An Assessment of Port Utilization on the Nigerian Economy (1995- 2020)
Chapter One
Aim and Objectives of the Study
The main aim of this research is to carry out an assessment of port utilization on the Nigerian economy.
The objectives of this research include:
- To ascertain how the quality of port infrastructure has affect the economy.
- Determine role of cargo throughput on the economy.
- To determine if there is co -integrating relationship among port utilization and the economy.
CHAPTER TWO
LITERATURE REVIEW
Conceptual Framework
We reviewed the concepts of port utilization, port throughput, docking capacity, quay operation, containerization, storage, transport, cargo clearance and transfer, and performance.
Cargo handling equipment
Cargo handling equipment’s are used to transport goods and materials from one location to another. Cargo handling equipment vehicle varies according to cargo type. Cargo handling equipment are employed widely in marines and railways for the transportation of heavy goods, containers, and components. Cargo handling equipment Vehicle generally comprises cranes, container handlers, straddle carriers, yard tractors and forklifts (Sislian, Jaegler&Cariou, 2016). The global cargo handling equipment market can be segmented based on propulsion, equipment type, application, and region. Based on propulsion, the cargo handling equipment vehicle market can be classified into diesel, electric, and hybrid. In terms of propulsion, the diesel segment accounts for a prominent share of the market. Based on equipment type the market can be segmented into Conveyer, Forklift, Truck, Aviation Dolly, Automated Guided Vehicles (AGV), Crane and various others. Also, Sislian, Jaegler and Cariou (2016), highlight the regional outlook and segments the market into four main regions, Americas (Canada, Mexico, USA), Europe, Asia-Pacific and Row (Argentina, Russia, Brazil). Each of the regions is further divided into various countries.
Containerization
Containerization is a method of distributing merchandise in a unitized form thereby permitting an intermodal transport system to be developed providing a possible combination of rail, road, canal and maritime transport. The system is long established and was in being at the turn of the century in a somewhat less sophisticated form. It came more into use in the North American coastal trade in the 1930s when the vessels were called Van ships (Zhigang, 2019).
Before the advent of containerization, all goods except bulk cargoes were transported in pieces in break bulk which according to Wu (2011) always caused damages and inefficiencies in handling and transportation. Besides the transportation inefficiencies, the era prior to the introduction of containerization was also characterized by labor intensity and piece by piece method of loading and unloading of cargo. Following this, Rosenstein (2000) referred to containerization as a new technology in the carriage of goods in which goods are packed into a metal box, transported as a unit and unloaded only at the destination (mostly final destination). He stated however that the effects were even more widely felt, since containerization facilitated intermodal transport and so had far reaching impact on stevedoring, ship operations and ports. Today we have seen the evolution of the sixth generation of container ships as the benefits of containerization become more attractive on a worldwide scale, thereby increasing the living standard and facilitating trade expansion. There are over 140 trading nations in the container business embracing 360 ports, each handling in excess of 34,000 TEUs in 2004, generating over 100,000 possible routes.
Containerized cargo seaborne trade has been averaging an annual growth of 10% and reached one billion tons in 2005. Thus, containerized trade is growing twice as fast as world seaborne trade. At the same time the trade matrix has widened with many new countries and cargoes entering the trade. Moreover, as the container fleet became more established, the average size of the vessel deployed increased from 21,000 dwt in 1992 to 31,000 dwt in 2005. This increased ship productivity and exploited the economies of scale. In 2005 the world best port handled an estimated 390 million TEUs. Currently the world fleet of container tonnage is over 3,500 ships which generate over 8 million TEU slots while the global equipment pool totals 21.1 million TEUs. In 2006 the container ship order book stood at 1,200 units which will provide the stimulus for further expansion of 4 million TEU in a four years period. By 2010 port throughput is likely to exceed 520 million TEU with total import/export volumes rising to 122 million TEU. Elsewhere the vessel fleet is likely to total 14 million TEU. Fundamentally, there is no doubt that containerization has been largely responsible for the globalization of trade.
Container types
The range of container types tends to expand annually to meet the increasing market demands on this fast-growing international method of distributing merchandise. Basically, the majority of containers used are built to ISO (International Standards Organization) specification thereby permitting their ease of ubiquitous use on an international scale. Given below are details of some of the types of containers available and their salient features;
CHAPTER THREE
RESEARCH METHODOLOGY
Research Design
To investigate port utilization on the Nigerian economy, an ex-post facto research design was employed using data set for a period of twenty-five (25) years culled from the Central Bank of Nigeria (CBN) statistical bulletin various years, UNCTAD Data Portal, and NPA Annual Report. The study relies on time series data from the maritime sector as well as some macroeconomic variables from the Nigeria economy and these will comprise the dependent and independent variables. While the Augmented Dickey-Fuller unit root (ADF), Ordinary Least Square (OLS) regression analysis, Co-integration test etc., will be used to analyze the data.
Study area
According to the Nigerian Ports Authority the country has six seaports: Apapa and Tin can island port complex in Lagos, the Onne and Port Harcourt ports in Rivers State, the warri port and the Calabar port. But, by many accounts, only the Lagos ports are operating anywhere near full capacity.
The Apapa and Tin can ports account for 70% of imports on average. NPA data shows that the Onne port handled about 80% of Nigeria’s export cargos between 2012 and 2017 but this is because the Onne port is located in an Oil & Gas Free Zone and most of Nigeria’s exports are oil & gas.
Population of the Study
The population of this study covers the ports in Nigeria and the Nigerian economy at large. Ports in Nigeria include Apapa port, Tin Can port, Delta port, Onne port, Calabar port and Rivers port. Data used in the study will be drawn from these ports.
Sample and Sampling Techniques
The sample period for the study covers twenty-five years from (1995-2020). There are two methods of sampling which are probability and non-probability sampling. Thus, non-probability sampling was used in this study. The real gross domestic product (RGDP) is the sample of the dependent variable and the samples for the independent variables are Cargo throughput (CTP) which will proxy for port utilization, Port infrastructural Development (PID) and Gross Registered Tonnage (GRT) serving as control variables.
CHAPTER FOUR
RESULTS AND DISCUSSION
Data Presentation
Table 4.1.1 : Data for the Study
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATIONS
Summary of Findings
This research study assesses the Utilization of ports on the Nigerian economy using annual time series data covering the period 1995 to 2020, the findings from the previous chapter are summarized below:
From the Augmented Dickey-Fuller test for unit root, it was seen that the variables were of mixed order of integration. The ARDL-bounds test approach to co -integration was used and it revealed the existence of a long run equilibrium relationship between the dependent and independent variables. CTP is negatively related to the dependent variable while GRT and PID were positively related to the dependent variable. All the variables were statistically significant. Although, the models shows that there exist a joint significance of the variables of the study.
Conclusion
The need for effective utilization of the ports in Nigeria to the Nigerian maritime sector and the economy at large cannot be over-emphasized. The study revealed that two of the variables that was used as proxies for port utilization was found to be positive and significant at the 1% level. This therefore signals the importance of well utilized ports on the maritime sector and the economy. The port authorities should therefore take into consideration the implications of its policy tools on the maritime sector and the entire economy.
Recommendations
The study therefore recommends among other things the need for policies that ensures a relatively robust port infrastructures and an efficient utilization of same. More so there need for policies that can attract investors to the maritime sector in Nigeria.
Contribution of Knowledge
Researchers who are interested in this research area can look deeper on the individual ports in Nigeria and determine the level of investment that can be attracted to them that can improve the maritime sector and economy at large.
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