New Telegraph

Export: Nigerian, others’ vessels stuck on Chinese waters

There are indications that Nigeria and other countries doing business to China are currently battling with export challenges as an estimated 20 per cent of all container ships with goods are currently stuck on the high sea over COVID-19 lockdown and the war in Ukraine.

A study by Royal Bank of Canada (RBC) indicated that many container ships, including that of Nigeria, heading to the Far East Asia, especially China, Eastern Europe and others had been stuck on the high sea for months as they await port entry to offload their goods. The development is said to be as a result of recent outbreak of another round of COVID-19 in China and the on-going conflict in Ukraine caused by the Russian invasions and sanctions. According to the study, at the Port of Shanghai alone there are 344 ships awaiting berth, a 34 per cent increase from last month, with warehouse- to-warehouse shipping taking 74 days longer than usual between China and the U.S. in goods discharge.

The study emphasised that aggregate times of turnaround at Europe’s three largest ports – Rotterdam, Antwerp and Hamburg – had risen eight per cent, 30 per cent and 21 per cent respectively – with RBC analysts warning that “things are getting worse.” Besides, this latest report has sent wrong economic signals to the global economy. While reacting to the study, the Director-General of Manufacturers Association of Nigeria (MAN), Mr. Segun Ajayi-Kadir, explained that the report on the stuck container ships belonging to Nigerian companies and others would further affect Nigeria’s non-oil export sector earning and massive disruption of production projections by manufacturing firms eyeing exports to China and Eastern Europe. According to him, the RBC’s study is an eye opener for the country’s manufacturing sector and the economy in general, as it will surely help other manufacturing firms, including exporters eyeing these affected regions to make amendments and go back to the drawing board in terms of goods production and exports.

The MAN director-general affirmed that supply side in export of goods items accounted for about 80 per cent of manufacturing firms’ revenue earnings in Nigeria, thereby bemoaning that many of them whose ships are involved would pay high demurrage to the shipping companies, who hired them to the affected places.

Ajayi-Kadir noted that China, Russia and Ukraine were key strategic global trade partners to Nigeria, saying that there would be profound consequences on Nigeria’s economy over the current situation in the worldwide shipping. He, however, lamented that it is sad that things are not looking positive yet for Nigerian manufacturing sector over headwinds in the global economy. The industrialist further stated that the re-emergence of COVID- 19 in China was worrisome in all ramifications as it is affecting shipment and movement of raw materials being used in the manufacturing sector, even as many firms are still counting huge losses incurred due to their inability to import goods from China and others. While speaking on the Ukraine conflict as well, Ajayi-Kadir noted that the manufacturing sector played key role in non-oil export revenue earning in the country and the GDP in general, saying no doubt, the Russian invasion of Ukraine territory and the possible economic sanctions imposed on Russian over its invasion had escalated instability in global trade with Nigeria not left out in the trajectories. According to him, in the wake of the current trend and uncertainty surrounding global crude oil, agric and manufacturing importation over the Russia/Ukraine war, the country’s non-oil export sector earnings will shrink in terms of revenue realised from shipping of manufactured goods abroad this year.

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