Africa tackles its risk culture

Africa is not known for its efficiency Africa is not known for its efficiency
Industry Database

While cost-cutting at ports in much of the world is leading to fears that risk management standards will fall, there appears to be brighter hope on that front in parts of Africa.

African ports have been striving to overcome their reputation for inefficiency, and a string of privatisations in Nigeria in particular seems to be helping them do this at the same time as tackling risk issues. The majority of the container terminal concessions for the 12 countries within the region between Senegal and Cameroon have variously gone to APM Terminals and French group Bolloré, with the exception of DP World in Dakar. 

The Nigerian privatisation which included APMT and Bollloré, covered 26 concessions over six ports and was probably the biggest such drive in the industry. Ahead of privatisation, the federal Nigerian Ports Authority shed 10,000 people.

Margins are reckoned to be three to four times higher in Africa than in the western world: terminal operators are making money because they have retained the tariffs that were in place before the privatisations. This means that they have the cash to invest in better operational procedures – and the investments so far have been visible and significant.

“The benefit of privatisation is that you bring international standards, and companies like APMT are very good at training, and then promoting, local people,” Steve Cameron, marine director at RTI Technologies, a company that specialises in providing risk and safety guidance, and expertise in accident investigation and disputes, told a meeting in London of Afrimari, a networking group for professionals with interests in the continent’s maritime trade and energy business.

There remains insufficient competition regionally to drive tariffs down, but there are signs of it happening and it may spread to Lagos, which faces a prospective challenge from the port of Lekki which has started construction 60km to the east of the city, and from the deep water terminal to be built by APMT and partners at Badagry.

Incidentally, there is said to be still too much reliance on manual operations at Customs, and Lagos is known for a less than friendly Customs regime. The reason given for so much cargo being checked though manual outturns and inspections rather than by container cargo scanners is that 60% to 80% of cargoes going through Lagos is mis-declared. Perhaps with respect to Customs procedures the new port of Lekki can wipe the slate clean and serve the hinterland effectively, said Mr Cameron.

Mr Cameron said that the arrival of global operators had led to a significant reduction of accidents and a far greater focus on safety. Some port authorities still lag significantly in this area, and senior management needs to raise awareness and buy in to a safety culture.

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