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More strategic investment in Africa’s ports can accelerate growth

Staff Writer |
Africa needs to take advantage of the economic potential of its ports and shipping sector if it is to realise its growth ambitions.

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Globally, ports are gateways for 80% of merchandise trade by volume and 70% by value.

Investment in ports and their related transport infrastructure to advance trade and promote overall economic development and growth is therefore vital – particularly in emerging economies that are currently under-served by modern transportation facilities.

However, port investment must be channelled appropriately to ensure financial sustainability and economic growth.

Investment is not always about building new ports or terminals – investment spent on infrastructure without cognisance of the efficiency and effectiveness of the performance of the port may not produce the desired results.

Port performance must be seen in the context of not only port infrastructure shortfalls, but also the fact that port performance has a direct impact on the efficiency and reliability of the entire transport network in which the port is just a node for the transfer of goods.

These are among the key findings of an analysis of port development in sub-Saharan Africa (SSA) issued by PwC.

The report "Strengthening Africa’s gateways to trade" was developed in response to the challenges facing SAA’s ports in attracting external investment and highlighting the regional economic and growth benefits thereof.

As an emerging market region endowed with vast resources and a growing population, SSA must accelerate its market access and trade across the region and with the rest of the world.

PwC analysis shows that a 25% improvement in port performance could increase GDP by 2%, demonstrating the close relationship between port effectiveness and trade competitiveness.

With growing congestion in many African ports, Africa runs the risk of sacrificing further growth through lack of investment in port terminal infrastructure.

Access to effective ports, interconnecting infrastructure and efficient operations to cope with current demand and future growth, will lead to reduced costs and improved overall freight logistics efficiency and reliability – all of which are fundamental to the region’s future success.

Despite the high volumes of goods that require transport, the development and integration of ports in Africa’s wider logistic chains remains uneven.

Some ports are important generators of benefit and serve large hinterland areas, often extending beyond national borders.

Others lag in terms of available facilities, reliability and efficiency in the handling of freight, which increase supply-chain costs.

The disparities in performance between different ports impacts on Africa transport logistic chains, and makes African countries less competitive than they could be.

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