Presentation on theme: "1. 2 CONTENT OF THE PRESENTATION To provide a conceptual framework for analysing Africa’s geo-economic and geo- strategic make-up Indicating the missing."— Presentation transcript:
2 CONTENT OF THE PRESENTATION To provide a conceptual framework for analysing Africa’s geo-economic and geo- strategic make-up Indicating the missing link – shipping - within Africa’s intermodal transport plans Analysing the role the maritime sector – particularly shipping can play in advancing Africa’s global geo-economic and geo-strategic interests To make a case for the development of an African Indigenous Shipping Tonnage KEY FOCUS ISSUES Merchandise trade Regional integration Geo-economic imperatives Geo-strategic interests (including security and safety) Strategic Responses to Africa’s Maritime Domain Challenges
3 largest island on earth with oceans on all sides: Atlantic Ocean (West) Indian Ocean (East) Southern Oceans (South) Mediterrenean & Red Sea (North) total of 54 countries of which 39 (72%) are coastal or islands coastline of 31,000 km inland waterways of 300,000 square kilometers seaborne trade volume 91% Trade dependent GDP (eg RSA: 58% of GDP comes from trade) 2nd second largest land-mass in the world after Asia the largest number of land- locked states in the world (15)
4 INTRA-REGIONAL TRADE IN AFRICA IMPORTSEXPORTS AFRICA9.68.7 DEVELOPING AMERICA20.918.5 DEVELOPING ASIA48.145.5 DEVELOPED AMERICA23.339.8 DEVELOPED EUROPE68.171.4 SOURCE: UNCTAD, 2008c. The African continent has the lowest intra-regional trade levels compared to other regions Africa is highly dependent on trade with countries over the oceans Africa’s top 7 exports with the rest of the world are concentrated around a few products, with crude oil alone accounting for 46% of the total Intra-African trade is fairly distributed between fuels, non-fuels primary goods (30%), of which ores and minerals = 11% and agriculture = 19%; manufactured goods (40%)
Exports to Africa dominated by coastal economies (8 out of 10) representing all regions 7 of the top 10 exporters to the rest of the world are oil producers; 4 countries accounting for 50% TOP TEN EXPORTERS TO AFRICA and THE REST OF THE WORLD EXPORTS TO AFRICAEXPORTS TO THE REST OF THE WORLD COUNTRYSHARE OF TOTAL INTRAREGIONAL EXPORTS COUNTRYSHARE OF TOTAL AFRICAN EXPORTS TO THE REST OF THE WORLD SOUTH AFRICA24.29ALGERIA17.36 NIGERIA12.37SOUTH AFRICA15.98 COTE d’IVORE7.40NIGERIA14.78 KENYA5.36ANGOLA8.80 SWAZILAND5.34LIBYA8.75 NAMIBIA3.47MOROCCO4.30 GHANA3.42EGYPT4.07 ALGERIA3.36TUNISIA3.87 TUNISIA3.18CONGO2.36 ZIMBABWE3.04COTE d’IVORE2.09 SOURCE: UNCTAD, 2008c # COUNTRIES IN RED APPEAR ON BOTH LISTS AND ARE COASTAL
5 of the top 10 importers from Africa are landlocked South Africa, Nigeria, Cote d’ivore, Namibia, Zimbabwe, Swaziland South Africa, Nigeria, Algeria, Libya, Morocco, Egypt, Tunisia dominate trade with rest of the world TOP TEN IMPORTERS TO AFRICA and THE REST OF THE WORLD IMPORTS FROM AFRICAIMPORTS FROM THE REST OF THE WORLD COUNTRYSHARE OF TOTAL INTRAREGIONAL EXPORTS COUNTRYSHARE OF TOTAL AFRICAN EXPORTS TO THE REST OF THE WORLD SOUTH AFRICA9.80SOUTH AFRICA25.40 BOTSWANA8.23MOROCCO9.22 NAMIBIA6.59ALGERIA9.18 COTE d’IVORE4.91EGYPT8.00 SWAZILAND4.70NIGERIA7.73 ZAMBIA4.58TUNISIA6.00 ZIMBABWE4.53LIBYA3.49 LESOTHO3.45SUDAN2.92 NIGERIA3.45LIBERIA2.78 D R CONGO3.24GHANA2.42 SOURCE: UNCTAD, 2008c # COUNTRIES IN RED APPEAR ARE COASTAL
7 AFRICA is largely dependent on trade for its economic development Intra-regional trade International trade Africa’s trade is dominated by coastal economies in all the 4 regions of the East, West, North and South That trade is largely seaborne and moves through its ports (91%) The development of the land-locked countries and their access to international markets are dependent on the performance of the network of maritime transport and logistics corridors, including ports and ships Transport, in this case maritime transport and logistics become an essential and strategic area of economic consideration in that context, the development of the maritime transport infrastructure become a key enabler and catalyst for the competitiveness and development of Africa’s economy
