NEWSLETTERJUNE 2012

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June Bank holidays:

21st : Togo25th : Mozambique30th : Congo (Dem Rep)

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Ports Tanzania : many ways to get deve-

loped

The country needs 6.1 billion US dollars over the next five years to finance infras-tructure development projects including railways, ports, airports and road.Tanzania is currently in the process of expanding its Dar es Salaam and Mtwara ports. The new development of coal and iron ore mining in Mchuchuma and Liganga in south central Tanzania is planned to be connected to the nearest port of Mtwara for economic reasons. Recently, the Zimbabwe government, which largely depends on South Africa and Mozambican ports, has started using Dar es Salaam port for its imports and exports. Zimbabweans initially used the port to clear vehicles only, but are now beginning to import other commodi-ties too. According to the port manager, M Ng’amilo, the number of vehicles the port has received has more than doubled from 32 862 in 2005 to 84 347 last year. Apart from Zimbabwe, other African countries which use Dar es Salaam port are Zambia, Malawi and Democratic Republic of Congo, Mozambique, Rwanda, Burundi and Uganda. In Tanga port, from 2001-2010, imports traffic handled has been recording an average of 18.2 % per year – a fact

brought about by bulk coal traffic – energy producer and clinker – an impor-tant input in cement production.The report showed a drastic decline in bulk petroleum liquid for the last ten years challenges facing the port include the low berth which inhibits ships from anchorage within the port vicinity, neces-sitating double handling. The port needs bigger pontoons to handle heavier cargo. Container traffic, both imports and exports, full and empty, recorded fluctuation since 2001.Tanga port Autho-rity has, on the drawing board, procure-ment of floating cranes which will cater for bigger ships without ship gear. The port has a programme to provide exten-sion of the container yard.Two new ports are expected to be built. The government of Tanzania and Uganda are engaged in serious talks on the strategic project of construction of the second port at Mwambani Bay.The anticipated new port will accommodate bigger ships, which will require building of deeper berths, unlike the present facility where incoming ships anchor a few kilometres from the port. The other port is expected to be built at Mbegani in Bagamoyo, district north of Dar es Salaam and lying opposite the southern end of the island of Zanzibar.

Events to comeJune 17 - 22, 2012, 2nd International Ocean and

Polar Engineering Conference Rhodes, Greecehttp://www.isope2012.org/index.htm

July, 2- 6, 2012, 2nd Africa Shipping and Oil

Roundtable, Accra, Ghanahttp://www.africashippingandoil.com/roundtable/africavenue.php

August 07-08, 2012, Breakbulk Africa Congress

Cape Town, South Africahttp://www.breakbulkevnets.com/index.php?section=breakbulk_africa2012

September 6th, 2012, 10th Intermodal Africa 2012

ICC Durban, South Africahttp://www.shipscene.com/Event/39

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Ports

Oil & Gas

Industry

Namibia : a strategic location

According to the Zambian Deputy Minis-ter of Home Affairs, Dr Simbyakula, Zambian trade has increased tremen-dously since the Namibian government offered Zambia a piece of land to esta-blish a dry port at Walvis Bay, and Zambia no longer feel the disadvan-tages that come along with being a landlocked country.The idea for a dry port was initiated by Namibia and Zambia in order to bolster regional cooperation during a joint com-mission meeting held in Zambia, Lusaka in November, 2006. In March, 2008 the two countries signed a draft memoran-dum of understanding for the develop-ment of the dry port facility at Walvis Bay.Namport (Namibian Ports Authority) has an obligation as a government institution

to make space available for landlocked countries in the region to obtain dry ports within the perimeters of Namport in order to facilitate the import and export of goods. Namport has made land avai-lable to Zambia, Botswana and Zim-babwe for the development of dry ports.The port of Walvis Bay is Namibia's largest commercial port and is strategi-cally located, with direct access to princi-pal shipping routes. Walvis Bay provides a real alternative to landlocked countries in the region, especially for time-critical cargo, while the dry ports will serve to diversify the landlocked countries' export routes away from South Africa.Walvis Bay is a natural gateway for inter-national trade and receives approxima-tely 3 000 vessel calls each year, while handling about 5 million tonnes of cargo.

