2013-02-28 12:24:41 - Recently published research from Business Monitor International, "Nigeria Shipping Report Q2 2013", is now available at Fast Market Research
Nigeria benefits from having immense oil reserves, making it the leading African supplier of crude and keeping its current account surplus wide. BMI expects that on the back of continued strong exports - bolstered by the continued elevated price of oil - Nigeria's balance of payments position will remain healthy, with a current account surplus surpassing US$26bn, or about 7.5% of GDP, in 2013. The country is, therefore, well placed to withstand the global economic headwinds currently circling.
We believe that government projections of both revenue and expenditures are too high, and we are projecting a federal budget deficit of 2.5% of GDP in 2013, compared to the government's projection of 2.2%. Despite the discrepancy, this nonetheless is an improvement compared
to 2012, when the shortfall was 3.0% of GDP according to our estimates.
Full Report Details at
Nigeria's second largest trade partner, India, appears to be keeping a keen eye on Sub-Saharan Africa (SSA). While imports from India have also grown strongly, expanding by an annual average of 24% between 2007 and 2011 to reach US$19.4bn, the value of SSA exports to India in 2011 was almost double, standing at US$36.7bn.
The lion's share of this trade is heavily focused in a small number of fuel-rich countries, with producers Nigeria, South Africa and Angola accounting for around 90% of total SSA exports to India in 2011. With BMI's Power team forecasting Indian electricity consumption to grow at a rate of over 6% per annum over the next decade and persistent domestic power shortages, we expect energy security to remain a key priority for New Delhi in its Africa strategy and remain the biggest single dynamic driving Indo-African trade.
Nigeria's shipping industry is also expected to perform strongly between 2013 and 2017, with the Port of Lagos set to remain the country's largest during this period in terms of tonnage throughput. In 2013, the largest annual growth is set to occur at the Port of Tincan Island (10.79%), while Nigeria's other main ports are all set to enjoy a profitable 2013 - Lagos (6.48%) and Harcourt (5.18%).
Headline Industry Data
* 2013 Port of Lagos tonnage throughput is forecast to increase by 6.48%.
* 2013 Port Harcourt tonnage throughput is forecast to grow by 5.18%.
* 2013 Port of Tincan Island throughput is forecast to increase by 10.79%.
* 2013 trade growth forecast at 7.40%.
Key Industry Trends
APMT Commits To Nigeria
BMI believes that Nigeria will need considerable extra container-handling capacity in the coming years as its economy and population continue to grow rapidly. Netherlands-based major terminals operator, APM Terminals (APMT), is looking to serve this need and is committing itself to Nigeria through its project to develop a new deep-sea port outside the commercial capital Lagos. APMT already operates the Apapa Terminal at the Port of Lagos and this new facility is in addition to current expansion works there.
CHEC Wins Apapa Port Contract
China Harbour Engineering Company (CHEC) has secured a contract for the Apapa Port project located in Nigeria it was reported at the end of 2012. The US$78mn contract entails the construction of a container and bulk terminal, ro-ro berths, basin dredging, follow-up road yards, terminal office buildings and more.
Nigerian Ports Among World's Most Expensive
Nigerian ports are currently among the most expensive to do business in the world, a situation that has been put down to the high and arbitrary charges being levied by concessionaires, according to the Nigerian Shippers' Council (NSC). Operators may begin to be put off by the expensive business environment, which could end up jeopardising Nigeria's plans to become a maritime hub in the region.
Key Risks To Outlook
We believe that the new Lekki Container Terminal to be developed by Philippines operator International Container Terminal Service (ICTSI) in Nigeria will go a long way to helping the African country address the ever-growing demands placed upon it by its rapidly expanding economy and population growth. Although a number of terminals are being developed in the region at present, with an eye to capturing transhipment trade, the expected demand for containers in Nigeria should be sufficient to support the new terminal in itself.
Instances of piracy in the Gulf of Guinea remain a real problem to shippers operating in the area, with the nations most affected being Nigeria, Cameroon, Equatorial Guinea, Benin, Gabon and Togo. Strategies to combat the scourge of piracy are currently being worked on with the latest being a report by the International Crisis Group. The group's Central Africa project director Thierry Vircoulon said: 'The weakness, and sometimes general inadequacy, of maritime policies in Gulf of Guinea states, and the lack of cooperation between them have allowed criminal networks to diversify their activities and gradually extend them away from the coast and out on the high seas, from the Niger delta to Cote d'Ivoire.'
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