3 April 2021

NIGERIA: THE APAPA GRIDLOCK – CHALLENGES AND SOLUTION

The seaport of Apapa was founded in the early 15th Century. It served the old Oyo Empire. An estimate of 500,000 Slaves shipped from Apapa port to the Americas, slaves came from the West
— By AgenceLaQuincaillerie

Executive Summary

The seaport of Apapa was founded in the early 15th Century. It served the old Oyo Empire. An estimate of 500,000 Slaves shipped from Apapa port to the Americas, slaves came from the West Africa region. Apapa is a Local Government Area in Lagos State of Nigeria, located to the west of Lagos Island.

The History of Apapa

The seaport of Apapa was founded in the early 15th Century. It served the old Oyo Empire.  An estimate of 500,000 Slaves shipped from Apapa port to the Americas, slaves came from the West Africa region. Apapa is a Local Government Area in Lagos State of Nigeria, located to the west of Lagos Island. The development of the port comprised three (3) broad phases: The first phase is the period of the establishment of British Colony up to 1892; phase 2 with the declaration of the protectorates, which extended to hinterlands, then the World War 1 and the phase 3 witnessed specific landmarks; such as construction of railway, dredging of harbour and creation of Apapa Wharf. It contains many ports and terminals operated by the Nigerian Ports Authority (NPA).

Demographic
information of Apapa and Lagos

Apapa port is Nigeria’s biggest port, handling a range of commodities; it has facilities for handling wheat, oil, cement, fish, dry cargo, and containers. There are limited narrow. roads to outflow the goods, with no rail or waterways alternatives for moving items to hinterlands.

What is the situation at Apapa Seaport?

Usman and Akoni (2018), reported that the gridlock has crippled commercial and private activities in Lagos, and has led to the breakdown of law and order in the axis. The task force set up by Federal and Lagos State governments to restore sanity had seemingly abandoned the road. This gridlock started some years back, and there are shreds of evidence to suggest that the various government efforts to restore normalcy have failed. It is important to stress that on Sunday 11, August 2018, the gridlock caused by a long queue of trucks extended from Mile 2 to Ijesa along Oshodi-Apapa Expressway; a distance of 14.2km, which usually takes 37 minutes (drive time); trucks parked on the road for days, thereby locking up the entire Lagos City with estimated population of 23.42 million persons (2018 projection figure). The current situation has ripple effects on the nation’s economy. This report will present statistical data covering a period of 2 – 5 years to support the need to seek alternative solutions.

According to industry experts, the loss to the Nigerian economy runs into trillions of naira annually. Also, the health of workers and motorists have been negatively affected.
Which has led to reduced productivity, loss of working hours, as some persons commute journey start as early as 3 am and may not return home till 11 pm daily.

What are the objectives of this paper?

Many initiatives have been taken by Lagos and Federal governments, respectively to resolve Apapa gridlock. However, the problem does not only persist, but it is growing at an alarming rate which has crippled Lagos State economy to great extent and the nation’s economy to a greater extent. Some of the previous initiatives include; the creation of truck parks, special truck lane, restricting truck movements to a specified time zones, creation of special tasks, and intervention by Nigerian Security Forces. Available evidence suggests that these initiatives have failed to address the problem, notwithstanding their good intentions.

Consequently, W.
Akhator is of the view that we should explore more options to find lasting solution. As a part of his contribution to resolving Apapa gridlock; today’s paper objectives include: 

a) To understand why previous
interventions have not yielded the expected result

b) Evaluation of the causes, and effects

c) To provoke thoughts process in
seeking alternative solutions

d) Use data from Dangote Plc
presentation at Federal Ministry of Power, Works and Housing Management Retreat
to evaluate the Apapa Gridlock

e) Propose multilayer approaches and
solutions
.

What are the Causes and Effects of Apapa Gridlock?

Apapa gridlock is causing the Nigerian economy losses daily. Okon in 2018 posited; that there is over 360% hike in haulage cost in the last few weeks; for instance, a 40-feet container now cost N600,000 instead of the previous cost of N190,000 (a distance of 89km) from Apapa APM Terminal to Ibafo. The consumer bears the ultimate cost (increase in goods prices). Indeed, as the situation degenerated into chaos, a traffic management and enforcement team comprising the Police, the Federal Road Safety Corps, FRSC; Lagos State Transport Management Agency, LASTMA; the Nigerian Navy; the Nigerian Security and Civil Defence Corps, NSCDC, and NPA security officials was set up. Soldiers of the Nigerian Army were co-opted into the traffic enforcement team. Unfortunately, the relief which motorists felt on account of interventions by these agencies, acting individually and as a team, was short-lived as the roads and bridges were later re-invaded and seized by these tankers and trucks.

