By Adedapo Adesanya
The African Union (AU) has adopted the Deep Blue Economy strategy by taking initiatives to promotes maritime transport, port activities, maritime security, as well as interstate exchanges to tackle foreign domination of shipping business on the continent.
In a report “Africa Blue Economy Strategy”, the AU noted that foreigners intentionally destroyed the budding African shipping lines and conferences to ensure that only Europeans offer such services and at their own prices.
It stated that in line with its projections, port activity in Africa is estimated to reach two billion tons by 2040.
AU noted that has concluded plans to reduce, if not eliminate foreign domination of shipping businesses in the continent as it commenced research and studies into many fields ranging from trade, security, job creation, poverty eradication, infrastructure among others to able to achieve its goals.
According to the report, the regional body noted that in its current configuration, maritime trade remains dominated by arms conglomerates which unilaterally set freight rates and thus organize the shipping market as they see fit.
Parts of the report reads: “This situation was favoured by a series of measures aimed at deregulation of the sector, with the main consequence being the disappearance of the liner conferences and the abandonment of the code of conduct for liner conferences, which established, inter alia, a key for allocating freight and an obligation to consultation between the different stakeholders, shipping companies and shippers.
“In a context of hyper-competition, marked by competitive interactions generating situations of permanent imbalance, the maritime transport sector, like all sectors of the economy, is facing a rapid evolution of business conditions.
“Since the liberalization of shipping in 1995, most shipping companies, particularly those in West and Central Africa have disappeared. Shippers, therefore, have serious difficulties in transporting their cargoes at reasonable costs, with foreign shipping companies operating at very high freight rates.
“Moreover, in most African countries, port infrastructures are obsolete and transport corridors in poor condition.
“It is in this context that the African Union has decided to take initiatives to promote maritime transport, port activities, security, maritime security, as well as interstate exchanges.”
Although Africa still has a relatively small impact in international trade (3 per cent of world volumes), African shipping follows the upward trend in the world. As a result, traffic in African container ports has grown at an average annual rate of 8 per cent over the past five years, compared to a global 5 per cent change.
Similarly, the forecasts of the International Monetary Fund and the World Bank show an increase in the continent’s traffic to 38 million two-foot equivalents (TEUs) in 2020 against 15 million in 2011.
