1.0
INTRODUCTION
Maritime logistics activities have to do
with everything that involves the carriage of seaborne trade in ships through
the seaports and the performance of planning, handling and documentation
activities required to transit the trade through the seaports to the
consignees’ warehouses and hinterland markets. The maritime industry is greatly important to
every country’s economy and economic activities. (Wanucha,
2014) “For whosoever commands the sea commands the trade; whosoever commands
the trade of the world commands the riches of the world, and consequently the
world itself”, wrote English adventurer Sir Walter Raleigh in 1829. Today,
ships transport 90 percent of international trade, and worldwide shipping
volume is expected to double by 2025. Maritime transport provides the cheapest
and the most effective way to move huge volumes of goods and raw materials
around the world.
Adewale (2015) posits that maritime activities have a very
important roles to play in the alleviation of poverty and creating wealth
because they constitute an important source of income and employment for many
people in maritime nations of the developing world, including Nigeria, in the
form of supply of seagoing personnel, labour for ship
recycling, ship owning and operating, ship building and repairs, as well as
port services, among others. Therefore, if maritime transport and the
associated logistical operations are threatened or become terribly in-secured,
it can have serious impact on the nation’s economic growth.
The severe acute respiratory syndrome coronavirus 2 (SARS-Cov-2) which
is popularly known as covid-19 is an infectious disease caused by the
SARS-Cov-2 virus. The first known case was identified in Wuhan, China, in
December 2019. The illness caused by SARS-Cov-2 was termed COVID-19 by the WHO,
the acronym derived from “coronavirus disease 2019.” According to WHO(2020);
most people infected with the virus will experience mild to moderate
respiratory illness and recover without requiring special treatment. However,
some will become seriously ill and require medical attention. The COVID-19
pandemic affected about 206 countries of the world with Nigeria inclusive and
resulted to the death of about 5,163,036 ( Worldometers, November 2021). According to NCDC
(2020); the first case of COVID-19 in Nigeria was discovered in Lagos state on
the 27th of February 2020 by Virology Laboratory of Lagos University Teaching
Hospital. With the discovery of the
first case of COVID-19 in Nigeria, the government took actions to contain the
spread of the pandemic which has already been ravaging countries like China,
Italy and many other countries. The actions taken by the government to reduce the
spread of the virus includes:
(i)
Sensitization of the
public about the virus.
(ii)
Proposing of
different prevention techniques.
(iii)
Creation of
different agencies to help monitor the spread of the virus and work toward
reducing the spread.
(iv)
Enforcing of
lockdown and compulsory sit at home measures to reduce the interaction of the
public.
The lockdown and sit
at home measures mostly, impacted on trade, businesses and organizations
including the maritime and port logistics sector globally. This is because it
led to the closure of many trading borders and hindered the ease of changing
onboard crew as well as the cost of crew change across the continents of the
World. Vessels entering major port from high risks zones were also placed on
quarantine and maritime and port workers were subjected to work remotely. This
led a serious disruption of the shipping and maritime sector, and the overall global
supply chain and logistics sector.
It is important to note that local Firms and government also involved in
shipping export and import trade. Both shipping export and import trade
stimulate the economy and guarantees economic growth. With the outbreak of the
COVID-19 pandemic however, economic activities in the maritime sector were crippled
worldwide, owing to the lockdown measures in major economies of the world. The
implication is that the circular flow of income has been significantly
constrained since a reasonable proportion of the productive factors are
currently lying idle. There is also a significant reduction in international
trade following the closure of seaports and airports to curtail the spread of
the pandemic (Inegbedion, 2020).
Due to the lockdown of the country, import and export activities were
unable to take place, and Nigeria is a country whose economy is heavily
dependent on export of crude oils. This situation resulted in the decrease in
the price of crude oil which had a huge negative impact on the economy. The revenue that is usually gotten from the
payment of import duties by importers was also reduced as importers were unable
to import goods from other countries. The route for major importation and
exportation of cargoes is through the sea. The effect of the covid-19 lockdown
can be said to have resulted to a decrease in the flow of activities at the
ports and the maritime logistics sector.
According to UNCTAD (2020); the coronavirus disease (COVID-19) triggered
a global health and economic crisis with wide-ranging implications for maritime
transport and trade. Restrictions introduced in response to the pandemic have
caused disruptions affecting ports, shipping and supply chains. Various
industries faced challenges along their supply chain such as raw material
shortages, lead time issues, ocean blank sailings, port closures, and reduced
working hours at ports, equipment and labour
shortages, as well as truck/transport capacity constraints. These obstacles
undermine the smooth movement of trade flows and supply chain operations and
can significantly erode the transport services trade liberalization and trade
facilitation gains achieved over the years. The lockdown which was introduced
as a measure to control the spread of coronavirus disease (covid-19) also
prevented individuals and firms from engaging in international trade which
resulted to a decrease in the number of container and general cargo vessels
visiting the ports. It is therefore important to investigate the impact that
the Covid-19 outbreak had on the maritime logistics and port sector in Nigeria
in order that proactive steps by taken in line with
empirical findings to curtail the economic effects and impacts of such, in the
case of future occurrences.
