Experts Warn: Proliferation of Port Projects Without Cargo Traffic Puts Investments at High Risk

Experts Warn: Proliferation of Port Projects Without Cargo Traffic Puts Investments at High Risk

Maritime stakeholders have issued a stark warning that the proliferation of seaports and indiscriminate investment in deep seaport projects across Nigeria risk becoming economically unviable due to the absence of guaranteed cargo traffic. This critical alert was sounded during the maiden International Deep Seaport Investment Forum (IDSIF), organized by Maritime Media Limited in Lagos.

Political Ambitions Versus Market Realities

Former Managing Director of the Nigerian Ports Authority (NPA), Bello Gwandu, emphasized that investment in port projects driven by political or sentimental considerations could lead to massive financial losses. He criticized the glaring disconnect between infrastructure expansion and actual trade flows, stressing that cargo availability, not political ambition, should determine port locations.

"It does not make sense that everyone wants to build a deep seaport where there is no cargo," Gwandu stated. "The era when the government dictated cargo destinations is over. Today, it is the customers and the private sector that determine where cargo goes. Public funds must be invested efficiently."

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Structural Issues and Failed Incentives

Gwandu highlighted significant structural issues in port financing and governance, noting that the dynamics of cargo ownership and movement have shifted dramatically from government-controlled to a private-sector-driven market. In this new reality, traders, manufacturers, and logistics operators determine cargo flows based on efficiency and cost considerations.

He recalled past incentives, including tariff discounts of up to 20 percent, introduced to attract vessels to less patronized ports. However, these measures failed to reverse the fundamental challenge of low cargo volumes. Building ports in locations without existing cargo bases or clear logistics access to customers fundamentally undermines their sustainability.

Pathways to Sustainable Development

Gwandu stressed that Nigeria must prioritize the development of export-oriented industries, particularly agriculture and manufacturing, to generate sustainable cargo volumes. He also called for greater specialization among ports, warning that multiple facilities offering identical services in different locations would only lead to inefficiencies and underutilization.

Instead, he urged policymakers to:

• Identify regional economic strengths and align port functions accordingly
• Ensure each facility serves a distinct purpose within the national logistics network
• Redirect cargo flows to underserved regions where shorter transport routes could improve efficiency

Gwandu noted that a significant portion of cargo currently handled in Lagos is ultimately destined for eastern and northern parts of the country, suggesting opportunities for more strategic distribution.

Coastal Port Development as National Imperative

Also speaking at the forum, former chairman of the Board of Trustees of the NPA, Bode George, called for the development of coastal ports across the country. He warned that the current over-dependence on Lagos ports poses serious risks to long-term economic growth.

"Concentrating maritime infrastructure in a single axis undermines national development," George cautioned. He linked Nigeria's maritime strategy to global developments, citing strategic vulnerabilities posed by narrow shipping routes like the Strait of Hormuz, where geopolitical tensions continue to threaten international shipping and energy supply chains.

The elder statesman maintained that coastal port development should be seen as a unifying national project capable of delivering widespread economic benefits beyond regional interests. He urged the Ministry of Marine and Blue Economy to treat the coastal port initiative as a national mandate requiring urgent, coordinated action.

Data-Driven Approach Required

Both experts advocated for a more deliberate, data-driven approach to maritime infrastructure development, anchored on:

1. Cargo generation strategies
2. Market realities
3. Long-term economic viability

The consensus among stakeholders is clear: Nigeria's port development must transition from politically motivated projects to strategically planned investments that align with actual trade patterns and economic needs. Without this shift, the proliferation of port projects risks becoming a costly exercise in infrastructure mismanagement rather than a catalyst for economic growth.