Topic: Does improvement in Maritime infrastructure enhance economic development?
Case study: Port of Douala, Cameroon
Marie Ewokolo Nfor342655MN
In the last few decades, globalization coupled with liberalization of markets, has increased and facilitated international trade. This way, manufacturers located all around the world could enter markets that are not located in their proximity more easily than ever before. This global trend was facilitated by a variety of transportation methods (containerization!) that led to the expansion and development of new infrastructure. Globalization has enabled businesses to expand quickly to different locations with the ports serving as their main gateway. Given the strategic nature of the port environment and the increase development in global trade, ports have proven to be very important for the economic development of some countries. China and Brazil are examples of countries that owe most of their economic development to the ports they have. Inland distribution is becoming a very important dimension of the globalization/maritime transportation/freight distribution paradigm Notteboom and Rodrigue, (2005). The economic report on Africa presented by UNECA 2013 shows that Africa’s growth performance has improved tremendously since the start of the 21st century. Despite the fact that growth slowed on average from 5.6 per cent between 2002 and 2008 to 2.2 per cent in 2009 due to the global financial crises and steep rises in food and fuel prices, Africa quickly recovered to a growth of 4.6 percent in 2010. Though it dropped again in 2011 due to political transition in North Africa in 2012, it increased to 5.5 percent despite the global slowdown and uncertainty. Cameroon being one of the main entrances to Africa as it is situated along the coastline of the Atlantic, has a great role to play in international trade and is a big contributor to the African Economic growth. According to World Bank, Cameroon had a GDP of 29.20 billion dollars as of 2015 with a ranking as 97th in the world. The average annual GDP growth rate in Cameroon was 4.6 percent from 2003 to 2015 with the highest in the first quarter of 2012 reaching 6.40 percent and lowest in the fourth quarter of 2009 with 1.90 percent. (World Bank report 2015).
Before the initiation of the oil trade, agriculture was the country’s economic pillar. Cameroon remains one of the world’s leading producers of certain foodstuffs namely: cocoa, coffee, bananas, palm products, tobacco, rubber and cotton. Fishing and forestry are two of the country’s additional important activities (www.gobaltrade.net). Cameroon’s mineral resources include bauxite and iron ore. High-yield deposits of bauxite are found in the northern part of Cameroon. Cameroon exploits timber and also, petroleum reserves constitute a primary source of government revenue. There is also a significant amount of unexploited natural gas near Douala, the economic capital of Cameroon. There is also a small amount of gold and a significant hydroelectric potential with the largest power station at Edea, on the Sanaga River. Looking at these natural resources coupled with the relatively cheap labor force and being one of the most politically stable economies in Africa, Cameroon stands to be a great location for international investors.
Looking at Cameroon’s trade flow there has been a steady increase in trade despite the fall in 2009 due to global economic crises. Trade contribution as percentage of Cameroon GDP for 2012, 2013, and 2014 respectively were 45.4, 49.57 and 52.89 percent (WITS report, 2015) shows high importance in the Cameroon economy. The growth rate in import was 28.39, 15.27, and 0.68 percent respectively for 2012, 2013 and 2014 while the growth rates of exports for these same periods were 99.09, 6.9 and 12.9 percent respectively. Here you notice that export from 2011 to 2012 was almost double this may be justified by the boom from the 2009 global economic crises. The port of Douala due to its critical position, serves as the gateway to several Central African countries. As one of the largest ports in Western and Central Africa, this implies an increase flow of goods putting more pressure on the port. Almost all the country’s exports (99%) were handled through Douala in 2011 (Port Autonome de Douala (PAD). Adding
to this, Douala is an important transit port for the landlocked countries of Chad and the Central African Republic (CAR). It has an average growth of up to 3.5 % per year in the volume of cargo handled, waiting time and turnaround time for ships arriving in port, average waiting time of 15.1 hours; turnaround time of 3.5 days for ships arriving in port in 2002 and 2011. While in 2011 and 2015 there was a slight increase in both average ship waiting time and average turnaround time to 15.7 hours and 3.6 days respectively. This difference may be as a results of port inefficiency (Port Autonome de Douala (PAD)
Source: World Intergraded Trade Solutions (WITS), IMF
Before the 20th century, a port was simply a location where ships came and (off) loaded cargo. Presently, this view has changed as defined in the report on land access to sea transport by ECMT, 2001:
A sea port is a logistic and industrial node in the global transport system with a strong maritime
character and in which a functional and spatial clustering of activities takes place, activities that
are directly or indirectly linked to seamless transportation and transformation processes within
This definition shows that the infrastructural network has a vital role to play in the port performance. Port performance does not only depend on how many vessels reach the port or how cheap the port’s cost are but also depends on the accessibility of the hinterland. That is looking at the inter-modality of the supply chain. How efficiently are goods transferred from a maritime transport mode (ship) to a land transport mode (rail or truck) and vice-versa. World Economic Forum identifies infrastructure as one of the 12 pillars of economic development for a country. Cameroon port infrastructure looks very poor leading to high logistic costs and inefficiency which acts as an impediment to economic development. There are no rails to the neighboring countries and the national railway company is only linked to three out of the ten provinces of Cameroon. This implies that the majority of the cargoes are being transported by trucks to their various destinations. Infrastructural development is one on the leading factors to market development and economic growth. The research of Hadi et al, 2002 shows the relationship between GDP and infrastructure and it indicates that countries can gain a great deal by improving investment and performance in port infrastructure.
