An integrated port system across the continent is key to realising AfCFTA

A system of integrated hub ports along the continental coastline is vital if the full potential of the $1.2bn or more African Continental Free Trade Area (AfCFTA) is to be realised and exploited.

However, there is a real danger that countries continue to develop in silos and vie with each other to develop these hubs instead of working together to take full advantage of the potential offered in terms of both intercontinental and global trade.

This is particularly true as maritime vessel sizes continue to increase — with Panamax (size limits for ships travelling through the Panama Canal) and post-Panamax vessels now regularly plying the sea routes. This means constant pressure for capital investment to address and accommodate the changing vessel dimensions.

A stark example of the need to integrate is Africa’s largest East Coast port — the 23-berth Kenyan port of Lamu — developed to service the Lamu Port-South Sudan-Ethiopia Transport Corridor. The first phase was completed at a cost of $354m, but it stands virtually idle, said Andrea Ciseau, secretary-general of the Ports Management Association of Eastern & Southern Africa (PMAESA).

Ciseau’s strong message was delivered at a Transnet one-day “Focus on Africa” conference held at Kempton Park, Gauteng, in September.

The theme of co-operation was echoed by other delegates participating in the conference, which took the form of a series of panel discussions dealing with transnational railway transport corridors and building integrated port systems.

“The reality is that the most successful hub ports are those located on the corners of the continent, such as Morocco, Djibouti and Durban,” said Ciseau.

He said the changing environment is creating opportunities as well as challenges. Typically, cargo patterns in Africa are also changing because of growing populations and developments such as oil and gas discoveries leading to increased exports of resources.

Additionally, rapid urbanisation involving young populations around ports is also leading to greater imports and employment opportunities as questions are consistently raised about how the ports can benefit these people by absorbing them and teaching them skills.

Some of the areas' delegates identified where this process can be enhanced include training people at the technical level regionally rather than sending them abroad for training; the beneficiation of not only resources, but also transport-related activities; and the effective use of technology to create smart ports.

Transnet Port Terminals managing executive Andiswa Dlanga emphasised the importance of hub ports to the region, particularly given the landlocked nature of many countries that are major mineral exporters, such as Zimbabwe.

She agreed that there’s a need for close co-operation, given that many of these exports require specialised facilities. So, while Durban operates as a major container port, there’s no point in the port of Maputo — whose strength is as a mineral export facility — competing in that regard.

“Similarly, Saldanha is a deep-water port ideally suited to the very large Cape-size vessels. They [Saldanha and Cape harbours] can each focus on their strengths and leverage economies of scale, which can then be enhanced through short sea shipments,” said Dlanga.

Osório Lucas, CEO of Maputo Port Development Company, said the emphasis should be on ensuring ports are as cost-effective and efficient as possible.  The high port costs are often an impediment to African exports and “having ports compete against one another is only a step backwards”, he said.

Transnet CEO Portia Derby said there is considerable co-operation between Transnet and other African ports — from Abidjan and Benin in West Africa to Namibia and Mozambique. This is in terms of both co-operation in areas such as dredging and infrastructural development where Transnet offers technical, operations and manufacturing capacity.

She and other delegates also said there are opportunities for economies of scale through the joint purchasing of goods and materials necessary for the maintenance and operation of the ports and railways across the region.

Derby said future conversations should cover issues such as security, port safety and piracy. There should also be a conversation about leveraging Transnet property (as probably SA’s second-largest property owner after the government) to strengthen the balance sheet and alleviate demographic distortions created by apartheid.

This article was paid for by Transnet.