1. 2 CONTENT OF THE PRESENTATION To provide a conceptual framework for analysing Africa’s geo-economic and geo- strategic make-up Indicating the missing.

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CONTENT OF THE PRESENTATION

To provide a conceptual framework for analysing Africa’s geo-economic and geo- strategic make-up

Indicating the missing link – shipping - within Africa’s intermodal transport plans

Analysing the role the maritime sector – particularly shipping can play in advancing Africa’s global geo-economic and geo-strategic interests

To make a case for the development of an African Indigenous Shipping Tonnage

KEY FOCUS ISSUES

Merchandise tradeRegional integrationGeo-economic imperativesGeo-strategic interests (including security and safety)Strategic Responses to Africa’s Maritime Domain Challenges

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largest island on earth with oceans on all sides:

Atlantic Ocean (West) Indian Ocean (East) Southern Oceans (South) Mediterrenean & Red Sea

(North)

total of 54 countries of which 39 (72%) are coastal or islands

coastline of 31,000 km

inland waterways of 300,000 square kilometers

seaborne trade volume 91%

Trade dependent GDP (eg RSA: 58% of GDP comes from trade)

2nd second largest land-mass in the world after Asia

the largest number of land- locked states in the world (15)

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INTRA-REGIONAL TRADE IN AFRICA

IMPORTS EXPORTS

AFRICA 9.6 8.7

DEVELOPING AMERICA 20.9 18.5

DEVELOPING ASIA 48.1 45.5

DEVELOPED AMERICA 23.3 39.8

DEVELOPED EUROPE 68.1 71.4

SOURCE: UNCTAD, 2008c.

The African continent has the lowest intra-regional trade levels compared to other regions

Africa is highly dependent on trade with countries over the oceans

Africa’s top 7 exports with the rest of the world are concentrated around a few products, with crude oil alone accounting for 46% of the total

Intra-African trade is fairly distributed between fuels, non-fuels primary goods (30%) , of which ores and minerals = 11% and agriculture = 19%; manufactured goods (40%)

Exports to Africa dominated by coastal economies (8 out of 10) representing all regions 7 of the top 10 exporters to the rest of the world are oil producers; 4 countries accounting for 50%

TOP TEN EXPORTERS TO AFRICA and THE REST OF THE WORLD

EXPORTS TO AFRICA EXPORTS TO THE REST OF THE WORLD

COUNTRY SHARE OF TOTAL INTRAREGIONAL EXPORTS

COUNTRY SHARE OF TOTAL AFRICAN EXPORTS TO THE REST OF THE WORLD

SOUTH AFRICA 24.29 ALGERIA 17.36

NIGERIA 12.37 SOUTH AFRICA 15.98

COTE d’IVORE 7.40 NIGERIA 14.78

KENYA 5.36 ANGOLA 8.80

SWAZILAND 5.34 LIBYA 8.75

NAMIBIA 3.47 MOROCCO 4.30

GHANA 3.42 EGYPT 4.07

ALGERIA 3.36 TUNISIA 3.87

TUNISIA 3.18 CONGO 2.36

ZIMBABWE 3.04 COTE d’IVORE 2.09

SOURCE: UNCTAD, 2008c # COUNTRIES IN RED APPEAR ON BOTH LISTS AND ARE COASTAL

5 of the top 10 importers from Africa are landlocked South Africa, Nigeria, Cote d’ivore, Namibia, Zimbabwe, Swaziland South Africa, Nigeria, Algeria, Libya, Morocco, Egypt, Tunisia dominate trade with rest of the world

TOP TEN IMPORTERS TO AFRICA and THE REST OF THE WORLD

IMPORTS FROM AFRICA IMPORTS FROM THE REST OF THE WORLD

COUNTRY SHARE OF TOTAL INTRAREGIONAL EXPORTS

COUNTRY SHARE OF TOTAL AFRICAN EXPORTS TO THE REST OF THE WORLD

SOUTH AFRICA 9.80 SOUTH AFRICA 25.40

BOTSWANA 8.23 MOROCCO 9.22

NAMIBIA 6.59 ALGERIA 9.18

COTE d’IVORE 4.91 EGYPT 8.00

SWAZILAND 4.70 NIGERIA 7.73

ZAMBIA 4.58 TUNISIA 6.00

ZIMBABWE 4.53 LIBYA 3.49

LESOTHO 3.45 SUDAN 2.92

NIGERIA 3.45 LIBERIA 2.78

D R CONGO 3.24 GHANA 2.42

SOURCE: UNCTAD, 2008c # COUNTRIES IN RED APPEAR ARE COASTAL

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AFRICA is largely dependent on trade for its economic development Intra-regional trade International trade

