FOR Nigeria and other African economies to realise their growth ambitions, there is need for more strategic investment in ports and their related transport infrastructure.
Such investment will help advance trade and promote overall economic development and growth particularly in emerging economies that are currently under-served by modern transportation facilities.
An analysis of port development in sub-Saharan Africa released by professional services firm PwC at the weekend, however, said the investment must be channelled appropriately to ensure financial sustainability and economic growth.
The report titled: ‘Strengthening Africa’s gateways to trade’, said investment is not always about building new ports or terminals, noting that 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.
“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,” the report said.
The PwC report, which was obtained by The Nation, was developed in response to the challenges facing sub-Saharan Africa’s ports in attracting external investment and highlighting the regional economic and growth benefits thereof.
The report said globally, ports are gateways for 80 per cent of merchandise trade by volume and 70 per cent by value, noting that Nigeria and other African countries need to take advantage of the economic potential of their ports and shipping sector if they are to realise their growth ambitions.
“As an emerging market region endowed with vast resources and a growing population, sub-Saharan Africa must accelerate its market access and trade across the region and with the rest of the world,” it said.
The PwC analysis showed, for instance, that a 25 per cent improvement in port performance could increase Gross Domestic Product (GDP) by two per cent, demonstrating the close relationship between port effectiveness and trade competitiveness.
The report added: “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.”
PwC Africa Transport and Logistics Leader Dr. Andrew Shaw said: “Ports are a vital part of the supply chain in Africa, with many ports having a far-reaching hinterland often spanning a number of countries, which makes them a natural focus for regional development.
“In this report, we show that the global transportation and logistics industry can no longer afford to ignore developments in Africa. Logistics service providers and ports in particular will continue to play a key facilitator role in trade competitiveness and thus facilitate trade and sustained economic growth across the region.”
Shaw further said trade competitiveness required governments and key stakeholders to see ports as facilitators of trade and integrators in the logistics supply chain, adding that efficient ports can make countries and regions more competitive and thus improve their growth prospects.
“The reliability and efficiency of each port terminal, including minimising delay to shippers, is critical to enhancing future trade facilitation,” he said.
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.
Commenting on the report, PwC Nigeria Partner Ian Arufor said: “International trade is a primary vehicle for the international movement of capital to developing nations, which ultimately drives economic development.”
“As the larger West African economies embark upon, or seek to accelerate, the implementation of their economic development drives, new and/or expanded port access and capabilities are increasingly recognised as key tenets of these programs.
“This is exemplified by the number of active port development and expansion projects in Nigeria and Ghana.”
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