Investment In Port Infrastructures Across Africa Coastlines

26 August 2020
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AllAfrica InfoWire (Washington, DC)

This article sheds some light on Investment in Port infrastructure in African Coastline. In so doing the paper addresses one of the controversial development outcome; what are the effect of investment in Port infrastructure in Africa.

In terms of development a discussion in this area is significant given existence of some major ports adjacent to the coastlines of Africa.  Such Ports are the Port of Durban based in South Africa also named Africa active Cargo Port. In East Africa we have major Ports of Dar es Salaam in Tanzania Mombasa in Kenya and the Nacala, Maputo and Beira in Mozambique.  Other important Ports are Djibouti, Lagos, Abidjan, Suez Canal and Tangier. There are other several transshipment Ports along and adjacent to the Coastlines and the Islands such as Mauritius, Zanzibar, Seychelles, Madagascar and Reunion.

Specifically the article focuses on two key questions; i) What are the rationales behind investment in Port infrastructure and ii) What are the economic and political impact of investment in Port infrastructure in Africa.  The article key hypothesis is on the anticipation that investment in port infrastructure in Africa has direct relationship with unlocking growth constraints to economic growth of Africa. By considering such hypothesis the article dismisses the competing hypothesis that investment in port infrastructure in Africa is related to escalating geo- political and geo- economic competition among Super powers within Africa Continent.    In reality Africa suffers from stagnated economic development and low growth due to poor conditions and low investment in Port infrastructure. It is through having well functioning Ports that Africa will strengthen connectivity and trade volumes with the rest of the World. As far as the rationale for investment in ports are concerned, investment in Port infrastructure is made to  address the aspects of development constrained in the form of efficient and functioning ports that can support movement of goods and services in and outside the African continent.

The greatest Impact of investment in Port infrastructure is felt on enhancing maritime transport system in Africa which connects gateways along the coasts of African economies to the major ports like Mombasa, Tanga, Dar-es-Salaam, Maputo, Nacala, Beira, Durban, Cape Town, Port Elizabeth, East London along the coasts of the Somali Coastal.  There is potentially another angle of economic benefit. Modern and well functioning ports and gateways serve major economic corridors. Specialized port terminals for each kind of vessel also dramatically increase handling efficiency.

Tankers and bulk cargo ships remain in port for two or three days to unload, while a container ship takes only 10 or 20 hours to transfer thousands or tens of thousands of tonnes of cargo. In sum, port efficiency is a major complaint from various users of ports within Africa.  Existing Ports requires constant investment to improve their performance, enable them to acquire new technology that aims to further enhance their performance. This is partly due to the fact that performance of individual ports in east Africa varies. For instance, Mombasa and Dar es Salaam exhibit generally good performance that is within global best practices on some indicators.

On the other hand, Port Sudan and Djibouti, along the coast of the Red Sea Large Maritime Ecosystems exhibit much lower port efficiency levels. [1] The capacity constraints faced at the ports of Mombasa and Dar es Salaam, coupled with extremely lengthy import and export procedures, add considerably to the time required to clear goods. The lengthy detention of goods in port becomes a major obstacle to distribution and a major contributor to logistics costs, thereby impeding trade.  Many countries in Africa are landlocked, depending not only on the procedures of their customs and other border agencies, but also on those of the neighboring transit countries.

The reports by UNCTAD (2018) confirmed that port inefficiency depicted by longer container dwell time, delays in vessel traffic clearance, lengthy documentation processing, lesser container per crane hour (with exception of South Africa) as one of the critical binding constraint. Ultimately over 70 percent of delays in cargo delivery compose of time spent within Ports. The report also indicated inadequate volume of cargo to allow full capacity utilization of maritime transportation along with its interlinked modes. Transport cost higher than global average by 40 to 60 percent. The report also mentioned inadequacy in human resource and ICT system to support an efficient and effective integrated Port Management Information System for efficient port administration and professional leadership to guarantee globally competitive and high-quality port performance.

Despite the problem of low investment in Ports there are other challenges that equally affect the development of Africa as far as Marine Ecosystems generally and Port in particular are concerned. One singled aspect is maritime piracy that frustrates maritime transportation and other activities of marine ecosystems from the regions of Eastern Africa which include the Western Indian Economies through the Gulf of Guinea to the coast of west Africa where Nigeria is one of the notorious courses of piracy as well as Somalia. It is estimated that at least 205 attacks on ships by pirates were recorded from 2005 to May 2015 in the Gulf of Guinea (Ulrick, 2018).

Therefore for the hypothesis that link geopolitics partly point towards the challenge rather than the primary cause and effect. Despite the challenges mentioned above it remains indisputable fact that investment in port infrastructure is very important for African economies.  Maritime transport in particular is essential for trade facilitation. In practice it should be one of the cheapest international transport costs that are a key component of trade costs and economic development. Recent research in Asia and the Pacific suggests that tariffs account for only 0–10% of bilateral comprehensive trade costs, while other policy-related trade costs (that is, of a non-tariff nature) account for 60–90% of bilateral trade costs.

The global economy has witnessed how Africa contribution to global trade remains the lowest in the World amid rapid expansion of trade volumes in other continents.  It is through well functioning Ports Africa can catch up with the rest of the World in terms of moving huge volumes of Cargo at affordable cost.  Besides African Maritime Economic sectors and components generate today a value of USD 296 billion with 49 million jobs. It is projected that by 2030, figures will be respectively USD 405 billion and 57 million jobs while in 2063 estimates would be USD 576 billion of value created and 78 million jobs. The number of jobs would correspond to about 5% of the active population in 2063 (UNCTAD, 2018).

[1] More details are found in the Review of Maritime Transportation (2015) Freight Rates and Maritime Transportation.

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