The port of Douala is the only main international port in Cameroon. Other secondary ports include Kribi: used mainly for timber, Port of Limbe used mainly for palm oil exportation and a river port in Garoua on the Benue River. This shows a high need for better infrastructural connection to the Douala port. One of the major constraints to economic development is the underdevelopment of ports and transport infrastructures. The transport sector is important because an economy cannot be productive, allocative and overall pareto efficient without an effective and well-functioning transport sector (de Langen et al., 2010). The demand for a port is directly related to the transport network and Cargo flow. Port Infrastructures are the main elements that determined the port performance. Poor infrastructures such as bad transport connectivity can lead to port inefficiency such as unnecessary delay of cargo flow or even damages of cargo. With regards to the increase of foreign investment in Africa, in order to achieve economic growth, Cameroon needs to enhance the performance of its ports so as to attract investors.
Looking at the overview of the Cameroon economy, the importance of the port of Douala owing to its strategic position, this research will focus on the main question;
What are the required measures for the Port of Douala in Cameroon to implement to sustain the economic growth of the country?
To answer this question, this paper will discuss the view of some scholars from the field of port economics on the factors that enhance economic growth. The purpose of this study is to investigate if the port of Douala has adequate potentials for sustaining economic growth. To have a good structure of the research, I am going to divide the main question into sub-questions;
What are the important factors that influence port performance (theoretical overview)?
Is there any relationship between port performance and economic development, and if yes: what are these relations? (theoretical overview)
What is the current state of the Cameroonian Economy? (statistical analysis)
What is the state of the port infrastructure and performance in Cameroon? (case study)
What infrastructural developments are needed by the ports of Cameroon to enhance performance and provide economic growth? (case study)
To have a better answer to the research question and sub-questions,
First a literature review has been executed in which the relation between port development and economic performance has been analyzed. This literature review results in an overview of possible research techniques that might be used in this thesis.
The second step is a data analysis in which the relationship between past and present economic performance and cargo flow of the port has been identified.
The third step is a case study performed on the port of Douala which has verified if the port infrastructure of Douala, Cameroon meets the requirements to provide economic growth.
The fourth step is a comparative analysis based on examples of other successful port development and impacts on the economy of some other ports/states in developing economies.
Finally policy suggestions are presented…
The next chapter follows with a literature review of other economic scholars on port performance measures and economic development. In addition it will investigate the link between port performance and economic growth. Chapter 3 will give a general overview of Cameroon economy. Chapter 4 Trade, Chapter 5 will give a detail analysis of the port infrastructures of Cameroon coupled with other factors that influence port performance. In chapter 6 I will outline the developments need by the port of Douala to enhance its performance and finally the conclusion.
Chapter 2: Importance of Seaports to the Economy
In this chapter, I will take a look at literatures and reports which exist in this area of port economics. The main focus of this chapter is to access the main port performance indicators from different views. It will also analyze the economic impact of seaports. These will be used as a parameter to access the functioning of the port of Douala, Cameroon and provide solutions when needed.