The causes include:

Many factors are responsible for the Apapa gridlock; foremost among them is bad road, Also, the roads in and out of Apapa Port have not been expanded in many years. With the increasing number of trucks daily to Apapa, this has created a chaotic situation in and around Apapa.

Population explosion in Lagos State from 1.1 million in 1967 to 23.42 million in 2018; an increase of 22.32 million persons is another major cause. The implication is that Lagos population has grown about 21 times occupying the same seemly size of land as it was in 1967. Without adequate planning and corresponding infrastructure capacity upgrade to match this explosion, this has undoubtedly contributed to the gridlock.

Other causes include;

a) Expansion of Industries in Apapa Port
area without corresponding adequate infrastructure

b) Bad driving habits

c) Infrastructure breakdown

d) Over concentration on the use of
Apapa Port

e) Lack of collaboration among
government agencies

f) Lack of linearity between the input and output in the use of Apapa
resources.

What are the effects of Apapa Gridlock?
Dangote made a presentation in 2018, during the presentation, he said Apapa
gridlock has negatively impacted on DIL Food businesses and is estimated to
have resulted in N15bn – N36bn in foregone profits. Also, it increased
operating cost, as the plants could not perform or operate at optimal capacity,
and transport costs increased due to longer turn-around-time (TAT) and
extortions encountered. Other businesses suffered similar financial losses.
Some smaller firms have closed down, thereby contributing to unemployment and
crime increase. In that paper, he reported that in 2017, DIL contributed about
N97bn to government as taxes. Projected contribution to the government in 2018.
He stated, that the projected government’s revenue across three major
businesses (Cement, Sugar & Flour) will amount to N2.1 Trillion by 2022.
Improving the status of Nigerian Transport Infrastructure will accelerate
economic growth, grow GDP, improve foreign reserves and provide job opportunities
for many Nigerians, he posited. Below is Dangote presentation to FMPWH in
figure 3.3, a summary of projected government taxes by 2022.

Figure 3.3: Dangote Presentation at FMPWH

What are the
findings?
Some
of the findings include;

a) Apapa Gridlock has
had negative impacts on the Nigerian economy; tax loss estimate from DIL in
2018 was N44bn, and in 5 years accumulated loss will be N2.1 Trillion. When all
the taxes combined from private sector operating in the Apapa axis, such as
BUA, Honeywell, and other businesses, the estimated total loss to the
government is about N11 Trillion.

b) The Economic actives
in Lagos have been negatively affected.

c) That PPP model can
be used to fix Apapa Gridlock; such as the use of (projected taxes) to fix the Gridlock and accentuate economic
growth. This will also reduce borrowing.

d) The current legal
frame on Transport Infrastructure Projects requires update and harmonisation
among all levels of government. A comprehensive and harmonised legal framework
will boost private investors’ confidence in using Blended Finance to repair and
upgrade Apapa ports.

e) Lagos State is
overpopulated, and requires strategies to reduce its population.

What are the
recommendations?

1.
Use multilayer PPP models to
finance Apapa Infrastructure Network for sustainable development, improve
performance, and increase government revenues.

2.
Create Dry Port along Benin
– Ore Expressway to free Lagos City of trucks.

3.
Use Hyperloop freight
Infrastructure to move goods and passengers in and out of Apapa Ports.

4.
Use Calabar, Sapele, Port
Harcourt and other Ports to reduce traffic at Apapa ports.

5.
Create Lokoja and Onitsha
ports to easy North & East wards traffic.

6.
Harmonise all agencies
connected with Ports, Transport, Security, FIRS, Customs, and Lagos
Traffic using ICT Hub share information.

7.
Create a legal framework to
address weaknesses and increase investors’ confidence.

 

In conclusion, the author’s contribution
to finding a solution to the problems of Apapa Gridlock is significant as this
study provides further insight into the importance of seeking alternative
methods of solving problems. He included by recommending the use of multilayer
approaches on solving Apapa Gridlock. He is of the view that these findings and
recommendations can be adopted for practical implementations. If you can
imagine it, you are half done way, he posited.

