The Manufacturers Association of Nigeria (MAN) has strongly opposed the 15% port tariff hike implemented by the Nigerian Ports Authority (NPA), warning that the decision could have serious economic repercussions. MAN cautioned that the hike would increase production costs, contribute to the diversion of Nigeria-bound cargoes, and make locally produced items less competitive. At a stakeholder engagement on the tariff hike, MAN Director-General Segun Ajayi-Kadir, represented by Cyprian Orakpo, contended that the higher port charges would put further financial strain on manufacturers who rely significantly on imported machinery and raw materials.
Ajayi-Kadir cautioned that the tariff adjustment will further weaken the nation’s industrial sector, which is already struggling due to high foreign exchange rates, rising inflation, and declining industrial capacity utilization. The association voiced worries that increased port fees would incite Smuggling as traders seek to avoid paying high levies. Importers may choose to reroute their cargo through nearby nations like Benin, Togo, or Ghana, where fees are still lower, in order to avoid the higher fees at Nigerian ports. It further contends that such diversion would result in less port activity in Nigerian harbors, which would ultimately undermine the government’s planned Revenue rise.
NPA justifies the tariff hike as a long-overdue adjustment.
Rather than burdening manufacturers and eroding Nigeria’s competitive edge, MAN noted that the emphasis should be on increasing port efficiency, lowering bureaucratic bottlenecks, and upgrading facilities. The association opined that these actions would improve revenue generation without endangering the expansion of the industrial sector. It also underlined the necessity for the government to consider policies that encourage domestic Manufacturing instead of complicating things for producers. Ajayi-Kadir criticized the NPA for implementing the tariff hike without adequate consultation with industry stakeholders.
He argued that meaningful dialogue should have taken place before the decision was made, allowing businesses to provide input on alternative revenue strategies. Meanwhile, the NPA justified the hike by pointing out that port Tariffs had not been reviewed since 1993, more than 30 years. The NPA claims that this protracted period of stagnation made an update necessary to bring the tariffs in line with actual operating expenses and economic realities. It stated that the updated rate would bring in much-needed funds for port improvements and improved administration.
Worries mount over the timing of the tariff hike.
Industry players, however, argue that the sudden increase to 15% occurs at a time when the Economy is already struggling with high inflation, foreign exchange rates, and a slowdown in the use of industrial capacity. According to MAN, it would be detrimental to implement such an increase given the state of the economy. As worries about the possible impacts of the tariff hike increased, the association’s DG urged the NPA to hold off the proposed 15% price hike and explore long-term revenue generation solutions with stakeholders.
Many worry that if the tariff hike is implemented without the necessary adjustments, it may worsen Nigeria’s already precarious economy by reducing port activity, eliminating jobs, and weakening industrial output. Since the early 1990s, Nigerian port tariffs were maintained at historically modest levels, a legacy policy intended to promote Investment and trade. While the figures from that time period differ, it is generally acknowledged that the tariffs were significantly lower than those that are currently levied by a number of nearby West African nations.
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However, with the proposed tariff increase, the cost differential between Nigerian ports and those in neighboring countries is expected to widen to the detriment of Nigeria’s competitive position. Comparatively, while neighboring West African countries have also faced pressures to modernize their port operations, their gradual and well-considered tariff adjustments have not compromised their overall attractiveness. The Nigerian case stands out because of its abrupt shift from a long-held low-tariff policy. Nigeria’s case is particularly notable because it represents an abrupt departure from a long-standing, low-tariff policy that had historically bolstered its Trade competitiveness.