Trade to the Gulf of Guinea: Ship Tracking Data Yields Insights into West Africa's Growth Story

15 mars 2022

Written by: Vivek Srivastava, Article No. 85 [UNCTAD Transport and Trade Facilitation Newsletter N°93 - First Quarter 2022]

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© Jan Hoffmann - Monrovia port, Liberia

The Gulf of Guinea in West Africa is home to some of the world’s most dynamic economies. Nigeria, the region’s largest economy and most populous state with some 210 million people, is overcoming recent problems, but is nevertheless set for GDP growth of 2.7% in 2022, according to the IMF’s latest forecasts. Several of its neighbours are set for highly impressive growth rates: Côte d’Ivoire (6.5%), Ghana (6.2%), Togo (5.9%), Benin (6.5%), and Cameroon (4.6%). Trade data is often cited by economists as a leading growth indicator, while other measures of economic activity are often lagging. With recent improvements in ship-tracking technology from both satellites and land-based receivers, trade data can now be derived real-time. The Gulf of Guinea is an interesting case in point, where dry bulk and containerised trade data yields some useful insights.

Construction activity and protein-rich diets

Growth in imports of dry bulk commodities into West Africa has suddenly shifted up a gear. After exhibiting compound average growth of 2% per annum from 2015 to 2020, flows accelerated 32% in 2021, as shown in Figure 1. In both volume and percentage terms, the biggest contribution came from the Asia Pacific region, adding 13 million tons, rising 21% year-on-year. Such stellar growth warrants a closer look at the drivers behind it.

 

Dry Bulk Commodity Flows into West Africa by Source region

Figure 1.  Dry bulk commodity flows into West Africa by source region
 

 

Data on commodities comprising these flows is not complete but is rapidly improving. Shipments from India show a lot of rice and grains and those from Europe are similarly dominated by agricultural products, particularly for animal feed use, as incomes per capita increase and people demand more protein in their diets. Southeast Asian flows meanwhile are comprised mainly of construction materials (cement, clinker, aggregates, etc.) as are those from the Middle East. Imports from China are split between these two themes, demonstrating the country’s burgeoning trade and investment relationship with the region. Income growth and construction activity are very much the driving forces behind these eye-catching growth rates.

Dry bulk import growth unconstrained by national boundaries

Analysis of ports in the Gulf of Guinea confirms that growth is widespread around the region and not confined to any one country. As shown in Figure 2, dry bulk port throughputs in 2021 exhibit significant year-on-year increases at Abidjan (Côte d’Ivoire, 84%), Cotonou (Benin, 79%), Lome (Togo, 62%), Tema (Ghana, 55%), and Takoradi (also Ghana, 52%). Even Nigeria’s main trade hub, Lagos, exhibited a 27% increase. With the onset of the global COVID-19 pandemic in 2020, most of these ports exhibited double-digit or high single-digit growth rates, demonstrating a resilience of regional economic activity in the face of global headwinds. The countries surrounding the Gulf of Guinea are far from homogenous, but this characteristic is shared.

 

Top 10 Dry Bulk Ports in West Africa by Import Volume

Figure 2. Top 10 Dry bulk ports in West Africa by import volume
 

 

Box trade yet to boom

Containerised trade, which tends to be dominated by finished and semi-finished products, does not yet exhibit the same sense of dynamism. As shown in Figure 3, the total TEU capacity of all containerships calling at ports in the region exhibited compound average growth of 2% per annum in the five-year period from 2016 to 2021 – solid, but unspectacular. Total TEU capacity has rarely broken above the 2.0 million TEU per month mark (for reference, Europe’s biggest port Rotterdam recorded over 3.0 million TEU on its own in the last month) and it remains dominated by intra-regional activity. Containerised imports tend to become more of a feature as economies mature. West Africa may be yet to reach this tipping point on its development curve.

 

Container ship Calls in West Africa by Region of Last Port Call

Figure 3. Container ship calls in West Africa by region of last port call
 

 

Ports remain a bottleneck

Impressive as West Africa’s import growth in agricultural products and construction materials may be, ports remain a bottleneck. Congestion has afflicted ports the world over in the latter phases of the pandemic and West African ports are not immune. Figure 4 compares average waiting times for a Supramax Bulk Carrier at two of the region’s busiest ports, Abidjan and Lagos, with two of the world’s busiest ports, Ningbo and Rotterdam.

 

Congestion at Selected Dry Bulk Ports

Figure 4. Congestion at selected dry bulk ports
 

 

Whereas in the last five years, Rotterdam has only once exceeded 75 hours and Ningbo has only once exceeded 200 hours, Lagos has frequently exceeded 300 hours and Abidjan has twice reached 700 hours. This suggests plenty of potential remains to be unleashed through logistical improvements and debottlenecking within these West African ports. Many ports globally are now investing heavily in port optimisation alongside the use of large-scale ship-tracking data, which is something that we may see emerge in West African countries as they continue to develop.

Ship-tracking data highlights drivers and adds dimensions to the picture

Ship-tracking data offers some useful insights into the current state of economic development in the Gulf of Guinea. Last year saw a rapid acceleration in imports of dry bulk commodities, led by agricultural products and construction materials, building on the gains of the year before, which also saw increases despite the onset of the global COVID-19 pandemic. It was widespread across the region, not confined to any one country. It is not yet mirrored in containerised trade, though this is perhaps to be expected at this stage of the region’s growth. Logistical debottlenecking could unleash yet further potential for this dynamic part of the world. Whether from an investment or a policy point of view, economists everywhere are sure to sit up and take notice of such high growth rates and ship-tracking trade data will be key to our understanding of these evolving trends.


Contact the author:

Vivek Srivastava | Senior Trade Analyst | VesselsValue | press@vesselsvalue.com


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