Ghana boosts maritime logistics capacity with major port upgrades

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Rising traffic and efforts to increase trans-shipment trade are driving the expansion of Ghana’s two main ports, offering opportunities to maritime and terrestrial logistics service providers.

In mid-December local engineering company Ibistek, the holder of a 25-year operational concession for Takoradi Port, signed a $370m contract with Belgian maritime infrastructure firm Jan de Nul to develop a new terminal at the site.

Takoradi, the country’s oldest port, which opened in 1928, is the second largest in terms of activity, accounting for around 30% of seaborne traffic.

The engineering, construction and procurement contract will see Jan de Nul take control of the development of the Atlantic Terminal, a combined on-dock container and multipurpose facility capable of handling petroleum products and dry cargo.

It will include the deepening of the port’s basin, construction of quay walls and ship-berthing infrastructure, and land reclamation works.

The port is expected to be able to handle 525,000 twenty-foot equivalent units (TEUs) by 2025, according to Ibistek officials, with the first stage of the project to be completed and ready to land freight by mid-2020.

“As it stands, the depth of the dock is only 7.5 metres, but the current development plan will see it reach 16 metres in the medium term,” Felix Nana Sakey, CEO of Ibistek, told OBG.

“This will match new Panamax standards and allow the largest and most technologically advanced ships to dock with ease.”

With the port able to berth new Panamax vessels – container ships capable of carrying 13,000 TEUs, more than double the previous models – economies of scale and speed of freight movements will increase.

See also: The Report – Ghana 2018

Port of Tema upgrades continue

The announcement comes amid the upgrade of Ghana’s largest maritime hub, the Port of Tema, which is undergoing a $1.5bn expansion.

The project includes the construction of an expanded breakwater, dredging of the main basin to allow for larger vessels to enter the port, extension of quay walls and investment in new loading cranes.

Due to be brought on-line in mid-2019, the expanded port will be able to handle 3.7m TEUs annually, up from its present capacity of 1m.

Freight movements rise amid increased capacity

The efforts to expand capacity at Takoradi and Tema coincide with an acceleration of activity at both ports.

In the first 10 months of 2018 throughput and freight movement at Takoradi Port increased by 10% year-on-year (y-o-y) to 7.3m tonnes, according to data from the Ghana Ports and Harbours Authority, putting it on track to eclipse the 8m tonnes of freight handled in 2017.

The increased activity at the port was driven by a 36% y-o-y rise in transit traffic, 14% growth in export handling and a 7% jump in import flows.

Meanwhile, the increase in throughput at the Port of Tema was even higher, handling 13.8m tonnes in the first 10 months of last year, up 21.1% on the 11.4m tonnes recorded during the same period in 2017.

The increased activity at Tema is an indicator of improved broader economic performance, according to Mohamed Samara, CEO of the port’s operator Meridian Port Services.

“The market and economy are doing well. You can tell there’s growth from the port,” he told OBG. “The volume is a good indicator for the economy.”

Ghana targets regional trans-shipment trade

Port freight movement volume and the economy could be given a further boost by efforts to expand maritime transit trade, with the government working to establish and solidify Tema and Takoradi as the ports of choice for nearby landlocked countries Mali, Niger and Burkina Faso.

To this end, plans for the construction of a rail link between Tema and Ouagadougou, the capital of Burkina Faso, have moved a step closer, with representatives from both countries in November signing a contract to review the project’s feasibility.

The planned link, which the government aims to have developed under a build-operate-transfer model, could also open up improved access to Mali’s markets in the north and Niger’s to the west.

Stronger transport links to inland destinations would offer cost reductions for logistics operators and support Ghana’s credentials as a regional trans-shipment hub, staving off competition from neighbouring countries.

A recent report by the logistics umbrella group Ghana Shippers Authority noted service provisions to the transit trade, including insurance, handling and haulage fees, and tracking and forwarding services, generated $24m last year.

This figure would increase significantly if improved connectivity allowed the transit trade to expand from its current level of around 6% of the freight movement total.

Higher transit freight volumes through Tema and Takoradi would provide greater opportunities for much of Ghana’s logistics sector. While the construction of the Tema-Ouagadougou rail link could impact trade in the long-haul truck segment as freighters shift from road to rail, increasing domestic trade, supported by the expanded port capacity, could offset any downturn.

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