Better governance could unlock economic opportunity for Africa's ocean industries Operations at the port of Lagos, Nigeria (scenar308 / Bernd S / CC BY 2.0)
By Mokrane Sabri 04-08-2021 03:55:00
Africa is a complex continent. She is an eclectic mix of authoritarian regimes, where leaders have been in power for many decades; countries that are attempting to make their way towards democracy, even if progress is incremental and slow; and others that have had a stronger semblance of democracy for many years, though (in honesty)are still trying to find their feet.
As beautiful as Africa is, she is a continent scarred by war, tainted by corruption, and in many instances lacking in transparency. For years there have been numerous attempts to bring the continent together to create a continent-wide common market, but the attempts have yet to gain serious traction. For a cohesive effort, you need common understanding and the ability to find common ground, so that you can make decisions for the greater good of the continent rather than just your own country.
With such diverse politics and governance, however, thats not easy to achieve. It is one of the reasons there are so many regional economic communities, and why so many countries belong to more than one. There are eight recognized by the African Union and seven more that it doesen't recognize, and overlaps occur in each. So far, the most successful attempt at uniting sub-Saharan Africa has been the African Continental Free Trade Area (AfCFTA), which started trading on January 1, 2021.
Focusing on growth
AfCFTA presents enormous opportunities for trade within the continent. Intra-African trade has increased its share to 15.4 percentover recent years, but Asia and Europe are still the continents main trade partners.
Greater focus needs to be placed on raising Africas share of world production and world trade, which are both currently less than three percent. Unfortunately, many African countries have low performance in trade facilitation indicators, scoring low in e-commerce; liner shipping connectivity; and doing-business indicators. Lack of transparency and perceptions of corruption are also hindrances to intra, and inter-continental trade, and sub-Saharan Africa is currently the lowest performing region on Transparency Internationals latest annual report.
Alternative approaches to revenue growth
In order to achieve her full capacity, Africa needs to look at alternative approaches to increasing revenue. In 2008, the Seychelles president, James Michel, shifted his countrys strategic focus to what has become known as the Blue Economy. The World Bank defines the Blue Economy as the sustainable use of ocean resources for economic growth, improved livelihoods, and jobs, while preserving the health of ocean ecosystem. While its a concept that has been embraced globally, on the continent where the idea was born, were falling far behind.
The African Union (AU) has designated the years 2015-2025 as The Decade of African Seas and Oceans, and in February 2020, it launched the African Blue Economy Strategy. The Southern African Development Community (SADC), the Common Market for Eastern and Southern Africa (COMESA), and the Indian Ocean Commission (IOC) also recognize the potential of the Blue economy as a lever of socio-economic development in their strategic documents.
According to the United Nations policy handbook on Africas Blue Economy, maritime zones under Africas jurisdiction total about 13 million square kilometers, including territorial seas and Exclusive Economic Zones (EEZ), and approximately 6.5 million square kilometers for the continental shelf. The continent therefore has a vast ocean resource base that can contribute to sustainable development.
In order to realize that sustainable development however, countries across the continent will need to collaborate across borders and sectors on a scale they have not previously achieved. The largest sectors of the current African aquatic and ocean-based economy are fisheries, aquaculture, tourism, transport, ports, coastal mining and energy.
Potential Major Hubs in Africa
As PWC has highlighted, African ports represent gateways for the continents commodity exports, but as countries grow and develop, ports are also essential for sustaining and improving more robust and diverse economic growth, through the import and export of manufactured goods and other products.
PwCs recent analysis showed that based on the degree of port centrality (shipping liner connectivity), the amount of trade passing through a port, and the size of the hinterland, Durban (South Africa), Abidjan (Cote dIvoire) and Mombasa (Kenya) are most likely to emerge as the major hubs in Southern Africa, West Africa and East Africa, respectively.
The report stated that the closest rivals to these ports are Lagos-Apapa (Nigeria) and Tema (Ghana) as alternatives to Abidjan, and Djibouti and to a lesser extent Dar es Salaam to Mombasa. Due to their better operational performance, both Lagos-Apapa and Tema pose significant challenges to Abidjans emergence as a hub, which might eventually be decided on factors such as on political stability, port performance and quality of inland connections.