Ghana ports : expansion projects

Eleven new fishing ports in Ghana are going to be constructed by the Dutch engineering and consultancy firm DHV. Construction will start in summer 2012 and is expected to end in 2017. The cost of construction totals 200 million dollars. Ghana’s coastline is 539 km long and very inhospitable. Approximately 20% of the population relies on fishing or related activities. For more than a century Ghana has grappled with the question of how to build the small fishing ports. Loa-ding and unloading currently take place on the beach and the boats and canoes cannot always cope with the heavy waves. Land has been reclaimed and quays and breakwaters are expected to

be built in the new port areas. The eleven new ports will be distributed along the coast. There will be ports in Axim, Dixcove, Winneba, Senya Beraku, Elmina, James Town, Gomoa Fetteh, Moree, Mumford, Teshie and Keta.The Ghana Ports and Harbours Authority (GPHA) has initiated steps to reclaim about half a kilometer of sea three kilometers westward of the Tema Port to secure more space for expansion to meet increasing demands of the mari-time industry. According to the acting Director-General of the GPHA, Mr Richard Abugri Anamoo, the Tema and Takoradi Ports had become too small to manage the present growth in maritime business.

Nigeria crude trade

U.S. imports of Nigerian crude slumped to the lowest level in more than 15 years according to Energy Department data. Africa’s largest oil producer shipped 337,000 barrels a day of crude to the U.S., the least since December 1996. That compares with an average of 768,000 barrels a day for 2011.Canada, Saudi Arabia, Mexico, Venezuela, and Nigeria have consistently been America’s five largest crude oil suppliers, although their rankings varied from year to year.Combined crude oil imports from the five countries increased by less than 1%

during 2011 to 6.1 million bbl/d (barrels a day). Crude oil imports of 0.8 million bbl/d were down 22% from the year before and the lowest since 2002.On the other way, South Africa's Deputy President, Kgalema Motlanthe declared that his country is looking to Nigeria for purchase of its crude oil. The Petro SA and private traders are expected to look at supply agreements for oil from Nige-ria. And a Memorandum of Understan-ding (MOU) on economic and technical co-operation has been signed between Nigeria and South Africa.

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Material

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Oil & Gas

Industry

Oil discovery in Ivory Coast

Anadarko Petroleum Corporation announced on June 8th a light oil disco-very at the Paon-1X exploration well offshore Côte d'Ivoire. It is located in the CI-103 block, encountered more than 100 net feet (31 meters) of oil pay (41 degrees API) in a Turonian-aged reser-voir. Anadarko holds a 40% working

interest in the CI-103 block. Additional partners include the operator, Tullow, and the Société Nationale d'Opérations Pétrolières de Côte d'Ivoire (Petroci). The Paon-1X exploration well was drilled to a total depth of approximately 16,700 feet (5,090 meters), in water depths of approximately 7,195 feet (2,193 meters).

West Africa energy venture

PetroEnergy Resources Corp. is inves-ting in a foreign consortium that will drill seven production and exploration wells in Gabon. With the additional wells, the consortium hopes to increase the daily production at the Etame site in Gabon to 30,000 barrels of oil a day. Of the seven wells, five will be for production and two for exploration. PetroEnergy, through

wholly owned subsidiary PetroGreen Energy Corp., currently has a 65-% stake in the joint venture vehicle called Maiba-rara Geothermal Inc., which is deve-loping a P2.8-billion geothermal power plant in Mt. Makiling.The 20-MW Maiba-rara geothermal power project is an integrated steamfield and power plant facility that is expected to be operational by late 2013.

Angola : new refinery in Lobito

The oil refinery built in Lobito is expected to produce in its first phase 120,000 barrels/day, declared the Oil minister of Angola, Jose Maria Botelho de Vascon-celos at the International Conference on Oil and Gas. The aim is to stop oil imports by products & promotes imports. The Lobito refinery will helped reducing

prices of oil products by about 16%, and will increase the added value to goods produced in the country. To halt the import of oil derivatives, the construction of the first refinery in Soyo, will have a production capacity estimated at 200,000 barrels/day.

South Africa to become a oil hub

The IMF forecasts that growth in Africa’s oil-exporting countries such as Nigeria and Angola will surge to about 7% this year due to the rising oil price. New discoveries in East Africa, looking for new supply chains and new sources of supply also present a big opportunity for the Western Cape to become a hub for the African oil sector.South African national oil company

PetroSA recently signed a partnership with China's Sinopec Group to push along the building of its Coega refinery. The agreement defines the process by which PetroSA and Sinopec will shape the business case for Project Mthombo, the initiative to construct a world-class crude oil refinery at Port Elizabeth's Coega Industrial Development Zone, according to PetroSA.

