‘Development of the Maritime Industry in the Region’

East African Private Sector Initiative on Regional Integration

Presented by : Vassilis Kyriakis & A. Elmi.Ahmed

Advantages of Regional Integration

• Closer Trading Links.

• Economies of Scale.

• Built of Strength and Confidence.

• Incentive for the Government.

• Stable and Predictable Business Environment.

• Synergy as Vehicle for the Integration into the World Economy (Information Exchange).

• Collaborated Interest and Benefit Rather than Individual Defense and Advance.

Regional Integration in Numbers• Trade within the EAC - Kenya, Uganda and Tanzania - grew

from $778Mn in 2004 to over $1Bn in 2006.

• Trade within COMESA stood at $7.8Bn in 2007, up from $4.5Bn in 2002.

• Trade among countries in Africa as a whole, in 2006, amounted to only 8.9% of their total exports.

• 51.2% of all Asian exports, in 2006, went to Asian countries.

• 24.3% of all South and Central America exports, stayed within that region.

Ways Forward

• Synergy between Members of the Regional Private Sector – Open Exchange of Information.

• Business Contracts Among Neighbouring Countries - Increase of Business.

• Boost Poorer and/or Smaller Countries with very Thin Markets.

• Regionally Organized-Trade Supporting-Private Institutions, that Identify/Broadcast Information on Regional Trade / Investment Opportunities.

African Shipping - Obstacles Ahead• Non-open Registry Fleet, average age:– 20.5yrs, against 12.2yrs for world fleet.

• Main Sea Routes:– Asia / North America (Transpacific);– North America / Europe (Transatlantic);– Asia / Europe – Mediterranean;

• Sub-Saharan Africa - 34.5% of the total goods loaded in Africa, or 2.1% of the worldwide cargo (2006).

• Sub-Saharan Africa – Loaded Goods 230mln tons vs. Unloaded Goods 70mln tons (2008).

• Economies of Scale - Cost to Shipper – Large Shipping Lines vs. Normal Liners.

Ports and Regional Trade• Ports - Regional / International Trade Nodes.• Efficiency of Ports:– Level of Trade.–Development of their Hinterlands

• Inefficient Ports:–High Trade Cost Imposition.– Import / Export Volume Reduction

Hinterland Import Volume Reduction.

• Location/good Market. At Red Sea, between Far East/Europe/Arabian Gulf/Africa.

• Dubai Port World Management.

• Ethiopia is a natural hinterland of Djibouti Port.

• IT efficient (Maximo, Navis and Sage).

• EDI System for Manifest Cargo.

• Safe place (CCTV) and secure implementation of ISPS code (Port Access System).

• Regular liner services connecting about 200 ports in 71 countries in the world.

• Good performance and high productivity.

• Good equipment and infrastructure facilities.

• Most centrally located port in the COMESA market (population 380 million people)

• Modern telecommunication and banking services.

• Close proximity to Djibouti FZ with many new companies.

A STRATEGIC PORT

Vessels /Country, Flying National Flag

1. Harmonized Shipping Policies- Promoting Regional Fleet.- Fostering Co-operation Between the Countries

of the Region.

2. Determine Common Positions on International Maritime Policy and Define Strenuous Solutions Through Regular Consultations.

3. Harmonize / Implement International Maritime Conventions.

Objectives of a Maritime Co-operation

Objectives of a Maritime Co-operation

4. Bilateral / Multilateral Co-operation– Between Maritime Administrations– Operational Organizations Maritime

Transport.

5. Maritime Transport / Port Operations Co-operation Between the sub-Regions/Members.

6. Establishment of sub-Regional and National Shipping Lines / Competitive Fleets.

A New Dynamic Player and Hub, in the Global Shipping Industry

• Formation of Djibouti Flag (State Registry).– Adopt appropriate National Marine Legislation.– Active Presence in IMO / Adopt IMO Regulations.– Appoint Specialized Bodies for a) Dealing with Flag

Matters and b) Surveying /Certification.• Expansion of Maritime Services.– Technical Inspections/Surveys/Management.– Authorization for Certification Renewal (Class, Flag,

etc.).– Repairs/Dry Dock (Economical, Social implications).

Regional Piracy Map 2010

Piracy – Challenge for the Region’s Shipping Development

• RISK! High Insurance Premiums.• High Insurance Premium High Transport

Cost.• High Transp/n Cost High Product Cost.• Receiver/Supplier seek alternative roots.• Piracy Control Price Control/ GROWTH!

"We need to strongly rethink our strategies for development and use regional integration

- closer ties among African economies - to promote and strengthen the current low levels of intra-African trade.“ - UN Economic

Commission for Africa

"The time has come to enlarge our markets.“ - Kgalema Motlanthe

Think BIG - The ‘Dubai’ of Africa(?)DUBAI

Area: 4,114 Km2

Population: 2,262,000 Density: 408.18/km2

Was: Desert Grew on:– Geographical Position.– Port / Trade.– Tourism.– Real Estate.– Financial Services.

DJIBOUTI

23,200 Km2

864,000

37.2/km2 (space for infra/ture)

Desert.

Advantages:

- Geographical Position.

- Port / Regional Trade.

- Red Sea Underwater World.

- Space for Development.

- D.F.Z.