Strong maritime industry drives resilient trade in Africa: UNCTAD

The latest Review of Maritime Transport by the United Nations Trade & Development (UNCTAD) highlights several bright spots across Africa’s shipping sector.

Between the first half of 2018 and the first half of 2023, port calls by container ships rose by 20 percent in Africa while tanker calls grew by 38 percent, both record-breaking increases for the continent, the report said.

"On vessel registration, Liberia in 2022 became the world’s largest ship register in terms of deadweight tonnage, surpassing Panama which had been in the lead for three decades. The African nation continued to top the list in 2023, posting a 17.3 percent share of the global fleet compared to Panama’s 16.1 percent."

Other African top performers include Cameroon at 27th place in terms of deadweight tonnage and vessel number and Nigeria ranked 33rd after expanding 16.2 percent in registered deadweight. "More broadly, South-South waterways connecting Sub-Saharan Africa to other parts of the developing world logged the highest increase (nine percent) in its volume of globalised container trade in 2023."

Red Sea crisis: Stakes high for Africa
Attacks on commercial ships in the Red Sea, which began in November 2023, prompted large numbers of vessels to navigate away from the Suez Canal and around the Cape of Good Hope, the report added.

"The rerouting, having increased congestion in South African ports, created opportunities for countries like Madagascar, Mauritius, Namibia or Tanzania, which are strategically located on maritime routes connecting Asia with Europe. Several East African countries, whose foreign trade is highly dependent on the Suez Canal – by volume, that’s approximately 31 percent and 34 percent, respectively for Djibouti and Sudan are therefore subject to the disruptions."

For example, East Africa has seen a shortage of perishable goods and standard containers due to longer cargo delivery times, impacting avocado, tea and coffee supply chains, the report added.

The impact on empty containers, driven by carriers prioritising shipments to high-paying markets such as Europe and the United States, came at the expense of regions like Africa – reminiscent of the pattern seen during the Covid-19 pandemic.

Renewable energy supply chain and Africa
The global transition to renewable energy sources also holds promise for Africa, the report added.

"Some African countries are already tapping into green hydrogen to meet their energy needs while others look to become port hubs for green hydrogen production, storage and transport. The African Hydrogen Partnership has identified Djibouti, Egypt, Ethiopia, Ghana, Kenya, Mauritania, Morocco, Nigeria, Tanzania, Rwanda and South Africa as potential landing zones or hubs for storing and distributing green hydrogen."

Africa enhancing resilience
Amid geopolitical uncertainties and climate risks, Africa is taking steps to enhance shipping capacity and trade connectivity. "Mauritius, for instance, has been building resilience to a range of threats by strengthening national development policies and cooperation with partners in and beyond Africa to bolster maritime security. Its various initiatives include capacity building, regional training and information sharing to combat pirate risks and guarantee the safety of maritime lanes, along with measures to increase resilience through port reforms focusing on connectivity and sustainability."

Maritime chokepoints affecting supply chains
The global economy, food security and energy supplies are at increasing risk due to vulnerabilities at key maritime routes, according to the report.

The latest report reveals that critical chokepoints - such as the Panama Canal (connecting the Pacific and Atlantic Oceans), the Red Sea and the Suez Canal (linking the Mediterranean Sea to the Indian Ocean via the Arabian Peninsula) and the Black Sea (an important hub for grain exports) - are under severe strain. "A combination of geopolitical tensions, climate impacts and conflicts have shaken global trade, threatening the functioning of maritime supply chains."

Maritime trade, which grew by 2.4 percent in 2023 to reach 12,292 million tonnes, had begun to recover after a contraction in 2022, the report added. "However, the future remains uncertain. The report projects a modest two percent growth for 2024, driven by demand for bulk commodities like iron ore, coal, and grain, alongside containerised goods. Yet, these figures mask deeper challenges. Container trade, which grew by just 0.3 percent in 2023, is expected to rebound by 3.5% in 2024 but long-term growth will depend on how the industry adapts to ongoing disruptions such as the war in Ukraine and rising geopolitical tensions in the Middle East.

“Meanwhile, the supply of container ship capacity grew by 8.2 percent in 2023. Disruptions at key maritime chokepoints, which temporarily increased demand for ships by lengthening shipping routes, have helped ease the issue of overcapacity. However, if shipping routes return to normal, the imbalance between supply and demand could lead to container vessel overcapacity."

Rebeca Grynspan, Secretary-General, UNCTAD says: "Building sustainable and resilient maritime transport and future-proofing global supply chains is not just an option – it’s a strategic necessity.”

Key recommendations
As the maritime industry faces growing challenges, UNCTAD’s report urges coordinated efforts to navigate, adapt and thrive in the complex environment. It calls for addressing disruptions at maritime chokepoints, investing in low carbon and green shipping, enhancing port efficiency and adaptation, mainstreaming trade facilitation to improve hinterland connectivity and combating fraudulent ship registration. Additionally, the report emphasises the importance of monitoring freight market developments, assessing trends in shipping rates and their impacts supporting vulnerable economies.