Boston, MA -- (ReleaseWire) -- 03/11/2014 -- Although we are sticking with our view that the Nigerian economy will grow by a robust 7.0% in 2014, we note that downside risks have increased over recent months. Specifically, ructions within the ruling party and the uncertainty surrounding the identity of the central bank governor are both issues which could destabilise the economy. That said, the country's shipping sector is set to perform well over the course of 2014, led in tonnage throughput terms by Port Harcourt, which is set to enjoy double-digit growth. Furthermore, the Port of Tincan Island is also expected to record healthy growth of just under 10%, while the Port of Lagos will also see healthy year-on-year (y-o-y) growth of 6.70%.
Nigeria registered a rise of 6.81% year-on-year (y-o-y) in GDP in Q3 2013, compared with 6.18% y-o-y in Q2 2013, according to the Abuja-based National Bureau of Statistics. The rise is attributed to an ease in the oil industry's contraction and an increase in agricultural output. Meanwhile, crude oil production grew from 2.11mn barrels in Q2 2013 to 2.26mn barrels in Q3 2013, despite disruptions in the country's oil export. 'Supply disruptions continue to hamper output in the oil sector,' the statistics bureau said (Bloomberg). This is detrimental to the country's shipping sector and plans are afoot to arrest this situation over the mid to long term.
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Headline Industry Data
- 2014 Port of Lagos tonnage throughput is forecast to increase by 6.70%.
- 2014 Port Harcourt tonnage throughput is forecast to increase by 10.47%.
- 2014 Port of Tincan Island throughput is forecast to increase by 9.74%.
- 2014 trade growth forecast at 7.75%.
Key Industry Trends
AP Lekki Port Finally Gets Go Ahead - The deep sea port at Lekki, which has been on the back burner for a decade, has finally been given the go ahead. Operated through a joint venture between International Container Terminal Services Inc (ICTSI) of the Philippines and Singapore-based Tolaram Group, the contract will be a 21-year build, operate and transfer one for the container terminal in Nigeria's Lagos Free Trade Zone. At an overall investment of US1.4bn the new port terminal, some 80km from Lagos, is set to boast an annual capacity of 2.5 million TEUs when it opens in 2016.
Box Throughput Boom Spurring Port Expansions - APM Terminals (APMT)'s West Africa Container Terminal (WACT) in Nigeria, was visited by its largest ever vessel towards the end of 2013, the 4,500TEU Maersk Copenhagen, and is a sign of the rapid container throughput growth at the country's ports. BMI believes that port expansions in West Africa are a developing trend on the back of strong macroeconomic conditions in the region that are spurring demand for containerised goods.
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