Facilitating trade across africa with ports infrastructure development

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  1. 1. Facilitating Trade Across Africa with Ports Infrastructure DevelopmentPresented by: Derrick ChikangaInfrastructure Research Analyst Frost & Sullivan
  2. 2. AgendaOverview Current Situation Future Developments Implications and Conclusions
  3. 3. Overview Key Takeaway: An efficient infrastructure system is key to facilitating trade and regional integrationWHY DOES The Future Hold? Facilitating Trade An efficient transport infrastructure network enables the smooth flow of goods and services between countries and across regions.Regional Integration Integrated transport systems create corridors for trade and inter-Economic Development Developed transport systems drive economic growth and fostercontinental cooperation.economic development.
  4. 4. Africa Key Infrastructure and Trade Statistics 56%$810 billion $403 billionTotal spending needed over the next five years to upgrade, rehabilitate and expand Africas infrastructure% of The value of ongoing and bankable investment in projects running till Sub-Saharan Africa on 2025 and beyond. transport infrastructure30Is the number of countries in Africa which have regular power outages (out of 55)723MtExpected (2020) increase in Sub-Saharan African trade volumes from 376Mt in 2009120.4Mt 50 years Expected It will take 50 (2020) increase years for most in intra-regional countries in trade volumes Africa to reach in Sub-Saharan universal access Africa from to modern 34.9Mt in 2009 infrastructure50%70%In land-locked Infrastructure countries, transport development has been responsible accounts for 70% for more than of the value half of Africas of exported improved goods economic performance Source: World Bank and Frost and Sullivan analysis *based on active projects in 2011
  5. 5. Current SituationWHY DOES The Future Hold?
  6. 6. Current Situation Key Takeaway: Limited investment creating operational challengesWHY DOES The Future Hold? Current RealityLimited Infrastructure Investment Port Infrastructure Operational Challenges Delays in clearances of cargo at major ports Delayed flow of goods across regionsFuture Potential (2020)Increased Infrastructure Investment Port Infrastructure Operational Efficiency Increased trade and economic growth Timely clearance of goods at major ports of entry
  7. 7. Current Situation Key Takeaway: Bulk of cargo currently loaded at most Africa portsVolume of Goods Loaded and Unloaded, Africa, 2012 900 800787.7Major Ports, Africa, 20121,159 Million TonnesSuez Canal Container Terminal, EgyptTonnes (Million)700 600 Djibouti Port, Djibouti500 371.3400 300 200Port of Mombasa, Kenya1000 Volume of Goods LoadedVolume of Goods UnloadedPort of Dar Es Salaam, Tanzania Port of Lagos, NigeriaVolume of Goods Unloaded, 32.0%Port of Beira, Mozambique Walvis Bay, NamibiaVolume of Goods Loaded, 6 8.0%Port of Richards Bay, South Africa Port of Saldanha Bay, South AfricaSource: United Nations Conference on Trade and Development (UNCTAD)Port of Durban, South Africa
  8. 8. Current Situation Key Takeaway: Key transport projects currently being undertaken in the central African region Mega Corridors, Africa, 2030 1,000 km Abidjan-Ouagadougou CorridorAlexandriaAddis AbabaOuagadougou AbidjanThe Greater Ibadan Lagos Accra (GILA) Corridor Combined population >18.0 million Contributes combined GDP of $127,592,000.IbadanLagosNairobiKinshasaDar es SalaamTrans-Cunene Corridor Will link the Democratic Republic of Congo (DRC) with South Africa through Angola and Namibia.Future Corridor Development900 km Kampala-NairobiMombasa urban corridorAccraLuandaMain Developed CorridorsCairoThe North Delta Region Combined population of 77.0 million Three emerging corridors: Cairo-Suez Cairo-Alexandria Cairo-Ismailia.Cape Town DurbanNorth-South Corridor Facilitate inter-regional trade from Cape to Cairo. Free trade area comprising 533.0 million people. Combined GDP of $833.00 billion or 58% of Africas GDP. Johannesburg/Pre toria
  9. 9. Current Situation Key Takeaway: Trade corridors to link ports and inland locations Key Corridor Developments, Africa, 2012Key Resources, Africa, 2012CBKEY: Corridors Current roadsBBBauxiteCOilGoldCCIron OreUraniumCurrent railCurrent and proposed portsBCKEY:Proposed roadsProposed railCCCGasCopper DiamondsTimber Coal Source: Frost & Sullivan AnalysisResources, Agriculture and Retail are the major drivers of trade in Africa
  10. 10. Current Situation Key Takeaway: Southern Africa to take the lead in developing trade corridors in the short-term Key Corridor Developments, Africa, 20121Southern Africa will drive trade corridor implementation in the short-term Timeframe: 2020 32Southern and East Africa will connect, ramping up trade in the medium-term Timeframe: 203032West and North will lag significantly in corridor development and implementation Timeframe: 2040+1Trade is predicted to evolve in three distinct phases, positioning East Africa as a key trade hub in the medium term
  11. 11. Current Situation Key Takeaway: Key transport projects to be undertaken in the east African region $5.3 billionConstruction of a new port in Northern Kenya$5.2 billion Rehabilitation of railway to improve transhipment$1.4 billion$2.23 billion Railway linking Tanzania to RwandaTema-Accra railway link$2 billion 900km railway linking port of Nacala to Moatize $6 billion Development of a new deep sea port $1.2 billion Increase port capacity from 2.7 to 11.0 million tonnes$9.34 billion 1,100 km railway linking Botswana to Mozambique via Zimbabwe , new port at Matatuine*based on active projects in 2013 Source: Frost & Sullivan Analysis
  12. 12. Future Developments WHAT DOES THE FUTURE HOLD?
