Monday, November 14, 2011

Trade Growth Challenges African Ports

Last updated: November 13, 2011 9:47 pm

Trade growth challenges Africa’s ports

The giant boxes inside Nigeria’s busiest container port are lined up in neat, ordered rows. The cranes hovering over them gleam with factory-fresh paint. It is the picture of a thriving port, thanks to a $200m investment in the facility APM Terminals, part of Denmark’s AP Møller-Maersk, since 2006.
But just outside the terminal, housed in the rundown Lagos district of Apapa, a long queue of trucks stretches out from the gate. Drivers complain they have been waiting four or five days, missing sleep and meals, to deliver an empty container and pick up a full one.




The two scenes may seem hard to reconcile, but they are part of the same phenomenon. The new equipment reflects confidence on the part of container terminal operators worldwide – including by APM Terminals and a Chinese operator with a stake in Tin-Can Island Container Terminal near Apapa – in west Africa’s future trade prospects. Global container terminal operators have invested hundreds of millions of dollars in Nigeria, Ghana and Côte d’Ivoire, while the main shipping lines that serve the region are receiving new ships tailored to west Africa’s needs.
But the queue outside APM Terminals Apapa – and a similar one at TICT – reflects how the infrastructure is still struggling to keep pace with demand for Asian imports. The Apapa terminal is currently experiencing 30 per cent year-on-year growth.
While precise figures are scarce, much of the growth is fuelled by Nigeria’s rising trade with China. Maersk Line, the world’s biggest container shipping line, says China alone now accounts for half of the trade it carries to Nigeria. About 60 per cent of container ships arriving in west Africa come direct from Asia.
Congestion at the port could be a drag on Nigeria’s rapid growth. Businessman David Negi, visiting his trucks stuck in the queue, says the long waits are making him reconsider plans to invest in more trucks.
To earn a decent return, his four trucks should each complete four journeys monthly between inland Nigeria and the port. But, gesturing at the long queue, he says: “Sometimes because of this I hardly get three in a month.”
Mr Negi’s frustration is shared by TICT, privatised at the same time as APM Terminals Apapa and owned by a consortium of France’s Bolloré Africa Logistics and China’s China Merchants.
TICT has invested in the terminal but the surrounding infrastructure is weak. “We are facing problems caused by the infrastructures, which are very poor,” says Yann Magarian, operations manager for TICT. “Nothing has been done during 25 years.”
Yet, despite current problems, conditions are, according to William Ross, a senior manager at APM Terminals Apapa, immeasurably better than before privatisation. In 2006, when APM Terminals took over, there were shanty towns in the port and vessels had to wait 30 days to berth.
“The equipment was in a poor condition; the throughput through the terminal was extremely low,” he says.
The terminal now handles about three times the traffic it did before privatisation and offers ships that arrive on time an almost immediate berth. “I’m not saying it’s perfect now, but it’s much better,” Mr Ross says.
At TICT, Mr Magarian says the Nigerian Ports Authority has started to tackle the infrastructure problems. “Since one year, one can see they are performing some civil works,” he says. “It’s coming up.”
Both container terminals agree, however, that the biggest restriction on their capacity is the Nigerian customs authorities’ insistence on inspecting every container entering and leaving the terminals, rather than focusing on the obviously suspicious. At Apapa, containers wait 21 days to leave the terminal, down from 30 before privatisation, Mr Ross said. Containers wait 23 to 24 days at TICT.
Both would be able to handle far more goods if this figure fell to the 15-day average in nearby Ghana, whose container terminal at Tema is seeing similar growth levels with fewer obvious signs of strain.
“We are working with the customs officials and the government to try to look at the way they do business in Nigeria,” Mr Ross says.
Yet, while circumstances remain as they are, Mr Ross, like many others in the region, accepts that merely keeping pace with current trade growth will remain a demanding prospect. “We’re running to stand still,” he says.

No comments:

Post a Comment