Monday, 04 March, 2024

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Apapa gridlock: Exporters lose $75bn as foreign buyers cancel 6400 contractual agreements


By Steve Agbota

The Federal Government’s effort to diversify Nigeria’s economy through non-oil export sector suffered a major setback recently as exporters lamented the loss of over $75 billion in five years due to the horrible Apapa gridlock.

This was as the nation’s non-oil export sector is  said to be losing about $15 billion annually leading to the continued  decline in repatriation of proceeds through Central Bank of Nigeria (CBN).

The loss according to exporters who spoke to Daily Sun came in the wake of their inability to access major seaports in Apapa Lagos due to its perenial traffic jam that has made movement in the area a nighetmare.

The situation which has  negatively impacted movement of non-oil exports, hampered foreign exchange earnings and led to over 10,000 people losing their jobs is also taking a toll on the economy as a whole.

Already several foreign buyers are said to have canceled over 6400 contractual agreements in the last four years, following exporters inability to   meet their contractual obligations due to delayed products delivery.

Exporters who spoke with Daily Sun said they have being forced out of business, as cost of freighting goods out the warehouses to port is very huge because only a few trucks can get into the port due to the gridlock.

They argued that many exporters are now struggling to remain in business while those in operation are incurring massive losses, with rising shipment cost currently estimated at almost at 2000 per cent higher than what it used to be. As a result,  several exporters have had to lay off some of their workers because they are struggling to pay salaries.

Speaking with Daily Sun, the Managing Director Universal Quest Nigeria, Mr. Sotonye Anga, said the effect of the gridlock on the economy and export is quite colossal.

On cancellation of contractual agreements, he said for every commodity that is being produced in Nigeria, other African countries have capacity to produce similar commodities, which makes the market so competitive.

“When people give a Nigerian exporter a contract to supply cashew, cocoa, sesame and you default by delaying in your shipment, the contract could be cancelled. Now when the contract is cancelled, you the exporter in Nigeria, you are less exposed with liability. You have already bought the goods; it is not your fault that there is gridlock in Apapa. But you are faced with it. Now the contract is cancelled, so it is the of the problem of the exporter.

“Sometimes, contracts are cancelled when the goods are already in transit on sea. Your goods are onboard a ship and because of the delay, you have suffered due to this gridlock, and the contract has been cancelled. Another challenge is  the quality will just deteriorate because these are perishable products in the first place. 

Credit: Daily Sun

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