Improving port performance could increase GDP by two percent. An efficient port reduces delays to shippers, reduces overall logistics costs and improves reliability of goods in transit. Yet across Africa, investment in port infrastructure and expansion has slowed.
Stability, security, and transparency are drivers of foreign investment
African governments have the ability to significantly impact the investment environment, and investors will look to the way they are planning, regulating, owning and operating their ports.
They will also take the countrys stability, security and perceived corruption levels into account. Experienced investors will certainly consider how individual governments have handled foreign inbound investment previously, and if there is not a favourable investment environment, it is not likely that inbound investment targets will be met.
This is particularly relevant at a time when the continent is seeing a high rate of election-related violence and accusations of corruption abound. There are thirteen national elections due to take place in 2021, a third of which take place in the Horn of Africa.
Djibouti, Benin and Chad all have their presidential elections in April 2021. Djiboutis port is located on Africas East coast, nestled on the Horn of Africa between Berbera and Massawa. As a potential rival to Mobassa for an African hub, Djiboutis ports have undergone some expansion in the past.
The country has already benefitted from investment from China, using the capital for port and infrastructural investments. In fact, the state-owned China Merchant Group acquired a 23.5 percent stake in Djibouti port in 2008, and is also trying to get a 40 percent stake (https://pwc.to/3wMXd1Z) in Ethiopian Shipping and Logistics Enterprise (ESLSE). In order to continue patrolling the waters of East Africa and to protect its investment in Djibouti, China inaugurated its first overseas military base in 2017 alongside the bases of the United States, France, Italy, Spain, Germany, and Japan.
The World Banks Economic Transformation in Djibouti reporthighlights key measures for improving its appeal to foreign investors, including: lowering the cost of production factors (electricity, ICT and labor costs) to raise competitiveness; further easing access to finance; leveling the playing field to enhance competition; and reforming the tax system to make it more equitable across firms.
Enticing future foreign investment may prove difficult, as investors will look to the past two years that DP World have spent in court attempting to secure a return on their investment in the Doraleh Container Terminal, which the Djiboutian government seized in 2018. The action was found to be illegal by the London Court of International Arbitration and the High Court of England and Wales. However, the Djiboutian government has failed to abide by the many court rulings and restore DP Worlds full rights under the concession agreement of 2006.
After Djibouti's election, Ismail Omar Guelleh must address the magnitude of the governments debt to the Chinese - along with the countrys reputation in the international investment community - if the people of Djibouti are to reap the benefits from its strategic location along global trading corridors.
In Benin, the Cotonou port was developed to assist landlocked countries like Mali, Niger and Burkino Faso. Rehabilitation of the port did help; however, it is still struggling to compete against nearby ports such as Tema, Lom and Lagos, which have been expanded and upgraded more recently. Both Chad and Burkina Faso have their own warehouses to store goods at Contonou port.
Considering the future
It will be interesting to see the outcomes of all of 2021s elections in Sub-Saharan Africa. Will the leadership remain the same? If it changes, will it make a tangible difference in uplifting the countries that do bring in a new order? Will we see changes in strategic economic approaches this year, and will concrete steps be taken to grow each countrys Blue Economy? Will the launch of AfCFTA be the start of growth across the continent?
Opportunities do abound in Africa, but as yet they are not nearly fully realized. What is needed is investment in improved governance to create a pipeline of investable opportunities that benefit both local and national economies, backed up by an enabling environment for responsible private sector investment throughout the value chain. The World Bank estimates the size of Europe's well-developed Blue Economy at 5.4 million jobs and nearly $600 billion in annual economic activity; just imagine what increased focus on Africas Blue Economy could do for the continent.
Mokrane Sabri is a senior trade manager and an expert on shipping in North Africa and the Middle East.
The opinions expressed herein are the author's and not necessarily those of The Maritime Executive.