2.2: Overview of world seaborne trade
In the past few decades globalization of markets and operations has forced managers to develop new perspectives of various managerial functions which requires more input to enhance growth in the market. From the below graph you can see that the volume of world trade carried by sea has again begun to steadily increase in recent years. In the longer term, the fact that shipping is the most fuel efficient and carbon friendly form of commercial transport should work in favor of an even greater proportion of world trade being carried by sea. (UNCTAD, 2016)
038100000Figxxx International Sea borne trade in selected years (In millions of tons Loaded)
Fig XXX shows a progressive increase in all cargoes from 1980 to 2015 though there was a decline in 2009 due to the global economic crisis. This has also initiated a push amongst port authorities to improve their port performance and efficiency due to an increasing competition between ports and growing pressure from shippers for lower port and shipping charges. This global trend was facilitated by a variety of transportation methods that led to the expansion and development of new infrastructure making seaports very important as they are seen as economic catalysts for the regions they serve, where the aggregation of services and activities generates benefits and socio-economic wealth, (K. Bichou, 2007). This has also increased both the theoretical and practical work on port performance measurements. The diagram above also gives on the changes in sea borne trade in containers, Dry bulk other than main bulk commodities, main bulk commodities and Oil and gas. Though they have been a progressive increase in all sectors we can see containerized trading has more than doubled between the year 1995 and 2005.
2.3: Port performance indicators
The purpose of measuring organizational performance is to (i) help the organization to understand its processes and to confirm what they know or reveal what they do not know,(ii) identify where problems, bottlenecks, waste, etc. exist and where improvements are necessary;(iii) identify whether customer needs are met, (iv) ensure decisions are based on facts, not on supposition, emotion, faith or intuition; (v) show if improvements planned actually happened and (vi) identify success, (Parker,2000).
Many authors have come out with different approaches on how to assess port performance and the relationship between these determining factors and the port environment. Despite all the techniques and approaches used by many economic scholars in evaluating port performance, there is still no unique framework for measuring port performance and efficiency. K. Bichou, 2007 outlines four core fundamental differences in the techniques used in benchmarking port performance. Firstly he looked at the differences in the definition of performance. Here the main question is ‘is performance measured in efficiency, productivity, utilization, effectiveness, etc.? The answer to this question depend on the individual’s perspective in measuring performance. Secondly there are perceptual differences among multi-institutional port stakeholders (regulator, operator, user/customer, etc.) and the resulting impact on the objective, design, and implementation of performance frameworks. He concluded by saying that spatial dimension (cluster, port, terminal, quay system, yard system, etc.), the boundary-spanning complexities of seaport operational (types of cargo handled, ships serviced, terminals managed, processes/systems operated, etc.) and the dissimilarity in both space and time, between world ports’ operational structures, functional scopes, institutional models and strategic orientations bring confusion not only on what and how to measure port performance, but also on what to benchmark against.
Traditionally, ports have evaluated their performance by comparing their actual and optimum throughputs that is measured in tonnage or number of containers handled. (Wayne, ManWo,; Erika,2013) categorizes port performance evaluation literatures in two categories namely: the port technical efficiency DEA studies (Data Envelopment Analysis) and port effectiveness performance indicator studies. Port technical efficiency DEA studies uses the DEA statistical technique to investigate the relative technical efficiency among individual ports in a group of ports, i.e., if one port is technically efficient than the other with respect to the production frontier. Effectiveness of a port depends on how much it optimizes its operational objectives in providing port services. Such objectives could be maximizing profits, reduction in the waiting time per ship etc.
K.Bichou, 2007 classifies port performance using three different measure namely the financial, physical and multifactor/total factor productivity. Financial metric and financial productivity measures which assess port performance looking at the ports profitability and other financial ratios such as return on investment, return on assets, capital structure and short-term liquidity. The financial approach was discredited by (Holmberg, S. 2000) with reason that they show the results of past actions and that they are designed to meet external evaluators’ needs and expectations. Financial productivities measured should not be applied alone when accessing performance as it does not include the contribution of intangible activities such as innovation and development programs. Many other aspects influence port financial performance including price and access regulation, market power, statutory freedom and access to private equity (K.Bichou, 2007) this brings about the physical productivity measure such as crane throughput per machine hour, berth or quay throughput per square-metre capacity and worker or gang output per man-hour. Port performance indicators are more focused on the technical performance of port assets and their efficiency, such as land, cranes, berths and labor (Brooks et al. 2010).
