the irony of africa

The irony of Africa is that some of the poorest countries on earth are also among the most expensive to do business. The deterrents to investment are many and varied ranging from corruption and inadequate infrastructure, to political ineptitude and civil strife.

Nowhere is this more true than in the swathe of countries that make up West Africa, running from Angola in the south to Senegal and Mauritania in the north-west. Here it is clearer than anywhere else just how important well run ports and supporting regulations and infrastructure can be to economic development.

Taking figures supplied by the United Nations, shippers importing a single 20 ft container to the region face some of the highest costs in the world, and frequently the longest delays. With a few notable exceptions such as The Gambia ($922/teu), Cameroon ($1,672) and Nigeria ($1,306), most West African nations are in the $2,000-$3,600/teu cost range, not much better than strife-hit Iraq ($3,900) and Zimbabwe ($3,999) and significantly worse than the East & Pacific region’s average of $948.5/teu.

“West African ports are seriously inadequate in facilities when compared to their developed world counterparts,” says Erland Ebbersten, regional director, GAC Angola. “Most ports in West African nations need to improve super fast so as not to be a disservice to their country’s economy and to their people.”

The shortage of quality port facilities results in delays and additional costs in berthing vessels, discharging and loading and delivering cargo inland. “The bottleneck at the ports is further exacerbated by the total lack of infrastructure for shipping and logistics,” says Mr Ebbersten.

Most agents and lines contacted by Port Strategy complained that port planning in West Africa was almost always reactive in response to congestion rather than based on forward planning. The lack of suitable infrastructure has become even more acute in recent years as the world’s strong economic growth spread to Africa, resulting in higher imports of finished goods and exports of raw materials.

In Angola, for example, the country’s 29% per annum growth rate is putting massive pressure on ports and infrastructure.

The entire logistics network, including available berths, warehouse space, cranes, upstream road links and truck capacity has been swamped by the volume of cargo coming into Luanda port, according to Gerrit Laubscher, general manager, GAC Angola.

“Vessels are currently waiting up to 70 days to be unloaded in Luanda and service levels are simply not comparable to global port standards. As an example, it can take an unacceptably long 24 hours to discharge 1,000 tonnes of cargo from break bulk vessels.”

There, as elsewhere in western Africa, the failure to align port and customs procedures exacerbates the shortage of structural logistics capacity. “More often than not, port congestion is caused by non-clearance of cargo,” says Mr Ebberstein. “In Angola, the consignee cannot start the complex and lengthy customs clearance procedures until the vessel has a berthing reference number that it only gets when arriving at anchorage. It is even worse for car carriers as the vessel is not permitted to berth until most of the cargo on the docks is cleared. This adds to further delays in berthing.”

The reasons for delays are usually because unwieldy Customs requirements and manual operating systems result in misunderstandings and delays, says Mr Laubscher. “Mount Everest is an anthill compared to the mountain you have to climb to clear cargoes in Angola. Waiting for more than two months for a container to be cleared out of Luanda port is the rule rather than the exception.”

However, progress is being made in West Africa, albeit slowly. Some successes have been down to resource-hungry nations such as China making major investments in infrastructure as a way of ensuring long-term supplies of commodities. But major logistics companies such as Maersk and DHL are also deploying their international clout to improve trading regimes.

Perhaps most important has been the growing recognition by a new generation of African politicians that foreign investment and management can deliver economic gains, not least through promptly paid taxes and service charges. This has seen a series of port liberalisation reforms across the region which has encouraged operators such as DP World, APM Terminals and Bollore Africa Logistics, a division of French conglomerate Bollore, to make major terminal investments.

“Through the trend of concessions to the private sector, ports in West Africa in particular have significantly increased their performances and their ability to manage the growth of volumes in their current infrastructures,” explains Eric Melet, operations director of Bollore Africa Logistics.

“We also feel West Africa is improving in many aspects through the renewal of its elite on one side and the impact of globalisation on the other side.

“Additional investments will be necessary to reach the next stage of performance so they can accept bigger vessels.”

Mr Ebbersten adds that GAC, which has an agency network which covers all major West African ports, sees a “a noticeable difference” in performance standards where privatisation has occurred, especially when international companies are involved. “These companies are profit-driven and they realise that only by giving their customers efficient service will profits increase in the long run,” he says.

“In cases when privatisation is not so successful it can be attributed to inexperienced local private companies – often where government officials have a vested interest – being awarded the contract.”