Funds for Ghana & Senegal

The World Bank has approved 120 million dollars for the second phase of the West African Agricultural Productivity Programme to improve food production and to cope with the increasing demand for food in Ghana and Senegal. The programme will be carried through the spread of new agricultural technologies and technology exchange programme, and supporting a greater push for tech-nology adaption and dissemination. Jamal Saghir, the World Bank Director for Sustainable Development in the Africa Region declared that “Adopting

new and improved crop management practices can increase cereal crops by 30%; irrigated rice systems could benefit from yield increase by nearly 50%; and cassava yield can be raised more than 40% ». With the population expected to increase from 300 million in 2011 to about 500 million in 2030, West Africa is faced with the challenge of satisfying the rapidly growing food demand.The World Bank believes that it is possible to increase production of key commodities that represent the basis of the West African food security system.

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Agriculture

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Rail & Road

Projects

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Upgrading railway in Congo

South African diversified miner Exxaro will upgrade a railway line in the Republic of Congo to transport at least 10 million tonnes a year by 2016 as it moves to exploit its recently acquired Myoko iron ore project. Exxaro, which bought Myoko from African Iron, is also mulling building a new harbour and a power plant at the mine, which has an upside

potential of 2.5 billion tonnes of iron ore, said Venter. The new harbour will probably be at Indienne, a small town which lies north of a deep-water port at Pointe Noire on the Atlantic coast. Exxaro plans to start production at Myoko in 2013, producing between 200,000 tonnes to 2 million tonnes of iron ore per year.

Raw

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Agriculture

Cameroon agriculture development

Palm oil production in Cameroon will increase by 55,000 tons to 265,000 tons this year, according to the Ministry of Agriculture and Rural Development Small-farmers. Cameroon’s palm oil output is expected to go up to 300,000 tons and above by 2016, thanks to Biopalm Energy Ltd, which launched a 900 billion CFA francs project in the sector in August 2011 in collaboration with the National Investment Corpora-tion (SIC) over 200,000 hectares. The country is attracting several major indus-trial growers in the sector, the latest being New York-based multinational agricultural firm Herakles Farms which

has already nursed seeds for deve-loping a 69,975-hectare plantation in the southwestern region.With its bananas, Cameroon has a target of doubling its annual output by 2013 and the EU is lending a helping hand. Europe is giving the country a grant of €48 million for the sector. Came-roon produced 230,000 tonnes of bana-nas in 2010, which increased the following year thanks to an improvement of the farming methods, to reach 250,000 tonnes. The current plans are therefore to raise output to 500,000 tonnes, mainly by establishing more plantations.

Tanzania 's record cotton crop output

Cotton production in Tanzania, may climb in 2012-13 after the country intro-duced contract farming and on improved weather, according to the Tanzania Cotton Board.Tanzania exports at least 70% of its annual crop mainly to the U.K., Switzerland, Belgium, Malaysia, Singa-pore, the United Arab Emirates, China and Kenya. The nation plans to boost domestic consumption of the crop to 51 % in three years. With the advent of contract farming, growers will agree with

buyers to supply certain quantities of specific qualities of the crop, usually at predetermined prices. That, together with improving productivity and increasing credit to farmers, is expected to boost its output. As many 500,000 Tanzanian farmers cultivate about 485,000 hectares of cotton in the country. Tanzania vies with Benin to be Africa’s sixth-biggest cotton producer, according to the U.S. Department of Agriculture.

Mozambique railways

Mozambique' ports and railways com-pany CFM expects to complete a much-delayed refurbishment of the Sena rail line linking the port of Beira with coal mines in Tete province by November this year. Once the work is finished, the Sena line, which links Tete province to the port of Beira in Sofala province, will have capacity to carry 6.5 million tons of coal per year, up from 2 million tonnes now, before being expanded further.The Brazilian mining company Vale will invest 4 billion U. S. dollars in the

construction and rehabilitation of railway lines in Mozambique to boost its logistic system. Vale engaged in coal exploration in Mozambique's central Tete province aims to facilitate its production and export from the central Port of Beira to potential markets in Asia and America. The project involves the Nacala Deve-lopment Corridor and a coal port at Nacala-a-Velha in the northern province of Cabo Delgado in coordination with the Mozambique Ports and Rails.

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Rail & Road

Projects

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Economics

& Politics

Industry

Funds for roads in Kenya

Kenya signed agreements with Japan for 31 billion Kenyan shillings ($360 million) in loans and grants to improve its roads. The loan involves building a road from Mombasa port’s container terminal and a bypass linking the seaside city’s South

Coast to the mainland. Growing invest-ment to improve the road network in East Africa’s largest economy will lead to savings for businesses and consumers. Transport expenses account for 40% of the price of goods in Kenya.