  13. 13. Future Developments Key Takeaway: East and West Africa anticipated to experience the highest growth in trade volumes2030CAGR20092020Southern Africa240Mt408Mt617Mt4.5%East Africa45Mt96Mt181Mt6.8%West Africa70Mt176Mt300Mt7.1%Central Africa21Mt43Mt77Mt6.4%Source: Africa Transport Outlook 2040African trade volumes are expected to Triple by 2030, driven by improved transportation infrastructure in East and West African
  14. 14. Future Developments Key Takeaway: Trade volumes to increase from 367 million tonnes in 2009 to 1,175 million tonnes in 2030WHY DOES The Future Hold? Trade Volumes Breakdown, Africa, 2009East Africa, 12. 0%Central Africa, 5.6 % Southern Africa, 63. 8%Volumes (Million Tonnes)West Africa, 18. 6%Southern AfricaEast AfricaWest AfricaCentral Africa700 600 500 400 300 200 100 0 200920202030YearTrade Volumes Breakdown, Africa, 2020 West Africa, 24. 3%East Africa, 13. 3%Central Africa, 5.9 % Southern Africa, 56. 4%Trade Volumes Breakdown, Africa, 2030Central Africa, 6.6 West % Africa, 25.5 %East Africa, 15.4 %Southern Africa, 52.5 %
  15. 15. Future Developments Key Takeaway: Most imports to come from Asia by 2020 Imports Volumes Origin, Africa, 2012Europe UK, Germany, France, Neth erlands and NorwayAsia China, Japan, India and KoreaNorth America USA & CanadaEAST AFRICA WEST AFRICAVolume of Goods: 31 Million TonnesVolume of Goods: 56 Million Tonnes SOUTHERN AFRICATotal Volume218 Million TonnesSource: United Nations Conference on Trade and Development (UNCTAD)Volume of Goods: 131 Million Tonnes
  16. 16. Future Developments Key Takeaway: Europe remains the biggest market for most African countries Exports Volumes Destinations, Africa, 2012Europe UK, Germany, France, Neth erlands and NorwayAsia China, Japan, India and KoreaNorth America USA & CanadaEAST AFRICA WEST AFRICAVolume of Goods: 65 Million TonnesVolume of Goods: 120 Million Tonnes SOUTHERN AFRICATotal Volume462 Million TonnesSource: United Nations Conference on Trade and Development (UNCTAD)Volume of Goods: 277 Million Tonnes
  17. 17. Future Developments Key Takeaway: Uganda and Zambia to WHY DOES TheFlows for experience the biggest increases in trade volumesEvolution for Select Future Major Intra-Africa Trade Landlocked Intra-African Trade Countries, 2030 Landlocked Countries, 2009-2030 Hold? Trade Volume (000 tons), 2009Trade Volume (000 tons), 20302931,696Uganda2,40811,600Rwanda422Burundi2150Zambia2,51115,950Malawi4531,811Zimbabwe1,2575,907Botswana1,3323,367Total8,27940,403Dem. Rep. of CongoTrade volume > 1 MT Key landlocked country Key port country *Arrow direction indicates flow of trade; arrow size does not indicate trade volumeLandlocked countries which are rich in resources and agricultural exports will benefit most from successful corridor implementation
  18. 18. Implications and ConclusionsWhat are the Implications for Africas Development
  19. 19. Implications and Conclusions Key Takeaway: Large funding deficit for infrastructure development currently exists in the short-term1Current on-going and bankable projects running till 2025 and beyond are valued at $403 billion. However, approximately $810 billion will be required in the next 5 years.2Sub-Saharan African trade volumes are expected to increase from 376Mt in 2009 to 723Mt in 2020. Volumes anticipated to reach 1,175Mt in 2030.3East Africas established intra-regional connectivity and improved regulatory environment is likely to drive access to markets in multiple countries.4Intra-regional trade corridors are expected to near completion over the next three decades, in the following sequence: Southern Africa (2020), East Africa (2030), West & North Africa (2040+).
  20. 20. Implications and Conclusions Key Takeaway: Investment in ports infrastructure should facilitate regional integration and trade developmentWHY DOES The Future Hold? Investment Opportunities The current lag ininfrastructure and operational challenges currently being experienced have necessitated the need for increased investment in ports infrastructure.Trade Opportunities Increased investmentin ports infrastructure will facilitate the smooth flow of goods and services across different regions. This will facili