Ready for the spotlight: emerging ports in Africa

But despite significant opportunities, Africa still makes up just
a small percentage of global trade, with problems persisting at its
ports from capacity issues to inefficient handling time, poor security
and in some places, corruption.

A recent report by PricewaterhouseCoopers (PwC) has argued that
Africa must now take advantage of the economic potential of its ports
and shipping sector if it is to realise its growth ambitions.

The company’s analysis shows that a 25% improvement in port
performance could increase GDP by 2%. We look at what needs to be done
at five African ports vying to become regional shipping powerhouses.

Durban is the largest port and by far the best performer in
sub-Saharan Africa. It is rated number one in PwC’s hub attractiveness
list for the continent. According to statistics from Transnet National
Ports Authority Cargo, a South African government organisation, in 2017
the port catered for 9,821 vessels and processed 22,785,7619 metric tons
of cargo.

At the same time, the port remains one of the most expensive in
the world and only achieves 75% of the efficiency expected from a major
global hub, lagging far behind other world hubs like Rotterdam and
Antwerp. The roads around the port also suffer from crippling
congestion, according to Transnet, with drivers regularly waiting for
hours and sometimes days to access the port.

Nonetheless, South Africa remains the undisputed port leader of
sub-Saharan Africa, with Cape Town and Ngqura ranking just behind Durban
in PwC’s hub attractiveness index.

The Port of Abidjan is the economic hub of the Ivory Coast,
generating around 80% of its customs revenues. It is also one of West
Africa’s leading commercial ports, serving landlocked countries
including Mali, Burkina Faso and Niger.

Built in 1950, the port’s poor infrastructure has struggled to
cope with growth in cargo traffic. The country’s 2010-2011 post-election
conflict also allowed other regional ports to capture a slice of its
traffic.

An expansion project in Abidjan was launched in late 2015 to
widen and deepen the canal leading to the main port. Work is also
underway to build a second container terminal to increase the port’s
cargo capacity and host larger, new-generation ships.

The project is expected to be completed next year and will cost
the authorities around $1.2bn. The investment looks like it will pay
off, with PwC placing Abidjan in its top three African ports likely to
emerge as a hub in the coming years.

Kenya has positioned Mombasa as the hub port for East and Central Africa.
While its performance has improved over the years, according to PwC, it
is underperforming alongside the entire East Africa region.

“East Africa is, in context of Africa, the market that’s the
least developed in respect of hub port development,” said PwC Africa
transport and logistics leader Andrew Shaw at a press briefing. “We see a
bit of a lag in East Africa in terms of investments within the ports
and also potentially a lag in involving the private sector.”

In its attempt to become a hub, Mombasa will face stiff
competition from Dar es Salaam, the coastal capital of Tanzania, which
is vying to serve the same landlocked countries. To help improve port
efficiency, Tanzania recently received a $12m grant from the World Bank
and $345m in credit for its Dar es Salaam Maritime Gateway Project.

A “massive systems failure” and huge congestion in Mombasa last
month paralysed the port’s activities, according to media reports,
highlighting some of the problems facing Kenya’s maritime strategy.
Nonetheless, with better hinterland connections and larger throughput
than Dar es Salaam, PwC researchers are confident Mombasa will reach its
goal of becoming the regional hub.

“It is very clear in our minds that Mombasa will come out as a
hub port, but it will require government to facilitate investments,”
said Shaw. “It will require the private sector to come in and provide
very efficient operations.”

Djibouti may be a small country with a population of just 850,000,
but it plays a key role as a Western ally in the volatile Horn of Africa
region. Now it also wants to play a key role in the region’s shipping
industry.

In 2009, the Doraleh Container Terminal (DCT) was built and has
since been a major “catalyst for growth”, according to PwC. While
Djibouti’s old port lacked capacity and water depth for larger vessels,
the government says DCT can now handle 1.6 million TEUs and has a water
depth of 18m. The port may be less likely to become a hub than Kenya and
Tanzania, but the tiny island is confident it can make its mark.

“We sit on two of the busiest shipping lanes in the world,” said
the chairman of the Djibouti Ports and Free Zones Authority, Aboubaker
Omar Hadi, in a recent interview with the Associated Press. “We are
servicing the wider region, including some of the world’s
fastest-growing economies.”

Nigeria
has a coastline of over 850km and more than 70% of its trade by value
is transported on ships. “The importance of the blue economy and in
particular, maritime transport for trade and development in Nigeria,
cannot be overemphasised,” said Nigeria’s Maritime Administration and
Safety Agency in a recent report.

The Port of Lagos is Nigeria’s primary seaport, but like all
ports in the country, it faces problems with efficiency. In October
2016, the Lagos Chamber of Commerce and Industry published an analysis
on the country’s ports that claimed trillions of Naira in revenue is
lost every year due to inefficiencies and infrastructural shortcomings
at the nation’s ports.

“The huge infrastructure deficit has led to deplorable access
roads, faulty cargo scanner, non-existent rail system, non-functional
truck bay and others which conspired to negatively impact on the service
delivery efficiency,” said Taiwo Afolabi, executive vice chairman of
SIFAX Group, at a conference last year.

“Our sector cannot continue to reel under the burden of
infrastructural decay if we want to contribute meaningfully to the
economy and fulfil the industry’s potential,” Afolabi added.