Titanic II

One of the Australia's wealthiest busi-nessmen, Clive Palmer, unveiled project to construct a replica of the Titanic, the Titanic II with plans for a maiden sailing from London to New York in 2016. CSC Jinling Shipyard Co Ltd, based in Nanjing, signed a Memorandum of Understanding on April 20 with Clive Palmer to construct the ship in China.The industry for cruise ships is now growing in China. The Chinese shipbuil-ding sector is evolving, with shipyards becoming less dependent on bulk carriers and seeking to increase the share of, for instance, container ships and liquefied natural gas storage tanks.

The ship will be equipped with "the latest navigation and safety systems", Palmer was quoted by the Australian Associated Press as saying in Brisbane. And design work in conjunction with a historical research team has begun on the Titanic II, which will have 840 rooms and nine decks. "But of course if you are supersti-tious, you never know what could happen.", declared Xiao Zhijia, an indus-try analyst at the China Shipbuilding Economy Research Center. Globally, there are seven to eight new orders for luxury cruise ships each year. For a 120,000-160,000-ton cruise, contracts usually range from $600 million (464 million euros) to $900 million.

South Africa : a tax to boost shipping

South Africa has some of the busiest ports on the continent but no commercial ships. Officials hope new tax norms may attract merchant vessels into the country. The new tonnage tax regime will be effective in 2013. The tonnage tax model allows vessel owners to pay a fixed tax rate, based on the size of the ship and working days. The current system taxes profits at 28 %, with a further 10% secon-dary tax based on dividends.South Africa makes up about 40% of the company’s activities in Africa. In an address to a transport committee in parliament last week, SA Maritime Safety Authority chief

executive, Tsietsi Mokhele declared that 98% of the country’s total import and export trade was carried by foreign ships, meaning South Africa last year lost out on 45 billion ($5.6 billion) in potential business. “We are almost 100% dependent on foreign shipping to get our goods to the market,” he declared. Mari-time exports make up 95% of total exports by volume, going through the eight ports dotting the approximately 3,000-kilometre long coast. South Africa’s main exports include minerals like gold, platinum and coal, as well as agricultural products and vehicles.

Turkey's economic interests in Africa

Turkey is now boosting its trade with East Africa. By the end of the 2012, there will be 33 Turkish embassies in Africa, with several more to open in the coming years. Turkish Airlines now has regular flights to Addis Ababa, Dakar, Johannes-burg, Nairobi and Lagos, seeking to turn Istanbul into a major hub for African travelers. Turkey's trade with Africa has recently exceeded the US$ 10 billion mark - slightly less than one tenth of

China-Africa trade, but a tenfold increase since 2000. The recent African Economic Outlook report shows that Turkey is massively extending its fronts in construction and trade on the African continent. Recently, the East African Community (comprises Kenya, Uganda, Tanzania, Rwanda and Burundi) started considering a non-binding trade and investment deals proposed by Turkey, according to Bloomberg News.

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Economics

& Politics

Port projects in the Persian Gulf

Persian Gulf states spend $46 billion on port projects amid sputtering global economic growth. More than 35 ports stretching from Kuwait at the head of the Gulf to Oman on the Indian Ocean plan to add space for as many as 60 million standard containers in little over a decade, more than doubling capacity from the current 50 million boxes. Abu Dhabi is leading the charge with its new Khalifa port, scheduled to open in the fourth quarter with capacity for 2 million containers, increasing to 15 million by 2030. Holder of 7 % of known oil reserves, Abu Dhabi will spend $7.2

billion on the first phase of Khalifa, which it says will focus on terminating cargo, reducing any overlap with Jebel Ali, where goods are trans-shipped from one vessel to another. Further west, Qatar, is spending 19 billion riyals ($5.2 billion) on a port with a planned volume of 6 million containers, due to open in 2016. Still, the International Monetary Fund says GDP growth in Gulf Co-Operation Council countries will slow from 5.3% this year to 3.7 % in 2013, and that “even with high oil prices, fiscal sustainability is an immediate issue".

Abidjan-Lagos corridor : funds for

less transport barriers

The World Bank ’s Board of Executive Directors approved US$90 million in grant that aims to reduce trade and transport barriers in the port and on the roads along Abidjan-Lagos in Cote d’Ivoire. This is the second phase of a regional Program including Ghana, Togo and Benin. It will finance trade and tans-port facilitation activities along the 130 kilometers coastal corridor in Côte d'Ivoire, as well as trade facilitation reforms in customs and in the port of Abidjan. The 1,000 km Abidjan-Lagos

corridor is the global gateway to coastal and landlocked countries in West Africa, with all landlocked countries using at least one port along the corridor. It will finance trade and transport facilitation activities (road infrastructure) and decrease delays in border crossing time and in port dwell time, reduce non-logis-tics costs, such as inventory and storage costs.The total cost of the Abidjan-Lagos Trade and Transport Facilitation regional program is estimated at about US$405.5 million and covers four countries: Côte d’Ivoire, Ghana, Togo and Benin.

