For Ship Turnaround Time (STT), while Tema Port has an average STT of 4.7 days, Apapa Port’s last recorded STT was 9.64 days in 2005, while in some cases, it worsened to 30 days.
In 2022, Nigeria exported N589.2 billion worth of agricultural products, an 18.5% increase from 2021. This figure was the highest since 2017, representing a positive performance. However, an overview of the agriculture sector shows that the sector is the greatest contributor to Nigeria’s GDP as well as the highest contributor to the country’s labour force.
While agriculture contributed 21.09% to GDP in 2022, the sector contributed less than 4% to export revenues, a signification of the low level of economic complexity in the sector.
Various sectors are responsible for the underperformance of the agriculture sector within the international trade context, however, one critical factor that has affected Nigeria’s agricultural export performance is logistics challenges at the port. For example, in 2019, a shipment of over 50,000 tonnes of cashew nuts valued at $300 million was delayed at the port because of traffic gridlock.
Also in 2018, the Lagos Chamber of Commerce and Industry carried out a survey in which it was noted that Nigeria loses $10 billion on non-oil exports due to logistical issues. This highlights the critical importance of port challenges for participants in Nigeria’s agricultural industry.
Before exploring the Ghanaian parallel, it is important to note that Nigeria and Ghana are both commodity export-dependent economies. While Nigeria is dependent on crude oil for most of its foreign exchange, Ghana is majorly dependent on gold, crude oil, and cocoa for its foreign exchange.
Ghana’s Agricultural Export Performance
Like Nigeria, Ghana does not generate its major export revenue from agricultural products. However, it generates a sizeable portion. For example, in 2022, cocoa beans contributed 12.4% of the country’s export revenue. And since 2015, agriculture has contributed 10% to Ghana’s export revenue, as per the World Bank.
Ghana’s major agriculture exports include cocoa, pineapples (both dried and fresh), mangoes (also both dried and fresh), kola nuts, yam, cassava, bananas, plantain, citrus, coffee, etc. Apart from cocoa, every agricultural product is classified as a Non-Traditional Export (NTE) in Ghana. According to the Ghana Central Bank, NTEs generated $3.30 billion in earnings in 2021.
According to the World Bank‘s 2019 Report, Enabling the Business of Agriculture, Ghana received a score of 50.49 ahead of Nigeria’s 49.17.
Why is Ghana performing better than Nigeria concerning agricultural exports? Number one, better ports.
Also read: UK to Cut Tariffs on Nigerian Exports from April 2023
The Port of Tema processes 80% of Ghana’s imports and exports, just like Apapa Port processes 79% of Nigeria’s foreign trade. However, looking at the different operational indicators by which ports are rated, the Tema Port ranks far ahead of Apapa. For Ship Turnaround Time (STT), while Tema Port has an average STT of 4.7 days, Apapa Port’s last recorded STT was 9.64 days in 2005, while in some cases, it worsened to 30 days.
Time spent at anchorage describes the duration ships wait before docking, from their entry into the port vicinity to their first berth. For Tema Port, this figure hit 54 hours (2.25 days) in 2016, and the figure dropped to 24 hours in 2021. For Apapa Port, this figure is at a whopping 21 days, according to the Nigerian Shippers Council.
Cargo dwell time is another factor that is used to rate operational efficiency. Tema Port’s cargo dwell time is around 20 days, however, at Apapa Port, it is between 20 and 28 days.
Essentially, the Tema Port displays a higher level of efficiency than the Apapa Port which ultimately affects the turnaround time of exports.
Insights
How does this affect food exports? According to ShipToNaija, it takes between 6-8 weeks to export food from Nigeria to the UK, the US, Canada, Germany, Belgium, Australia, and other countries. It takes an average of 50 days to export food from Nigeria.
Also read: Why we cannot export our way out of this crisis
Analyzing the extended travel duration reveals not only port inefficiencies but also additional bureaucratic obstacles. To conduct commercial exports from Nigeria, exporters must navigate a complex process involving multiple agencies such as NAFDAC, SON, NEPC, CAC, a commercial bank or NEXIM bank, the Federal Ministry of Trade and Investment, and the Nigerian Customs Service. However, there currently exists no streamlined platform that democratizes access to these agencies or automates the overall process.
When you consider obtaining documents like a clean inspection certificate, NXP form, proforma invoice, NEPC registration certificate, bill of lading, and certificate of origin, along with the challenges of clearing goods at the port and the resulting disruptions from inefficient operations, it becomes evident that a complete system overhaul is necessary.
