Month: March 2025

The overarching objective of port development in Nigeria is to improve port infrastructure, by focusing on improving infrastructure, efficiency, and technology to boost economic growth and facilitate trade, with a goal of Nigeria becoming a regional transshipment hub. 

 The Nigerian maritime sector has over the past 2 years undergone several developments. These include the introduction of Naira-based petroleum product sales by the NPA, the establishment of a One-Stop-Shop for efficient coordination, the appointment of new port managers, and the construction of inland dry ports like the Gateway Inland Dry Port in Ogun State.  

 In 2025, key developments in Nigeria’s maritime sector include efforts to improve maritime safety and security, infrastructure upgrades, and promoting indigenous shipowners, with initiatives like the Deep Blue Project and the Nigerian Maritime Industry Working Group (NIWG) playing a crucial role. 

 The following are a more detailed look at some key developments from 2024 -2025: 

 Safety and Security 

The Nigerian government and the Nigerian Maritime Administration and Safety Agency (NIMASA) have been working to enhance maritime security, including initiatives like the Deep Blue Project and collaboration with the Nigerian Navy to combat piracy and other maritime crimes.  

 

Safety Standards 

NIMASA has focused on enforcing safety standards, training, and awareness campaigns to educate operators and passengers on safety practices.  

 

Marine Environmental Pollution 

The government is taking measures to address marine pollution and protect the environment, including efforts to prevent oil spills and other forms of pollution.  

 

Infrastructure and Development. 

Port Modernization and Efficiency 

The objective is to combat major challenges of infrastructural deficiencies, corruption and inefficiency within the port sector. 

Infrastructure Challenges 

The lack of adequate infrastructure, including roads and rail networks, has hampered port operations.  

 

Capacity Constraints 

 Ports have struggled to handle the increasing volume of cargo, leading to congestion and delays.  

 

Infrastructure Development 

 Efforts are underway to upgrade Nigeria’s six ports namely Apapa, Tin Can Island (both in Lagos), Onne, Port Harcourt (both in Rivers State), Warri (in Delta State), and Calabar (in Cross River State) to decongest traffic, and attract larger vessels, with public-private partnerships encouraged for port modernization and infrastructure development with the overall objective of revenue generating and efficiency.  

 

The critical aspects of the port modernization are:  

 Rehabilitation and Renovation: The government is prioritizing the rehabilitation and renovation of existing port facilities, including quay walls, berths, and storage areas.  

 

Deep-Sea Ports: Development of deep-sea ports to accommodate larger vessels and modern shipping trends is a key focus.  

 

Rail Linkages: Establishing rail linkages to all ports is crucial for efficient cargo transportation and intermodal synergy.  

 

Technology and Automation 

 Digitalization: The Nigerian Ports Authority (NPA) aims to fully digitalize port operations by 2025.  

 E-payment and E-SEN: Implementing e-payment and Electronic Shipping Notice (E-SEN) systems for streamlined processes.  

Port Service Support Portal: Standardizing cargo handling and import-export operations through a portal to improve efficiency and transparency.  

 

Efficiency and Capacity 

 Improved Turn-Around Time: Efforts are underway to reduce vessel turn-around time and cargo dwell time in ports.  

 Enhanced Cargo Handling: Modernizing cargo handling equipment and procedures to improve efficiency.  

 

Private Sector Participation 

 Concessioning of Terminals: The government has implemented a policy of concessioning port terminals to private operators to improve efficiency and attract investment.  

 Public-Private Partnerships: Encouraging public-private partnerships for infrastructure development and modernization.  

 

Private Sector Participation – Specific Projects 

Badagry Deep Sea Port: A deep-sea port project in Badagry is in the pipeline, awaiting Federal Executive Council approval.  

Lagos Ports Modernization Project: The NPA is collaborating with ITB-HITECH Joint Venture to modernize the Lagos ports.  

