Southern African ports ‘co-operating rather than competing’

Please find below an interesting article that has been recently published by Business Day Live, reflecting on the cooperation of the southern African ports. Please click here to read the original article. 

Region’s ports take regional, rather than competitive, approach to try to attract greater share of world trade, Transnet National Ports Authority CEO Tau Morwe says

PORTS in Southern Africa were adopting a regional, rather than competitive, approach to attracting a greater share of the world’s trade, Transnet National Ports Authority (TNPA) CEO Tau Morwe said on Monday.

He was speaking on the sidelines of the second annual African Ports Evolution conference, which brings together CEOs of ports authorities, terminal operators and investors from across the continent.

South Africa was co-operating and had signed agreements with the port authorities of Maputo and Namibia to share nonsensitive information on capacity availability and requirements, Mr Morwe said in an interview. If ports in the region were able to get their act together, it could make financial sense for ships that traditionally passed through the Suez Canal to sail around Africa instead.

However, while there was a need for regional co-operation, Mr Morwe stressed that South Africa needed to cater for its own port capacity requirements before addressing regional needs. The TNPA plans to spend about R60bn on port infrastructure over the next seven years. This excludes what the private sector will invest in new terminals and ship repair facilities.

The conference heard that ports authorities and corridor groups in other regions on the continent were also engaged in initiatives to overcome regulatory bottlenecks, increase capacity, and dramatically improve performance and efficiency so that they can cater for the rapid increase in trade.

Traffic through Kenya’s port of Mombasa has increased by 7.4% a year over the past 12 years, while Mozambique’s port of Maputo is forecasting an increase in cargo handling to 40-million tons by 2020.

“Slow customs clearance procedures, transit delays and high transport costs are hindering Africa’s ability to compete in global export markets,” the conference organisers said.

“Growth rates of over 5% in the past two years have made Africa one of the fastest-growing regions in the world but more than 90% of international trade between sub-Saharan Africa and the rest of the world is conducted via maritime transport.

“The expected growth in trade volumes coupled with a lack of adequate transport infrastructure on the ground means that many African ports are now faced with an imperative need to upgrade and expand their infrastructure.”

They said that if “ports authorities are able to significantly reduce this average they will effectively reduce the cost of doing business across the continent and open up new cross-border business opportunities”.

A World Bank study had determined that cargo still spends on average about 20 days in most sub-Saharan ports compared with the average of four days in most large East Asian and European ports.

Last week, Finance Minister Pravin Gorhan unveiled a new digital customs clearing system that would centralise the clearing of all import and export declarations. The R350m system is expected to reduce border turnaround times from two hours to six minutes, and inspection processing from eight hours to two hours, and eliminate mountains of paperwork.