Promoting African Ownership and Participation in Africa’s Shipping and Maritime Sectors

Published on 8th May 2018

There is growing desire by member states of the African Union to harness the offerings of the Blue Economy and ensure that the African people fully benefit from them. The Blue Economy is of strategic importance to Africa. Thirty-eight African Union member states are either coastal or island states, and are yet to harness the full potential of the oceans and seas around them.

Harnessing this potential could enable Africa to start exploiting her resources of the oceans, rivers, lakes and seas to create jobs and stimulate structural transformation of her economies; and, this is key to breaking down the poverty traps that hinder our economies from advancing to higher levels of socio-economic development.

This is the more clear when we bring into the picture, the fact that over 25% of the African population live within 100 km of the coast, coastal and marine environments. This also translated to over 35,000 km of coastlines that are rich in biodiversity and other natural assets.

From the foregoing, it is clear that the Blue Economy can play a vital role in the socio-economic activities of many African countries in terms of contributions to higher levels of the Gross Domestic Products and sectors like food security, fisheries, forestry, tourism, transport and trade; among others.

The Blue Economy or Life Below Water is Goal 14 of the United Nations Sustainable Development Goals. A close examination of this goal clearly shows that its effective and comprehensive attainment can greatly contribute to the attaining of all the other sixteen United Nations Sustainable Development Goals. The Blue Economy is, in this connection, a strategic pillar of sustainable development.

In Africa, we are implementing the United Nations Sustainable Development Goals in tandem with the African Union Agenda 2063. It is because of their complementarity that Africa has a single reporting template on the implementation of these two strategic documents.

The Decade of African Seas and Oceans started in 2015. Preparations to celebrate the Decade of Seas and Oceans in Africa on 25 July 2018 have started at the African Union Headquarters.

Over 90% of Africa’s imports and exports are conducted through the oceans and seas. This ties in with the fact that ninety percent of world trade and two-thirds of energy supplies are carried by vessels plying the oceans and seas.

Over the past four decades, the volume of global sea-borne trade has more than quadrupled. While raising consumption and standards of living in many countries, this development has also brought to life the fact that shipping is a major contributor to global warming. The emissions from ships are estimated to be as huge as the size of the Germany economy, the largest economy in Europe and fourth largest economy in the world. Against this background, shipping must also factor in questions of environmental sustainability in its operations.

Like in other areas of the global environmental challenge, the African footprint in this environmental damage is not visible because it is marginal. In this connection, and in accordance with the polluter pays principle, the major polluters on the high seas must ordinarily provide assistance to African shipping companies to harness technologies that reduce carbon emissions. But we are told this principle does not apply in the International Maritime Organization.

Nevertheless, the world is committed to ensuring that shipping does not emit carbon dioxide by 2050. Africa should not be left behind in accessing carbon free shipping technologies. Against this background, Africa must increase her voice in the governance structures of International Maritime Organization.

I, therefore, call on all member states of the African Union to become members of the International Maritime Organization. Similarly, I urge African entrepreneurs to increase investments in African shipping so that we increase the number of African ships on the high seas. This will give us presence and voice.The starting point will be to appoint African IMO Ambassadors and the African Union Commission is actively pursuing this.

In my meeting with Mr. Juvenal Shiundu, Acting Director, for Technical Cooperation, International Maritime Organization, I asked who regulates the International Maritime Organization. His answer, which is correct, is that it is member states who regulate IMO. I raised this question because there are currently 38 African member states of the International Maritime Organization.

To take part in the regulation of IMO, we need to bring in the others so that the voice of Africa is head in this major institution of global governance, and hence my call for increased African membership in IMO.

The supreme policy making body of the International Maritime Organization, the Assembly, meets once every two years. Much of the work is done in the Council, committees and sub-committees and with full African membership in IMO, more African countries would be able to participate in its subsidiary organs and significantly contribute to Its regulation.

The basic complaint of African Ship-Owners against IMO is that it keeps raising standards and this is making it difficult for African ship-owners to grow their businesses. This would change with increased membership and investments; and with them, voice.

The African ship-owners are now well placed to increase their investments. This is the message we have conveyed to other members of the African private sector following the establishment of the African Continental Free Trade Area on 21st March, 2018 in Kigali, Rwanda.

On that day, Africa began the journey of creating a large and integrated market to overcome her historical fragmentation. The African Continental Free Trade Area is an economic space encompassing all 55-member states of the African Union to promote duty-free flow of goods and services once it is operational. It will be a market of close to 1.3 billion people. This population is projected to grow to 1.7 billion by 2030. In that year, the African middle class, which is also growing will be 600 million people.

With a growing middle class will also emerge growing spending power in diverse fields ranging from consumption of food to housing construction. Consumption is critical to the growth of the business, including shipping. It is also critical to stronger economic growth and economic diversification.

We also project trade expansion under the AfCFTA, (which is good for business). Intra-African trade will increase by 52.3% by 2022 just from tariff liberalization. This is projected to double if there is effective removal of non-tariff barriers. The AfCFTA is clearly a strategic business opportunity, and African maritime stakeholders must seize the moment by mobilizing investments to cater for this large market.

On 20th March, 2018, the African Union organized the African Continental Free Trade Area Business Forum which brought together policymakers and private sector leaders with a view to leveraging the power of the private sector to drive Africa’s integration. The Forum was successful both in terms of attendance and commitment by the private sector to institutionalize this Forum. The African Ship-Owners Association was ably represented at this Forum by the hardworking Secretary General.

Another matter of interest to the African Ship-Owners Association is that the African Union Commission is also in the process of drafting the African Union Trade Facilitation Strategy. This is a policy document that seeks to ease the movement of goods across the continent. It will also enable coastal countries to improve port infrastructure and services, and in the process, position Africa to gain greater competitiveness in global trade. This is because ports are a vital part of the supply chain in Africa with each port having a far-reaching hinterland often spanning a number of countries. Under the Trade Facilitation Strategy, a range of physical, organizational, technological and institutional elements will all play an integrated role in determining port capacity and efficiency.

I invite the African Ship-Owners Association to participate in the First Intra-African Trade Fair to be held in Cairo, Egypt from 11-17 December, 2018 where we target to conclude trade deals amounting to US$25 billion. We look forward to the outcome which we will bring to the attention of the Assembly of African Union Heads of State and Government when it convenes in July this year in Nouakchott, Mauritania. Let me also add that we welcome the support offered by the African Ship-Owners Association for two experts to be based at the African Union Commission. The experts will be a vital link with the Association and African Union member states.

By Ambassador Albert M. Muchanga,

African Union Commissioner for the Department of Trade and Industry.

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