South Africa is one of the strongest African markets and a gateway for other countries to trade with others throughout sub-Saharan Africa. However, the country urgently needs to improve its port infrastructure. Countries with inadequate ports will not be able to properly benefit from the Africa Continental Free Trade Area (AfCFTA) as trade starts to liberalise in Africa.
In May 2021, the World Bank and IHS Markit released their global Container Port Performance Index (CPPI). The Index is based on total port hours per ship call, which is defined as the elapsed time between when a ship reaches a port to its departure from the berth having completed its cargo exchange. South African ports performed quite poorly. Out of 351 facilities, the Index ranked Cape Town at 347th; Port Elizabeth at 348th; Durban at 349th; and Ngqura at 315th.
According to the Index, “More than four-fifths of global merchandise trade by volume are carried by sea, and approximately 35% of total volumes and over 60% of commercial value is shipped in containers.”
Port Technology reports that research conducted by the terminal operating system provider Navis, found the following to be the biggest areas of concern:
- Optimisation
- Cost reduction
- Improving yard operations
Port inefficiency can be considered a non-tariff trade barrier, and it is within the power of governments to eliminate all manner of such barriers if they want to encourage more trade both into and out of ports.