2.0
AIMS
AND OBJECTIVES
The aim of this
study is to investigate the effects of the coronavirus disease (COVID-19) on
Nigerian maritime logistics sector activities.
The objective of this project is to discover the following;
i.
To compare the
inward container traffic (TEU) of Nigerian ports during the pre-covid-19 and
covid-19 era.
ii.
To compare the
outward container traffic (TEU) of Nigerian ports during the pre-covid-19 and
covid-19 era
iii.
To compare the cargo throughputs (TEU) of
Nigerian ports during the pre-covid-19 and covid-19 era.
3.0
BRIEF
REVIEW OF EMPIRICAL LITERATURE
Studies by Ozili
(2020a) examined “COVID-19 in Africa: Socio-economic impact, policy response
and opportunities in Africa.” The design employed was discourse analysis. The
results show that the coronavirus pandemic has had a significant effect on
African countries. The pandemic is having its toll on economic activities and
social interaction through the safety measures put in place to curtail the
pandemic, such as physical distancing. A major implication of the study is the
influence of social policies on the social and economic well-being of citizens,
especially the drastic reduction in economic activities. Teachout
and Zipfel (2020) investigated the economic impact of
COVID-19 lockdowns in sub-Saharan Africa.
They sought to quantify the impact of lockdowns on people's livelihoods.
Consistent with the outcomes of recent surveys of income streams under
lockdowns, assumptions were made on the likely impact of COVID-19 containment
measures on various sectors in sub-Saharan Africa. They hypothesise that
workplace closures occasioned by the lockdown are likely to have a severe
effect on the economy.
In another study, Thurlow (2020) looked at how the COVID-19 lockdowns are
imposing substantial economic costs on countries in Africa. He presents an
assessment of the economic effects of COVID-19 in some African countries with a
specific focus on their varied effects on different sectors and types of
households. The challenges for governments in responding to the crisis and progressing
to policy formulation and implementation for medium and longer-term economic
recovery are indicated. Dzobo et al. (2020) examined
the “COVID-19 pandemic situation in Zimbabwe and viewpoints on important
considerations and strategies for lifting the lockdown” given the likelihood
that socio-economic pressures will challenge the sustainability of the
lockdown, owing to the possible consequences of lockdown on the economy.
Okeleke (2020) researched on the “Results of Coronavirus
(COVID-19) on the Nigerian Maritime Workers.” The methodology adopted in the
paper was an in-depth study of all literature materials dealing with the
history of the COVID-19 pandemic, its results on world economy and view on how
it affects the Nigerian shipping industry and the maritime and aviation
workers. The result showed that COVID-19 pandemic is an economic woe to the
global market and economy, it led to the collapse of the global economy in many
ways. Okeleke & Aponjolosun
(2020) performed “ A study on the effects of COVID–19
pandemic on Nigerian seafarers”.
They sought to discover the effect of the COVID-19 pandemic on Nigerian
seafarers during the period of the pandemic. The research showed that the
lockdown which is a measure adopted to contain the COVID-19 had a significant
effect on seafarers get reliefs from the port.
Organisation of Economic
Cooperation and Development (2020) observes that the containment measures put
in place to check the spread of the COVID-19 pandemic have led to the temporary
shutdown of many businesses, widespread financial market turmoil, an erosion of
confidence, heightened business uncertainty, as well as restrictions on travel
and mobility. The major impacts are: decline in the level of output of between
twenty percent (20%) to twenty-five percent (25%) in many economies, with
consumers’ expenditure potentially dropping by around one-third. This has
adversely affected GDP growth in most countries within service sectors, retail
sectors, non-essential construction work and the manufacturing sector; with the
manufacturing sector experiencing the least effect since most manufacturing
firms are less employment-intensive.
Ruzvidzo (2020) observed
that the economic impact of COVID-19 on African cities is likely to be acute
through a sharp decline in productivity, jobs and revenues. COVID-19 is
expected to have severe employment effects in urban areas. The urban-based
sectors of the economy (manufacturing and services) which currently account for
64% of GDP in Africa are expected to be worst hit by the COVID-19 induced
lockdown, leading to significant losses in productive jobs (ECA, 2020).
