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Facilitating trade across africa with ports infrastructure development
 

Facilitating trade across africa with ports infrastructure development

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As presented by Derrick Chikanga at the Ports Evolution conference held in Cape Town in August this year, 2013.

As presented by Derrick Chikanga at the Ports Evolution conference held in Cape Town in August this year, 2013.

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    Facilitating trade across africa with ports infrastructure development Facilitating trade across africa with ports infrastructure development Presentation Transcript

    • Facilitating Trade Across Africa with Ports Infrastructure Development Presented by: Derrick Chikanga Infrastructure Research Analyst Frost & Sullivan
    • Agenda… Overview Current Situation Future Developments Implications and Conclusions
    • Overview Key Takeaway: An efficient infrastructure system is key to facilitating trade and regional integration WHY DOES The Future Hold? Facilitating Trade  An efficient transport infrastructure network enables the smooth flow of goods and services between countries and across regions. Regional Integration  Integrated transport systems create corridors for trade and inter- Economic Development  Developed transport systems drive economic growth and foster continental cooperation. economic development.
    • Africa – Key Infrastructure and Trade Statistics 56% $810 billion $403 billion Total spending needed over the next five years to upgrade, rehabilitate and expand Africa’s infrastructure % of The value of ongoing and bankable investment in projects running till Sub-Saharan Africa on 2025 and beyond. transport infrastructure 30 Is the number of countries in Africa which have regular power outages (out of 55) 723Mt Expected (2020) increase in Sub-Saharan African trade volumes from 376Mt in 2009 120.4Mt 50 years Expected It will take 50 (2020) increase years for most in intra-regional countries in trade volumes Africa to reach in Sub-Saharan universal access Africa from to modern 34.9Mt in 2009 infrastructure 50% 70% In land-locked Infrastructure countries, transport development has been responsible accounts for 70% for more than of the value half of Africa’s of exported improved goods economic performance Source: World Bank and Frost and Sullivan analysis *based on active projects in 2011
    • Current Situation WHY DOES The Future Hold?
    • Current Situation Key Takeaway: Limited investment creating operational challenges WHY DOES The Future Hold? Current Reality Limited Infrastructure Investment Port Infrastructure Operational Challenges • Delays in clearances of cargo at major ports • Delayed flow of goods across regions Future Potential (2020) Increased Infrastructure Investment Port Infrastructure Operational Efficiency • Increased trade and economic growth • Timely clearance of goods at major ports of entry
    • Current Situation Key Takeaway: Bulk of cargo currently loaded at most Africa ports Volume of Goods Loaded and Unloaded, Africa, 2012 900 800 787.7 Major Ports, Africa, 2012 1,159 Million Tonnes Suez Canal Container Terminal, Egypt Tonnes (Million) 700 600 Djibouti Port, Djibouti 500 371.3 400 300 200 Port of Mombasa, Kenya 100 0 Volume of Goods Loaded Volume of Goods Unloaded Port of Dar Es Salaam, Tanzania Port of Lagos, Nigeria Volume of Goods Unloaded, 32.0% Port of Beira, Mozambique Walvis Bay, Namibia Volume of Goods Loaded, 6 8.0% Port of Richards Bay, South Africa Port of Saldanha Bay, South Africa Source: United Nations Conference on Trade and Development (UNCTAD) Port of Durban, South Africa
    • Current Situation Key Takeaway: Key transport projects currently being undertaken in the central African region Mega Corridors, Africa, 2030 1,000 km Abidjan-Ouagadougou Corridor Alexandria Addis Ababa Ouagadougou Abidjan The Greater Ibadan Lagos Accra (GILA) Corridor • Combined population >18.0 million • Contributes combined GDP of $127,592,000. Ibadan Lagos Nairobi Kinshasa Dar es Salaam Trans-Cunene Corridor • Will link the Democratic Republic of Congo (DRC) with South Africa through Angola and Namibia. Future Corridor Development 900 km Kampala-NairobiMombasa urban corridor Accra Luanda Main Developed Corridors Cairo The North Delta Region • Combined population of 77.0 million • Three emerging corridors: Cairo-Suez Cairo-Alexandria Cairo-Ismailia. Cape Town Durban North-South Corridor • Facilitate inter-regional trade from Cape to Cairo. • Free trade area comprising 533.0 million people. • Combined GDP of $833.00 billion or 58% of Africa’s GDP. Johannesburg/Pre toria
    • Current Situation Key Takeaway: Trade corridors to link ports and inland locations Key Corridor Developments, Africa, 2012 Key Resources, Africa, 2012 C B KEY: Corridors Current roads B B Bauxite C Oil Gold C C Iron Ore Uranium Current rail Current and proposed ports B C KEY: Proposed roads Proposed rail C C C Gas Copper Diamonds Timber Coal Source: Frost & Sullivan Analysis Resources, Agriculture and Retail are the major drivers of trade in Africa
    • Current Situation Key Takeaway: Southern Africa to take the lead in developing trade corridors in the short-term Key Corridor Developments, Africa, 2012 1 Southern Africa will drive trade corridor implementation in the short-term Timeframe: 2020 3 2 Southern and East Africa will connect, ramping up trade in the medium-term Timeframe: 2030 3 2 West and North will lag significantly in corridor development and implementation Timeframe: 2040+ 1 Trade is predicted to evolve in three distinct phases, positioning East Africa as a key trade hub in the medium term
