02 Apr 2016

'Good ports are critical for Africa’s growth

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Nearly 90% of international trade from Africa happens by sea, yet alack of infrastructure and long ship waiting times continue to hamper productivity for the African maritime sector. A wave of new investments is set to change this and drive growth over the medium term, according to a new report from research consultancy SeaIntel.
Cameroon is looking to build a brand new port at Kribi, which would be the only deep sea-port in central Africa. Last week, authorities announced that the second phase of construction was set to kick off, with a $675 million financing arrangement secured with the Export-Import Bank of China.
Meanwhile, neighbouring Gabon is looking to upgrade its port infrastructure. Two major ports, Owendo and Port-Gentil, handle 80% of Gabon’s imports and exports.
Further on in West Africa, the Port of Lome in Togo has made significant advances in improving capacity and efficiency. Last January, shipping line MSC launched an eleven vessel service via Port of Lome to and from Asia. Seaintel data suggests that this significantly “ramped up” large scale West African transhipment traffic over the past year.
The race is on

Meanwhile, the race to be East Africa’s gateway is on between Kenya and Tanzania. Kenya is looking to upgrade Mombasa port and improve efficiency; last year Mombasa processed 1 million containers (or TEUs; twenty-foot equivalent units are the industry standard) in a year for the first time.

But Tanzania is firmly in the race too, with construction of a new port at Bagamoyo, north of Dar es Salaam, having broken ground in October. Tanzania says it will be the biggest port in East Africa; it is hoped the new facility will handle double the capacity of the one in Dar es Salaam.
The project will cost about $11bn, with much of the funding for construction coming from a government-owned Chinese investment firm. It will take two years to complete, and includes building rail and road links.
With such a high dependence on external trade, good ports are critical for Africa’s growth. The World Bank’s figures suggest that delays in ports add roughly 10% to the cost of imported goods, more than tariffs in many cases.
For exports the damage is worse. In northern Mozambique, the banana industry could be 20 times larger if Nacala—a natural deep-water port—were as cheap as those in Ecuador, reckons Jake Walter of TechnoServe, an NGO. Instead, perhaps 80% of containers leave Africa empty, says an article in the Economist.
‘One-in-two chance’

“Productivity at the quayside [has] improved at many terminals. However, actual container deliveries perform poorly with less than a one-in-two chance that your cargo will arrive on time at the customer,” said Victor Shieh, Editor-in-Chief at SeaIntel.
But getting ports right will go a long way in improving trade efficiency, as well as raising revenues for governments. Ports sequester trade where it can be regulated and taxed: in Kenya, for example, some 40% of government revenue is generated by the customs department.
And there are ambitions for “upcountry” cities, too. Global marine terminal operator DP World recently announced that it had been granted a 25-year concession to develop and operate a new logistics centre in Kigali, Rwanda.
The project will consist of a container yard and warehousing facility, with an annual capacity of 50,000 TEUs and 640,000 tonnes of warehousing space. Rwanda aims to be the logistics hub for its region, including Burundi and eastern Democratic Republic of Congo.
Source: M&G Africa/hellenicshippingnews.com
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