Specifically, most “Africans in informal urban employment (approximately 250
million) are expected to be at risk. Also vulnerable to the COVID-19 pandemic
are firms and businesses in the cities, especially the small and medium
enterprises, which account for about eighty per cent (80%) of employment in
Africa” (ECA, 2020). These risks are compounded by a likely hike in the cost of
living, which is expected as shown for example by some initial reports of up to
100% increase in the price of some food items in some African cities (Ruzvidzo, 2020).
Adekola (2020) examined the
“Perspectives on the impact of the COVID-19 pandemic on the global and African
maritime transport sectors, and the potential implications for Africa’s
maritime governance.” The paper examined the impacts of the pandemic on the
MTS, at the global and African levels, and discussed what Africa’s priorities
for its MTS should be in the post-pandemic era. The short-term impacts of the
pandemic are identified as including a drop in the volume of trade transported
by maritime shipping; disruptions due to re-routed shipments; maritime defaults
and bankruptcies; and stranded seafarers. To understand the longer-term
impacts, the paper analyzes the pandemic’s effect on five critical trends
facing the MTS globally, viz, trade tensions,
geopolitical developments, structural disruptions, regulatory pressures, and
environmental incidents. In the African context, the paper highlights that with
a mere 4% share of global container port traffic and a 7% and 5% share,
respectively, of international maritime exports and imports (measured by
tonnage), Africa’s significance to the global MTS is not huge. Hence, an impact
analysis based on the global MTS trends would be premature. The paper concludes
that Africa’s MTS in the post-pandemic era should focus on improving
operational performance and sustainable development. Africa should also improve
maritime governance to ensure that desired developmental outcomes are realized.
It is argued that adopting a multi-stakeholder governance framework will be
most appropriate for the continent’s MTS in the post-pandemic era. Further
research is however needed to identify how a multi-stakeholder governance
framework should be adapted and deployed to fit different African environments.
Inegbedion (2021) examined the
“Impact of COVID-19 on economic growth in Nigeria: opinions and attitudes.” The
study examined the impact of COVID-19 on economic growth in Nigeria: Opinions
and attitudes. The purpose was to ascertain respondents' perception of the
effect of the COVID-19 pandemic on economic growth in Nigeria. The
cross-sectional survey research design was employed and a mix-method was used
in collecting the research data. Results of the respondents’ opinion indicated
that the COVID-19-induced lockdown has significantly constrained economic
activities and the circular flow of income. Lastly, the perceived reduction in
the circular flow of income in the wake of the COVID-19 lockdown has negatively
impacted on economic growth in Nigeria. The need for policymakers to take
drastic measures to curtail the pandemic and forestall a recession that may be
consequent upon the pandemic was suggested.
Maryla et al. (2020)
examined “the potential impact of COVID-19 on GDP and Trade” by utilising a
standard global computable general equilibrium model to model the shock as:
Underutilization of labour and capital, an increase in international trade
costs, a drop in travel services, and a redirection of demand away from
activities that require proximity between people. The results indicate
significant declines in GDP in both developing industrial countries. The
declines were observed to be approximately 4 per cent below the benchmark for
the world. The outputs of domestic services as well as traded tourist services
are observed to be worst hit by the pandemic lockdown.
Lucas (2020) investigated
the “Impacts of COVID-19 on inclusive economic growth in middle-income countries.”
The design was a literature review of studies on coronaviruses. His findings
indicate that COVID-19 is likely to cause much greater economic damage than any
recent disease outbreak or economic crisis as its economic impacts are broader
and much more severe than most of the previous crises. More worrisome is the
fact that COVID-19 has exerted significant disruptions on global value chains,
which currently account for above two-thirds of world trade; and an end to the
disruptions is not in sight. An extract from an Oxford University study
revealed that COVID-19 has brutalised communities by unleashing infection and
death indiscriminately across the world (Shretta,
2020). IMF forecasted that the global economy is likely to contract by -3% in
2020 and that “the cumulative loss to
global GDP over 2020 and 2021 from the pandemic crisis could be around 9
trillion dollars, making it the worst economic downturn since the Great
Depression” (Gopinath, 2020).
Banwo and Ighodalo (2020) researched on “The Impact of the Covid-19
Pandemic on the Operations of Marine Vessels in the Nigerian Oil and Gas
Industry.” The study evaluated the impact of the COVD-19 pandemic and attendant
regulatory actions in relation thereto on the operations of marine vessels
which support upstream oil & gas activities in Nigeria. It is pertinent to
note that like past epidemics and pandemics, most of the economic impacts of
COVID-19 are consequences of the measures taken to curtail the spread of the
disease rather than a direct effect of the disease itself (Inegbedion,
2021). The study suggested that as effects of the COVID-19 pandemic across
various sectors continue to evolve with far reaching consequences, particularly
for marine vessel operators who service the oil and gas industry in Nigeria. It
is therefore important that operators stay abreast of the latest local and
international developments and obtain appropriate advice on how to mitigate the
myriad of issues which will continue to arise in the coming months.