By

Okpia
W. Akhator
(FMVA,
MBA, MSc, FCA)

Alumni
of the University of Oxford, England

Infrastructure
Development & Finance

Managing
Director – IGWEHI Transatlantic UK Ltd

Logo Wappp 100

The History of Apapa

The seaport of Apapa was founded in the early 15th Century. It served the old Oyo Empire.  An estimate of 500,000 Slaves shipped from Apapa port to the Americas, slaves came from the West Africa region. Apapa is a Local Government Area in Lagos State of Nigeria, located to the west of Lagos Island. The development of the port comprised three (3) broad phases: The first phase is the period of the establishment of British Colony up to 1892; phase 2 with the declaration of the protectorates, which extended to hinterlands, then the World War 1 and the phase 3 witnessed specific landmarks; such as construction of railway, dredging of harbour and creation of Apapa Wharf. It contains many ports and terminals operated by the Nigerian Ports Authority (NPA).

Demographic
information of Apapa and Lagos

Apapa port is Nigeria’s biggest port, handling a range of commodities; it has facilities for handling wheat, oil, cement, fish, dry cargo, and containers. There are limited narrow. roads to outflow the goods, with no rail or waterways alternatives for moving items to hinterlands.

What is the situation at Apapa Seaport?

Usman and Akoni (2018), reported that the gridlock has crippled commercial and private activities in Lagos, and has led to the breakdown of law and order in the axis. The task force set up by Federal and Lagos State governments to restore sanity had seemingly abandoned the road. This gridlock started some years back, and there are shreds of evidence to suggest that the various government efforts to restore normalcy have failed. It is important to stress that on Sunday 11, August 2018, the gridlock caused by a long queue of trucks extended from Mile 2 to Ijesa along Oshodi-Apapa Expressway; a distance of 14.2km, which usually takes 37 minutes (drive time); trucks parked on the road for days, thereby locking up the entire Lagos City with estimated population of 23.42 million persons (2018 projection figure). The current situation has ripple effects on the nation’s economy. This report will present statistical data covering a period of 2 – 5 years to support the need to seek alternative solutions.

According to industry experts, the loss to the Nigerian economy runs into trillions of naira annually. Also, the health of workers and motorists have been negatively affected.
Which has led to reduced productivity, loss of working hours, as some persons commute journey start as early as 3 am and may not return home till 11 pm daily.

What are the objectives of this paper?

Many initiatives have been taken by Lagos and Federal governments, respectively to resolve Apapa gridlock. However, the problem does not only persist, but it is growing at an alarming rate which has crippled Lagos State economy to great extent and the nation’s economy to a greater extent. Some of the previous initiatives include; the creation of truck parks, special truck lane, restricting truck movements to a specified time zones, creation of special tasks, and intervention by Nigerian Security Forces. Available evidence suggests that these initiatives have failed to address the problem, notwithstanding their good intentions.

Consequently, W.
Akhator is of the view that we should explore more options to find lasting solution. As a part of his contribution to resolving Apapa gridlock; today’s paper objectives include: 

a) To understand why previous
interventions have not yielded the expected result

b) Evaluation of the causes, and effects

c) To provoke thoughts process in
seeking alternative solutions

d) Use data from Dangote Plc
presentation at Federal Ministry of Power, Works and Housing Management Retreat
to evaluate the Apapa Gridlock

e) Propose multilayer approaches and
solutions
.

What are the Causes and Effects of Apapa Gridlock?

Apapa gridlock is causing the Nigerian economy losses daily. Okon in 2018 posited; that there is over 360% hike in haulage cost in the last few weeks; for instance, a 40-feet container now cost N600,000 instead of the previous cost of N190,000 (a distance of 89km) from Apapa APM Terminal to Ibafo. The consumer bears the ultimate cost (increase in goods prices). Indeed, as the situation degenerated into chaos, a traffic management and enforcement team comprising the Police, the Federal Road Safety Corps, FRSC; Lagos State Transport Management Agency, LASTMA; the Nigerian Navy; the Nigerian Security and Civil Defence Corps, NSCDC, and NPA security officials was set up. Soldiers of the Nigerian Army were co-opted into the traffic enforcement team. Unfortunately, the relief which motorists felt on account of interventions by these agencies, acting individually and as a team, was short-lived as the roads and bridges were later re-invaded and seized by these tankers and trucks.

