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It costs more to ship through Apapa port than Ghana’s Tema port, others –SBM

An SBM Intelligence report has shown that it is more expensive to ship goods into Nigeria from the European Union through the country’s Apapa port.

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Nigeria’s business environment; Survival of the fittest, Reps move to block leakage of N600 billion revenue monthly at Apapa, Tin Can port, It costs more to ship through Apapa port compared to Tema port, others - SBM

It is more expensive to ship goods from the European Union to Nigeria, compared to other African countries like Ghana and South Africa. This is according to a report by SBM Intelligence, which was published last week.

The Details: The report, which took three months to compile and analyse, revealed that South Africa’s Durban Harbour is the least expensive in terms of shipping charges, terminal charges, and the cost of transporting goods to local warehouses.

It costs more to ship through Apapa port compared to Tema port, others - SBM

Tema Port

In the same vein, the Tema Port in Ghana is less expensive compared to what obtains at Nigeria’s Apapa Port. The report chillingly revealed that Nigeria’s Apapa Port is five times more expensive than Durban Harbour and three times more expensive than Tema Port. Part of the report said:

“SBM tracked shipments over a period of three months to three ports in Africa and came up with this average costs of first, shipping goods in from the EU, the terminal charges that containers pay while they are in those ports, and the average cost of local transportation from the port to selected warehouses within the port cities.

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“The costs for the Apapa Port in Lagos are by far the highest, five times higher than in Durban, South Africa, and three times higher than in Tema, Ghana. While each of the component parts of this dataset, shipping charges, terminal charges and local transport, are highest for Lagos, it is local transport, 10 times the cost in Lagos than in both Durban and Tema, that really makes Lagos an expensive place to do business in.”

[READ MORE: Reps investigate N600 billion monthly revenue loss at Apapa, Tin Can ports)

More Details: The SBM report went further to reveal that at the Apapa Port, importers spend an average of $374 in shipping charges. This is far more than the $247 importers pay at the Durban Harbour for the same purpose. Meanwhile, at the Tema Port, the average shipping cost is $321.

In terms of terminal charges, people shipping goods through Nigeria’s Apapa Port pay an average of $457, compared to $180 average costs at the Durban Harbour and $280 at Tema Port.

When transporting imported goods from Nigeria’s Apapa Port to local warehouses, businesses spend an average cost of $2,050. This is far more than the $208 it costs to transport containers from Durban Harbour to South African warehouses. In Ghana, it costs just $285 to transport containers to local Ghanaian warehouses.

What this means: Perhaps this explains why there is always heavy congestion at the Apapa Port, which serves as Nigeria’s main port. Earlier this year, the Nigerian Ports Authority (NPA) declared an emergency at the port due to a buildup of massive congestion. A temporary solution was even put in place to divert vessels to alternate terminals. But it appears the root cause remains unsolved.

The SBM report also raises questions about Nigeria’s ease of doing business. According to Nairametrics’ commentator and economic expert, Kalu Aja, “if it is easy to do business in Nigeria, then importers should be able to clear goods faster and cheaper.”

It costs more to ship through Apapa port compared to Tema port, others –SBM

Durban Harbour

Recall that Nigeria recently moved up fifteen places to number 131 in the latest ease of doing business index, as earlier reported by Nairametrics.

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Commenting further, Kalu Aja noted that proper implementation of the Africa Continental Free Trade Area (AfCFTA) could enable Nigeria to become a major export-import hub. He said:

“With the ‘open borders’ of AfCFTA, that’s a key advantage as Nigeria could become an import-export hub. But then again, Nigeria would need to do a lot of work to restructure its port system before it can fully take advantage of AfCFTA.”

Meanwhile, Nairametrics had reported that the Federal Government claimed it has started positioning the nation to benefit fully from the AfCFTA and take advantage of the opportunities it provides.

The Managing Director, Nigerian Ports Authority (NPA), Hadiza Bala-Usman, stated that the development would ensure smooth transmission of goods and investments through the ports. According to her, it would boost the trade relationship between Nigeria and other countries.

Why it matters: Infrastructure upgrade creates opportunities for the nation. The deplorable state of the ports in Nigeria has become a trade barrier, preventing connectivity, which is costly to companies depending on the ports for importing and exporting of goods. Bala-Usman said with this removed, and dredging of seaports, as well as the elimination of corruption, and manual processes in the sector, enormous opportunities would be recorded.

