Africa’s Maritime Sector: A Secure Base for the African Continental Free Trade Area to deliver its core values
Written by Capt. Ola Olubowale, AfIN, MRIN
Maritime Business Professional
Member: Australia Africa Chamber of Commerce
Western Africa’s maritime sector is a bullish industry unknown to many people; the global projection of the new emerging market shows that population strength will be in Africa after China. Studies have shown that transportation is a requirement for every nation, regardless of its industrial capacity, population size or technological development status. The majority of the African transportation systems, right from inception, were perceived to be poorly designed and unable to be scaled up to meet greater demands, a design flaw that has caused traffic congestion on roads, overstressed railways, and has led to faltering airfields and mass-transport blind spots, as seen in most of the West African countries.
Overall effect: it appeared to be market impediments that operate to limit the extent to which African entrepreneurs undertake businesses in the maritime sector and their prospects for success; but, the industry's complexity/capital intensive nature presents endless business opportunities for solutions.
Supporting the above narrative, maritime transport will continue to provide continental solution services to connect people to jobs, homes, communities and essential services vital to the supply value chain. However, these opportunities have not yet been leveraged. Inland waterways, the coastal waterways, and the West African trans-Africa coastal trade routes are left unattended; these opportunities are untapped.
The recently signed African Continental Free Trade Area (AfCFTA), signed by 54 of the 55 countries in Africa, began on 1 January 2021. It has been projected that the collaboration will deliver an estimated $3 trillion market and could help to realise more than $84 billion in untapped intra-African exports, according to a new report by the African Export-Import Bank (Afreximbank).
However, many maritime security experts and business investor/maritime experts might defer on views of the sector being bullish due to concerns about security in the region, particularly the piracy issues in African waters. There are also concerns from investors about the environment, social and governance (ESG) matrix which is a critical driver for investors into any sector investment.
Most West African countries' maritime and security authorities are leading the sea battle to address piracy issues in African waters. It is a known problem, but it has a solution, creating business value for maritime security operators in the area, which is a significant multi-million-dollar venture. Regardless of the security views, the African maritime industry remains bullish, and is a secure base for AfCFTA to deliver its value to the continent