When the Nigerian government embarked on the port concession exercise in 2006, the primary objective was to enhance efficiency, attract private sector investment, and modernize port operations.
At the time, the Nigerian Ports Authority (NPA) had been burdened with inefficiency, bureaucracy, and underinvestment, making it clear that private sector participation was necessary to transform the maritime sector.
But since the landmark exercise took place, some developments have given credence to the apprehensions in some quarters that there were faults inherent in the Nigerian port concession process.
The exercise has largely been fingered for allegedly creating an unhealthy monopoly, it also did not make room for post-concession regulation, and lastly, there was no enabling law to guide the new stakeholders; including the NPA and the terminal operators.
While the man who midwifed the exercise as the then-Managing Director of the Nigerian Ports Authority; Chief Adebayo Sarumi had once openly-admitted that one of the concessionaires; APM Terminal was undeservedly favoured to monoplise container handling at the Lagos Port Complex (LPC), other stakeholders have at one time or the other, also picked holes in the post-concession relationship between regulators and operators.
They argued that NPA has failed to live up to its responsibilities as penned-down in the port concession agreement. Some have also noted that terminal operators now bore many unanticipated costs while NPA only collects ‘underserved’ royalties.
To put the issues in proper perspectives, it is important to bring out certain facts. Government’s first argument in support of port concession was that the ports (just like other businesses) could be better operated by the private sector. Secondly and rightly too, the government also observed that the nation’s seaports were becoming too expensive in the face of decaying facilities.
The options were between commercialisation and outright concession of the facilities. Government, in defiance of better and by-far more superior arguments, decided to settle for port concession. It eventually had its way, having won to its side the two house unions; namely the Maritime Workers Union of Nigeria and the Senior Staff Association of the NPA.
Since that decision was taken and the eventual handing over of the ports to private terminal operators, can one rightly say that things have changed for the better?
Nearly two decades later, the results have been mixed. While some terminal operators have exceeded expectations by investing in infrastructure, deploying modern cargo-handling equipment, and improving turnaround times, others have failed to meet the required standards, contributing to persistent bottlenecks, congestion, and inefficiencies.
Now, with the Federal Government considering terminating the concession of underperforming operators, it is imperative to take a pragmatic approach. A blanket cancellation of all expired concessions would be counter-productive. Instead, the government must adopt a merit-based system that distinguishes between those who have added value to port operations and those who have not.
The terminal operators in Lagos, Calabar, Delta and Onne should be evaluated on clear performance metrics, including investment commitments, efficiency improvements, and adherence to global best practices. Those who have upheld their end of the bargain should have their concessions renewed, while those who have failed to meet expectations should be shown the exit.
However, beyond assessing the terminal operators, the government must also take responsibility for creating an enabling environment for port efficiency. The lack of supporting public user infrastructure—such as adequate roads, electricity, rail connectivity, and functional scanners have, in some cases, limited the performance of terminal operators.
A significant government investment in these critical areas would complement private sector efforts and ensure that the ports operate optimally. Furthermore, regulatory agencies must improve oversight and enforcement of service level agreements, ensuring that operators meet their obligations rather than operating unchecked once they secure a concession.
There is also the need for greater transparency in the concession renewal process. The government must resist the temptation of political favouritism and instead adopt a competitive, performance-driven approach. New concessionaires should only be considered if they can demonstrate superior operational capacity and financial commitment compared to existing ones. Otherwise, renewing contracts for well-performing operators remains the best course of action to sustain port efficiency and attract further investment.
A lot of people, especially those who are sympathetic to the cause of the private terminal operators misconstrue the call for a review as a call for termination of the concession agreement between the terminal operators and the NPA. This, certainly is not true. Hopefully, the parameters of the proposed review have been well spelt-out.
We, and of course, stakeholders in the Nigerian maritime industry are also aware that the concession period of some of the terminals have ended at different times, and that some of them (if not all) have secured an extension. So, it is not out of place to request that the whole agreement be reviewed and the gaps blocked.
The Federal Government should consider the impact of the delay on the various concessionaires in the port, and hasten the process.
It is also our hope that the review and renewal process will be a holistic review of the entire 2006 agreement, taking cognisance of the various legal lapses and the new realities.
Nigeria’s ports are critical to the economy, and their efficiency impacts trade, revenue generation, and global competitiveness. While the government’s renewed focus on port reform is commendable, it must ensure that decisions on concession renewals are guided by performance, fairness, and long-term national interest.
Retaining the best operators while phasing-out inefficiency is the only way to build a port system that meets the demands of a growing economy.
