South Africa’s ports face slowed competitiveness due to capacity gaps [Business Africa]

Rédaction Africa Links 24 with Africanews
Published on 2024-02-01 16:31:19

As the shipping industry undergoes changes, South Africa’s ports are facing significant challenges that are affecting trade and economic growth. With container ships being rerouted away from the Red Sea, it was expected that South Africa’s ports would see an increase in traffic and business. However, the reality has been quite different as capacity challenges have meant that there is not enough space for ships to dock, let alone refuel.

According to the World Bank, South African container ports are among the most inefficient in the world due to infrastructure gaps. This has had a significant impact on the operations of port operator Transnet, with losses exceeding $300 million in 2023. It is estimated that port and rail failures are costing the South African economy up to $19 billion a year.

The main container port in South Africa, Durban, has particularly struggled to handle the increased traffic diverted from the Red Sea. Ships have had to wait up to twenty days for dock space, leading some shipping lines to choose alternative ports such as Namibian or Mauritian ports.

Marisa Lourenco, an independent political and economic risk analyst focusing on southern Africa, sheds light on the infrastructure challenges facing South Africa. She emphasizes that a lack of investment and maintenance of key infrastructure has rendered the country’s ports uncompetitive.

In addition to the challenges in the shipping industry, tensions between neighboring countries in East Africa have also affected trade. Burundi’s decision to close its border with Rwanda has had a significant impact on trade between the two countries. While the reasons for the border closure are political, it has caused disruptions for traders, transporters, and manufacturers in both nations. In 2022, Rwanda’s exports to Burundi were worth $3.8 million, and the closure of the border has forced Rwandan traders to seek new markets.

Furthermore, Uganda has faced issues with the quality and safety of its grain exports, particularly to Kenya and South Sudan. Contamination of maize exports with aflatoxins led to a temporary ban on exports. The contamination was found to be a result of poor post-harvest and storage protocols. In response, a campaign targeting multiple stakeholders across the food value chain is underway to increase grain quality and safety.

These challenges in South Africa’s ports and the broader trade disruptions in East Africa underscore the importance of infrastructure investment, efficient trade policies, and cooperation between neighboring countries. Addressing these issues will be crucial for the sustainable growth of the shipping industry and trade in the region.

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