Read the original post:
Africa's Growth and the Potential of the Blue Economy - The Maritime Executive
- QazInnovations: Kazakhstan seeks to bring volume of innovative ... - inform.kz/en - April 23rd, 2023 [April 23rd, 2023]
- World Earth Day: What is green finance, and why do we need it so much? - The Economic Times - April 23rd, 2023 [April 23rd, 2023]
- Netarts Bay cleanup scheduled for Earth Day with SOLVE and ... - Tillamook Headlight-Herald - April 23rd, 2023 [April 23rd, 2023]
- Shaping humanitarian and ethical governance in Pakistan - The Express Tribune - April 23rd, 2023 [April 23rd, 2023]
- Remarks by Secretary of the Treasury Janet L. Yellen on the U.S. ... - Treasury - April 23rd, 2023 [April 23rd, 2023]
- Investing in nature: Building local economies through conservation - McKinsey - April 23rd, 2023 [April 23rd, 2023]
- Lalith's economic vision for Lanka: Export or perish - The Sunday Times Sri Lanka - April 23rd, 2023 [April 23rd, 2023]
- Alliance for an Energy Efficient Economy to help A.P. govt. implement energy-efficiency projects - The Hindu - April 23rd, 2023 [April 23rd, 2023]
- President Biden Announces Key Appointments to Boards and ... - The White House - April 23rd, 2023 [April 23rd, 2023]
- A Restraint Approach to U.S.China Relations: Reversing the Slide ... - Quincy Institute for Responsible Statecraft - April 23rd, 2023 [April 23rd, 2023]
- Carrollton Mayor and City Council Election Preview 2023: Meet your ... - Star Local Media - April 23rd, 2023 [April 23rd, 2023]
- Governor Kelly Signs Bipartisan Bill to Expand Teacher Workforce in ... - Kansas Governor - April 23rd, 2023 [April 23rd, 2023]
- Indigenous Peoples Must Have Full Representation, Participation in ... - United Nations - April 23rd, 2023 [April 23rd, 2023]
- The EPA Region 6 Announces a Total of $23 Million to ... - U.S. EPA.gov - April 23rd, 2023 [April 23rd, 2023]
- Kansas governor strikes funding for anti-abortion pregnancy centers ... - Kansas Reflector - April 23rd, 2023 [April 23rd, 2023]
- Can You Fight for Climate Justice Without Being Antiwar? - Common Dreams - April 23rd, 2023 [April 23rd, 2023]
- Sustainable Tourism: A World leading to the road of Environment consciousness - Nomad Lawyer - NomadLawyer - April 23rd, 2023 [April 23rd, 2023]
- Atlanta's Cop City and the Struggle for Climate Justice - Resilience - April 23rd, 2023 [April 23rd, 2023]
- Jaishankars visit to Uganda, Mozambique went almost unnoticed but it indicated Indias bold gambit in Africa - Firstpost - April 23rd, 2023 [April 23rd, 2023]
- Natural resource - Wikipedia - October 30th, 2022 [October 30th, 2022]
- Non-renewable resource - Wikipedia - October 30th, 2022 [October 30th, 2022]
- Minister Wilkinson Launches Phase 2 of the Regional Energy and Resource Tables - Canada NewsWire - October 13th, 2022 [October 13th, 2022]
- Executive Secretary participates in Russian Energy Week to advocate for decarbonization in the UNECE region ahead of COP27 - UNECE - October 13th, 2022 [October 13th, 2022]
- Renault Group: The Future Is NEUTRAL: The circular economy is stepping into a new era! - Yahoo Finance - October 13th, 2022 [October 13th, 2022]
- Economy Expected to Contract Further in 2023, as the Fed Appears Resolved to Tame Inflation - PR Newswire - October 13th, 2022 [October 13th, 2022]
- Brazils Runoff Election Will Have Enormous Effects on the Global Climate Crisis - Truthout - October 13th, 2022 [October 13th, 2022]
- Health disparities and health inequalities: applying All Our Health - GOV.UK - October 13th, 2022 [October 13th, 2022]
- Opinion: Biopolitics is the invisible hand shaping mental health - The Connecticut Mirror - October 13th, 2022 [October 13th, 2022]
