By Olabode Opeseitan
PROLOGUE: THE ARGUMENT THAT MISSES THE POINT
Nigeria is once again arguing about the wrong thing.
A country that consumes more than eleven million tonnes of steel each year and produces only a fraction of that has decided that the real scandal is the importation of 120,000 tonnes of British steel for the Lagos ports upgrade. That shipment is barely one percent of the annual import gap. The paradox is almost theatrical. Instead of asking why Ajaokuta remains dormant, the outrage has settled on a stop gap consignment from Scunthorpe.
This is the noise drowning out the signal.
Last week, the Tinubu administration closed a 746 million pound deal to rebuild the Apapa and Tin Can Island ports. Within hours, the initiative was branded a debt trap, a neocolonial gambit, a British subsidy disguised as Nigerian progress. Critics warned of hostile terms, fiscal suffocation, and the impossibility of repeating the Lekki Deep Sea Port model.
The rhetoric is loud. The facts are quiet. And the facts tell a different story.
What follows is a clear walk through the numbers, the official documents, and the arithmetic that critics have chosen to ignore.
1. The Terms, Without the Drama
The loan is a Buyer Credit Facility fully guaranteed by UK Export Finance.
The borrower is the Nigerian Ports Authority, acting through the Ministry of Finance.
The lender is Citibank London.
The terms, confirmed in the March 19 joint statement, are straightforward:
• Tenor of ten to twelve years
• Three year grace period
• Interest rate of SOFR plus 2.75 percent
• Full UKEF guarantee
• A twenty percent UK content requirement worth about 236 million pounds
These are not predatory terms. They are, by African sovereign debt standards, exceptional. Nigeria’s last ten year Eurobond carried a spread of 5.5 percent with no grace period. This facility costs roughly half that.
UKEF’s approval of the Naira as a repayment currency is a privilege other African borrowers rarely enjoy. It shields the federal budget from pure foreign exchange volatility and gives Nigeria a flexibility that is not common on the continent.
Nothing in these terms resembles a trap. Everything resembles a country regaining access to affordable capital.
2. The Asset Pays for Itself
Apapa and Tin Can are not speculative ventures. They are revenue engines.
According to the NPA’s 2025 performance reports, the two ports generated more than one trillion Naira in the first quarter alone and about 2.4 trillion Naira in the first ten months of the year. The upgrade is designed to cut vessel turnaround from seven to ten days to under forty eight hours.
The National Bureau of Statistics estimates that every idle day costs the economy about 45 billion Naira in inventory carrying costs. A four day improvement adds roughly 180 billion Naira to GDP each year. Customs automation is projected to raise collection efficiency from 78 percent to more than 95 percent, adding about 300 billion Naira annually.
The Ministry of Finance projects that incremental revenue will cover more than sixty percent of annual debt service.
This is what financiers call a self liquidating asset.
3. The Lekki Model Was Not Magic
Lekki Deep Sea Port succeeded because three conditions aligned:
• A site with strong cash flow potential
• A government willing to cede operational control
• A regulatory environment stable enough for long term investment
Its financing structure, which combined equity from China Harbour Engineering Company and Tolaram with a 629 million dollar loan from the China Development Bank, was not a template that can be photocopied.
The Minister of Marine and Blue Economy has already said the Lekki BOOT model will be pursued for Onne, Warri, Calabar and Port Harcourt. But replication is not magic. It is work, plus the peculiarities of each project. Every port has its own revenue profile, its own risk matrix, and its own investor appetite. There is no universal shortcut.
4. The Hardest Part Was Not Signing the Loan
Financial close is where most African infrastructure dreams stall. It often requires a sequence of institutional checks that many projects struggle to meet. These include IMF and DMO debt sustainability assessments, environmental and social approvals from NESREA, National Assembly guarantee ordinances, independent technical due diligence, and currency risk structuring. The process routinely takes twelve to eighteen months and fails more often than it succeeds.
The failures are not abstract. They have price tags:
• Zambia lost a 500 million dollar World Bank port rail connector loan in 2024
• Mozambique lost a 1.2 billion dollar SACE backed electrification facility in 2023
• Guinea lost a 900 million dollar AfDB deep water port loan in 2025
• Chad lost a 300 million dollar AFD river port facility in 2024
• Zimbabwe lost a 450 million dollar EXIM China rail port upgrade in 2023
In each case, the need was real, the plans were drawn, and the capital never arrived. Nigeria’s ability to close a 746 million pound UKEF backed facility is the exception, not the rule.
5. The Steel Debate That Misses the Real Crisis
Nigeria’s steel deficit is well documented. The country consumes more than eleven million tonnes a year and produces only about three million. The rest is imported. The 120,000 tonnes of British billets represent less than one and a half percent of the annual import gap.
They are a scheduling necessity, not a structural betrayal.
The real scandal is that Ajaokuta, designed for two million tonnes a year, remains dormant while Nigeria borrows to rebuild its ports. The British Steel contract is not the problem. Ajaokuta is.
6. The Benefits That Outlive the Loan
Based on NPA projections for the western corridor upgrade, the combined rehabilitation and concessioning process is expected to generate:
• Between 2,000 and 3,000 direct jobs across civil works, dredging, terminal operations and customs digitisation
• Between 10,000 and 15,000 indirect jobs in trucking, warehousing, freight forwarding and ancillary logistics
The broader economic benefits remain substantial:
• A four day reduction in dwell time adds about 180 billion Naira to GDP each year
• Improved customs efficiency adds about 300 billion Naira to federal revenue
• Lagos regains its position as the West African transshipment hub
• The debt service to revenue ratio stays below the 15 percent DMO threshold
This is not cosmetic infrastructure. It is structural reform.
EPILOGUE: THE ARITHMETIC THAT ADDS UP
A country once told it could not be trusted with capital has secured a fully guaranteed facility from one of the world’s strictest export credit agencies. The loan does not loom like a sword. It sits inside a ledger that already shows a surplus.
The only contradiction worth outrage is that three billion tonnes of iron ore lie untouched while 120,000 tonnes of steel sail in from Scunthorpe.
The ports will pay for themselves. The steel paradox will not fix itself.
Obviously, this is not a trap. It is progress with a price tag the country can afford.
Opeseitan is a business leader and public affairs analyst.
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