Can Ports Deliver the Goods: Africa's Economy Will Grow by 1% to an Average of 4.2% This Year, According to the U.N. If This Is So, and If That Trend Continues, Can the Continent's Ports Cope with the New Business?

By McCan, Thom T. | African Business, October 2003 | Go to article overview

Can Ports Deliver the Goods: Africa's Economy Will Grow by 1% to an Average of 4.2% This Year, According to the U.N. If This Is So, and If That Trend Continues, Can the Continent's Ports Cope with the New Business?


McCan, Thom T., African Business


Nepad, the African Union's grand design for the continent's social and economic salvation, will view the UN's growth forecast for Africa both as a comfort and a warning. It will be encouraged that Africa's prospects are finally on the upswing, but will also be aware that the continent's success relies on the way it can reinvent itself through infrastructure rebirth, revitalised economic activity, and resurgent investment and trade.

Maritime transport in Africa was largely designed and organised for trade between Europe and the former colonies. Sluggish growth and marginalisation have, in many cases, maintained that status quo; for others, stirring economies are demanding gateways that work and deliver the goods.

Too few ports have adequate computer and communication systems and are often inefficient and cause cost overruns to those using them. National shipping companies are severely constricted in their efforts to move cargo along the continent's coasts in competition with the foreign shipping companies that dominate the region's waterways. Regional coastal shipping services are still primarily informal and those benefiting most from multi-stop sea transport are foreign companies that have greater leverage to negotiate and add new stops on their routes.

To the detriment of indigenous companies, the tariff rates paid by African carriers to ship to northern countries are higher than those paid by their non-African shipping competitors. This iniquity further constricts the ability of African shipping companies to grow.

MARITIME TRANSPORT BOOMING IN S AFRICA

In contrast, a key region where maritime transport is flourishing is southern Africa. Here South Africa's re-emergence into the global business community has significantly expanded maritime trade.

A pumped-up regional economy has also triggered the quick modernisation of Namibia's principal seaport, Walvis Bay, and of Maputo in Mozambique.

Although these ports represent new and aggressive competition to South African harbours, they're viewed as "partners" in the sprit of economically uplifting the SADC and growing interregional trade and investment. Namibia, Botswana, Malawi, Zaire, Mozambique, Malawi, Lesotho, Swaziland, Angola, Zambia and Zimbabwe are arterially linked and are, in some way or another, interdependent on the region's ports.

IS PRIVATISATION THE ANSWER?

While privatisation is seen as key to African ports' sustainable efficiency, most of the continent's governments are reluctant to lose financial and administrative control of these jewels in their economic crowns. Under international pressure, such ports as Maputo, Lagos and Walvis Bay and, to a lesser degree South Africa's, have started privatising or commercialising some operational aspects--namely selected terminal management, security and traffic control.

From the late 1980s, the World Bank actively promoted public sector reform through state divestiture titan Africa's corporate community. Touting the success of privatisation programmes in the former Soviet Union and in Central and Eastern Europe, where tens of thousands of medium-sized enterprises were handed over to private operators, African states began to feel the heat and are edging towards privatisation. They are tougher nuts to crack, however, and African ports still have a long way to go before they are privatised to any meaningful degree.

The extent of Africa's acceptance in the global village will depend largely on how it develops, maintains and manages its ports. Making export and import sales and arranging the finance, are relatively small functions in relation to physically moving goods in an efficient and safe manner. Everything else will fall apart if African ports cannot be seen to be trustworthy trade partners.

When the port of Durban, arguably Africa's most efficient, was unable earlier this year to handle vessels within acceptable inter national time limits, the port was eventually bypassed by sonic shipping companies and financially penalised by freighters and forwarders. …

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Can Ports Deliver the Goods: Africa's Economy Will Grow by 1% to an Average of 4.2% This Year, According to the U.N. If This Is So, and If That Trend Continues, Can the Continent's Ports Cope with the New Business?
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