Africa’s trade is dominated by coastal economies in all the 4 regions of the East, West, North and South

That trade is largely seaborne and moves through its ports (91%)

The development of the land-locked 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

Transport, in this case maritime transport and logistics become an essential and strategic area of economic consideration

in that context, the development of the maritime transport infrastructure become a key enabler and catalyst for the competitiveness and development of Africa’s economy

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Africa is the only world region with no merchant tonnage of note under its control (registry) to handle her coastal intra-regional and extra-territorial seaborne trade

Africa imports transport and logistics services with every import - export activity• No tax and tonnage related benefits hence skewed balance of trade

Decimation of maritime services expertise (sea based and ashore) and competitiveness

Lost opportunities for possible investment in shipping by Africans

Vulnerability to foreign geo- political and geo-economic pressures

Undermines the establishment of viable coastal industry to complement the land and aviation national transport infrastructure and services

Loss of opportunities for domestic industrial development and job creation

Weaker position in coordinating intra-regional African coastal trade strategies

Weakening of the capacity of countries and governments to govern their ocean territories and provide safety and security

GLOBAL TRADE GROWTH & GROWTH IN SHIPPING

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International Seaborne Trade and Exports of Goods, 1955-2007

Seaborne Trade (billions of tons of goods loaded)

Exports of Goods (trillions of current $US)

Satellite AIS – Africa region 10Apr – 9890 vessels

AFRICA: A SIGNIFICANT PLAYER IN WORLD TRADE

STRATEGIC RESPONSESSTRATEGIC RESPONSES

HOW DOES AFRICA LEVERAGE THE POTENTIAL BENEFITS ARISING OUT OF THE MARITIME TRDADE ACTIVITIES IN THE CONTINENT AND ON ITS COAST

“THE NEED FOR AFRICAS OWN CAPACITY”

“Indigenous tonnage ownership” is possible

Article 3(1) of the African Maritime Transport Charter defines the objectives of the Charter

“To declare, articulate and implement harmonised maritime transport policies

capable of promoting sustained growth and development of African Merchant

Fleets......”

STRATEGIC RESPONSESSTRATEGIC RESPONSES

DEVELOPMENT OF PROPER CONTINENTALLY HARMONISED ENABLING LEGISLATION

Definition of an African Ship

Africa must ensure that in their respective legislation, the word “African ship” is defined in such a way

that it has the effect of preventing or discouraging foreign ships from being passed as African ships.

This definition may, e.g., include, among others, a condition that a ship must be wholly owned by

nationals or companies of African states and must be crewed by nationals of those states” etc.

National and Trans African Cabotage Policy

Cabotage as a policy needs to be implemented regionally in order to ensure growth of coastal shipping

which most maritime countries use for the development of their maritime industries

International Commercial Terms

Africa is endowed with many types of mineral resources e.g. oil and gas, iron ore, etc but does not fully

benefit from these. Many countries export FOB. It is estimated Africa loses billions of dollars as a

result. Africa generally imports CIF. With this arrangement in place, Africa’s tonnage will not survive.

STRATEGIC RESPONSESSTRATEGIC RESPONSES

SHIPPERS COUNCILS

Shippers Councils are responsible for protecting and defending the interests of shippers by

focussing the simplification of transport and trade procedures

The councils need to be established where they do not exist but such existence needs to be

underpinned by the sole need to ensure the promotion of Africa’s tonnage capacity

The councils need to cooperate continentally as prescribed by Article 3 of the African Maritime

Transport Charter.

STRATEGIC RESPONSESSTRATEGIC RESPONSES

PROPER MARITIME INFRASTRUCTURE

Further, To support such tonnage, Africa must pay more attention to developing world class

maritime infrastructure that is able to appropriately service its ships and also attract ships from

foreign jurisdictions plying their trade in the waters of Africa. Without such facilities, there is

always inherent risks that such tonnage will ground to a halt or Africa will be forced to service

them in foreign jurisdictions, thus exporting revenue unnecessarily.

