Caution urged in Africa ports upgrade

Many African countries have made great progress in modernizing their ports, but further gains on the continent will require wise decisions in order to avoid wasteful investment amid increasing competition, a report said.

Yielding spectacular results are the Port of Tanger Med in Morocco, Port Said in Egypt and the Port of Djibouti, according to the report, which was authored by the Africa CEO Forum, a group that promotes Africa's private sector, and Okan, an Africa-focused consulting and financial advisory firm.

Despite such progress, particularly in facilities serving container shipping, much remains to be done, it said.

The report said modernization of port infrastructure is a fundamental component of Africa's industrialization and economic integration efforts. More than 80 percent of the continent's trade passes through ports.

But one of the main challenges facing the continent's port managers is how to invest wisely to avoid "the delusions of grandeur" trap, according to the report.

"Despite countries' stated ambitions in numerous national development strategies, not all of them will be able to serve as continental hubs," it said. "Instead of investing in expensive, major infrastructure projects, many countries would benefit from taking a more conservative, step-by-step investment approach and focusing on the bottlenecks that hinder their operations."

Ending inefficiencies

The report said so-called hub wars are raging in Africa, leading to speculation that overcapacity may threaten the prospects of the continent's container terminals.

The report said there is a need to end a vicious circle of operational inefficiencies, noting that African ports often suffer from operational inefficiencies, straining their competitiveness and crippling communities and businesses with high logistics costs.

This is in addition to inadequate stakeholder coordination, poor turnaround management, burdensome administrative procedures, equipment theft and damage, as well as inappropriately used storage areas.

Instead of investing in hard assets, the report said the best way to reduce these costly inefficiencies is to review operating procedures and improve cooperation between port players.

In an environment where budgetary resources are limited and technical expertise continues to be in short supply, the report said that making use of public-private partnerships is an appealing solution for upgrading Africa's port infrastructure.