MAN faults NPA’s 15% tariff hike, says it’s ill-timed

The Manufacturers Association of Nigeria (MAN) has criticised the proposed 15 percent increase in tariff by the Nigerian Ports Authority (NPA).
It will be recalled that on February 6, the NPA said it secured approval to increase its tariffs by 15 percent to enhance infrastructure and upgrade equipment.
The upward tariff review was the first since 1993.
In a statement on Sunday, Mr. Segun Ajayi-Kadir, MAN’s director-general, said the manufacturing sector is already beguiled by numerous challenges.
The MAN DG described the timing of the hike as inimical, stressing that businesses are already struggling with the rising cost of operations, high rate of foreign exchange (FX) and other general economic uncertainties.
Ajayi-Kadir also said Nigeria’s current economic climate is characterised by rising inflation, FX challenges, and declining industrial capacity utilisation.
He said, ports as the gateway to international trade, played a crucial role in the efficiency and cost-effectiveness of business operations.
“According to the United Nations Conference on Trade and Development (UNCTAD), 80 percent of Nigeria’s traded goods are transported by sea, with 70 percent of total imports and exports in West and Central Africa destined for Nigeria,” he said.
“This underscores the critical role Nigerian ports play in facilitating trade and industrial productivity.
“For manufacturers, port-related charges constitute significant indirect costs, as most raw materials and industrial machinery are imported through these ports.
“Any increase in charges will have a ripple effect, leading to higher production costs, increased inflationary pressures, and reduced competitiveness of locally manufactured goods.”
Ajayi-Kadir said many businesses are experiencing a downturn due to unsustainable operating costs.
He said the increase is ill-timed and could signal a departure from the government’s avowed efforts and commitment to the ease of doing business.
Ajayi-Kadir said it is inevitable that the additional strain on industrial activities will ultimately lead to reduced capacity utilisation and possibly job losses.

“Furthermore, Nigeria must remain competitive in regional trade,” he added.
“Neighboring countries with more efficient and cost-effective ports will become far more attractive alternatives, leading to increased cargo diversion.
“This will not only reduce revenue for the Nigerian government but will encourage smuggling and other untoward trade practices that weaken our economy.”
Ajayi-Kadir said alternative approaches to port revenue generation such as reducing turnaround time for vessels, improving cargo clearing processes, tackling bottlenecks, and infrastructural development are critical.
“While we acknowledge the need for revenue generation, increasing port tariffs can be counterproductive in the long run,” he said.
The MAN DG urged the NPA to put the proposed 15 percent tariff increase on hold and work with stakeholders to explore long-term revenue generation options.