You may download the SBM Intelligence report by clicking here.

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Emmanuel is a professional writer and business journalist, with interests covering Banking & Finance, Mergers and Acquisitions, Corporate Profiles, Brand Communication, Fintech, and MSMEs. He initially joined Nairametrics as an all-round Business Analyst, but later began focusing on and covering the financial services sector. He has also held various leadership roles, including Senior Editor, QAQC Lead, and Deputy Managing Editor. Emmanuel holds an M.Sc in International Relations from the University of Ibadan, graduating with Distinction. He also graduated with a Second Class Honours (Upper Division) from the Department of Philosophy & Logic, University of Ibadan. If you have a scoop for him, you may contact him via his email- [email protected] You may also contact him through various social media platforms, preferably LinkedIn and Twitter.

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Business News

How to register for FG’s N75 billion MSME survival funds

FG released guidelines to access the N75 billion MSME Survival Fund.

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Small Businesses in Nigeria

The Federal Government (FG) has released the guidelines to access the N75 billion Micro, Small and Medium Enterprises (MSME) Survival Fund and Support Initiatives, which took effect from September 21, 2020.

The scheme, which is the core of the N2.3 trillion stimulus package of the Nigerian Economic Sustainability Plan includes the N60 billion MSMEs Survival Fund and the N15 billion Guaranteed Offtake Schemes.

This disclosure was made in an official statement by the Federal Government through a series of tweet posts on its official Twitter handle.

The statement from FG read, “As the portal for the registration of prospective beneficiaries of Survival Fund opens, interested Nigerians in the Payroll Support Scheme are to note that the site will be open from 10 pm Monday, September 21, 2020.”

The statement says that the registration for the payroll support will start with the educational institutions at 10 pm Monday, September 21, 2020, and will be followed by businesses in the hospitality industry by 12am Friday, September 25, 2020.

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The portal will also open for other categories of small businesses from 12am, Monday, September 28, 2020. It should be noted that the scheduling of the registration for prospective beneficiaries is to ensure that the process is seamless and hitch-free. The registration of every sector is to continue until Thursday, October 15, 2020.

To register for this initiative, the Federal Government has also provided a portal for entry. Potential beneficiaries are advised to log on to https://survivalfund.ng to complete their registration.

As part of the registration process, the beneficiaries are expected to provide personal registration details, activate their account, register their organization after they have successfully activated their account.

Corporate Affairs Commission (CAC) Number, Bank Verification Number (BVN), SMEDAN Number, a Tax ID (optional) and the organization’s bank account details will be needed.

Completing the Payroll Support Registration, beneficiaries’ first name, last name, email, mobile number and Password will be required. Also, their Date of Birth, residential address and residential Local Government Area will also be provided.

 

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Corporate Press Releases

Tony Elumelu named in “Time 100” list of the 100 Most Influential People in the World 2020

The UBA and Transcorp Plc Chair is one of three Nigerians on the list, alongside Tomi Adeyemi and Tunji Funsho.

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UBA’s Tony Elumelu, Wizkid

TIME has named Tony O. Elumelu, one of Africa’s leading investors and philanthropists, in the 2020 TIME100, the annual list of the 100 most influential people in the world. The list, now in its seventeenth year, recognises the activism, innovation, and achievement of the world’s most influential individuals. Mr Elumelu, who is one of only four Africans on the 2020 list, is recognised for his track record of business turnaround and value creation, and economic empowerment of young Africans.

Tony Elumelu is the Founder and Chairman of Heirs Holdings, his family-owned investment company, committed to improving lives and transforming Africa, through long-term investments in strategic sectors of the African economy, including financial services, hospitality, power, energy and healthcare. He is the Chairman of top pan-African financial services group, the United Bank for Africa (UBA), which operates in 20 countries in Africa, the United Kingdom, France, and is the only African bank with a commercial deposit taking licence in the United States. The bank provides corporate, commercial, SME and consumer banking services to more than 21 million customers globally.  Elumelu also chairs Nigeria’s largest quoted conglomerate, Transcorp,  whose subsidiaries include Transcorp Power, one of the leading generators of electricity in Nigeria and Transcorp Hotels Plc, Nigeria’s foremost hospitality brand.