(Tongzon, 1994) estimates port performance looking at the cargo size or throughput. He stated that the speed of moving cargoes into and out of ships at berth will influence the overall port performance via the charges imposed on ship owners and the actual throughput handled. In his evaluation of port throughput he did a comparative assessment of the determinants of port throughput in different ports. The port throughput determinants where port location, frequency of ship call, port charges, economic activities and terminal efficiency. His research proved that though all the factors have contributions to port performance, terminal efficiency is a vital component of any waterfront reform aimed at improving port performance and efficiency. (Tonzon, 1994) also examines the determinants of efficiency which he listed as container mix, work practice (time consciousness), crane efficiency, and vessel size and cargo exchange (economies of scale). He concluded that the stronger influence of terminal efficiency relative to other factors and the determination of port performance provides an empirical justification for giving top priority to improving terminal performance in the overall process of waterfront reform. The dominant contribution of crane productivity (TEUCH) to terminal efficiency justifies the need to put more emphasis on enhancements of crane productivity. Port ownership also has a significant role to play in port performance (Tonzon, 1994).
In conclusion, port performance indicators mainly center around output, quality of service, cost, services, efficiency, time and logistics (supply chain, quality and mode of transportation, etc) as stated by other organizations and researchers (Brooks 2007; World Bank 1991;; Tonzon,1994; de Langen 2007; UNESCAP 2005; UNCTAD 2006; Bichou 2006; Robinson 2006; Talley 2006; Arvis et al. 2007; Slack 2007; Tongzon 2007;; DFT 2009,; etc.).
2.4; Port economic impact
To have a better understanding of the relationship between port performance and economic growth, I will start by looking at the economic impacts of ports. Both direct and indirect activities have significant contributions on the economic effect of the port. Direct port- related activity are activities that are directly linked to the daily running of the port such as dredging, (off)loading, logistic activities et cetera. On the other hand, the indirect port related activities depend on the direct port related activities. The port being the main gateway for a country’s import and export with approximately 90 percent of world cargo transportation and international trade are done using the port due to large volume and lower cost compared with other transport (UNCTAD, 2010). It is obvious that it has an enormous contribution to the economy. Following the 2012 Port Metro Vancouver Economic Impact Study, (PMVEIS,2012) the economic effect by looking mainly at the number of jobs created by the port, number of persons employed per year and wages, contribution to GDP and the economic output per year. Employment provided by the port was divided into direct, indirect and induced employment. A total of 93,200 were directly employed at the port per year in approximately 98,800 jobs with a total yearly wage of 6,100 $ millions contributing 9,650 $ millions to the GDP with an economic output of 20,280 $ millions in all sectors. See details on the different job sectors in table xxx
Table xxx Different Job sectors
Source; 2012 Port Metro Vancouver Economic Impact Study p.50
Direct jobs are mainly jobs with local firms providing direct services to the seaport. These jobs depend on direct port activities such as railroads and trucking companies moving cargo to and from port terminal, Stevedoring, Freight Forwarder/Customs Broker, Manufacturing/Processing, Shipping, Storage/Warehousing, Ship Building/Repair, Bulk Terminal Operator, Automobile Terminal Operator, trucking, Government Agency, Tug/Tow/Barge etc.
Induced jobs are jobs created by those directly employed in the port due to purchase of goods and services locally and throughout the economy. These jobs totally depend on port activities and may cease to exist if the port closes. Such jobs include health care providers, local transportation services, retail stores, the local construction industry, businesses providing professional and business services in support of those directly employed, local and state government agencies providing public services and education to those directly employed etc.
Indirect jobs reflect to those jobs generated in the local economy as the result of local purchases by the firms directly dependent upon seaport activity such as maintenance and repair services, consulting and other business services, insurance companies etc.
Ports also contribute to the government revenue through tax. (PMVEIS,2012) shows that employees, employers, and both cruise passengers and crew contributed more than $1,270 million annually in tax revenue to all levels of government in 2011. Port of Houston Authority report, 2012 also outline the main port economic impacts as job creation, contribution to personal income, increase in Gross domestic product, economic output and government revenue through taxes.
2.5 Impact of port on Economic development.
For better understanding of the relationship between maritime infrastructure and economic growth we are going to go through the papers of some scholars showing us the importance of infrastructures and economic growth. From the 2013 report of the African Development bank (AfDB, 2013) it is clearly seen that Africa suffers from serious infrastructure deficit compared with countries in other regions. Africa has limited infrastructures such as energy, transportation, information, communication and technology coupled with a complex trade regulation. Cost of transportation is relatively high for businesses in most African economies because of inadequate infrastructure. Following the AfDB report 2013 African countries exhibit the lowest levels of productivity of all low-income countries and are among the least competitive economies in the world. Africa’s annual growth is estimated to being reduced by at least 2 percent due to inadequate infrastructures while on the other hand African firms could achieve productivity gain of up to 40 percent with adequate infrastructure. A larger stock of infrastructure is thought to fuel economic growth by reducing the cost of production and transport of goods and services, increasing the productivity of input factors, creating indirect positive externalities, and smoothing the business cycle. There is, indeed, a plethora of subjective and more technical evidence that better quantity and quality of infrastructure can directly raise the productivity of human and physical capital and hence growth (e.g. by providing access to roads, this can:
(i) improve education and markets for farmers’ outputs and others by cutting costs, (ii) facilitate private investment, (iii) improve jobs and income levels for many).