The causes include:

Many factors are responsible for the Apapa gridlock; foremost among them is bad road, Also, the roads in and out of Apapa Port have not been expanded in many years. With the increasing number of trucks daily to Apapa, this has created a chaotic situation in and around Apapa.

Population explosion in Lagos State from 1.1 million in 1967 to 23.42 million in 2018; an increase of 22.32 million persons is another major cause. The implication is that Lagos population has grown about 21 times occupying the same seemly size of land as it was in 1967. Without adequate planning and corresponding infrastructure capacity upgrade to match this explosion, this has undoubtedly contributed to the gridlock.

Other causes include;

a) Expansion of Industries in Apapa Port
area without corresponding adequate infrastructure

b) Bad driving habits

c) Infrastructure breakdown

d) Over concentration on the use of
Apapa Port

e) Lack of collaboration among
government agencies

f) Lack of linearity between the input and output in the use of Apapa
resources.

What are the effects of Apapa Gridlock?
Dangote made a presentation in 2018, during the presentation, he said Apapa
gridlock has negatively impacted on DIL Food businesses and is estimated to
have resulted in N15bn – N36bn in foregone profits. Also, it increased
operating cost, as the plants could not perform or operate at optimal capacity,
and transport costs increased due to longer turn-around-time (TAT) and
extortions encountered. Other businesses suffered similar financial losses.
Some smaller firms have closed down, thereby contributing to unemployment and
crime increase. In that paper, he reported that in 2017, DIL contributed about
N97bn to government as taxes. Projected contribution to the government in 2018.
He stated, that the projected government’s revenue across three major
businesses (Cement, Sugar & Flour) will amount to N2.1 Trillion by 2022.
Improving the status of Nigerian Transport Infrastructure will accelerate
economic growth, grow GDP, improve foreign reserves and provide job opportunities
for many Nigerians, he posited. Below is Dangote presentation to FMPWH in
figure 3.3, a summary of projected government taxes by 2022.

Figure 3.3: Dangote Presentation at FMPWH

What are the
findings?
Some
of the findings include;

a) Apapa Gridlock has
had negative impacts on the Nigerian economy; tax loss estimate from DIL in
2018 was N44bn, and in 5 years accumulated loss will be N2.1 Trillion. When all
the taxes combined from private sector operating in the Apapa axis, such as
BUA, Honeywell, and other businesses, the estimated total loss to the
government is about N11 Trillion.

b) The Economic actives
in Lagos have been negatively affected.

c) That PPP model can
be used to fix Apapa Gridlock; such as the use of (projected taxes) to fix the Gridlock and accentuate economic
growth. This will also reduce borrowing.

d) The current legal
frame on Transport Infrastructure Projects requires update and harmonisation
among all levels of government. A comprehensive and harmonised legal framework
will boost private investors’ confidence in using Blended Finance to repair and
upgrade Apapa ports.

e) Lagos State is
overpopulated, and requires strategies to reduce its population.

What are the
recommendations?

1.
Use multilayer PPP models to
finance Apapa Infrastructure Network for sustainable development, improve
performance, and increase government revenues.

2.
Create Dry Port along Benin
– Ore Expressway to free Lagos City of trucks.

3.
Use Hyperloop freight
Infrastructure to move goods and passengers in and out of Apapa Ports.

4.
Use Calabar, Sapele, Port
Harcourt and other Ports to reduce traffic at Apapa ports.

5.
Create Lokoja and Onitsha
ports to easy North & East wards traffic.

6.
Harmonise all agencies
connected with Ports, Transport, Security, FIRS, Customs, and Lagos
Traffic using ICT Hub share information.

7.
Create a legal framework to
address weaknesses and increase investors’ confidence.

 

In conclusion, the author’s contribution
to finding a solution to the problems of Apapa Gridlock is significant as this
study provides further insight into the importance of seeking alternative
methods of solving problems. He included by recommending the use of multilayer
approaches on solving Apapa Gridlock. He is of the view that these findings and
recommendations can be adopted for practical implementations. If you can
imagine it, you are half done way, he posited.

By

Okpia
W. Akhator
(FMVA,
MBA, MSc, FCA)

Alumni
of the University of Oxford, England

Infrastructure
Development & Finance

Managing
Director – IGWEHI Transatlantic UK Ltd