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In the previous article, we explored common challenges faced by the African ports sector, which, though multifarious, are often interrelated and create a self-perpetuating cycle. For example, lack of finance to fund port projects is the cause of poor infrastructure and outdated equipment, which in turn adversely impacts productivity and efficiency levels, which then deter Carriers from calling at the port and the EXIM community from utilising the port, making it difficult for the port authorities to raise finance for upgrades and expansions (due to uncertain financial viability and future prospects). Cumulatively, these factors constrain the growth of the ports sector, acting as an impediment to African trade and preventing economies therein from achieving their latent potential. A careful perusal of the nature of these challenges makes it abundantly clear that some are controllable while others (the extrinsic ones, emanating from macroeconomic and geopolitical developments) are beyond the port’s control. This article examines the initiatives that ports and terminals can undertake to overcome these challenges, as well as steps to mitigate the impact of macro-level and geopolitical factors. This article is the first of the two articles wherein we will delve into this topic and cover each point in comprehensive detail. 1) Port Upgrades and Modernisation Programs Given the subpar state of infrastructure at most ports, embarking upon port upgrade and modernisation programmes is of the utmost importance. These can inter alia involve dredging to increase draught, constructing new berths, strengthening existing berth structure and various operational facilities therein, as well as modernisation programmes to overhaul obsolete equipment. This will help improve operational efficiency and boost productivity at the port, enabling it to better perform its core functions of handling vessels and moving cargo. An example is the port of Dar es Salaam in Tanzania, whose upgrade programme has enabled it to accommodate Post Panamax vessels of 300 mtrs length, pursuant to investments by the Government through the Dar es Salaam Maritime Gateway Project (DMGP). 2) Port Expansion Projects Consequent to underinvestment in the African ports sector, capacity and infrastructure have not increased to match even the natural growth of cargo, with the result that several ports operate at close to their maximum capacity, and have no room for handling additional volumes, thus causing diversion of cargo to competing ports in the region. Port authorities and operators therefore need to design structured expansion projects, taking into cognisance current and future requirements. These projects need to be comprehensive in their scope (to encompass all aspects that have a bearing on the port’s performance) and futuristic in their scale (taking into account growth forecasts). Ideally, before designing the expansion plan, the port authority or terminal operator should commission a market study to identify the underlying potential and the volumes that it can realistically translate into. The market study should take into consideration all possible sources of cargo, such as new manufacturing capacity, focus on the agro exports, transit cargo from landlocked countries that the port serves as a maritime conduit for, demand due to demographic and economic factors, etc., as well as threats from competing ports in the region. Once the study is complete and there is visibility into t
How Can African Ports Overcome Structural Challenges?
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