Some interesting insights that came out of the Nepad Transport Summit 2010

A sprawling beast of a conference was the Nepad Transport and Infrastructure Summit 2010, held from 13 to 15 October at Gallagher Estate, home of the Pan-African Parliament.

As could be expected at an event drawing together ministers and captains of industry from every country in Africa, an enormous quantity of talk filled the venue, sketching the outlines and homing in on the minutiae of the challenges and opportunities encountered at present by a multitude of initiatives in the water and sanitation, information and communication technology (ICT), aviation, energy, road transport, rail transport and maritime sectors.

In most instances, it emerged that the opportunities would inevitably arise once the challenges were dealt with; that is to say, a long road to travel (such as the Dakar-Djibouti highway, still in the planning stages, which is sure to galvanise regional economies once complete – in a decade or so).

In most instances, too, it became clear that the single greatest challenge was the administrative inertia preventing the harmonisation of regulatory frameworks ineluctably required before any of the really exciting cross-border projects can get off the ground.

Be that as it may, certain findings were of great interest to the investor on the lookout for opportunities unencumbered by the too-challenging sort of challenge.

Perhaps the single most important take-home finding that emerged was made by Tsietsi Mokhele of the South African Maritime Safety Authority. In a speech bemoaning the woeful condition of the African maritime sector, he stated that the reason maritime transport had been neglected in transport integration planning – despite the fact that it handles the overwhelming bulk of freight into and out of Africa – is that for too long, planners have tended to balkanise the supply chain into segments (road, rail, aviation, shipping) instead of developing the sort of holistic integration multimodal solutions that an Africa Incorporated would require.

In terms of that insight, the Summit did provide one outstanding success story that is the envy of Africa and is already being emulated in at least one country.

‘Durban on the West Coast of Africa’

In the course of a presentation on getting freight into Angola at the inaugural Nepad Summit in 2009, a member of the audience pointed out that the waiting times incurred in transiting the Port of Luanda were so egregious (wholly due to official corruption) that not a few transport operators had opted to ship their goods to Angola by road – from Durban. One year later, those operators have cause to review their choice, for Durban has been relocated to the desert land of Namibia.

The author of this miracle is not, however, some desert wizard equipped with an army of djinns and articulated flying carpets, but a cheerful band of optimists endowed with vision, drive and a holistic, integrated, multimodal logistics model – the Walvis Bay Corridor Group.

This organisation, ably led by chief executive officer Johny Smith, effectively groups all the stakeholders of the Walvis Bay Corridor under one umbrella.

The vision that unites them is simple: Africa Incorporated is a gigantic shopping mall (albeit some parts of it resemble more closely a construction site with a spaza shop), and Walvis Bay is its western portal.

That 80% of the ports in southern Africa are on the east coast makes Walvis Bay an enticing option for those who may want to access the 300 million potential consumers who inhabit not only Namibia but also the countries adjacent to it: South Africa, Botswana, Zambia, and Angola.

Speaking at the Nepad Summit maritime parallel session, Smith emphasised that in attaining its objectives, the Group had proceeded in the manner that one devours an elephant: ‘piece by piece’.

First it was decided that the initiative would have to be a private-public partnership (PPP) – a joint development that addressed the concerns of stakeholders in the transport sector as a whole as well as local and national government.

Then, crucially, it was decided that despite being a wholly Namibian initiative, the focus would not be on Namibia alone, but on encouraging and developing intra-African trade and regional markets.

The port of Walvis Bay had to be developed into a service facilitation centre for maritime operators or risk being perceived as a fishing village. It was therefore designed as a multipurpose port: In terms of ship servicing and repairs, it began with a PPP between Namport and a Durban-based company, and it now has floating docks that have directly resulted in 700 new jobs.

The rest is a puzzle waiting to fall into place.

