- Babajide Okeowo
The approval by the Federal Government of Nigeria for the commencement, expansion and development of Snake Island Port is set to be a significant milestone for the Nigerian maritime and shipping industry.
To this effect, the investment, which is to be executed through Public-Private Partnership (PPP) arrangement, is with a new 45-year concession agreement for Snake Island Port with the Federal Government that allows for an expanded operational scope and will attract about $1 billion in private investment.
This approval highlights the importance of PPPs in driving economic growth and development in Nigeria, with the country experiencing a growth in PPPs over the last decade across different sectors from energy to infrastructure, transportation, and telecommunications.
Stakeholders have consistently clamoured for increased private sector involvement in financing critical infrastructural development in different sectors and as private sector players identify infrastructural gaps in the country’s maritime sector and take strategic steps to fill them, significant improvements in the sector are imminent.
Investments in Nigeria’s ports will improve efficiency in cargo handling and reduce turnaround times for vessels, high cost of shipping and the challenges currently experienced in logistics services.
Achieving significant cost savings for businesses increases competitiveness and provides a more business-friendly environment compared to other African countries. Private investment also leads to the development of new technologies and innovations, which can further boost the sector’s growth and development and play a crucial role in driving the growth and modernisation of the maritime sector.
Over the years, PPPs in the maritime sector have paved the way for investments in the acquisition of modern terminal equipment and expansion of existing cargo holding facilities, improved efficiency and growth in both ship traffic and cargo, and the acquisition of operational platforms and systems for regulatory activities. As of 2021, the Federal Government’s revenue from the maritime sector had doubled 10 years post-concession.
Nigerdock was originally awarded Free Zone and Port Development Status by the Presidency in 2005, leading to the establishment of Snake Island Integrated Free Zone (SIIFZ) in the same year. The Nigerian Ports Authority (NPA) and Nigeria Customs Service also approved direct shipping for the facility in 2017, with the NPA green-lighting cargo handling operations in 2021.
Nigerdock’s success is a testament to the power of private sector investment and the importance of modernising and upgrading infrastructure in emerging economies. This latest approval is yet another significant milestone for the maritime and logistics services Company that has been at the forefront of job creation, socio-economic empowerment, and the support of the blue economy.
The PPP project, which has been in the works for some years, will see Snake Island Port immediately commence operations as an expansion to Nigerdock’s existing operations, while the shipyard and Free Zone remain core parts of the business. This move is set to spur economic growth and development in Nigeria and attract more clients to SIIFZ.