Ports crucial to Sino-African trade success

China's development of deepwater ports and other infrastructure reveal a key role in belt and road initiative

China's rapid growth and economic interest in Africa is a hot topic for debate among scholars the world over, especially in the recent past. It is fair to say that renewed interest in the continent has led to massive infrastructure development in most of its states, courtesy of China.

The manufacturing industry in China relies greatly on the African market. It produces relatively cheaper products when compared with other world manufacturing industries, and the low price tags of Chinese textiles, electronics and construction materials have become a hit with the developing African market.

The 2008 international financial crisis further opened up the African market to Chinese products, with the country's export industry suffering a major blow from Western markets. These economies slowed down and their demand for Chinese products declined sharply as a result. This is when Sino-Africa trade volume exceeded that between the United States and Africa, making China Africa's largest trading partner.

China, on the other hand, imports a lot of raw materials, minerals and crude oil from African countries such as the mineral-rich Democratic Republic of Congo, Zambia and Tanzania to sustain its manufacturing sector which has, in the last 30 years, propelled it to become the second-largest economy in the world after the US. China has overcapacity in the domestic production of steel, and cement and therefore exports these to both developing and developed countries.

The rapid growth of the country since the formation of the People's Republic of China in 1949 has led to a sharp decline in natural resources available in the country. China is forced to import to sustain its manufacturing industry.

Meanwhile the Chinese economy has itself slowed down in recent years and the current leadership, under President Xi Jinping, is looking for other avenues to sustain China's growth. This is where reliable, fast and efficient gateways to and from China are needed in Africa's much sought after developing countries.

Recently the Chinese government, through Chinese Vice-Minister of Commerce Qian Keming, listed the Kenyan ports of Mombasa and Lamu as being crucial in Xi's Belt and Road Initiative. The strategic initiative is an adaptation of the ancient Silk Road, which was greatly expanded during the Han Dynasty (206 BC - AD 220). The road originated from the east in Chang'an, now Xi'an, and wound up in the Mediterranean Sea.

The Belt and Road Initiative has also listed ports in Tanzania, Somalia and Djibouti as being important to the implementation of the ambitious plan.

If successful, the initiative will involve over 60 countries that currently represent a third of the world's economy. The initiative has, however, drawn resistance from countries that see China as having other, motives in the initiative.

Xi has moved to dispel these concerns, emphasizing that China is committed to not interfering in the internal affairs of other nations. Xi also envisions a trade route linked to Africa through the revival of the ancient maritime silk routes. Therefore efficient ports, railways and roads are crucial for the implementation of this initiative.

In implementing the maritime silk routes, China is now developing seven deepwater ports along the African coastline. These are Bizeret in Tunisia, Djibouti, Maputo, Dar es Salaam, Libreville in Gabon, Tema in Ghana and Dakar in Senegal. Chinese companies have also had a major interest in the expansion of ports in Africa that lie along the ancient Maritime Silk Road. This further affirms their importance in promoting economic ties and trade with African countries.

The port of Mombasa is still the busiest and most efficient port in East Africa, serving Uganda, Rwanda, Burundi, northern Tanzania, Ethiopia, Somali, South Sudan and the Democratic Republic of Congo. Mombasa was also the destination of the ancient Maritime Silk Road that started from Quanzhou City, located in eastern Fujian province. The ancient Maritime Silk Road linked the East and the West hundreds of years ago.

Mombasa port is also the second largest in Africa in terms of annual tonnage container handling. It is therefore imperative that expansion work on the port make it an even greater gateway and entry point for goods. However other regional ports, such as Dar es Salaam, are now competing with Mombasa in terms of efficiency, a move that has seen the Kenyan government move with speed to improve operations at the port.

In January, the Japan Bank for International Cooperation advanced a 25 billion Kenyan shilling ($243 million) loan for the expansion of Mombasa port. The first phase of the project is expected to finish in March next year, while the final phase should be complete by 2020.

This is the second expansion project, after China Road and Bridge Corp completed its expansion of Berth 19 at a cost of $82.15 million. Officials at the time said the expansion was the first for the port in two decades.

The ongoing construction of a standard gauge railway by the company, from Mombasa to Nairobi, is yet another project that indicates how important the port is to strengthening economic ties with African countries. The railway line is expected to extend to Uganda, Rwanda and Burundi in its second phase so as to connect the capital cities of the east African countries. This will ensure seamless movement of goods to and from the cities all the way to the port of Mombasa.

Lamu port, located on the southern coast of Kenya, is also undergoing major infrastructure upgrades under the ambitious Lamu Port South Sudan Ethiopia Transport corridor project.

This will be the largest infrastructure and transport project in East Africa and will connect Lamu port with neighboring oil-rich South Sudan and Ethiopia through rail, road and an oil pipeline. Currently, a dilapidated road network connects the three countries.

The Tanzanian government plans to invest $11 billion in the upgrading of Bagamoyo port, which will make it the biggest in the region, dwarfing Mombasa port. China Merchant Holding International is backing the project and plans indicate that an industrial zone, complete with rail and road links, will form part of the project. Bagamoyo is approximately 75 kilometers from the port of Dar es Salaam and experts have raised eyebrows over the viability of the project because of its close proximity Dar es Salaam port.

China Merchant recently acquired 23.5 percent of the Port de Djibouti for a total of $185 million. The acquisition also includes two-thirds of the Doraleh port container terminal. The port lies at the mouth of the Red Sea and is ideal for cargo movement.

It is therefore apparent that the major seaports in Africa should be made to operate 24 hours a day to make them efficient and reliable, a move that will boost Sino-Africa economic and trade ties.

The author is professor of economics at the School of Economics, Kenyatta University, Kenya. The views do not necessarily reflect those of China Daily.

(China Daily Africa Weekly 10/16/2015 page10)