8 Africa is the only world region with no merchant tonnage of note under its control (registry) to handle her coastal intra-regional and extra-territorial seaborne trade Africa imports transport and logistics services with every import - export activity No tax and tonnage related benefits hence skewed balance of trade Decimation of maritime services expertise (sea based and ashore) and competitiveness Lost opportunities for possible investment in shipping by Africans Vulnerability to foreign geo- political and geo-economic pressures Undermines the establishment of viable coastal industry to complement the land and aviation national transport infrastructure and services Loss of opportunities for domestic industrial development and job creation Weaker position in coordinating intra-regional African coastal trade strategies Weakening of the capacity of countries and governments to govern their ocean territories and provide safety and security
STRATEGIC RESPONSES HOW DOES AFRICA LEVERAGE THE POTENTIAL BENEFITS ARISING OUT OF THE MARITIME TRDADE ACTIVITIES IN THE CONTINENT AND ON ITS COAST “THE NEED FOR AFRICAS OWN CAPACITY” “Indigenous tonnage ownership” is possible Article 3(1) of the African Maritime Transport Charter defines the objectives of the Charter “To declare, articulate and implement harmonised maritime transport policies capable of promoting sustained growth and development of African Merchant Fleets......”
STRATEGIC RESPONSES DEVELOPMENT OF PROPER CONTINENTALLY HARMONISED ENABLING LEGISLATION Definition of an African Ship Africa must ensure that in their respective legislation, the word “African ship” is defined in such a way that it has the effect of preventing or discouraging foreign ships from being passed as African ships. This definition may, e.g., include, among others, a condition that a ship must be wholly owned by nationals or companies of African states and must be crewed by nationals of those states” etc. National and Trans African Cabotage Policy Cabotage as a policy needs to be implemented regionally in order to ensure growth of coastal shipping which most maritime countries use for the development of their maritime industries International Commercial Terms Africa is endowed with many types of mineral resources e.g. oil and gas, iron ore, etc but does not fully benefit from these. Many countries export FOB. It is estimated Africa loses billions of dollars as a result. Africa generally imports CIF. With this arrangement in place, Africa’s tonnage will not survive.
STRATEGIC RESPONSES SHIPPERS COUNCILS Shippers Councils are responsible for protecting and defending the interests of shippers by focussing the simplification of transport and trade procedures The councils need to be established where they do not exist but such existence needs to be underpinned by the sole need to ensure the promotion of Africa’s tonnage capacity The councils need to cooperate continentally as prescribed by Article 3 of the African Maritime Transport Charter.
STRATEGIC RESPONSES PROPER MARITIME INFRASTRUCTURE Further, To support such tonnage, Africa must pay more attention to developing world class maritime infrastructure that is able to appropriately service its ships and also attract ships from foreign jurisdictions plying their trade in the waters of Africa. Without such facilities, there is always inherent risks that such tonnage will ground to a halt or Africa will be forced to service them in foreign jurisdictions, thus exporting revenue unnecessarily.
