Relevant stakeholders, financing institutions, and development partners must also collaborate to foster an environment encouraging private sector participation in water transport.
- Recent economic growth and development within Southern and Eastern Africa have created positive opportunities to expand water transport services.
- Water transport through inland waterways and over shorter maritime distances has the potential to enhance continental interoperability in Africa significantly.
- Prospective investment partners must offer more flexible and better-packaged financial facilities in water transport.
Enhancing continental interoperability through water transport
Water transport through inland waterways and over shorter maritime distances has the potential to enhance continental interoperability in Africa significantly.
This could reshape the economies of African nations, particularly island and landlocked states. However, sufficient support and a facilitative governance framework are required.
Fusing maritime transport into the fabric of the African continent enhances connectivity. Connectivity is essential for enabling trade under the African Continental Free Trade Agreement (AfCFTA), implementing the green agenda, improving food security, and providing employment for young people.
Water transport offers an option for green logistics chains across the continent. It shifts part of the freight and passenger traffic to this alternative mode of transportation, potentially developing port towns and cities.
Finance, governance, and low private sector involvement issues still hamper the development of the water transport sector. Without incorporation into the shipping strategy of the regions (and, indeed, the whole continent), island nations would continue to be less competitive and face marginalisation as the planet becomes more globalised.
There is a need for urgent complementary action. Notably, there is a requirement for investment in creating indigenous shipping companies to offer reliable and affordable services, linking island states with mainland countries.
In recent deliberations, industry sectors have remained unanimous in calling for more significant investment in Africa’s marine transport. Moreover, the development partners emphasise the issue of mobilizing development resources.
African leadership must play a leading role in improving water transport
As a necessary precondition for full integration with the continent’s mainland, the heads of African nations and continental organisations must be conscious of their obligation to identify solutions that solve the weak maritime connection of African Island states.
Governments must acknowledge the timeliness of promoting efficient, safe and reliable inland waterway transport (IWT) and short-sea shipping (SSS) services in Africa. Moreover, there is a need for the continent to dedicate significant support to these sectors. Water transport requires comparatively less investment than road transport. Nevertheless, it has the potential to unlock diversified social, economic and environmental opportunities.
Continental organisations, such as the African Union Council and the AfCFTA secretariat, must lead the consultation process to formulate regional and continental initiatives to solve the lack of good marine services to and from Africa’s Island nations.
Public decision-makers at the continental, national and regional levels must successfully handle both the regulatory framework and the physical infrastructure aspect of inland waterway transport, which are essential for the industry’s sustainable growth.
Relevant stakeholders, financing institutions, and development partners must also collaborate to foster an environment encouraging private sector participation in water transport. Relevant financial institutions and investment partners must expedite the mobilisation of funding and provide the necessary resources to support the successful implementation of water transport infrastructure in Africa.
Moreover, prospective investment partners must offer more flexible and better-packaged financial facilities. This is in line with the potential projects’ magnitude and the needs of investors and promoters to scale up their operations across the continent.
Investment opportunities in Africa’s water transport
Water transport service demand is derived demand. This is because technology is not desired for its own sake but for the services it delivers to the economy. Therefore, any change in the size of the economy will result in a more significant potential for cargo growth and a rise in demand for marine transport.
Recent economic growth and development within Southern and Eastern Africa have created positive opportunities to expand water transport services. Owing to the impressive growth of the East African economy, where countries like Tanzania and Ethiopia have experienced remarkable growth rates higher than the regional and continental levels, there is a prospect for expanding cargo traffic. A few of the sub-regions ports are experiencing capacity constraints and congestion.
The worldwide standard for port dwell time is no more than seven days. In East Africa, however, cargo often remains in the port for more than a week. The outcome is port congestion and inefficiency. This is especially evident in Mombasa and Dar es Salaam. General cargo and container traffic in the two ports substantially exceeds the designed capacity.
In terms of container traffic, Port Sudan is likewise suffering capacity limitations. All three of these ports have reached their maximum capacity for dry-bulk cargo. There is some potential to alleviate capacity restrictions by enhancing port performance, but eventually, additional investments will be necessary.
Development and quality of various means linking to the maritime system, such as ports, have a direct correlation with the observed water transportation performance. Hence, the availability of such modes will also be crucial to demand more from the economy and perhaps the water.
That is why the services of marine transportation or any other means is a derived demand that is not demanded of its own but due to the services it provides. One of the significant binding constraints in water transportation growth is cargo availability. That is the only factor that can guarantee the economic viability of the projects.
Observed impressive economic growth of East and Southern Africa make a strong base or justification for improvement and expansion of transportation services. In countries like Ethiopia and Kenya, industrial parks have played a leading role in ensuring cargo availability once completed.
Thus, Africa needs investments in industrial parks. The design must take a complete and holistic approach. The approach will ensure a systematic linkage between ports, industrial areas and sources of raw materials. Therefore, even with the need for investment in port improvement and expansion, world-class industrial parks covering major sectors such as textile, sugar production, apparel, leather, and pharmaceutical agro-processing such as tea, coffee, and sisal need developing.
Tanzania is currently implementing a major drive of industrialization, while Kenya and Ethiopia have already made some progress. More efforts remain necessary to improve farming and the exportation of major cash crops. These cash crops include sisal, coffee, cotton, tea, and tobacco. The crops are voluminous and likely to increase demand for transportation services and the economy. This way, water transportation projects will be assured of cargo availability and attain a payback investment period in this area.