Tuesday, Oct 25, 2016
Infrastructure | Africa | Angola

Luanda’s port a solid and expansive base for trade

Investor-led injection of $75 million slices turnaround times in Luanda’s port

8 months ago

Port of Lobito is Angola’s second-busiest port and has been upgraded to handle mining ore for export from Katanga, DRC and Zambia, carried by the Benguela railway

Angola’s two largest ports, at Luanda and Lobito, provide a solid and expansive base for trade, not only for the country itself, but also for its landlocked neighbours. Enormous investment in port facilities and infrastructure have helped boost their capabilities and capacities, as well as reduce waiting times. Now, the ports are being integrated into Angola’s land transport networks

Given its deep waters, generous coastline and some of the best roads and railways in sub-Saharan Africa, Angola enjoys several geo-strategic advantages. Keen to capitalise on the country’s favourable positioning, the Angolan government is currently encouraging a series of projects to restore and rehabilitate the country’s large network of ports. When completed, the ports will serve as a critical springboard for increasing the country’s international investment and export opportunities.

Over the coming years, the plan is to turn Angola into a transport hub that will benefit domestic producers by allowing them to more easily and cost-effectively import and export goods beyond borders. Critical to this plan are the country’s top two ports: Port of Luanda and Port of Lobito.

At present, PricewaterhouseCoopers estimates indicate that 95 per cent of Angola’s imports come by sea. This means that the country’s international trade is nearly entirely dependent on the country’s ports, which represent Angola’s best chance at becoming an important regional supplier, especially for its neighbouring landlocked countries including Zambia and Zimbabwe.

To make the best of this advantage, the Angolan government’s development strategy has so far included opening up the maritime sector to private investment, and to expanding the reach of ports and port operators beyond the ports themselves. There has been a push to integrate ports with other logistical systems in the country, including heavy investment in the rebuilding and extension of the domestic rail network.  

The major players from the private sector who have invested in Angola’s ports include the Multiterminais and Multiparques groups. In 2005, they inherited an under-invested terminal at the Port of Luanda, which had very limited physical room for expansion.

In addition to its limited space, it was also frightfully inefficient – at the time, vessels were waiting up to 30 days to dock and unload. Following an investor-led injection of $75 million-worth of new equipment, bulk storage silos and a state-of-the-art tracking system, the average wait time has dropped to three days, thereby greatly alleviating congestion and reducing costs to the customer by roughly $700 per container, according to the Director General of the Multiterminais and Multiparques groups.

Accounting for 80 per cent of Angola’s imports, the Port of Luanda is among the key focal points of the country’s future development plans, which include building a national rail network that will be used to stimulate trade across different geographic regions of Angola. It will play a critical role in reducing regional and mobility asymmetries, and by extension, the reduction of poverty.

According to the port’s management, not only is Angola favourably placed to become a transport hub within the region of sub-Saharan Africa, the Port of Luanda is especially well placed within Angola and already plays a hugely important part of the country’s logistical chain. In 2014, over 13 million tonnes of cargo and over 1 million TEUs passed through the port.

A spokesperson from the port attributes the port’s impressive expansion to its innovative approach. “We operate differently to other ports in that we are not just interested in having more ships,” he explains. “We want those ships to be full of cargo. I am far more interested in the cargo volume of ships than the actual number of ships – for the benefit of everyone, we want our ships to arrive full of cargo.”

A large component of the future strategy for the maritime sector in Angola includes international cooperation. In fact, in a bid to cement Angola’s commitment to the maritime sector, Minister of Transport Augusto da Silva Tomás, together with Bjorn Kjerfve, Director of the World Maritime University, signed an agreement in the spring of 2013 that would allow for the training of Angolan personnel in maritime affairs. Under the terms of the agreement, Angolan students would be trained in maritime security, navigation technologies and pollution protection. As part of the arrangement, visa requirements were also relaxed.

These types of agreements are beneficial to the future of Angolan industry because they give Angolans exposure to the know-how, technology and management skills so critical to the sustained growth of the maritime sector. At the same time, they also give foreign countries the benefit of early-mover advantages in the industries that will become the pillars of a more robust Angolan economy.

“We are on the cusp of a boom,” asserts the port’s management. “We have got through the reconstruction phase, and now we have moved into the building phase where we start with new, modern technologies that will revive and enhance our existing structures.”

Although there is still a considerable amount of work before the Port of Luanda is seamlessly integrated with the country’s ever-expanding rail and air networks – as is expected in the future – the management team has a clear roadmap for how to get his sector where he thinks it should be.

“Above all, we need to ensure the open, participatory and transparent management of our projects,” he says. “We need our leaders to develop a well-defined master plan, and we need to stick to it. Last, but not least, we need to train our workforce to learn, to be motivated and to empower themselves with new skills.”

Dr Anapaz de Jesus Neto, Director of the Port of Lobito, is of a similar mind. Though smaller, the Port of Lobito is located on a sand spit that is around three miles (5km) long. Upgrades at the port, valued at around $1.25 billion, were inaugurated last year by President José Eduardo Dos Santos, and raised its handling capacity to 3.6 tons of cargo per year.

One of Lobito’s greatest selling points is the fact that it is linked to a part of the railroad from Benguela, which covers 1,300 kilometres. Known as the Lobito Corridor, this corridor intersects with the Port of Lobito and the Catumbela International Airport, in addition to the soon-to-be-constructed inter-African highway that will connect all the countries of Southern Africa. Once all of this infrastructure is in place, the Port of Lobito will essentially become the headquarters of distribution for all countries without access to the sea.   

Clearly, Port of Lobito has a tremendous geographic advantage, which Dr Neto only hopes to enhance through competitive policies that will make it a reliable, cost-efficient source of import and export. “Competition is about three things,” he explains. “Speed, price and differentiation.”

Following this vein, his plans for the future of the port include finding a way to make it more competitive from a price perspective, without compromising on quality. The speed of loading and unloading goods must improve, and the services the port offers must clearly set it apart from competitors. He highlights that there are three other ports within close proximity of Porto Lobito, and that these are all very competitive, robust ports, including Port Elizabeth and Durban in South Africa. Beyond, Dualah and Camarões, both located in West Africa, are also solid competitors.

Dr Neto mentions the competition to stress the importance of managing Lobito’s port in a way that assures the key competitive pillars of low prices, speed and quality.   

“In the future of Angola, I see an optimistic country – a country with a firm plan for its social and economic development on a grand scale,” concludes the port director. “I firmly believe in this optimism, and whether or not I am alive to see this evolution of my country first hand, I know it will happen.” 




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