http://www.joc.com/port-news/international-ports/japan-reinvigorates-african-port-logistics-investment-efforts_20160928.html
Japan reinvigorates African port, logistics investment efforts
Turloch Mooney, Senior Editor, Global Ports | Sep 28, 2016 9:47AM EDT
The Japanese government met Tuesday with representatives from dozens of the country’s largest companies to examine how to facilitate infrastructure development in Africa as it continues to demonstrate its resolve to further expand its influence on the continent.
The meeting between the infrastructure ministry and more than a hundred construction companies, trading houses, and manufacturers will become a regular occurrence and follows Japanese Prime Minister Shinzo Abe’s commitment to invest $10 billion in African infrastructure in the coming three years, including ports and hinterland links.
“For developing resources, and also for increasing the connectivity of the whole of Africa, it will be necessary to develop roads and ports,” Abe said in his keynote address to the Tokyo International Conference on African Development, or TICAD, in Nairobi at the end of August.
In a speech with a strong maritime aspect, the prime minister made clear Japan’s intention to increase its influence in trade lanes between Africa and Asia and make the oceans connecting the two continents “a main artery for growth and prosperity.”
“When you cross the seas of Asia and the Indian Ocean and come to Nairobi, you then understand very well that what connects Asia and Africa is the sea lanes.
“Japan bears the responsibility of fostering the confluence of the Pacific and Indian Oceans and of Asia and Africa into a place that values freedom, the rule of law, and the market economy, free from force or coercion, and making it prosperous.”
Japan is seeking to re-establish a leading position of investment and influence in Africa. TICAD was started by Japan 23 years ago and has funneled about $47 billion into projects on the continent, but Japan has in recent years fallen behind China as the key overseas investor and influencer of the economic and other policies of African governments.
Abe held a series of meetings with African leaders during his visit to the continent, including a summit with the president of Coite D’Ivoire, Alassane Dramane Ouattara, at which he promised a loan of $108 million for the establishment of a landing area and construction of a cereal berth at the Port of Abidjan.
Japan’s investments in Africa have so far been focused on the ports of Mombasa in Kenya and Nicala in Mozambique.
August saw the official inauguration of the first phase of a new container terminal at Mombasa funded by a loan from Japan’s development agency, the Japan International Cooperation agency, or JICA.
The $297-million facility can handle 550,000 twenty-foot-equivalent units per year and ramps up Mombasa’s existing annual cargo handling capacity to 1.6 million TEUs. Kenya will repay the loan over a period of 40 years.
Mombasa is the largest port in East Africa and second largest on the continent by cargo tonnage and container throughput. It is a key gateway for the transport of imports of fuel and consumer goods and exports of commodities like tea from landlocked neighbors Uganda and Rwanda.
The port now is preparing for an upsurge in competition from the giant Chinese-invested Bagamoyo port in Tanzania.
Japan will spend a further $500 million on the port, close to half of which is already allocated as a loan for development of its second phase.
“In five years’ time, we expect to hit 2.5 million TEUs after completing the second phase,” Kenya’s finance minister, Henry Rotich, said during the inauguration ceremony.
At Nacala in northern Mozambique, the deepest port in southern Africa, Japan is investing $255 million in the port’s second phase of development. The project will expand the capacity of the port to more than 250,000 TEUs and 5 million tons of cargo per year by 2020.
Nacala port is expected to experience substantial growth as the main gateway to the Nacala Corridor, home to some 45 million people, and a regional trade gateway for southern Africa. Mineral resources, including coal and natural gas, have been discovered in the region, leading to projections that cargo volumes through the port could increase tenfold by 2030.
“The project aims to increase cargo-handling productivity, which is pivotal for exports and imports in northern Mozambique, thereby contributing to economic development and poverty reduction in the Nacala Corridor, which stretches from northern Mozambique to Malawi and Zambia,” according to JICA.
In order to enhance regional economic activity and intra-Africa trade, Japan is investing heavily in hinterland transport and trade connections and transport corridors. Japanese-funded transport infrastructure projects are underway over much of the east coast of Sub-Saharan Africa, from Sudan and Eritrea as far as South Africa, as well as in West Africa around Ghana, Togo, and Cote D’Ivoire.
Also underway is a series of capacity-building projects to develop so-called “One Stop Border Posts” that aim to develop a uniform one-stop customs system throughout the distribution network of the continent.
A recently completed model project is the Rusumo International Bridge at the border of Rwanda and Tanzania and on the Central Corridor arterial roadway from the Indian Ocean to Rwanda. Japan invested $34.5 million in the construction of a new bridge and streamlining of customs processes, and JICA estimates it will result in savings of $1.8 million in costs for round-trip transportation between the port of Dar es Salaam in Tanzania and Kigali, capital of Rwanda, in its first year.
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Contact Turloch Mooney at turloch.mooney_at_ihsmarkit.com and follow him on Twitter: @TurlochMooney.
A version of this story originally appeared on IHS Fairplay, a sister product of JOC.com within IHS Markit.
http://www.joc.com/sites/default/files/field_feature_image/mombasa%201.jpg
The second phase of the Port of Mombasa in Kenya, pictured, is just one example of Japan's heavy investments in African infrastructure and supply chains.
Received on Wed Sep 28 2016 - 10:18:27 EDT
