business community.
Recently, the Manufacturers Association of Nigeria (MAN) has strongly opposed the move, warning that it will increase production costs and exacerbate inflation. Segun Ajayi-Kadir, MAN’s Director-General, emphasises that businesses are already struggling with high foreign exchange rates, rising operational costs, and astronomical energy prices. With the recent introduction of a 4% Free On-Board (FOB) charge by the Nigeria Customs Service, industry leaders fear these additional financial burdens will devastate manufacturers and other businesses reliant on imports and exports. Meanwhile, some fear increased costs could further weaken the region’s trade competitiveness, pushing even more importers to divert their cargo to ports in neighbouring countries.
Local declining port activity and the shift to regional alternatives.
As a result, Nigeria’s ports have historically been the primary destination for over 70% of West Africa’s trade. However, recent reports indicate that the volume of cargo handled has fallen to less than two million Twenty-Foot Equivalent Units (TEUs). The continued rise in clearing costs has driven many importers to turn to Ghana, Togo, and the Benin Republic, where charges are lower and processes are more streamlined. This shift is particularly concerning given the federal government’s commitment to enhancing the ease of doing business and positioning the country as a central Logistics hub.
With businesses increasingly choosing alternative ports, Nigeria risks losing vital customs revenue and job opportunities that depend on port activities. With the 15% increase in port charges now in effect, businesses and consumers should brace for potential price hikes across various goods and services. Importers and exporters will bear higher costs, which could lead to increased prices for essential commodities. While the NPA argues that the extra revenue will be used to upgrade port infrastructure, the immediate impact may be Inflationary Pressures and reduced trade activity.
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Looking ahead, the success of the tariff hike will depend on the NPA’s ability to channel funds into critical projects that enhance port efficiency. If modernisation efforts succeed, businesses could benefit from reduced vessel turnaround times, streamlined cargo clearance, and improved service delivery. However, if challenges such as Corruption and bureaucracy persist, the tariff increase could further damage the local trade competitiveness and push more businesses to seek alternatives in neighbouring countries. Lastly, to navigate the challenges, the government must balance revenue generation and maintaining a business-friendly environment.