- Avaaz urges Georgieva and Trudeau to lasso-in commitments from IMF to attend December's vital UN Biodiversity Talks in Montreal - GlobeNewswire - October 13th, 2022 [October 13th, 2022]
- Kochi as a global city? Why not, asks the man behind Ahmedabads mega city story | Manorama English - Onmanorama - October 13th, 2022 [October 13th, 2022]
- Hennessy and Thurgood Marshall College Fund Announce partnership with Group Black and The Bishop Gallery to make "America's Most Influential... - October 13th, 2022 [October 13th, 2022]
- Pollution Prevention Week highlights ways to reduce, reuse and recycle waste - Michigan (.gov) - September 22nd, 2022 [September 22nd, 2022]
- England headed for incineration overcapacity, warns UKWIN - Resource Magazine - September 22nd, 2022 [September 22nd, 2022]
- 3 years of the Principles for Responsible Banking: our vision for change United Nations Environment Finance Initiative - UNEP Finance Initiative - September 22nd, 2022 [September 22nd, 2022]
- Isn't It Time To Challenge The Growth Paradigm? OpEd - Eurasia Review - September 22nd, 2022 [September 22nd, 2022]
- Coalition of Nearly 50 Organizations Launches 'Tear the Paper Ceiling' Campaign to Raise Awareness Around the 70+ Million Workers in the U.S. Skilled... - September 22nd, 2022 [September 22nd, 2022]
- Remote work can actually be more productive: More Hub readers respond to the work-from-home phenomenon - The Hub - September 22nd, 2022 [September 22nd, 2022]
- Mendocino Public Health on record-setting Sept. heat: We can't just treat this as a once-in-15-years occurrence - The Mendocino Voice - September 22nd, 2022 [September 22nd, 2022]
- Carbon Ridge Secures $6 Million Investment from Leading Climate Investors and Maritime Industry Leaders - Business Wire - September 22nd, 2022 [September 22nd, 2022]
- Regenerative Travel Is the Next Phase of Responsible Tourism - Outside Online - Outside - September 22nd, 2022 [September 22nd, 2022]
- NNPC: Between rebranding and reforms, By Tijah Bolton-Akpan - Premium Times - September 22nd, 2022 [September 22nd, 2022]
- Embodying the spirit of Malaysia - The Edge Markets MY - September 22nd, 2022 [September 22nd, 2022]
- Nonprofit executive takes on state-appointed economic development role - MiBiz: West Michigan Business News - August 29th, 2022 [August 29th, 2022]
- Noble Mineral Exploration Signs Exploration Agreement with the Constance Lake First Nation - Junior Mining Network - August 29th, 2022 [August 29th, 2022]
- China and the Democratic Republic of the Congo: A Progressively Deepening Bilateral Partnership - The Geopolitics - August 29th, 2022 [August 29th, 2022]
- Oil money is flooding into Guyana. Who will benefit? - Reuters - August 29th, 2022 [August 29th, 2022]
- Remote-work revolution exposes need for better data, tracking tools to evaluate workforce, pay and economy - The Spokesman Review - August 29th, 2022 [August 29th, 2022]
- We need rare earth elements for a greener future, but there's a catch - CBC.ca - August 29th, 2022 [August 29th, 2022]
- BRNHA the steward of the living traditions of WNC: Opinion - Citizen Times - August 29th, 2022 [August 29th, 2022]
- The Fiji Times Back in history: Future of forestry sector - Fiji Times - August 29th, 2022 [August 29th, 2022]
- Hochul announces grand opening of Capital Region BOCES Career and Technical Education Center - Troy Record - August 29th, 2022 [August 29th, 2022]
- Predicting the Future of Greenhouse Gas Emissions - Columbia University - August 15th, 2022 [August 15th, 2022]
- JD.com Ranks 46th on 2022 Fortune Global 500 - Yahoo Finance - August 15th, 2022 [August 15th, 2022]
