High Shipping Costs Threaten Nigeria’s Maritime Hub Ambition — Alabi

Chairman of the Shipping Association of Nigeria and Senior Partner at Primera Africa, Boma Alabi, SAN, speaks with ANOZIE EGOLE on how port congestion, multiple charges, regulatory bottlenecks and rising logistics costs are undermining Nigeria’s ambition to become a regional maritime hub.

Nigeria’s ambition to establish itself as a leading maritime hub in West Africa continues to face significant challenges, with high port costs, congestion, regulatory bottlenecks and inefficient inland logistics placing businesses at a disadvantage.

According to the Chairman of the Shipping Association of Nigeria and Senior Partner at Primera Africa, Boma Alabi, SAN, the country’s biggest shipping cost challenge is not a lack of port capacity but inefficiencies in the processes surrounding cargo clearance and movement.

Alabi said congestion at major Lagos ports, particularly Apapa and Tin Can Island, has pushed average cargo dwell time to between 18 and 21 days, compared with five to seven days in Ghana and about four days in Cotonou.

“These delays translate into higher storage, demurrage, trucking and financing costs,” he explained.

He added that Nigeria’s logistics and clearance costs are estimated to be about 30 per cent higher than those of many West African competitors. Depending on the commodity and financing structure, congestion and process delays can increase the final landed cost of imported goods by between 20 and 30 per cent.

Multiple Charges Add to the Cost

Beyond congestion, Alabi identified the multiple charges and levies imposed by government agencies as another major concern for businesses operating in the maritime sector.

He argued that these costs ultimately move through the supply chain, from shipping lines and importers to wholesalers, retailers and consumers.

“In sectors with thin margins, even a few percentage points of extra charges can significantly raise shelf prices or make exports uncompetitive,” he said.

Alabi specifically pointed to statutory charges collected by agencies including the Nigerian Maritime Administration and Safety Agency and the Nigerian Ports Authority, noting that some of these fees are collected in US dollars.

He warned that this contributes to the dollarisation of the economy and increases the cost burden on businesses.

Nigerian Shipping Lines Face Financing and Policy Challenges

Despite Nigeria’s large market, locally owned shipping companies have struggled to capture a significant share of the country’s deep-sea maritime trade.

Alabi identified access to capital and foreign exchange as major constraints.

Deep-sea container and tanker operations require substantial capital investment and access to long-term, dollar-denominated financing. According to him, Nigerian operators continue to face difficulties with both the cost of capital and access to foreign exchange.

He noted that the Cabotage Vessel Financing Fund, which was established to support indigenous operators, was designed to address some of these challenges but has not been successfully deployed.

Regulatory uncertainty is another obstacle, he said.

Frequent changes in port charges, customs practices and cabotage implementation make long-term planning more difficult and weaken investor confidence.

Nigerian operators also face stiff competition from global shipping lines with established international networks, digital platforms and integrated logistics services.

“Until financing, policy stability and logistics integration improve, Nigerian-owned lines will remain marginal in deep-sea trades,” Alabi said.

Nigeria Losing Cargo to Regional Competitors

The cost disadvantage becomes more significant when Nigeria is compared with competing ports across West Africa.

Alabi said Nigerian importers and exporters generally face higher overall shipping-related costs than their counterparts in Ghana and Ivory Coast.

The difference, he explained, is not necessarily in the basic ocean freight rate but in port-side and inland logistics costs.

A shipper may pay similar ocean freight to other West African destinations, but the overall cost of moving cargo through Apapa can be considerably higher than through ports such as Tema and Abidjan.

Longer cargo dwell times and higher clearance costs are also encouraging some Nigerian-bound cargo to move through neighbouring countries, including Ghana, Togo, Benin and Ivory Coast.

This creates a significant economic opportunity loss for Nigeria, which has the largest consumer market in West Africa but risks losing regional transhipment and distribution business to more competitive ports.

Congestion Continues to Hurt Businesses

For Nigerian businesses, port congestion goes beyond delays at the terminals.

It increases operating expenses, ties down working capital and makes Nigerian goods less competitive in regional and international markets.

Alabi said this is particularly important as the African Continental Free Trade Area creates greater opportunities for intra-African trade.

He argued that Nigerian exporters could perform significantly better if they operated on a level playing field with competitors in other African markets.

Although Nigerian exports have increased despite the challenges, higher logistics costs and longer processing times can cause exporters to lose orders to businesses in countries such as Ghana and Ivory Coast, where delivered prices and transit times may be more competitive.

Reforms Showing Early Progress

Alabi acknowledged that some recent investments and reforms are beginning to produce results.

He cited the Lekki Deep Seaport as an example of an investment that has delivered measurable gains, while noting that other reforms, including B’Odogwu and the National Single Window Project, remain at relatively early stages and are still experiencing implementation challenges.

He also welcomed greater stability and predictability in the foreign exchange market, saying improved access to foreign exchange could support businesses across the maritime value chain.

The Rail Question

For Alabi, improving Nigeria’s maritime competitiveness requires more than expanding port infrastructure.

He called for an integrated logistics strategy connecting ports to rail networks, roads, dry ports and border infrastructure.

One of his key recommendations is to increase rail’s share of inland freight from about 1–2 per cent to between 15 and 20 per cent over the next five years.

Such a shift, he argued, would reduce dependence on trucking, ease pressure on roads, lower inland transportation costs and shorten transit times.

Two Urgent Reforms

Asked to identify the most urgent reforms needed from the Federal Government, Alabi highlighted two priorities.

The first is the rationalisation of port charges and agency levies through a single, transparent tariff framework that would bring Nigeria’s effective port and clearance costs closer to those of competing West African economies.

The second is the development of an integrated hinterland logistics system anchored on rail.

He believes these measures would improve competitiveness, reduce congestion and make Nigeria more attractive to regional cargo.

Alabi also welcomed the elevation of the Nigeria Shippers’ Council to the role of economic regulator of the ports, expressing hope that the new framework would encourage greater coordination among the various agencies operating within the maritime sector.

Unlocking the Blue Economy

Despite the challenges, Alabi remains optimistic about Nigeria’s maritime potential.

With stable policies, integrated logistics planning and targeted incentives, he believes the shipping sector could attract several billions of dollars in new investment over the next five years.

Potential areas include terminals, inland dry ports, coastal shipping and logistics technology.

Such investment, he said, could generate tens of thousands of direct and indirect jobs across stevedoring, trucking, warehousing, ship agency, ship repair and other maritime services.

For Alabi, however, the opportunity extends beyond shipping.

He believes Nigeria’s blue economy could become a major driver of economic growth if the country fully exploits its maritime resources, including fishing, marine services and the protection of its territorial waters.

“The potential in this sector is far greater than our oil and gas,” he said, stressing that properly harnessing the blue economy could ultimately support economic growth and improve living standards.

For Nigeria to realise its ambition of becoming West Africa’s maritime hub, however, the message from the industry is clear: infrastructure alone will not be enough. The country must also reduce the cost of doing business at its ports, streamline regulation, improve inland connectivity and create a more predictable environment for investment.