African Port Development in the 2020s

The maritime industry remains a very dynamic field of business. According to the IMO, over 90% of the world’s trade is carried by sea.

On the African Continent, several trends have both impacted and will continue to impact on, the African maritime and port sectors.

These include:

Continued strong predicted population growth in Africa through the 21st Century;
Increased economic growth on average
Continued increase in cargo volumes and cargo vessel sizes calling at African ports
The use of big data

POPULATION

Whilst population growth slows in most parts of the world, and even decreases in some parts such as Japan, German and Spain, this is not the case in Africa where population is increasing annually by approximately 2.4%. Current population in 2023 is 1,460481,772. This figure is expected to reach 2.4 Billion by 2050 – a staggering 3.5 million more people per month, according to Joseph J Bish

Image from portfinanceinternational.com

ECONOMY

Several economic factors at play on the African continent hamper the economic development of the continent. Amongst these are the more general issues of fiscal constraints, political uncertainty, weak governance and weak investor sentiment. Added to that, the African Economic Outlook 2023, by the African Development Bank, is being published “as African countries are dealing with multiple shocks, including the effects of the COVID-19 pandemic, disruptions to global supply chains due to Russia’s prolonged invasion of Ukraine and a tightening of global financing conditions”. Yes, these shocks have had significant impact on the African continent, with a reduction in the continent’s real GDP growth from 4.8 percent in 2021 to 3.8 percent in 2022.

“A mix of short -term and medium- to long-term policies are needed to accelerate and sustain the growth momentum in Africa”

According to the ADB however, African economies remain resilient, with average growth projected to stabilize at 4.1 percent in 2023–24.

CARGO VESSEL SIZE INCREASE:

The growth in population brings with it increased cargo volumes, which in turn brings a demand for larger vessels calling at ports, which in turn demands an upgrade in infrastructure continent wide, most notably in the size and handling capacity of its ports.

In 2021, according to UNCTAD, Africa’s maritime trade, including both goods loaded and discharged, amounted to 1.3 billion tons, a 5.6% increase over 2020. The continent accounted for 6.9% of total goods loaded and 5% of total goods discharged.

BIG DATA

It would be remiss of African Ports not to use the big data currently available in the tech space to spearhead the development process – with some saying that Digital Transformation could pit Africa as a game changer into the future.

Ports should turn “Smart”, using data to connect supply chains with local communities providing improved communication and co-ordination on both land and water sides. Says Aristide Mbella of talent technology company LRMG, “The concept of a “smart port”, or an intelligent port, has developed thanks to innovations and technological advances, aiming to be always faster and more accessible. These are ports that use automation and new technologies, such as Artificial Intelligence (AI), Big Data (or big data), the Internet of Things (IoT) and blockchain to improve their performance”

AFRICA’S POTENTIAL

Within this topsy-turvy “growth-decline-growth” scenario on the African continent’s economy, coupled by the continued growth in population in Africa, the continent is experiencing an increase in projects associated with port development.

According to a leading energy investment platform, “while 4% of the world’s trade containers are handled by African ports, a gap exists between Africa’s ports and global port trade trends and standards”. This has forced the need to improved port infrastructure and now several African countries have projects in the pipeline or currently underway, with the top 5 totalling almost $8 Billion. You can read about these here: https://energycapitalpower.com/top-5-port-projects-in-africa-by-investment/

These are only a few of the major developments happening – and more privately funded port developments will be seen in years to come for a number of reasons: