A new report by multinational professional services network PricewaterhouseCoopers (PwC) has identified how Africa’s ports and shipping sector could unlock the full potential of its economic growth.
The report, ‘Strengthening Africa’s gateways to trade’, which PwC developed in response to the challenges facing sub-Saharan Africa’s (SSA) ports, has found that a 25% improvement in port performance could increase its GDP by 2%.
Dr. Andrew Shaw, PwC Africa Transport and Logistics Leader, stated: “SSA ports are under increasing pressure to respond to the needs of shipping lines, logistic providers and multinational traders, as they seek to drive efficiencies throughout the value chain.
“There remains a strong case for SSA to focus on investment in ports.
“Developing port infrastructure ahead of demand, focusing on the ports with the greatest potential (the ‘hub’ ports of the future) and improving the overall functioning of these ports so that through productivity gains they are increasingly attractive as destinations for global trade are key imperatives.”
However, with growing congestion in many African ports, PwC's report has warned that the country runs the risk of sacrificing further growth through lack of investment in port terminal infrastructure.
High port logistics costs, poor reliability and low economies of scale in trade volumes have a negative impact on trade growth in Africa.
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According to PwC estimates, SSA doubling throughput at its major ports could result in an average logistics cost saving of US$ 2.2 billion per annum.
Ian Arufor, Partner PwC Nigeria, commented: “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 recognized as key tenets of these programs.
“This is exemplified by the number of active port development and expansion projects in Nigeria and Ghana.”