Amuka et al (2021) examined
the “business challenges of covid-19 pandemic and potential strategies of
sustainability in Nigeria maritime sector.” The research provided a timely and
study to understanding some areas in maritime industries with practical
insight. It provided a concise review of challenges in maritime operation and
management, impact of disruptions and possible response to be in full business.
The study recommends that required collaboration and coordination of all
stakeholders to ensure the reorganization of operation and working conditions
due to sanitary protocols. It suggested that there should be a digital
transformation and technological solutions that ports and shipping operators
will adopt to lay ground for a more efficient and effective future. There will
be going back to old ways of doing business and further development of
artificial intelligence and the internet of things will accelerate the pace of
change towards a fully digital world.
Ajayi (2020)examined
“maritime contracts: impact of covid-19 on time charter parties in the Nigerian
maritime sector.” the focus of this research is on the effect of COVID-19 on
time charter parties taking cognisance of the fact that most vessels employed
in the cabotage trade and in the oil and gas market
in Nigeria are on time charter party. The study was able to show situations in
which renegotiation on the contract can be considered in the event of force
majeure, late delivery and late redelivery. The study suggested that the easier
route for a party asserting force majeure with respect to a time charter party
in the Nigerian maritime sector would be to rely on the impact of measures by
different states in the ‘land domain’ (such as the effect of closure of coastal
border of some coastal States on crewing, equipping and supplies to vessels
under time charter in the Nigerian maritime industry) on the performance of
maritime obligations under existing time charter parties. It also suggests that
the party seeking to rely on COVID-19 as a force majeure event must also comply
with the notice requirement in the charter party. On the event of late delivery
of the vessel, depending on the facts and circumstances, the charterer has the
option to suspend the charter where there is a force majeure event. In sum,
whether the owner can rely on force majeure in a case of late delivery, or the
charterer is entitled to cancel the charter, or in the case of redelivery, the
charter can rely on force majeure or the owner entitled to damages for
late-redelivery will be based on the facts and circumstances of each case.
Due to the widespread worry
that the COVID-19 pandemic has caused, numerous research have been conducted on
the issue in the short time that the pandemic has existed. The majority of
these empirical studies did not investigate the significance of the disparities
in volumes and tonnages of seaborne trade handled by ships and ports in the
Nigeria maritime industry in the pre and post Covid-19 eras. This the gap that
this study is set to close by comparing the seaborne trade handled in the ports
in the pre and in Covid eras.
4.0 METHODOLOGY
The study used an
ex-post factor research design in which secondary data was used for the study.
Secondary data on the seaborne trade handled in the maritime and port logistics
sector in the Covid era and pre Covid
era were proxied by the TEU handled in the seaports
over the period. The data was sourced
from the Nigeria ports authority (NPA). The data obtained was analyzed by using
the difference of means statistical test to compare the trade flow through the
seaport over the two periods. The Calabar port was
used as case study.
5. RESULTS AND
DISCUSSION
The result
shown in table2, indicates that the mean of the shipping export container
traffic handled during the precovid-19 era is 326505.00TEUs with the standard
deviation of 221822.23 while the mean of the shipping export trade (container
traffic) handled during the covid-19 era is 160761.00TEUs with the standard
deviation of 29196.44. By implications, more export trade was handled by the
maritime logistics sector in Nigeria in the pre covid
era than in the covid-19 era. The difference of means test shows a mean
difference of 165744.00TEUs in favour of shipping export trade handled in the
pre Covid-19 era. This is significant and corroborates the findings of Nwokedi et al, (2021)
6.0 CONCLUSIONS
The COVID-19
and the ensuing lockdown have impacted on the global maritime sector in
different ways which have resulted to several studies and researches that has
been carried out by several scholars and academic researchers in the maritime
industry in order to discover the extent of the impact and also proffer
solutions on recovery, and that is also the major objective of this study. The
conclusion of this study include that the cargo throughput of Nigerian ports
significantly increased during the period of COVID-19 when compared to the
cargo throughput before the COVID-19. The inward container traffic of Nigerian
ports during the COVID-19 was also significantly greater than the inward
container traffic before the COVID-19. The outward container traffic of
Nigerian ports during the COVID-19 decreased compared to the outward container
traffic before the COVID-19.
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