Having reaffirmed its intention to liberalise its inland waterways system as a means of easing overwhelming pressure, particularly from freight, on Nigeria’s creaking road infrastructure, the Ministry of Transport (MoT) will need to demonstrate more commitment than past administrations for private investors to respond in force. Though it has the 14th-largest waterway network in the world, Nigeria has not optimised its use. Despite enormous economic growth since independence, the total amount of goods transported via waterway has stayed roughly on par with colonial times. The federal government is pursuing a twin-track policy of rehabilitating and securing the waterways and opening the sector to private operators. This plan must be successful for the country to establish a functioning multimodal transport system for both passengers and freight.
NATURAL BOUNTY: Nigeria’s 8600 km of inland waterways and 852 km of coastline formed the backbone of the Royal Niger Company’s links to the hinterland during the colonial period, with trade centred on the dredged Lower Niger River. An estimated 250,000 tonnes of primary goods (including cotton, groundnuts, cocoa and oil palm) are freighted to the ocean annually, according to MoT. Roughly 50 rivers connect 28 of the 36 states, presenting a naturally more extensive network than the highway system. In the tropical southern part of Nigeria waterways often provide a much-needed connection to otherwise isolated communities. The parastatal Nigerian Inland Waterway Authority (NIWA) estimates some 60% of Nigeria can be connected through an efficient waterways system. The two major rivers, Niger and Benue, merge at the level of Lokoja, in Koggi State, before flowing down to Port Harcourt. While these large rivers have the strongest potential for inland transport, the little trade that does now take place centres on a complex system of waterways in the Niger Delta and in the south-west. The NIWA estimated in 2011 some 3000 km of inland waterways were navigable, with some 13 recognised ports, although the sizes of boats they can accommodate vary widely. Attempts to rehabilitate the network through the construction of river ports in the 1980s failed to revive traffic flows and suffered fund leakages. The MoT estimated in 2010 inland waterway traffic accounted for only 1.6% of total transport. Although slow for passenger travel over long distances, the scope for expanding freight traffic is clear: one 15-barge tow can carry the equivalent of 225 rail cars or 870 trucks.
ENABLING THE REGULATIONS: Sedimentation, other obstructions, insecurity, inadequate port infrastructure and connections to the hinterland have all played a part in the system’s disuse. Legal disputes and uncertainty between state and federal governments have also obstructed progress, the most cited example being between the state of Lagos and the NIWA. Established in 1997, the NIWA regulates and manages the waterways in an exclusive capacity. While state governments have sought to launch their own plans for their waterways, a key question over ownership of the waterways has repeatedly delayed efforts at rehabilitation.
STATE CONTROL: The Lagos State Metropolitan Area Transport Authority (LAMATA), established in 2002, has planned to develop 28 waterway routes spawning the 22% of the state constituted by creeks and lagoons. LAMATA claims 70% of the state is accessible by water. Cracking down on banditry along the lagoon, the state has moved to dredge key channels, rehabilitate jetties and concession private piers and the ferry system. While only a few car-ferry crossings operate along the Lekki lagoon, the state plans to develop the Lekki and Lagos lagoons as well as the Ogun and Yewa Rivers, particularly for passenger traffic. Luk Haelterman, the managing director of the OK Free Trade Zone Enterprise, told OBG, “The most effective way for Lagos to alleviate the congested road network is to develop transport links over water. In the next few years a number of transit points between Lagos and the south-east will come on stream.” This state-driven development model spurred action from federal government, which tabled a series of reforms for inland waterways in 2010. Although a hint of liberalisation that arose in 2005 was not implemented, the new reforms offer a clear path.
The administration aims to pass new legislation to mimic the concession model for seaports and restructure the NIWA into a landlord and regulator for private concessionaires, like the Nigerian Ports Authority. The NIWA would issue licences for navigation and operation of piers, jetties and docks, while a new NIW Fund would cover half the costs for building and rehabilitating infrastructure. Meanwhile, part of the funds derived from the 2003 Cabotage Act, which mandates all domestic transport be Nigerian-flagged, would be used to support low-interest credit lines to upstart operators. Pilot concessions are envisioned for jetties in Lagos, Port Harcourt, Onitsha and Warri, meant to be generalised at ports inland. The MoT commissioned a feasibility study for the whole system, focusing on the Baro to Warri and Port Harcourt line on the Lower Niger and the Lokoja-Markurdi section of the Benue River.
DREDGE & BUILD: In early 2012 Idris Umar, the minister of transport, reaffirmed a commitment to forge ahead with required dredging works and jetty construction pending legislation. Given high fluctuations in water levels during the dry season and historic lack of maintenance, the dredging of key channels became a priority under the administration of President Umaru Musa Yar'Adua. Although attempts at dredging 572 km of the Lower Niger from Baro to Warri were made in 1978 and 1996, it was only through federal investment of N36bn ($230m) that the project was completed in early 2011. The NIWA estimated in November 2011 that the river could handle 1000-tonnes-capacity vessels.
Crossing eight states, this stretch of river constitutes the first phase of the government’s dredging programme. A second phase was launched in July 2012 to maintain the dredging of the section (including the purchase of a smaller dredger) and is due for completion by the end of the first half of 2013, with the MoT planning to establish a management company for the Niger River in September 2012. The federal government has allotted some N12.4bn ($79.4m) of the total N16bn ($102m) dredging fund to the NIWA, with the rest going to the NPA and the Nigerian Maritime Administration and Safety Agency (NIMASA). Other phases will include dredging the Benue River from Makurdi to Lokoja, the second branch of the Lower Niger (“River Nun”) to Yenagoa, as well as the upper segment of the Niger, according to statements by Umar. Work on the Makurdi-Lokoja segment is expected to begin by the end of 2012. Work has also started on port developments along dredged sections of the Niger. The N4.6m ($29,440) rehabilitation of the Onitsha Port was completed in August 2012, opening a major direct freight link into one of Nigeria’s most bustling market cities.
In parallel to the ports’ development, the MoT has planned for the construction of six inland container depots (ICDs) structured as public-private partnerships. Logistics operators and shipping lines such as CMA-CGM and SDV-Bolloré have in the past expressed support for such ICDs and the links they facilitate to coastal seaports through the waterways. The government expects to develop ICDs in the states of Borno, Plateau, Kaduna, Zaria, Kano, Oyo and Abia, though no schedule has yet been set for their completion.
SAFE PASSAGE: While the NIWA has resumed some ferry routes in the Niger Delta following the slowdown in attacks since 2010, the government also expects a number of private investors to follow, particularly to expand freight. The issue of security is also paramount for investors. Nigeria had already bought 12 new gunboats from Malaysia for N750m ($4.8m) in May 2011 to better patrol inland waters.
In January 2012 the House of Representatives urged NIMASA to increase the number of boats patrolling waterways to crack down on armed robbery and sabotage. Controversially a contract for patrolling the Niger Delta’s waterways was awarded to Global West Vessel Specialist Agency, a company run by a former militant Delta leader, in early 2012. Proposed reforms provide for the establishment of an independent tracking system for vessels along the entire network of waterways to ensure reliability in traffic of goods and passengers.
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