An open economy is mostly free from trade barriers where exports and imports form a large percentage of the GDP. No economy is totally open or closed in terms of trade restrictions, and all governments have varying degrees of control over movements in the factor or product markets. The degree of openness of an economy determines a government’s freedom to pursue economic policies of its choice, and the susceptibility of the country to international economic cycles. This is truer in this era of globalization which has seen the world become a global village.
International Trade is a major economic growth driver, trade enables a nation to export what it has the comparative or competitive advantage in producing and import what it lacks comparative or competitive advantage in producing. Open economies are able to harness the benefits of trade to enhance their productivity and competitiveness. It is in this light that the Federal Government of Nigeria in 2014 approved the Inland Container Nigeria Limited Bonded Terminal for upgrade to status of an Inland Dry Port with 5,000 TEU (Twenty-foot Equivalent Unit) capacity which has recently been completed. The Kaduna Inland Dry Port is the only one among the six inland depots that is ready for business with its designation as “Port of origin and final destination by the Federal Government. (Gazette no 60. Vol.102 of May 26, 2015).
The originally designated Dry Port and Truck Transit Park (TTP) is an initiative of the Federal Government aimed at diversifying the economy and making international trade more competitive. The Dry Port and TTP projects were conceived as part of solutions to the problem of hinterland shippers’ inadequate access to seaports and frequent congestion. The frequent congestion at seaports had led to the loss of cargoes in transit, carnage and accidents. The Federal and Kaduna State Governments are providing infrastructure and facilities at the Dry Port which is currently operating at its temporary site in Kakuri near the old Railway Station.
The importance of Kaduna as the former administrative capital of the defunct Northern region, a centre of commerce and industry drawing huge agricultural trade in local and export volumes, and a transportation/logistics hub all combine to make the state a suitable choice for this viable inland dry port. To ascertain the facility’s readiness for commissioning and to ensure conformity to standards, Minister of Transportation Rotimi Amaechi accompanied by the Governor of Kaduna State Mallam Nasir Ahmed El-Rufai and other top Government functionaries embarked on a final inspection on the 20th of June 2017. President Muhammadu Buhari is scheduled to commission the Kaduna Dry Port on Thursday 4th of January 2018. The Kaduna Dry Port will receive cargo from Apapa Port Lagos through the road or railway. As a port of origin and destination exporters and importers can and will export and import directly from or into Kaduna.
The Kaduna Inland Dry Port has the capacity to provide services for unloading of imported container cargoes for breakdown to smaller tons per consignee, as well as the consolidation of export cargoes for onward shipment to overseas destination. For a start an average of 50 containers currently arrive the Kaduna Inland Dry Port every week. The Inland Dry Port has the potential benefits of not only reducing transport cost and bringing shipping to the door steps of the shippers, but to also generate employment opportunities in the region of about 5,000 jobs to the teeming people and boosting the local and national economy.
The Kaduna Inland Dry Port is also tied to the functionality of the Abuja-Kaduna Railway Transport System which was inaugurated in July 2016. A study showed that of the 2.5 million tonnes of Cargoes destined for the North West, 57% is for Kano State while 35% is for Kaduna and 8% for the rest of the states. With the designation of only Kaduna as the port of Origin and Final Destination, the Kaduna Dry Port is sure to attract heavy traffic. Total Cargo through put is estimated to rise to 165 Million tons in 2020 while containerized cargo through put is expected to grow from 1.025 M in 2010 to 2.2 M in 2020. Kaduna Inland Dry Port is likely to attract 80% of all Kaduna State bound cargoes and 25% of all North Western States bound cargoes. It is estimated that by 2020, total container through put for Kaduna Inland Dry Port will grow to 15,440 TEUs.
Based on past analyses the Kaduna Dry Port remains an attractive investment opportunity and a financially profitable venture. The current administration in Kaduna State has Infrastructure, Transportation, Manufacturing, Agriculture, Agro allied, Solid Minerals, Housing, Waste Management and Job creation as priority sectors, with very friendly policies to attract investments to the state; these priority sectors invariably have direct bearing to the dry port. The dry port can even service our neighbouring land locked countries like Niger making Kaduna a regional hub.
The Kaduna Inland Dry Port will reduce congestion at our nation’s seaports, improve transport infrastructure, and facilitate increased trade and economic activities especially in the hinterland and revitalize the once strong Nigeria’s agricultural export. This therefore is a major boost to infrastructural development, ease of doing business and a major catalyst to diversification of the Nigerian economy and easing of trade. This will improve Nigeria’s degree of openness which measures the extent to which the Nigerian economy depends on trade with other countries or regions, e.g. the ratio of the sum of total imports and exports to GDP. If our economy must converge and benefit optimally from globalization, the main thrust is to make Nigeria’s economy more competitive with greater ease of doing business which is what the Kaduna Inland Dry Port among many others seeks to achieve.
Dabo is the Permanent Secretary, Kaduna State Ministry of Works, Housing and Transport