General Secretary of the Association of Bonded Terminal Operators of Nigeria (ABTON), Aare Haruna Omolajomo, in this exclusive interview with Joshua Yousouph examines the state of indigenous bonded terminals; nearly two decades after Nigeria’s port concession programme. He argues that while government has recorded impressive revenue growth, local operators have been marginalized by policy failures, shrinking cargo allocations and the growing dominance of foreign concessionaires. He also speaks on local content, port efficiency, bonded terminal relevance, allegations of contraband, and the reforms needed to revive the sector.
· “Government should reserve at least 30 percent of all import cargo for indigenous bonded terminal operators”
· “Bonded terminal operators do not determine what is inside containers”
Nearly 20 years after the port concession programme, what is your assessment of the state of indigenous bonded terminal operators in Nigeria?
If you ask me to summarize the situation in one sentence, I would say that indigenous bonded terminal operators are merely surviving. Many of them are struggling to remain in business despite investing billions of naira in infrastructure. It is unfortunate because, from the government’s perspective, everything appears to be working perfectly. Customs revenue continues to rise, government is celebrating record collections, and there are even discussions about raising revenue targets further, because collections have exceeded expectations.
Nobody can deny that Nigeria is making progress in terms of customs revenue. That is a positive development and every stakeholder welcomes it. However, behind those impressive figures lies another reality that many people do not see. The indigenous bonded terminal operators who invested heavily to support Nigeria’s port system are gradually disappearing. Many operators borrowed huge sums from banks to develop facilities after the port concession exercise. Today, those investments are lying idle because, they no longer receive enough cargo to sustain operations. Some of these businesses are alive only in name. Financially and psychologically, many operators have reached breaking point because they have watched their investments deteriorate over the years without meaningful government intervention.
Do you believe the current challenges stem largely from the port concession policy?
The concession policy itself was not entirely bad. We must acknowledge that it brought improvements to port operations and government revenue. However, no policy is perfect. As the current concession agreements approach renewal, government now has an opportunity to correct the mistakes that were made in 2006.
Personally, I am not against concessionaires obtaining renewals. My concern is that the Federal Government should critically examine the entire arrangement before renewing them. Nigeria now speaks strongly about local content in many sectors of the economy. We have the Renewed Hope Agenda. We have policies designed to encourage indigenous participation in economic activities. Those same principles should also be reflected in the maritime industry. If concession agreements are renewed without addressing local participation, indigenous terminal operators will continue to disappear despite their enormous investments.
You frequently mention local content. What exactly should Nigeria learn from other countries?
The answer is simple. Nigeria should study countries that deliberately protect indigenous businesses without discouraging foreign investment. Take Ghana for example. The Ghanaian government has policies that deliberately reserve a significant percentage of cargo handling activities for indigenous operators. That ensures local companies benefit substantially from maritime trade while foreign investors also participate. South Africa has also demonstrated strong commitment to protecting indigenous interests. Rather than allowing foreign concessionaires to dominate every aspect of the logistics chain, government ensures that local participation remains protected.
The same situation exists in Togo and several other maritime nations. Unfortunately, Nigeria appears to be moving in the opposite direction. Foreign concessionaires have gradually expanded beyond terminal operations into businesses that traditionally belonged to Nigerians. If government truly believes in local content, then maritime should not be an exception.
You have repeatedly said Nigeria is losing millions of jobs because of the current arrangement. Why do you believe so?
The estimate is straightforward. When indigenous bonded terminals become inactive, thousands of businesses connected to them also lose opportunities. Directly and indirectly, Nigeria is losing close to 10 million jobs.
Foreign concessionaires now perform multiple services that were previously handled by indigenous businesses. They operate logistics. They engage in customs brokerage. They provide door-to-door delivery. They participate in cargo clearing. They have gradually expanded into nearly every segment of the logistics chain. Consequently, Nigerian operators who traditionally earned income from these activities have been displaced.
