World Economy

Economy, Policy Uncertainty Threaten Africa Port Projects

The Lekki Deep Seaport in Nigeria.The Lekki Deep Seaport in Nigeria.

A number of port development projects across Africa may be pointing to a positive outlook for capacity expansion in the region, but the myriads of uncertainties in economic growth become a limiting factor.

The United Nations in its new report tagged: “Review of Maritime Transport 2017,” is optimistic that the projects, when realized, would aid trade facilitation in the region, AllAfrica reported.

However, projects such as the $1.5billion Lekki Deep Seaport in Nigeria, and the proposed $2.5billion Badagry Deep Seaport are currently facing challenges ranging from economic considerations to inconsistency in policies.

The United Nations Conference on Trade and Development report noted that container port volume in Africa dropped by 1.2% in 2016, but will grow by 1.1% in 2017, and by 2.5% by 2018. It, however, forecast that world seaborne trade will increase by 2.8% in 2017, with total volumes reaching 10.6 billion tons.

Projections for the medium term also point to continued expansion, with volumes growing at an estimated compound yearly growth rate of 3.2% between 2017 and 2022.

UNCTAD noted that against the situation in some regions, the projected demand is expected to surpass planned capacity growth (East Coast of North America, China and Oceania).

“Capacity expansion is expected to outweigh demand growth in Northern and Western Africa, Southern Asia and the Gulf Coast of North America, sighting Drewry Maritime statistics.

“Assuming all planned projects are implemented, it is likely that capacity growth in Africa and Southern Asia will be significant. In Western Africa, for example, a sharp increase in port development projects is being observed, fuelled mostly by Chinese investment in African infrastructure projects.

“Several projects are under way, and others are in the pipeline. Dredging works are in progress at ports such as Abidjan, while ground and soil improvements are being carried out in Lome. In some cases, new greenfield sites have been selected to boost capacity, as illustrated by the $1.5billion project in the Port of Lekki, Nigeria.

“The expansion project of Tema Port, estimated at $1.5billion, is expected to reach completion by the end of 2019, while the Takoradi Port expansion project of $197 million is well under way.

“Similarly, the Ghana liquefied natural gas import terminal project ($500 million) and the Atuabo Freeport project ($700 million) are in the final stages of construction. A $690 million expansion project is being implemented in Dar-es Salaam Port.

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