Africa: Investment Opportunities in Waterborne Transport in Africa


Relevant stakeholders, financing institutions and development partners should also work together to foster an enabling environment for private sector participation in water transport.

  • Recent economic growth and development in Southern and Eastern Africa has created positive opportunities to develop inland waterway transport services.
  • Inland waterway and shorter sea-distance transport has the potential to significantly improve continental interoperability in Africa.
  • Potential investment partners should offer more flexible and better conditioned financial facilities in water transport.

Improving continental interoperability through water transport

Inland waterway and shorter sea-distance transport has the potential to significantly improve continental interoperability in Africa.

This could reshape the economies of African nations, especially island and landlocked states. However, sufficient support and a facilitating governance framework are necessary.

Merging maritime transport into the fabric of the African continent improves connectivity. Connectivity is key to enabling trade under the African Continental Free Trade Agreement (AfCFTA), implementing the green agenda, improving food security and providing jobs for young people.

Water transport offers an option for green supply chains across the continent. It shifts some freight and passenger traffic to this alternative mode of transport, potentially developing cities and port towns.

Problems of financing, governance and weak involvement of the private sector still hinder the development of the water transport sector. Without integration into the maritime strategy of regions (and, indeed, the entire continent), island nations would continue to be less competitive and face marginalization as the planet globalizes.

Urgent further action is required. In particular, there is a need to invest in the establishment of local shipping companies to offer reliable and affordable services, linking island states to mainland countries.

In recent deliberations, industry sectors remained unanimous in calling for greater investment in maritime transport in Africa. Furthermore, development partners are emphasizing the issue of mobilizing development resources.

African leadership must play a leading role in improving water transport

As a necessary prerequisite for full integration with the continent, the heads of African nations and continental organizations must be aware of their obligation to identify solutions that resolve the weak maritime connection of African island states.

Governments should recognize the opportunity to promote efficient, safe and reliable inland waterway transport (IWT) and short sea shipping (SSS) services in Africa. Moreover, there is a need for the continent to dedicate significant support to these sectors. Water transport requires relatively less investment than road transport. Nonetheless, it has the potential to unlock diverse social, economic and environmental opportunities.

Continental organizations, such as the African Union Council and the AfCFTA Secretariat, should lead the consultation process to formulate regional and continental initiatives to address the lack of good maritime services to and from the island nations of ‘Africa.

Policy makers at continental, national and regional levels need to successfully manage both the regulatory framework and the physical infrastructure aspect of IWT, which are essential for the sustainable growth of the industry.

Relevant stakeholders, financing institutions and development partners should also work together to foster an enabling environment for private sector participation in water transport. Financial institutions and relevant investment partners should accelerate the mobilization of finance and provide the necessary resources to support the successful implementation of water transport infrastructure in Africa.

In addition, potential investment partners should offer more flexible and better-conditioned financial facilities. This matches the scale of potential projects and the needs of investors and developers to expand their operations across the continent.

Investment opportunities in water transport in Africa

The demand for water transport services is a derived demand. Indeed, technology is not desired for itself but for the services it provides to the economy. Therefore, any change in the size of the economy will result in greater potential for freight growth and increased demand for shipping.

Recent economic growth and development in Southern and Eastern Africa has created positive opportunities to develop inland waterway transport services. Due to the impressive growth of East Africa’s economy, where countries like Tanzania and Ethiopia have experienced remarkable growth rates above regional and continental levels, there is a prospect for expansion. freight traffic. Some of the ports in the sub-regions are experiencing capacity constraints and congestion.

The world standard for port dwell time is no more than seven days. In East Africa, however, cargo often remains in port for more than a week. The result is port congestion and inefficiency. This is particularly evident in Mombasa and Dar es Salaam. General cargo and container traffic at both ports far exceeds planned capacity.

In terms of container traffic, Port Sudan also suffers from capacity limitations. These three ports have reached their maximum capacity for dry bulk cargo. Capacity restrictions can be alleviated by improving port performance, but over time additional investment will be required.

Industrial parks

The development and quality of the various means linked to the maritime system, such as ports, have a direct correlation with the performance observed in terms of transport by water. Therefore, the availability of these modes will also be crucial in demanding more from the economy and perhaps water.

This is why the services of maritime transport or any other means constitute a derived demand which is not required in itself but because of the services it renders. One of the main obstacles to the growth of water transport is the availability of freight. This is the only factor that can guarantee the economic viability of the projects.

The impressive economic growth observed in Eastern and Southern Africa provides a strong basis or justification for the improvement and expansion of transport services. In countries like Ethiopia and Kenya, industrial parks have played a leading role in ensuring cargo availability upon completion.

Thus, Africa needs investment in industrial parks. The design should take a comprehensive and holistic approach. The approach will ensure a systematic link between ports, industrial areas and sources of raw materials. Therefore, even with the need to invest in upgrading and expanding ports, world-class industrial parks covering major sectors such as textiles, sugar production, garments, leather and agro-pharmaceutical industries such as tea, coffee and sisal should be developed.

Tanzania is currently implementing a major industrialization drive, while Kenya and Ethiopia have already made some progress. Further efforts are still needed to improve agriculture and the export of major cash crops. These cash crops include sisal, coffee, cotton, tea and tobacco. Harvests are large and likely to increase demand for transport services and the economy. In this way, water transport projects will be assured of cargo availability and achieve a payback investment period in this area.

Previous Ukrainian unit finds dead Russian soldiers and sends them home as a warning
Next Maersk offers eco-friendly rail solution for Spanish reefer container exports – alleviating supply chain bottlenecks