Exploring Maritime Prospects
The maritime policy imperatives and goals as set out in the Transport Policy state that the South African Maritime Safety Authority (SAMSA) has a multipronged mandate as far as the country’s maritime interests are concerned. Apart from developing maritime awareness, SAMSA has to assist in the creation and fostering of an economic environment for the maritime transport industry that will allow South Africa and the industry to compete with other nations. Sobantu Tilayi, chief operations officer of SAMSA, explains how the Authority is striving to meet its directives and contribute to positioning Africa at the seat of world trade.
We need to take full advantage of the existing and new gas finds on the South African coast. Onshore energy and large infrastructure projects will require that we have a link that takes African production to market in the region. These are development opportunities that we cannot afford to miss out on,” he says.
by Andrew Ngozo
CASE IN POINT | SAMSA
Shedding more light on the prospects associated with these developments, Tilayi says offshore oil and gas require an industry for the fabrication of structures. In this regard, he points out that the benefits to the metal and engineering industries are massive. However, the manufacturing sector requires transportation of often large equipment, and this is where the Authority comes into play. “According to Sunrise Energy, more than 218 floating structures are required to support the East Coast gas activities. We have a good head start already as far as this is concerned and the region is best positioned to provide logistics bases for the booming industry owing to the proximity of exploration sites,” he observes. A case in point in this regard, he states, are the facilities at the Cape Town and Saldanha ports which, although close to the sites, are not nearly as well developed as they should be.
With the present developments, and particularly with the discovery of gas on the East Coast of Africa, more support bases will be needed. The Southern Cape and KwaZulu-Natal ports thus hold immense potential for dealing with the opportunities presented. “The really essential link for the logistics bases as far as transportation is concerned is coastal shipping. We have not broken even yet, but we are steadily marching towards realising that goal,” he shares.
Africa is one of the world’s fastest-growing emerging markets and infrastructure development among others is going to grow at a rapid pace. In fact, it has gained momentum over the past few years. According to the United Nations Conference on Trade and Development (UNCTAD) 2012 Report, Africa requires infrastructure investment of at least 7% of its gross domestic product (GDP) in order to address the infrastructure backlogs. South Africa, as the biggest economy on the continent, is involved in a number of energy infrastructure ventures and, more often than not, transportation of equipment into the region is required. While this equipment largely does not originate from the region, there is scope for Africa’s involvement in the transportation chain for moving the equipment. Currently, most African countries import the equipment, and, in some instances, this includes the services that could be offered in African countries. This is done to the detriment of local industry.
The maritime connectivity of African countries is largely determined by the amount of mineral resources they possess. “This has resulted in resource export-led urbanisation of Africa, which is a very unsustainable model,” Tilayi states. In this context, he elaborates, the development of maritime transport infrastructure becomes a key enabler and catalyst for the competitiveness and development of Africa’s economy as well. With a population of approximately 1.05-billion people and 91% of continental trade being seaborne, there are vast developmental opportunities for coastal economies throughout Africa.
The Challenges for Africa
The development of coastal economies is not entirely divorced from that of landlocked countries, asserts Tilayi. Both the development of the landlocked 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. This is quite a poser for such countries as South Africa, a coastal economy.
Another area in which Africa can exploit its maritime space is in the ship registries and shipping Tilayi is quick to add, however, that this area also brings with it its own peculiar challenges. Africa is the only world region with no merchant tonnage of note under its control or registry to handle its coastal, intraregional and extraterritorial seaborne trade. In Tilayi’s view, this then means that there are no tax- or tonnagerelated benefits, which results in a skewed balance of trade. This has several repercussions for the continent, the common factor being that there are many lost opportunities.
Tilayi says there is often a decimation of maritime service expertise and competitiveness. This applies to opportunities that are sea-based and onshore. “Apart from lost opportunities for possible investment in shipping by Africans, there is also the continent’s vulnerability to foreign geopolitical and geoeconomic pressures. This undermines the establishment of a viable coastal industry to complement national land and aviation transport infrastructure and services. Additionally, there are lost opportunities for domestic industrial development and job creation.” In conclusion, Tilayi maintains that all these factors result in a weak continent. “Africa finds itself in a weaker position in coordinating intraregional African coastal trade strategies, and there is a weakening of the capacity of countries and governments to govern their ocean territories and provide safety and security.”