Investment in African ports loaded too far towards import facilities, says local agent

Although very large investments have been made in African ports, that investment has been focused on container terminals rather than bulk cargo terminals, warned Christian Fassino, deputy general manager at Cote d’Ivoire based Compagnie des Experts Maritimes (CEM), an Average Agent in West Africa that provides loss prevention and post-damage services.

As container terminals are the means by which most imports are brought into a country, while bulk terminals were the means by which most goods were exported, this has led to a mismatch, he said.

Speaking during the Loss Prevention Forum on day three of the IUMI 2018 conference in South Africa, Fassino emphasized that “there is no such thing as one Africa. It has 54 shades of colour and 54 meanings.”

That said, he was optimistic for the continent as a whole. Growth was forecast to be 2.6% in 2017, growing to 4% in 2022. Commodity exports growth was one contributory factor, while transforming local economies was another.

Fassino said that there was an emergence and development of a new middle class in Africa, which was eager to consume imported goods. “Logically, therefore, the continent’s port infrastructure will need to grow to cope with increased demand”, he said.

One of the hurdles that Africa has faced in its attempt to expand has been the cost of transport. Shipment sizes tend to be relatively small on a global scale, and, along with other factors such as less developed communications infrastructure, to move a container was 1.5 to 3.5 times more expensive in Africa than it would be, for example, in Europe.

During the past decade sub-Saharan Africa received 10% of global investment in port, with projects from companies such as CHEC and Bollore generally coming in at a size of $500m to $800m. These had included Kribi deepwater container terminal ($574m), extension of Port of Conakry in Guinea ($774m), Port of Sao Tomé (China Harbour Engineering Company, $800m), a second container port in Abidjan (Bollore-APTM-Bouygues, $980m) Port of San Pedro extension (MSC, $560m) and the giant Tema project in Ghana (Bolloré-APTM- Ghana Port Authority) at $1.5bn.

Fassino noted that an important factor in Africa was that there were a relatively large proportion of landlocked countries. This meant two things, that ports were potential entry ports to other countries than their own, and also that the ports were competing with each other to serve those inland countries. Landlocked Mali, for example had three ports to choose from. Fassino said that the port a Malian importer or exporter chose depended on a range of factors. Hardware infrastructure was obviously important, but also of significance was the political climate, the occasional import bans, piracy risk, and warehouse congestion. For example, Nigeria recently imposed a temporary import ban on rice to protect local producers. This has had two consequences for Benin. The first was that the volume of rice imported to Benin tripled, clearly not all of it destined for Benin, but for smuggling into Nigeria. This in turn causes congestion problems for Benin.

In terms of piracy threats, Togo waters were currently considered safer than Nigeria, but this has led to congestion at the port of Lome.

Another, sometimes paramount, factor was the quality of inland connection. Last week the only road linking Benin to Niger had a bridge collapse. “Basically you can’t move goods from Benin to Niger from Cotounou port, Planned imports were therefore going to the other ports, observed Fassino, adding that “this is a constantly changing reality. It is a volatile environment which creates a need to maintain connection with people on the ground, and this is a role that every good local agent can fill.” He said that this illustrated the need to have local experts who were on the ground day in, day out.

Referring to the mismatch between modern container terminals and unmodernized bulker terminals, Fassino observed that Abidjan’s container facilities were super-modern, but the area devoted to bulk exports were still old-fashioned, with warehouses getting flooded. “Despite the hundreds of millions of dollars that have been invested, we still need to look at basic issues such as warehouse conditions, cargo storing conditions, theft and so on,” he said, noting that “not enough focus has been given to basic standards”.

Other problems in African ports at the moment included occasional under-quay erosion and truck congestion within the port, which resulted in inefficiencies and created a theft risk, with non-security-cleared drivers and mates in the port for some time.

Infrastructure investment was just one piece of a puzzle to ensure that cargo is handle in and efficient and safe manner.

Fassino said that there were four main criteria that needed to be addressed.

1.     Ports infrastructure

2.     Efficiency

3.     Quality of stevedores

4.     Port safety and security.

At the top in West Africa were Lagos Apapa, Tema, and Abidjan, At the bottom was Conakry in Guinea

Despite investments, loss prevention stats have not drastically changed in Africa. Fassino observed that 80% of CEM’s assignments were for post damage surveys, while only 20% was to loss prevention,

“In Africa as everywhere else the devil is in the details and you need to be in the port day in and day out. Loss prevention performance can be improved by use of local intelligence. I believe that there are highly technical competent local surveyors in Africa who understand your business and understand Africa”, Fassino concluded.