South Africa 's economic challenge

In 1995 South Africa accounted for almost half of sub-Saharan Africa’s GDP; today it claims less than a third. Although its economy grew at a robust 5% a year in the four years up to 2009 it has managed barely 3% since then, making it one of the slowest-growing in Africa. The economy of Nigeria, with some 158m people to South Africa’s 50m, has been roaring along at an annual rate of almost 7% for the past eight years—and may even become Africa’s biggest by 2016, with Egypt (82m people) hot on its heels. At the same time, Ghana and Kenya, among others, are competing with South Africa to host the African headquarters of foreign multinationals. General Electric, for example, recently chose Nairobi, as its sub-Saharan hub, copying firms such as Nestlé, Coca-Cola and Heineken.Yet South Africa’s decline is only relative.

It still has easily its biggest economy, with GDP per head of over $11,000 at purchasing power parity, bigger than China’s or India’s and more than four times the African average. Its infrastruc-ture is by far the best in Africa. KPMG, a professional-services firm, thinks the whole idea of a gateway into Africa is dated. Entry into African markets now depends more on the nature of the deve-lopment, it says in a recent report.The International Monetary Fund (IMF) predicts that, over the next five years, Africa will surpass Asia and seven African nations will be in the top ten fastest-growing economies. The IMF also forecasts 2012 growth figures averaging around 6% for sub-Saharan Africa – and with countries like Angola raking in gross domestic product, growth almost double that, the continent is touted as the investment destination of the decade.

SAGA cannot guarantee that the information made available on this newsletter is correct, accurate or exhaus-tive. It is therefore recommended that readers check the information by other means.

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General

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Piracy

Sources:www.afp.comwww.allafrica.comwww.bbcnews.comwww.macauhub.comwww.reuters.comwww.economist.comlocal African newspapers The Maritime executiveNewspapers

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East Africa : Piracy outlook Piracy off the coast of Somalia threatens one of the principal foundations of today's modern interconnected global economic system the freedom of naviga-tion. In a globalized world, the impact of piracy in one area of the world can cause a ripple effect across the globe. People in countries around the world depend on secure and reliable shipping lanes for their food, their medicine, their energy, and consumer goods brought by cargo ships and tankers. By preying on com-mercial ships in one of the world's busiest shipping lanes, pirates off the Horn of Africa threaten more than just individual ships. They threaten a central artery of the global economy and that means that they threaten global security.In response to the growing threat, the shipping industry has developped and implement "best management practices" to prevent pirate boardings before they take place. These include practical measures, such as:proceeding at full speed through high risk areas;employing physical barriers such as razor wire;posting additional look-outs;reporting positions to military authorities; and mustering the crew inside a "citadel" or safe-room in the vessel when under attack.Approximately 20% of all ships off the Horn of Africa are not taking proper secu-rity precautions. These account for the overwhelming number of successfully pirated ships.To date, not a single ship with Privately Contracted Armed Security Personnel aboard has been pirated.The IMO has agreed an interim

Guidance for Private Maritime Security that applies to privately contracted armed security personnel on vessels transiting off the east coast of Africa. The aim is to seek certification with national and international standards on using deployement on private contracted armed security personnel.To fight piracy, early May, EU 's naval force carried out its first airstrikes against pirate targets on shore.Satellite communications services provi-der have also seen a significant growth in the maritime security sector. For example, Inmarsat has 60% of its business which comes from the maritime sector.Expanding the capacity to prosecute and incarcerate pirates is also a real chal-lenge and is one that the international community, including the governments of flag states and ship owners, will have to work hard to address. Part of what makes piracy seem so intractable is that despite these dangers, the lack of other economic opportunities in coastal com-munities means there is no shortage of willing recruits for pirate organizers to choose from.

Is Zambezi river navigable ?

According to an agreement signed in May in Maputo by the Presidents of the two neighbouring countries, technicians from Mozambique and Malawi are going to carry out feasibility and environmental impact studies to determine if the Zam-bezi River is in fact navigable.

The African Development Bank have shown interest in funding the technical studies. The delegations of the two countries signed also a memoranda of understanding in diplomacy and energy.