Mr Elumelu is the most prominent champion of entrepreneurship in Africa. In 2010, he created The Tony Elumelu Foundation (TEF), the philanthropy empowering a new generation of African entrepreneurs, catalysing economic growth, driving poverty eradication and ensuring job creation across all 54 African countries. Since inception, the Foundation has funded just under 10,000 entrepreneurs and created a digital ecosystem of over one million as part of its ten year, US$100m commitment through the TEF Entrepreneurship Programme.  Self-funded, the Foundation is increasingly sharing its unique ability to identify, train, mentor and fund young entrepreneurs across Africa, with institutions such as the UNDP, the ICRC and leading European development agencies.

Heirs Holdings, which serves as a corporate role model for African businesses, and the Tony Elumelu Foundation will both celebrate 10 years of impact in November. Their mission continues to be inspired by Mr Elumelu’s economic philosophy of Africapitalism, which positions the private sector, and most importantly entrepreneurs, as the catalyst for the social and economic development of the continent.

The full list of the 2020 TIME100 and tributes appear on time.com/time100.

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Business

Rack Centre to create West Africa’s largest data centre in $100m expansion

Rack Centre’s expansion programme will increase capacity to a total net lettable white space of 6000 square metres.

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Leading carrier neutral data centre operator in West Africa, Rack Centre, has announced an expansion programme that will increase capacity to a total net lettable white space of 6000 square metres, which will pave way for 13MW of  IT power capacity in its Lagos campus.

This was disclosed in a press release by the company, which was seen by Nairametrics.

The expansion is expected to bring carrier neutral scale to West Africa, and this is in response to increasing demand for data centre space from cloud uptake, telecommunication investment and outsourcing of IT facilities by enterprises in the region.

READ: Multichoice, StarTimes, others’ reception increase by 23% in Nigeria- Report

The funding for this expansion will come from a $250m pan-African data centre platform, established by Actis and Convergence Partners, a leading ICT infrastructure investor in Africa.

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In addition to the expansion in  Rack Centre, the platform is also actively developing additional buy and build opportunities across Africa, to establish a network of carrier neutral data centres aimed at catering to carrier, cloud and hyperscale customers. 

Back story:  It is noteworthy that on March 2020, in a bid to pave way for the expansion programme, Actis, a London private equity firm, announced an investment in Rack Centre, taking a controlling stake in the business alongside Jagal.

READ: Are we heading towards a food crisis?

Why this matters

Nigeria is a key entry point for global telecommunications, content, and cloud players seeking access to the region. Despite the potentials of the country; with 138 million internet subscribers, more than any country in Africa or Europe, and the largest population and GDP in Africa, a lack of cost-effective, energy-efficient IT infrastructure, has been a constraint to doing business in the region. 

However, in a bid to create unrestricted connectivity between customers, telecommunication carriers, and internet exchange points within its data centres in the region, as a unique scale carrier neutral player, Rack Centre brings global best practice to Nigeria, as the first carrier neutral data centre in the region, to achieve Uptime Institute Tier III Certification of Constructed Facility (TCCF).

READ: Lagos announces N10 billion public-private partnership for aquaculture centre

The global leaders that the platform has engaged include:

  • Tim Parsonson, Co-founder, Teraco Data Environments – the largest carrier neutral operator in Africa, who joins the Board as Chairperson on the board.
  • Frank Hassett, a veteran of the global data centre industry and previous Vice President of Infrastructure, at Equinix, brings over 1300MW of build and operate experience, to assist with hyperscale expansion.

While speaking on the expansion of capacity, Andile Ngcaba, Chairman of Convergence Partners, said;  “Africa is at the start of a critical time in its development, as the 4th industrial revolution offers the chance to leapfrog many of Africa’s challenges, and harness the immense potential of its people. Convergence Partners is delighted to partner with Actis in accelerating the growth of high quality data centre infrastructure, an indispensable part of the foundation of this revolution in the region.”

Dr Ayotunde Coker, Managing Director of Rack Centre, emphasized that the group is proud of the quality and scale bar which they have set in the region.

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“We are proud of the quality and scale bar we have set in the region and are scaling to be the de-facto digital data hub for West Africa

“Mass adoption of digital working models and content distribution is driving growing investment in the region and Rack Centre offers a world class location to house these IT and telecoms facilities,” Coker said.

Supporting this ambition, engineering consultancy Arup, have been appointed for the project.  The leadership status of Arup is uncontested,  having designed over 2,000MW of IT capacity for industry-leading tech giants, and co-location providers across the globe.

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