Africa, despite its enormous size, still represents only a small portion of world trade. Exports are largely commodity based and include oil, coal, iron ore, ferrochrome, precious metals, cocoa, palm oil and timber. Yet, Africa is growing and many of its larger economies are beginning to diversify away from a traditional commodity focus. Ports represent the gateways for these commodity exports, but as countries grow and develop, ports are also essential for sustaining and improving more robust and diverse growth in African economies through the import and export of manufactured goods and other products.
A new report from PricewaterhouseCoopers notes that Africa needs to take advantage of the economic potential of its ports and shipping sector if it is to realize its growth ambitions. Globally, ports are gateways for 80 percent of merchandise trade by volume and 70 percent by value. Investment in ports and their related transport infrastructure to advance trade and promote overall economic development and growth is therefore vital – particularly in emerging economies that are currently under-served by modern transportation facilities.
Globalized supply chains have enabled goods and services to be transported across the world to meet the ever-increasing demands of populations. Ports are gateways for 80 percent of global merchandise trade by volume and 70 percent by value. As an emerging market region endowed with vast natural resources and a young and growing population, sub-Saharan Africa must accelerate its market access and trade both across the region and with the rest of the world. This is important to stimulate economic growth, diversify its economies, reduce the inflationary effects of weak transport and logistics infrastructure, become globally competitive, create employment and reduce poverty.
Sub-Saharan Africa’s economic outlook
The economy of SSA gained strong momentum up until 2014 when several factors led to a severe slowdown in growth. Major oil producing countries, notably Angola and Nigeria, were hit by falling oil prices, while South Africa saw contractions in its mining and manufacturing industries and had to deal with the effects of drought on the agriculture market.
The 1.2 percent growth estimate for 2016 is the lowest SSA has experienced for two decades and worse than that seen in the aftermath of the 2008-2009 global economic crisis.