Namibia has a 1 500-kilometre coastline and a population of only two million, yet regional consumers number some 300 million. Twenty years ago, however, the region simply had no trade route except via South Africa; the viability of Walvis Bay itself largely depended on diamond money.

Transport links such as the Trans-Kalahari, Trans-Caprivi and Trans-Cunene corridors have since been developed – and business is already booming. Goods from Walvis Bay can be transported to Joburg within 48 hours. Border posts between Namibia, Botswana and South Africa now open 24/7, and an integrated management process has reduced border post waiting times to 30 minutes.

Other than these established routes, Zambia and Angola have become strong trade focuses for Namibia. Areas such as the Democratic Republic of Congo have become focuses for trade from Namibia.

In an effort to attract more shipping lines to the port, Walvis Bay has strong connections to European, North American, South American and Far Eastern shipping lines.

Tonnage has increased from 20 000 teu to 260 000 teu per annum, thanks to the advantages boasted by the port of Walvis Bay: safety, security, short transit times, no port congestion, regional trade integration and, above all, a change in the mindset of authorities and consumers.

Despite this runaway success, much remains to be done. Trade into Angola via Walvis Bay is set to skyrocket once the rail link to Luanda is completed, thanks to the reduced logistics costs offered by rail freight. (The rail sector is currently a marketplace seething with innovative new solutions, such as KPMG’s bimodal Rail Runner solution, which offers a versatile means of combining road and rail operations.) A rail link to Gaborone is also being planned.

A cross-border railway is a continuum that requires harmonisation between all stakeholder countries, so the climate of co-operation between Namibia and its regional partners is a distinct competitive advantage.

‘Further on up the West Coast, another Durban’

The outstanding success of Walvis Bay has attracted not only the admiration of Africa but also emulation – and South African countries are lining up to take advantage of the investment opportunities offered by Port Harcourt, Nigeria.

Port Harcourt is Nigeria’s second largest city and the gateway to the country’s oil-producing area, Rivers State – destination of 60% of Nigeria’s foreign direct investment. Now a R2-billion New City infrastructural development is to go ahead. The plan was first introduced at an investment forum in Durban (a twin city of Port Harcourt).

The idea is quite simple: to transform Port Harcourt from a ‘garden city’ of two million into a regional hub, and unlock the region in much the same way as Walvis Bay has been doing in Namibia.

The master plan, devised by principal project consultant and partner Arcus Gibb, is now approaching implementation phase, with first-phase opportunities including power, water supply and reticulation, solid waste management, ICT, urban transport, housing, commercial offices, industrial parks, and a golf course and clubhouse.

Tenders will be floated internationally in the near future.

Port Harcourt boasts an international airport offering direct flights on KLM, Lufthansa, Air France, and the like. It has two ports: one (Onne Port) being an oil-and-gas free zone; a third is to be built on an offshore island.

eThekwini (Durban) Mayor Obed Mlaba is on record as saying that Durban and Port Harcourt’s twinning agreement is aligned with South African’s concept of African development: “We believe that unless Africa can develop itself, no one will. And if Africa does not determine what it wants to do, no one else will. Africa cannot be strong if it is not strong in its own backyard.”

This sentiment has been echoed strongly by the private sector. Arcus Gibb views Nigeria as a growth area of the first importance and is growing its business there. Property development company SBT Juul’s CEO Trevor Juul has been quoted as saying that Port Harcourt offers a return on investment of 25% (SBT Juul has several big projects on the go in Port Harcourt, including an airport hotel, a Montecasino-style leisure and shopping centre, and an ICT park).

SA-Nigeria Chamber of Commerce Honorary CEO Dianna Games has urged South African companies not to miss out on the fantastic opportunities offered by Port Harcourt, as the early-bird window of opportunity is shrinking, with competition increasing as the business environment improves.

In addition, despite South Africa’s good relations with Nigeria, it is not the only country to have been wooed for investment.

Greg Penfold

Additional source:

www.howwemadeitinafrica.com