STRATEGIC RESPONSES FOCUSSED MARITIME INDUSTRY DEVELOPMENT Ship Building There is a need for Continent to co-operate in ship building capacity building. Africa through its trade and strategic requirements, has a substantial market for ships that it requires to support its shipbuilding industry Individually, Africa may find it difficult to compete with countries of the Far East. Africa may, for example co-operate in manufacturing different parts of vessels. Offshore Industry Support The booming offshore industry needs support that would significantly contribute to the maritime industry activity and further enhance the expertise and capacity that the continent requires.
STRATEGIC RESPONSES Need for Funding Funding is critical to the establishment and promotion of indigenous African Tonnage as well as general maritime industry development Africa must generate such funding through available initiatives such as the Maritime Industry Development Levy on all foreign vessels handling cargoes in African Ports. Africa should consider establishing an African Maritime Bank and/or Regional Maritime Banks and/or National Maritime Banks.
CONCLUSION Establishing and promoting indigenous tonnage will not happen overnight. Thus as a start, make use of bareboat charter with conditions attached such as, that the ships operations office is registered and is situated in the African State in question, the ship is crewed by a determined number of Africans, the charter is for a period of not more than five years. E
GOAL 2: Promote South Africa’s maritime industry/economy development Promotion of Maritime BBBEE and industry transformation Promotion of maritime awareness, maritime industry skills capacity and creation of jobs SAMSA STRATEGIC GOALS SAFETY, SECURITY AND DEFENCE PERSPECTIVE TRANSPORT PERSPECTIVE INDUSTRIAL PERSPECTIVE SHIP & BOAT BUILDING SHIP REPAIRS & CONVERSIONS LOCAL/REGIONAL COASTAL SHIPPING & LOGISTICS BUSINESS CONSULTING SERVICES ENGINEERING & TECHNOLOGY SERVICES SKILLS TRAINING RESEARCH & INNOVATION FINANCING & ASSURANCE SERVICES EXPLORATION SERVICES (VALUE ADDED) PERSPECTIVE SHIPPING/CARGO OPERATIONS & LOGISTICS PORT & MARITIME ADMIN INTERNATIONAL SHIPPING & LOGISTICS OFFSHORE ENERGY & MINING PRODUCTION MID & DOWNSTREAM PORTS & HARBOURS MARITIME CORRIDORS SAFETY OF LIFE, PROPERTY & ENVIRONMENT TERRITORIAL INTEGRITY MARITIME SUPPLY CHAIN SECURITY SHIP REGISTRY
21 The current recession is offering the continent a unique opportunity to implement the African Maritime Charter through a comprehensive African Maritime Development Strategy, thereby positioning itself as a key maritime trade and shipping region, focussing on: Policy recognition and and developing of the regional African coastal shipping as part of the ‘domestic’ transport network planned COMPLETE with appropriate cargo consolidation hubs [hub and spokes] and intermodal maritime corridor s linked to inland regions Establishment of a continental short-sea-shipping strategy, enforceable through: regional cabotage network (exclusive to African tonnage) coastal trade policy to integrate the continent’s coastal economies serving to strengthen the state’s capacity and capability to enforce safety, security and territorial integrity
22 The key challenge Africa must face up to is the absence of indIgenous blue sea merchant tonnage to keep the sea lines of communication open The current situation is not sustainable, undermining Africa’s ability o: African naval support for off shore operations Carry influence in world trade and shipping affairs Secure and diversify opportunities for African investors Sustain numbers of African who could find jobs at sea if they had berths for training Promote the maritime industrialisation programme: provide adequate ship repair infrastructure facilities on the continent establish regional maritime industrial hubs for ship building, boat building and component manufacturing Provide world class ‘soft infrastructure’ development programmes introduce maritime awareness and education in the populacel Provide high tech training and research centers Improve participation of females in maritime