    • Current Situation Key Takeaway: Key transport projects to be undertaken in the east African region $5.3 billion Construction of a new port in Northern Kenya $5.2 billion Rehabilitation of railway to improve transhipment $1.4 billion $2.23 billion Railway linking Tanzania to Rwanda Tema-Accra railway link $2 billion 900km railway linking port of Nacala to Moatize $6 billion Development of a new deep sea port $1.2 billion Increase port capacity from 2.7 to 11.0 million tonnes $9.34 billion 1,100 km railway linking Botswana to Mozambique via Zimbabwe , new port at Matatuine *based on active projects in 2013 Source: Frost & Sullivan Analysis
    • Future Developments WHAT DOES THE FUTURE HOLD?
    • Future Developments Key Takeaway: East and West Africa anticipated to experience the highest growth in trade volumes 2030 CAGR 2009 2020 Southern Africa 240Mt 408Mt 617Mt 4.5% East Africa 45Mt 96Mt 181Mt 6.8% West Africa 70Mt 176Mt 300Mt 7.1% Central Africa 21Mt 43Mt 77Mt 6.4% Source: Africa Transport Outlook 2040 African trade volumes are expected to Triple by 2030, driven by improved transportation infrastructure in East and West African
    • Future Developments Key Takeaway: Trade volumes to increase from 367 million tonnes in 2009 to 1,175 million tonnes in 2030 WHY DOES The Future Hold? Trade Volumes Breakdown, Africa, 2009 East Africa, 12. 0% Central Africa, 5.6 % Southern Africa, 63. 8% Volumes (Million Tonnes) West Africa, 18. 6% Southern Africa East Africa West Africa Central Africa 700 600 500 400 300 200 100 0 2009 2020 2030 Year Trade Volumes Breakdown, Africa, 2020 West Africa, 24. 3% East Africa, 13. 3% Central Africa, 5.9 % Southern Africa, 56. 4% Trade Volumes Breakdown, Africa, 2030 Central Africa, 6.6 West % Africa, 25.5 % East Africa, 15.4 % Southern Africa, 52.5 %
    • Future Developments Key Takeaway: Most imports to come from Asia by 2020 Imports Volumes Origin, Africa, 2012 Europe UK, Germany, France, Neth erlands and Norway Asia China, Japan, India and Korea North America USA & Canada EAST AFRICA WEST AFRICA Volume of Goods: 31 Million Tonnes Volume of Goods: 56 Million Tonnes SOUTHERN AFRICA Total Volume 218 Million Tonnes Source: United Nations Conference on Trade and Development (UNCTAD) Volume of Goods: 131 Million Tonnes
    • Future Developments Key Takeaway: Europe remains the biggest market for most African countries Exports Volumes Destinations, Africa, 2012 Europe UK, Germany, France, Neth erlands and Norway Asia China, Japan, India and Korea North America USA & Canada EAST AFRICA WEST AFRICA Volume of Goods: 65 Million Tonnes Volume of Goods: 120 Million Tonnes SOUTHERN AFRICA Total Volume 462 Million Tonnes Source: United Nations Conference on Trade and Development (UNCTAD) Volume of Goods: 277 Million Tonnes
    • Future Developments Key Takeaway: Uganda and Zambia to WHY DOES TheFlows for experience the biggest increases in trade volumesEvolution for Select Future Major Intra-Africa Trade Landlocked Intra-African Trade Countries, 2030 Landlocked Countries, 2009-2030 Hold? Trade Volume (‘000 tons), 2009 Trade Volume (‘000 tons), 2030 293 1,696 Uganda 2,408 11,600 Rwanda 4 22 Burundi 21 50 Zambia 2,511 15,950 Malawi 453 1,811 Zimbabwe 1,257 5,907 Botswana 1,332 3,367 Total 8,279 40,403 Dem. Rep. of Congo Trade volume > 1 MT Key landlocked country Key port country *Arrow direction indicates flow of trade; arrow size does not indicate trade volume Landlocked countries which are rich in resources and agricultural exports will benefit most from successful corridor implementation
    • Implications and Conclusions What are the Implications for Africa’s Development
    • Implications and Conclusions Key Takeaway: Large funding deficit for infrastructure development currently exists in the short-term 1 Current on-going and bankable projects running till 2025 and beyond are valued at $403 billion. However, approximately $810 billion will be required in the next 5 years. 2 Sub-Saharan African trade volumes are expected to increase from 376Mt in 2009 to 723Mt in 2020. Volumes anticipated to reach 1,175Mt in 2030. 3 East Africa’s established intra-regional connectivity and improved regulatory environment is likely to drive access to markets in multiple countries. 4 Intra-regional trade corridors are expected to near completion over the next three decades, in the following sequence: Southern Africa (2020), East Africa (2030), West & North Africa (2040+).
    • Implications and Conclusions Key Takeaway: Investment in ports infrastructure should facilitate regional integration and trade development WHY DOES The Future Hold? Investment Opportunities  The current lag in infrastructure and operational challenges currently being experienced have necessitated the need for increased investment in ports infrastructure. Trade Opportunities  Increased investment in ports infrastructure will facilitate the smooth flow of goods and services across different regions.  This will facilitate inter-regional trade and the development of trade corridors. Growth Opportunities  Increased trade will foster growth and regional development. Sustained Economic Growth Through Trade and Development
    • The End Your contacts: Derrick Chikanga Infrastructure Analyst, Africa Tel: +27 (0) 21 680 3204 Email: Derrick.chikanga@frost.com Samantha James Corporate Communications Tel: +27 (0) 21 680 3260 Email: Samantha.James@frost.com