By Jean-Claude Bastos de Morais, Founder & Group CEO, Quantum Global
Ranked amongst the world’s 10 largest ports, Jebel Ali Port is spread across 134 kilometre squared of land and is equipped with 67 docks and handling 21 metre TEUs (twenty-foot equivalent units). Constructed in 1976, and inaugurated in 1979, Jebel Ali port has since expanded adding further terminals—and is en route with a large expansion programme to be completed in 2030 designed to handle a capacity of 55 metre TEUs.
One man’s vision, Dubai’s late Ruler, Sheikh Rashid bin Saeed, to change the desert by the Gulf into one of the great harbours of the world was thought of as almost foolish at the time. Many advisers were said to have tried to dissuade Sheikh Rashid from pursuing the development of Jebel Ali Port as Port Rashid, located more prominently at the Dubai Creek, was still under-used, the Jebel Ali location was considered remote being 30 kilometre outside of Dubai and there was no natural harbour.
When they enlisted his son, His Highness Sheikh Mohammed bin Rashid—the current Ruler; his father is said to have answered that the Port was not destined for his generation, maybe not even the next generation, but they had to build it for there would come a time when they would not be able to afford it. And fast forward 40 years, Jebel Ali is not only the largest man-made harbour in the world, it may arguably be the most valuable commercial asset in the UAE today.
The Dubai story has some key learnings for Africa, most evidently, that port development has positive spill over effects into other connected sectors such as technology, transportation as well as creates jobs and boosts regional growth. Investing in major long-term infrastructure developments such as ports, can play a critical role in driving inclusive and sustainable growth.
Many parts of Africa that still suffer from an infrastructure deficit, specifically in the areas of energy, transportation and technology. As the Dubai example shows, port development is one area of infrastructure development, which if taken advantage of, has the potential to link less-developed communities to markets in a sustainable way and reduce the cost of production for enterprises, increase growth and productivity (which is typically higher in countries that have adequate infrastructure), as well as reduce the cost of doing business (see Africa Investment Index (AII)).
The African Development Bank’s (AfDB) report on Developing Africa’s Infrastructure for Enhanced Competitiveness which explores challenges faced in Africa with infrastructure development, stated that infrastructure could add a further two per cent to GDP growth across the continent.
According to the report, Infrastructure that is sufficient and works properly is crucial for Africa’s economic integration. African economies can begin the process of deep integration if their infrastructure networks are designed in such a way as to link production centres. Such infrastructure will enable Africa to compete effectively, tap into regional markets and benefit from globalisation through investment and trade.”
Large scale and long-term projects such as the development of ports are only possible with national support and government advocacy. Public Private Partnerships (PPP’s) can act as the necessary financing and with these factors combined, are vital components for creating the necessary conditions for Port development.
Some African focused investment companies have already taken advantage of the huge financial and developmental potential of port development. Quantum Global Group for example, is a private equity firm with seven sector-focused African funds, including a dedicated infrastructure fund. The Fund financed a PPP between Caioporto S.A. and the Angolan Government to develop a multi-purpose deep-water port in the Northern Province of Cabinda, in Angola; Port of Caio (PoC).
The Port is strategically positioned nine kilometres north of Cabinda, with the initial phase to include the development of the port infrastructure, a vast facility of nearly 150 hectares, which include marine structure and terminal facilities as well as industrial storage units, administrative and logistics offices. Being the first deep sea port in Angola, PoC will be a catalyst for creating an economic ecosystem in Cabinda, Angola at large, as well as a gateway with neighbouring countries. As seen in Dubai and UAE, with the ongoing success of Jebel Ali Port, multiplier effects into other industries will also be improved. PoC will be an import and export hub complemented by free zones, and will create an ecosystem for comprehensive supply chains directly improving GDP and growth. In the medium- term, the port is forecast to create up to 30,000 new jobs, 1,600 of which directly in the port and surrounding close infrastructure reducing local unemployment by 16 per cent.
Jebel Ali Port which is today ranked first globally for its productivity, is a key enabler in Dubai’s overall trade and industrial strategy and thus as a catalyst for economic prosperity and sustainable economic development. In the African context, where infrastructure development will play a driving role in economic growth, large-scale and long- term projects such as PoC are already showing the enormous benefits for local and national stakeholders, neighbouring countries as well as the strong returns for private investors.
Source: CPI Financial