A new report from the World Bank asks a key question--why does cargo spend weeks in Sub-Saharan African ports—and comes up with some very thought-provoking ideas. Authors Gael Raballand, Salim Refas, Monical Beuran and Gozde Isik, argue that the answer is NOT that the lack of port capacity. Examining six Sub-Saharan African ports—Tema (Ghana), Lome (Togo), Douala (Cameroon), Mombasa (Kenya), Dar es Salaam (Tanzania), and Durban (South Africa)—the authors find that on average cargo spends about two weeks more in port than in the large ports of Asia, Europe and Latin America. Longer “dwell” times mean that the cost of transporting goods is much higher in Africa than elsewhere; something that Alan Gelb and I have written about extensively, using data from enterprise surveys carried out in Sub-Saharan Africa.
Raballand et al. argue convincingly that the answer to Africa’s ports problem is not new capacity but the resolution of tricky political economy issues. They describe a vicious circle—(1) fraud and collusion amond customs and port officials, (2) long cargo dwell times due to multiple bargaining processes, (3) self-selection of importers and brokers who aim to reduce competition and earn rents and (4) reduced pressure for simplifying procedures and increasing productivity.
Their solution lies not in building or expanding ports, but in improving the use of existing capacity. If policymakers have a better understanding of how the private sector operates, they can then design policy tools to clear shipments prior to arrival, use price incentives, and monitor and amend customs auction practices to break monopolies and increase efficiency. Raballand et al. present solutions that are nuanced, informed by a very detailed knowledge of the private sector, port operations, and the degree of competition that exists in each of the six countries. The report is a must-read for those of us who would like to see private sector flourish in Africa—it reminds me that there is a lot to be learned before proposing policy solutions for Africa’s private sector.