Rebecca Ejiforma
A stakeholder in the nation’s maritime sector, Adeniran Aderogba, has said that a deliberate policy strategy is needed to change the structure of Africa international trade from primary goods to high valued industrial inputs and consumer products, which constitutes the bulk of Africa’s imports from other regions of the world.
Aderogba stated this in his presentation, ‘Building a Robust African Maritime and Logistics Sector Towards a Successful Implementation of AFCTA in Maritime/Shipping Trade’ at Intra-African Trade Fair, IATF 2023, which was held recently.
He said, “In pursuit of this objective, we need to deepen and expand our industrial base to scale up productive capacity in manufacturing to produce goods to meet domestic demand and for the export market.
“In more practical terms, African economies must redirect its goals to vigorously pursue the policy of import substitution to enable her shift from import dependency to export-oriented economy.
“Besides tariff and non-tariff barriers, Africa needs to creatively mobilise resources for massive investment in trade facilitating transportation infrastructure such as shipping service, seaports, airports, railroads, roads, waterways, all complemented with modern communication networks.”
On shipping services, he said, “Governments in African countries, especially the littoral states should as a matter of economic development priority, provide relevant and adequate policy and legal environments to stimulate private sector investment in the provision of shipping services. Where most appropriate, public private partnership (PPP) could be considered in this regard. Because of the huge capital outlay required, coupled with the techno-managerial skill needed to successfully establish and run a shipping outfit, and, as well as stiff competition from the more established shipping companies outside the continent, Africa investment for the initial time, can focus on short sea shipping to serve the region.
“AfCFTA has provided the framework for a continental Cabotage regime. This could serve as a springboard for capacity building into intercontinental shipping in the medium to long term period. Here, collaboration and cooperation would be key and should be encouraged at the highest level of political authority and business leadership.”
He said, “There is a compelling imperative for paradigm shift in the port trade in Africa. A fundamental change in philosophy is needed in seaport concept, design, development and operation. “A new generation of African seaports that are market and competitive oriented is well overdue. The ideal new generation of African ports must be the archetypal seaport, hallmarked by sufficient draft; state of the art cargo handling equipment; ICT enabled; trade specialised, strong marketing strategy and globally competitive oriented transshipment hub. African seaports can move from competition to collaboration to merger and strategic alliances in order to compete favorably in the constantly changing port trade, induced by trade dynamics, technology and shipping and logistics demand of modern global trade. The different variants of the PPP model are suitable for seaport development, depending on specific circumstance and appeal. Our new generation of seaports must be conceived and developed to be economic growth centers.”
He said that funding, “Remains the central factor impeding development of the maritime and shipping sector in Africa, as indeed, other critical transport and economic infrastructure. For the peculiar nature of the maritime and shipping sector, the funding must be appropriate and adequate to be effective and deliver the required outcome. Development of modern seaports in Africa cannot be achieved through a public budget. Strong and committed PPP funding mechanism is very key. The public sector needs to take the lead in mobilising and incentivising private investment in the port sub-sector. For shipping, specialist financing is important as the segment does not fit for the conventional financing model. Ship financing is complex and complicated. Skills must be applied in order to get the right mix of funding that matches the needs of the sector. Specialist and dedicated funding institutions play a defining role in funding fleet acquisition. The Afreximbank can play a crucial role here by developing a dedicated portfolio for shipping. The ongoing initiative and effort to establish a Regional Maritime Bank in Africa should be generally encouraged and supported by governments and business leaders in the region.”
On the policy environment, he said, “For the maritime sector to develop and support the objective and goals of the AfCFTA, appropriate policy and regulatory environment must be conscientiously provided. This would give private investment the needed comfort and confidence to stake their capital. It would be necessary for Africa countries to develop Strategic Blueprint (SBP) to serve as a roadmap for coordinated investment in the development of their Marine and Blue Economy potentials. In this way, peer review mechanisms would be necessary to share best practices among them.
“Africa must scale up her productive capacity in finished and semi-finished goods in order to create the necessary conditions for trade exchange among and between her countries. There must be a need for movement of freight and people for transportation service to be supplied (transport service is a derived demand). The success of AfCFTA is inherently linked to safe, reliable, efficient and cost-effective transport systems across the African region. Trade thrives on an efficient transportation system and transportation prospers with growth in trade. Both are mutually reinforcing. It is overtly clear that maritime traffic is the dominant mode in global trade flow. The same would be true for intra Africa trade. Therefore, due attention and priority must be accorded to the development of the maritime transport system in Africa to facilitate full realisation of AfCFTA objectives.”