- Minister Wilkinson Releases New Report Showing the Impacts of Climate Change and Necessity of Climate Adaptation in Ontario - Canada NewsWire - August 15th, 2022 [August 15th, 2022]
- Do Armenians have a future as an independent nation? Part 4 - Armenian Weekly - August 15th, 2022 [August 15th, 2022]
- Getting the diagnostics right 2 - BusinessWorld Online - August 15th, 2022 [August 15th, 2022]
- GrammaTech and T.E.N. Announce Call for Nominations for Product Security Executive of the Year Awards - Business Wire - August 15th, 2022 [August 15th, 2022]
- Energy Vault and Jupiter Power Announce Agreement for Battery Energy Storage Projects in Texas and California Totaling 220 MWh - Business Wire - August 15th, 2022 [August 15th, 2022]
- The North East LEP: Thinking bigger and planning together for the future - Bdaily - August 15th, 2022 [August 15th, 2022]
- It's not enough to buy American. You also need to sell American all around the world. - The Ripon Society - July 27th, 2022 [July 27th, 2022]
- Bid to designate 50k acres in UP as wilderness highlights tension over public lands - MLive.com - July 27th, 2022 [July 27th, 2022]
- A 'Living Wall' At Texas A&M Could Be The Key To Smarter Cities - Texas A&M University Today - July 27th, 2022 [July 27th, 2022]
- Architects and designers must embrace the circular economy - Project Scotland - July 27th, 2022 [July 27th, 2022]
- Strategic Minerals increases Tin and Tantalum production in June and Q2 2022 at its Penouta Mine - Yahoo Finance - July 27th, 2022 [July 27th, 2022]
- Issues of the Environment: Improving recycling rates and quality of recycling materials in Washtenaw County - WEMU - July 27th, 2022 [July 27th, 2022]
- Joe Oliver: The Liberal Cabinet Needs an Intervention - The Epoch Times - July 27th, 2022 [July 27th, 2022]
- SDG&E and Cajon Valley Union School District Flip the Switch on Region's First Vehicle-to-Grid Project Featuring Local Electric School Buses Capable... - July 27th, 2022 [July 27th, 2022]
- Reimagining business: The greatest debt of all time - Newsroom - July 13th, 2022 [July 13th, 2022]
- Moody's affirms A1 rating of Newfoundland and Labrador, changes outlook to stable - Moody's - July 13th, 2022 [July 13th, 2022]
- New Mexico's oil and gas revenues are breaking records and complicating budgets - New Mexico Political Report - July 13th, 2022 [July 13th, 2022]
- FACT SHEET: White House Announces over $40 Billion in American Rescue Plan Investments in Our Workforce With More Coming - The White House - July 13th, 2022 [July 13th, 2022]
- The Class of 2022 Is Ready to Workon Their Terms - SHRM - July 13th, 2022 [July 13th, 2022]
- Faraday Copper Announces Updated Mineral Resource Estimate for the Copper Creek Project in Arizona; Measured and Indicated Mineral Resources Exceed... - July 13th, 2022 [July 13th, 2022]
- Inside the Triangle's latest job opening data: What boards are showing and who's hiring - WRAL TechWire - July 13th, 2022 [July 13th, 2022]
- Reserve Bank keeps blinkers on inflation, raising OCR to 2.5% - Stuff - July 13th, 2022 [July 13th, 2022]
- Abe's drive to bring back Japan | The Interpreter - The Interpreter - July 13th, 2022 [July 13th, 2022]
- UCF Hospitality Researchers Expertise Is Tapped for Global Sustainable Tourism Report - UCF - June 30th, 2022 [June 30th, 2022]
- Feminist Economics and the Fight for Human Rights - OHCHR - June 30th, 2022 [June 30th, 2022]
- Biden Administration announces historic coastal and climate resilience funding - National Oceanic and Atmospheric Administration - June 30th, 2022 [June 30th, 2022]
- Why green ammonia will be the workhorse of EU's future hydrogen economy - EURACTIV - June 30th, 2022 [June 30th, 2022]