STRATEGIC RESPONSESSTRATEGIC RESPONSES

FOCUSSED MARITIME INDUSTRY DEVELOPMENT

Ship Building

There is a need for Continent to co-operate in ship building capacity building.

Africa through its trade and strategic requirements, has a substantial market for ships that it

requires to support its shipbuilding industry

Individually, Africa may find it difficult to compete with countries of the Far East. Africa

may, for example co-operate in manufacturing different parts of vessels.

Offshore Industry Support

The booming offshore industry needs support that would significantly contribute to the

maritime industry activity and further enhance the expertise and capacity that the continent

requires.

STRATEGIC RESPONSESSTRATEGIC RESPONSES

Need for Funding

Funding is critical to the establishment and promotion of indigenous African Tonnage

as well as general maritime industry development

Africa must generate such funding through available initiatives such as the Maritime

Industry Development Levy on all foreign vessels handling cargoes in African Ports.

Africa should consider establishing an African Maritime Bank and/or Regional Maritime

Banks and/or National Maritime Banks.

CONCLUSIONCONCLUSION

Establishing and promoting indigenous tonnage will not happen overnight. Thus as a

start, make use of bareboat charter with conditions attached such as , that the ships

operations office is registered and is situated in the African State in question, the ship

is crewed by a determined number of Africans, the charter is for a period of not more

than five years.

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GOAL 2: Promote South Africa’s maritime industry/economy development Promotion of Maritime BBBEE and industry transformation Promotion of maritime awareness, maritime industry skills capacity and creation of jobs

SAMSA STRATEGIC GOALS

SAFETY, SECURITY AND DEFENCE PERSPECTIVE

TRANSPORT PERSPECTIVE

INDUSTRIAL PERSPECTIVE

SHIP & BOAT

BUILDING

SHIP REPAIRS & CONVERSI

ONS

LOCAL/REGIONAL COASTAL

SHIPPING & LOGISTICS

BUSINESS CONSULTING

SERVICES

ENGINEERING &

TECHNOLOGY

SERVICES

SKILLS TRAINING

RESEARCH & INNOVATION

FINANCING & ASSURANCESERVICES

EXPLORATION

SERVICES (VALUE ADDED) PERSPECTIVE

SHIPPING/CARGO

OPERATIONS & LOGISTICS

PORT & MARITIME

ADMIN

INTERNATIONAL

SHIPPING & LOGISTICS

OFFSHORE ENERGY &

MINING

PRODUCTION

MID & DOWNSTRE

AM

PORTS &HARBOURS

MARITIME CORRIDOR

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SAFETY OF LIFE,

PROPERTY & ENVIRONMENTTERRITORIA

L INTEGRITY

MARITIME SUPPLY CHAIN

SECURITY

SHIP REGISTRY

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The current recession is offering the continent a unique opportunity to implement the African Maritime Charter through a comprehensive African Maritime Development Strategy, thereby positioning itself as a key maritime trade and shipping region, focussing on:

Policy recognition and and developing of the regional African coastal shipping as part of the ‘domestic’ transport network planned COMPLETE with

appropriate cargo consolidation hubs [hub and spokes] and intermodal maritime corridor s linked to inland regions

Establishment of a continental short-sea-shipping strategy, enforceable through:

regional cabotage network (exclusive to African tonnage) coastal trade policy to integrate the continent’s coastal economies serving to strengthen the state’s capacity and capability to enforce

safety, security and territorial integrity

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The key challenge Africa must face up to is the absence of indIgenous blue sea merchant tonnage to keep the sea lines of communication open

• The current situation is not sustainable, undermining Africa’s ability o:African naval support for off shore operationsCarry influence in world trade and shipping affairs Secure and diversify opportunities for African investors Sustain numbers of African who could find jobs at sea if they had

berths for training

Promote the maritime industrialisation programme: provide adequate ship repair infrastructure facilities on the

continent establish regional maritime industrial hubs for ship building, boat

building and component manufacturing

Provide world class ‘soft infrastructure’ development programmes introduce maritime awareness and education in the populacel Provide high tech training and research centers Improve participation of females in maritime

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THANK YOU

ASANTE