Photo credit: DiasporaEngager (www.DiasporaEngager.com).

  • Sub-Saharan Africa economy is expected to grow by 3.4 per cent in 2021.
  • With AfCFTA fully implemented, the World Bank projects that Africa’s gross production will rise by about US$212 billion above the baseline by 2035.
  • Manufacturing exports will increase by 62 percent and internal trade in manufactured goods increasing by 110 per cent by 2035.

Congestion in African ports costs the continent’s economy millions of dollars.

However, the African Continental Free Trade Area (AfCFTA) — a free trade area that went into effect on January 1, 2021 — has boosted the continent’s economic prospects.

According to the World Bank, the sub-Saharan Africa economy is expected to grow by 3.4 per cent in 2021.

Read: Africa’s best blue economy investment opportunities

As a result of these and other reasons, the region’s economy is anticipated to recover faster than expected, according to the analysis. Free trade is projected to play a critical role in Africa’s rapid integration into regional and global industrial and value chains during the next 12 months, according to the report

With AfCFTA fully implemented, the World Bank projects that Africa’s gross production will rise by about US$212 billion above the baseline by 2035, with manufacturing exports increasing by 62 per cent and internal trade in manufactured goods increasing by 110 per cent.

How are ports in Africa coping as the continent’s economy rebounds from the pandemic?

Africa’s ports are, however, not changing fast enough. This is according to a report, Africa’s Ports: Rapid Transformation, by The Star newspaper in Kenya.

In many ports, the current infrastructure is insufficient to meet the current demand. As a result, ports across the continent face a major problem: congestion.

In August, a server failure at Nigeria’s main port slowed down port operations, including the clearing of commodities.

Losses of up to US$55 million per day were anticipated by the Seaport Terminal Operators Association of Nigeria (STOAN). An attack on Transnet’s network systems resulted in the port closures of South Africa in July of 2021. Congestion in Lagos, Nigeria’s main port, has been so bad that ships have had to wait up to 80 days to reach the port.

Additionally, the ports of Mombasa, Dar es Salaam, and Cape Town all have infrastructure that is not up to par.

When it comes to customs and efficiency in the context of the AfCFTA, how can ports keep up with demand?

There is a simple solution: digital technology.

For Wamkele Mene, AfCFTA’s Secretary-General, effective use of digital technology will improve AfCFTA’s operational capability, which in turn will improve trade efficiency in Africa. To quote South Africa’s Deputy Minister for the Department of Trade Industry and Competition, Fikile Majola “digital technology is vital for the revival of productive capacity.”

“Technology Enabled Smart Customs, Driving Port Modernization Through Digitalization” was the theme of the Huawei Smart Customs Online Summit on October 15. Experts from Huawei, Deloitte, and NucTech concurred that most countries are actively digitizing their customs operations following the pandemic and exploring global digital transformation. Big data, AI, cloud computing, IoT, and digital twins are being used to develop more resilient global supply chains. A growing economy is allowing customs to provide stronger oversight, as well as a broader range of services.

According to Augustine Chiew, a Huawei executive who serves as the company’s Director of Customs and Tax Industries, Covid-19 has had a significant impact on customs and other government sectors during the past 18 months.

Read: Kenya, Tanzania: ongoing supremacy battle for the ultimate port 

Smart ports will incorporate intelligent customs clearance, collaboration, e-services and integrated port management if they are to succeed in the future.

Huawei debuted its global smart customs solution in March of this year. Customs offices would play a more vital role in boosting national economic and trade development, according to Yue Kun, President of Huawei’s Global Government Business Unit.

It is, nevertheless, essential to strike a delicate balance between increased trade security and improved customs clearance. Security and convenience can be gained by moving to the digital world. Cloud computing, big data, and artificial intelligence are some of the technologies that Yue Kun hopes to leverage to construct an efficient and secure smart custom solution with his ecosystem partners. — said Yue Kun.

Africa’s economy will profit from more efficient customs procedures in the long run. AfCFTA’s economic value-add through tariffs alone is expected to be substantial when fully implemented. Africa currently has an average tariff of 6.1 per cent, with African businesses operating inside Africa having higher tariffs than those exporting outside of Africa.

Trade between Africa and the rest of the world is expected to rise by 10 per cent in the next two to three years as a result of the implementation of AfCFTA regulations.

Customs procedures in the region are being redesigned to be more secure, convenient, and efficient. After the epidemic, digital technology will continue to play a significant role in promoting economic growth. As for Africa’s economic growth, there is no doubt about that.

The bright side of Africa’s future seaports

African ports have seen a surge in investment during the past decade. Modern port infrastructure has emerged along the African coast.

From Durban, Dakar to Djibouti and Tangier, the investments in these ports is meant to meet the needs of a continent that is experiencing unprecedented growth.

One of the world’s largest private investors, the UK’s impact investor CDC has pledged millions of dollars to DP World’s efforts to grow its operations in Africa. Two weeks later, Bolloré which has 42 African ports and operates 16 container terminals, revealed that it was assessing its activities on the continent and hinted that it may sell its port holdings.

Congestion and bottlenecks caused by Covid-19 have kept global economic recovery from picking up speed in the past two years. A major contributor to economic development and diversity, ports serve as entry points for 80 per cent of the world’s trade goods in terms of volume and 70 per cent in terms of value.

For Africa, the AfCFTA should offer a new direction on how ports infrastructure and congestion are addressed.

The lack of enough tech infrastructure has led to avoidable delays which immediately increases costs and decreases competitiveness. Africa is in a better place now than ever to ensure that these tech issues are resolved to make the continent’s ports more competitive.

Read: Seaports logistics efficiency to determine Kenya, Tanzania supremacy wars

Source of original article: Industry and Trade – The Exchange (theexchange.africa).
The content of this article does not necessarily reflect the views or opinion of Global Diaspora News (www.GlobalDiasporaNews.com).

To submit your press release: (https://www.GlobalDiasporaNews.com/pr).

To advertise on Global Diaspora News: (www.GlobalDiasporaNews.com/ads).

Sign up to Global Diaspora News newsletter (https://www.GlobalDiasporaNews.com/newsletter/) to start receiving updates and opportunities directly in your email inbox for free.