The Nigerian Ports Authority (NPA) has announced a 15% increase in its tariffs. The move, approved by relevant authorities, aims to address aging infrastructure, obsolete equipment, and slow port capacity expansion.

Abubakar Dantsoho, the NPA Managing Director, disclosed this during a maritime stakeholders’ meeting in Lagos, as reported in a post on X (formerly Twitter) on Thursday.

Dantsoho, represented by Olalekan Badmus, Executive Director of Marine and Operations, emphasized that the tariff hike is necessary to fund critical upgrades, including infrastructure maintenance, dredging, automation, and the deployment of modern marine crafts. He also highlighted the need for Nigeria to regain its competitive edge in cargo handling amid global economic shifts and regional competition.

Stakeholders at the meeting supported the increase, citing the erosion of tariff value due to Nigeria’s soaring inflation rate, currently around 35%. Joshua Asanga, a former NPA General Manager, noted that operational costs, including wages and fuel, have risen significantly, while NPA charges have remained stagnant for over three decades. Demian Ukagu, another stakeholder, stressed the importance of investing in outer port facilities and jetties to ensure sustainable trade and a minimum return on investment.

The NPA warned that maintaining outdated tariffs would lead to poor services, inadequate infrastructure, and declining port efficiency, underscoring the urgency of the adjustment.

The NPA’s tariff increase comes just a day after the Nigeria Customs Service (NCS) announced a new 4% levy on the free-on-board (FOB) value of imported goods. The NCS explained that the levy, mandated by the Nigeria Customs Service Act 2023, is essential for funding its operations and ensuring effective service delivery. The customs levy, combined with the NPA’s tariff hike, is expected to significantly increase the cost of imported goods.

Implications for Import Costs and Inflation

The simultaneous rate increases by the NPA and NCS are likely to exacerbate the already high cost of imported goods in Nigeria. With inflation at a record 35% and a cost-of-living crisis gripping the nation, these adjustments could further strain consumers and businesses. Importers will face higher expenses due to the 4% FOB levy and the 15% NPA tariff, which may be passed on to consumers in the form of higher prices for goods.

The combined impact of these measures could also hinder trade competitiveness, as neighboring countries with lower port charges and customs levies may attract more cargo traffic. While the NPA and NCS argue that the increases are necessary to improve infrastructure and service delivery, the timing raises concerns about their potential to worsen Nigeria’s economic challenges.

In conclusion, while the tariff and levy adjustments aim to modernize Nigeria’s ports and customs operations, their immediate effect on import costs and inflation could deepen the economic hardship faced by Nigerians. Policymakers must balance the need for revenue generation with the broader goal of stabilizing the economy and alleviating the cost-of-living crisis.