 

Private Sector Participation – Key Players 

 The key players are;

 Nigerian Ports Authority (NPA): The government agency responsible for developing, owning, and operating ports and harbors.  

 

Federal Ministry of Transportation: Oversees the port sector and implements policies for modernization.  

 

Private Terminal Operators: Companies that operate port terminals under concession agreements. 

  

Nigerian Shippers Council: A government agency that promotes the interests of shippers and works towards improving port efficiency.  

 

 Floating Dock Project 

 NIMASA is partnering with the Nigerian Ports Authority (NPA) on the Floating Dock Project, which aims to provide economic benefits through employment and training opportunities.  

 

Investment in Maritime Infrastructure 

The government is investing in maritime infrastructure, including the acquisition of specialized mission patrol aircraft and vessels, as well as a command and control center.  

 

Indigenous Shipowners and Economic Growth. 

Empowering Indigenous Shipowners 

 The government is working to empower indigenous shipowners and increase local tonnage in the maritime sector with particular focus on the following areas: 

Cabotage Act 

The Cabotage Act reserves the commercial transport of goods and services within Nigerian coastal and inland waters to vessels flying the Nigerian flag owned by Nigerians and built in Nigeria.  

 

Marine Tourism 

NIMASA is promoting marine tourism as a key area for economic development, urging stakeholders to invest in relevant areas.  

 

Manpower Development 

NIMASA is focusing on manpower and human capacity development, including the training of seafarers and naval architects.  

 

NIMASA NSDP 

The Nigerian Seafarers Development Programme (NSDP) was created by NIMASA in 2008 with the mandate to train Nigerian youths to become seafarers and naval architects.  

 

 For further enquiries kindly contact the F.O. Akinrele & Co. International Trade, Shipping & Transport Group – info@foakinrele.com 

Between 2023 -2024, Nigeria experienced extreme exchange rate volatility with unprecedented erosions of Naira values against foreign currencies particularly, the US Dollar, GBP Sterling and the Euro. 

At the commencement of the term of the current government in May 2023, a floating exchange rate regime was introduced allowing market forces to determine the value of the Naira. The intentions were very well placed in view of the prevailing regime of multiple exchange rates in the previous government from 2015 – 2023. 

Under the previous government, unbridled foreign borrowing and a multiple exchange rate regime resulted in the erosion of foreign and domestic investor confidence. Huge gaps had arisen between the official and unofficial rates causing severe shortages of foreign exchange. This, coupled with the effect of COVID, signaled a dysfunctional economy. 

In May 2023, at the inception of the current floating exchange rate regime, the exchange rate was N460.70 – $1.  

The unified multiple exchange rate window was established to enhance efficiency in the FX market but initially, the rates significantly unraveled, dropping to N 1390.00 – $ 1 in May 2024 and then to an all time low at N 1,738.74  – $ 1 in November 2024 with the inflation rate at 34.8%. 

Heavy speculation between unlicensed persons in Naira and hard currencies resulted in unprecedented volatility and erosions in Naira values in turn causing major dislocations to domestic and foreign commerce in a still heavily import dependent economy.  

The situation was compounded by other factors including the removal by the Federal Government of fuel subsidies in 2023 and the prevalence of large volumes of Naira in circulation through monetary policies of the previous regime. 

Attempts to Stabilise Exchange Rates 

Significant attempts to stabilise the Naira and improve foreign exchange liquidity have been made. They include; most significantly, the clearing of the vast overhang of Nigeria’s due dollar obligations of approximately $7 billion. The clearing of the vast forward payment of $6.8 billion for Naira. The successful clearing of the aforementioned have given foreign investors comfort and confidence by easing prolonged pressure on the Naira, continually burdened by speculative demand for the dollar. 

There have also been oversight and regulatory and policy interventions by the CBN in the Official Market through a series of guidelines, such as the Central Bank of Nigeria’s (CBN) order to Banks to sell their excess dollar stock and maintain certain levels of prudential thresholds. 

