PRODUCTIVITY AND EFFICIENCY IN NIGERIA’S SEAPORTS: A PRODUCTION FRONTIER ANALYSIS

AUTHORONWUEGBUCHUNAM, DONATUS EBERECHUKWU (PhD)

AFFILIATION: DEPARTMENT OF MARITIME MANAGEMENT TECHNOLOGY, FEDERAL UNIVERSITY OF TECHNOLOGY, OWERRI NIGERIA

Majority of studies in the port sector have linked productivity growth with port reforms. On determinants of efficiency in the sector; while some empirical research works found significant relationship between ‘type of ownership structure’ (public vs. private terminal operators) among other factors, others found no significant relationship. The majority of such studies featured Data Envelopment Analysis (DEA) and Stochastic Frontier Analysis (SFA) models as analytical framework. This is in spite of limitations associated with DEA and SFA models. In this research we fill the gaps in existing research by ascertaining the effect of port ownership structure involving foreign private and indigenous private terminal operators on seaport efficiency. This is carried out simultaneously with productivity assessment of Nigeria seaport using a relatively novel modelling framework: Translog Output-Oriented Distance Function model. Using a panel data set covering a period of twenty three years (1991-2013), we calibrated a Translog-output distance function model which incorporates the best features of the traditional models: DEA and SFA. Based on the error structure of the Translog model, we also calibrated an efficiency model. The Two models: Translog distance function and efficiency models were applied in assessing the effects of the spate of port reforms embarked by the Federal government of Nigeria. Results indicate that the port concession policy has induced a productivity growth in the ports; with the index averaging about 1.02 per annum in the last twenty three (23) years. This growth is linked to two main sources: efficiency change and technical change. In addition, it was also found that proximity to economic activity, size of terminal and type of port operators are significant factors that affect efficiency of our seaports. Assessment of relative efficiencies of the ports also indicates that only sixty-three (63%) of ports concessioned to private terminal operators and which are located in the Western part of Nigeria attained optimal efficiency levels. The study recommends among others that port regulator should be appointed by the government to monitor activities of the terminal operators, ensure they fulfil their contractual obligations in the area of investments in cargo handling facilities and provision of quality ports services. The government should also improve ports’ landside infrastructure. The latter is expected to strengthen the competitive position of ports that face barriers of distance to markets or industrial centres.

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