Beyond employment, there is also the issue of capital flight. The profits generated by these foreign companies are largely repatriated abroad instead of being reinvested in Nigeria. Years ago, one concessionaire openly admitted that profits earned from Nigeria were being used to finance operations in other countries. That means Nigeria provides the revenue while other economies enjoy the long-term benefits. This cannot support sustainable economic development.
Can you paint a clearer picture of the condition of bonded terminals today?
Across Lagos and Ogun States alone, we have over 40 indigenous bonded terminals. Unfortunately, only about four or five of them are operating above 20 percent capacity. Most are operating below five percent utilization. Some have virtually stopped operating altogether. Today, many bonded terminals have been reduced to what I call glorified clearing agents. Instead of functioning as full inland cargo terminals, they survive on occasional container transfers. Yet despite these realities, they continue to pay licence renewal fees every year. They maintain Customs officers. They employ workers. They provide electricity through generators. They pay local government taxes, state taxes, federal taxes and numerous regulatory charges. In addition, Customs requires operators to maintain a ₦100 million cash-backed bank bond before licences can be renewed. Imagine tying down ₦100 million while struggling to make even modest annual profits. It is simply unsustainable.
Some stakeholders insist bonded terminals have become obsolete because modern seaports now have larger facilities. Is that argument valid?
No. That argument only demonstrates a misunderstanding of modern port operations. Bonded terminals exist all over the world. Some countries call them Inland Container Depots (ICDs). Others call them Inland Container Terminals. Some refer to them as dry ports or off-dock terminals. Regardless of the name, they all perform essentially the same function. The role of a seaport is to receive vessels quickly and transfer cargo inland. Ports should not become long-term storage centres. Bonded terminals help decongest ports. They improve cargo movement. They reduce vessel turnaround time. They support exports. Countries like the United States, Ghana, Togo and South Africa continue to rely on bonded terminals because they improve logistics efficiency. The challenge in Nigeria is therefore not relevance. The challenge is government policy.
Critics point to cases where contraband goods were intercepted in bonded terminals. Does this not justify stricter restrictions?
No. Every allegation should be examined based on evidence. Bonded terminal operators do not determine what is inside containers. Cargo first arrives at the seaport. Customs processes the documentation. Transfers are approved by Customs. Containers move under Customs escort. Customs officers accompany the cargo throughout the movement process. Customs officers are stationed inside bonded terminals. Cargo examinations take place in their presence. If one or two operators deliberately violate the law, they should face prosecution. But it is unfair to condemn an entire industry because of isolated cases. Contraband has also been intercepted inside seaports. Nobody argues that the ports themselves should therefore be shut down. The same standard should apply to bonded terminals.
Some observers also argue that many bonded terminals lack the equipment required to operate efficiently.
Another misconception is the failure to distinguish between bonded warehouses and bonded terminals. They are not the same. A bonded warehouse is primarily a storage facility. A bonded terminal is a mini-port. It must have large stacking areas, container handling equipment, Customs presence, online connectivity and other supporting infrastructure. Before Customs grants approval, it inspects every facility and determines whether it qualifies as a bonded warehouse or a bonded terminal. If operators later fail to maintain those standards, Customs has the authority to sanction or suspend them. So, if any approved facility no longer meets operational standards, the responsibility lies with regulators to enforce compliance. The standards already exist. What is needed is consistent enforcement.
Finally, what specific actions would you like the Federal Government to take?
The first requirement is a deliberate local content policy for the maritime industry. Government should reserve at least thirty percent of all import cargo for indigenous bonded terminal operators. Secondly, concessionaires should stop extending into every aspect of logistics through door-to-door services that eliminate opportunities for indigenous businesses. Thirdly, regulators must enforce international maritime standards fairly and professionally. Finally, government should remember that indigenous operators are not asking for special treatment.
We are not asking government to expel foreign investors. We simply want a level playing field where Nigerian businesses are given meaningful opportunities to participate in the country’s maritime economy. If these reforms are implemented, government will not only protect local investments but also create jobs, strengthen indigenous capacity and build a more sustainable Blue Economy. That, ultimately, is what ABTON has continued to advocate.