Another key measure was the introduction in February 2024 of a new policy restricting international oil companies (IOCs) from repatriating 100 percent of their foreign exchange proceeds abroad immediately, limiting them to only 50 percent of their proceeds immediately while the other 50 percent will be repatriated 90 days from the day of inflow. 

Additionally, measures have also been taken to prevent foreign currency racketeering, foreign exchange rate manipulation, money laundering and the financing of terrorism by stopping the proliferation of unregulated transactions through robust monitoring a number of Bureaux De Changes (BDC), under the regulatory guidelines titled  “REVISED REGULATORY AND SUPERVISORY GUIDELINES FOR BUREAU DE CHANGE OPERATIONS IN NIGERIA.” 

 The aforementioned cluster of measures individually and cumulatively laid the foundation for the stabilisation of the foreign exchange market. 

Electronic Foreign Exchange Matching System (EFEMS) 

 The EFEMS initiative, which was officially introduced on October 3, 2024, represents the boldest and most far reaching move by the CBN to address longstanding issues of speculation and lack of transparency in the foreign exchange market. It encourages compliance with all rules that pertain to making the foreign exchange market open and transparent to investors. After a test run in October-November 2024, it became fully operational in December 2024.  

EFEMS requires all foreign exchange transactions to be conducted through this platform and therefore enables real-time order matching among banks and ensuring supply-demand data is openly available.  

The objective of EFEMS is to reduce speculative activities and eliminate market distortions, allowing the CBN to exercise regulatory oversight and effectively regulate the FX market. 

The CBN also launched the Nigerian Foreign Exchange (FX) Code, a comprehensive guideline aimed at ensuring transparency, integrity, and accountability among Authorised Dealers.  

The FX Code introduces six core principles: Ethics, Governance, Execution, Information Sharing, Risk Management and Compliance, and Confirmation and Settlement Process.  

The code supports the overall objective of EFEMS by mandating banks to show their real-time quotes and matching orders and promoting a fair and robust FX market, leading to more transparency and efficiency.  

The CBN Governor recently stressed that the reforms of 2023-2024 have yielded tangible results with remittances through International Money Transfer Operators (IMTOS) rising 79.4 per cent in the first three quarters of 2024 to $4.18 billion, compared to $2.33 billion in the same period of 2023.  

The positive effects of the foregoing basket of measures have been reflected in Nigeria’s external reserve, which grew by 12.74 per cent, reaching US$40.68 billion at the end of 2024. 

For further enquiries kindly contact the F.O. Akinrele & Co. Corporate, Foreign Investment and Capital Markets Group – info@foakinrele.com

Adam Smith, the famous Scottish economist and philosopher in “An Inquiry into the Nature and Causes of the Wealth of Nations”  espoused the virtues of the invisible hand of free markets with little governmental interference.  

The year 2022-2024 and so far in 2025, have witnessed geopolitical headwinds as demonstrated by international trade re-alignments and prevailing global trends towards protectionism between the US and her trading partners. Yet in line with Adam Smith’s core philosophy, Africa must act with renewed zeal and focus on establishing free markets and frictionless trade as epitomised by the African Continental Free Trade Area (AfCFTA) Agreement. 

The AfCFTA remains the world’s largest free trade area since the creation of the World Trade Organization (WTO).  

AfCFTA market projection is significant, with the combined GDP expected to reach US$7 trillion by 2035, and $29 trillion by 2050. The World Bank foresees an increase in foreign direct investment (FDI) in this trade area of up to 111% by 2035. 

The creation and evolution of AfCFTA commenced from the 10th Extraordinary Session of the African Union on AfCFTA in March 2018 where the following agreements were signed into law:  

i. The AfCFTA  

ii. The Kigali Declaration (Agreement)  

(signed by 54 out of the 55 African countries Eritrea being the only country not to have signed nor ratified)  

iii. The Protocol on Free Movement of Persons 

(signed by 32 out of the 55 AU Member States only 4 countries – Mali, Niger, Rwanda, and Sao Tome & Principe have ratified.  

The AfCFTA brings together 8 pre-existing and separate free trade areas and/or customs unions each with different regulations otherwise known as Regional Economic Communities (RECs). 

The 1st of January 2021, marked the start of trading under the AfCFTA.  

The African Continental Free Trade Agreement’s primary objective is to reduce trade barriers between the different RECs of the African Economic Community, and eventually to use these RECs as building blocks for the ultimate goal of an Africa-wide customs union. 

The year 2021 also saw the roll-out of the pilot phase of the Pan-African Settlement System (PAPSS), a combined initiative of African Export-Import Bank (AFREXIM) and the AfCFTA, which was formerly launched in Ghana on 13 Jan 2022.  

PAPSS serves as the continent-wide platform for the processing, clearing and settling of intra-African trades and commerce payments. The system was developed by the AFREXIM and promises to reduce the cost and time of payments, lower the level of banking liquidity required to make payments, and improve central bank oversight of payments. 

The PAPSS in the African regional context functions identically to and complementary to the Swift global payment system. Its objectives like Swift  are speed, cost savings, reliability and dependencies on hard currency. The PAPSS ensures instant or near-instant transfers of funds between originators in one African country and beneficiaries in another. 

Although the 1st of January 2021, marked the start of trading under the AfCFTA Agreement however, no trade has yet taken place under the AfCFTA regime.  

On 7 October 2022, the AfCFTA Secretariat launched the AfCFTA Guided Trade Initiative (GTI) in Accra to allow for commercially meaningful trade under the Agreement to commence for eight (8) participating countries: Cameroon, Egypt, Ghana, Kenya, Mauritius, Rwanda, Tanzania and Tunisia. This initiative is being used to pilot the operational, institutional, legal and trade policy environment under the AfCFTA, and has since been extended and as at January 2024, 12 State parties have finalised their legal modalities to enable trade under the GTI to commence. 

The GTI is a pilot program that aims to test the legal, trade policy, institutional, and operational environment of the AfCFTA. The program focuses on value chain development and 96 commodities, including tea, coffee, ceramic tiles, processed meat, and sugar.  

The 54 members of the AfCFTA are at different stages of implementation and limited trade has occurred under the GTI. The GTI is a pilot program that matches importers and exporters.  

As at August 2024, 48 countries (including the 4 richest countries on the continent, Nigeria, South Africa, Egypt, Algeria) out of the 54 signatories have ratified the treaty. 

KEY OBJECTIVES 

In 2025, the AfCFTA aims to be fully operational. 

Its key objectives are:  

• A transition from its current foundational phase to full operationalization of a robust trade framework.: 
• Clear steps towards dismantling of barriers to cross-border commerce and the improvement of trade facilitation.  
• Implementation of protocols aimed at empowering women and youth. 
• Strengthening collaboration between AfCFTA member states.  
• The building of capacity in the key AfCFTA institutions to implement   
• Commitment by the AfCFTA Secretariat to a continental private sector platform for SMEs.  

 

KEY CHALLENGES 

A number of key challenges are: 

• Infrastructure gaps, financial constraints, and competition, which impede the expansion of businesses under the AfCFTA.  
• The implementation of the AfCFTA remains slow yet, there remains the potential to increase intra-African trade by more than half by the end of 2025. 
• Political instability through recent coups and political unrest across the Sahel and central Africa have dampened investor confidence and trade potential.  

OPPORTUNITIES  

The AfCFTA represents a major franchising opportunity in Africa, creating a larger, more connected market that could drive significant business growth.  

The AfCFTA through a large unified market will accelerate trade and investments with China and Europe. 

For further enquiries kindly contact the F.O. Akinrele & Co. International Trade, Shipping & Transport Group – info@foakinrele.com