For developing countries like Cameroon, whatever the GDP growth related focus, most cross-country studies find a positive impact. For instance, roads are needed for Africa to catch with the rest of the world (Buys et al. (2006). Roads are essential to reduce differences across regions within countries (Estache–Fay (2010). Port quality is central to the evidence collected on the gains from trade facilitation for instance. In the case of APEC countries, Wilson et. Al (2003) found that increasing port capacity for countries below capacity average could increase APEC average per capita GDP by 4.3%.
International trade is one of the contributing factors to a country’s GDP. Though international trade consists of trading between tangible and intangible good like services, you will agree with me that most of the transportation of tangibles is through the ports which is largely linked to other forms of transport. The importance of the maritime infrastructures to the economy cannot be over emphasized. Trade between nations has always made a significant contribution in terms of increasing wealth among the world population (Smith, 1776). Today, over 80% of all trade is seaborne (Stopford, 2009; UNCTAD, 2015). World merchandise trade volumes have grown at a modest rate of 2.3% in 2014 following the global gross domestic product (GDP) growth rate of 2.5%, indicating a strong correlation between trade and GDP (UNCTAD, 2015). The history of urban development also reveals that economic advancement is especially apparent in cities with seaports (Shan et al., 2014). A study of 91 countries with seaports conducted an empirical inquiry into the broader economic contribution of seaborne trade, from a port infrastructure quality and logistics performance perspective. A structural equation model (SEM) was used to provide empirical evidence of significant economic impacts of port infrastructure quality and logistics performance. Furthermore, analysis of a multigroup SEM is performed by dividing countries into developed and developing economy groups. The results reveal that it is vital for developing countries to continuously improve the quality of port infrastructure as it contributes to better logistics performance, leading to higher seaborne trade, yielding higher economic growth. Port activity is no longer limited to just cargo handling; logistics service provision in an international context has become a core part of the business (Wang and Cullinane, 2006). In this situation, the most imperative aspects of logistics performance are logistics costs and reliability of supply chains. Poor logistics facilitation takes a large toll on a country’s competitive advantage, and insights in this respect were conferred by Arvis et al. (2007). In a world of just-in time production processes, it is not only the time and cost of delivery of shipments that matters, but also its reliability and predictability. A firm’s hedging costs due to poor reliability and predictability of logistics services can be significantly high in terms of higher inventory maintenance requirements (Arvis et al., 2010). The trade-off between direct freight costs and reliability varies depending on a country’s commodity trade and logistics performance, which can limit the potential of developing countries to diversify from time-insensitive commodities to value-added goods (Arvis et al., 2010). An unpredictable arrival time due to port inefficiency in terms of dwell time and clearing time of goods has a direct impact on logistics and land transport.
Due to the important role played by ports both in international and domestic trade, they generate positive contributions economic growth; first, by direct contribution via its added value; and second, by indirect contributing via development of other economic activity.
Economic theory often refers to ports as important factors of economic development, particularly from an historical standpoint where they promoted commerce and the welfare of nations. The basic argument is that ports expand the market opportunity of both national and international firms. By expanding the market areas of firms, ports increase competition, resulting in lower prices for the consumers of the port traffic. These involve all sectors of economic activity, including manufacturing firms, heavy industries, resource extraction industries or retailers (Rodrigue, ; Schulman, 2017). They added that increasing competitiveness brought by port investments can also be a double-edged sword for a national economy and as such aggregately increasing competitiveness promotes positive economic benefits though some national firms may be put out of business. Ports can be considered as “funnels” to economic development since they act as a catalyst and incite development to take place in specific economic sectors and locations nearby ports or along corridors (Rodrigue, ; Schulman, 2017). We can also categorise port benefits to direct, indirect and induced benefits. Indirect and induce benefits are difficult to quantify port investment that does lead to increased economic activity, the benefit is properly measured by the net value of the additional output while direct benefits are financial benefit and can easily be accounted for. Study carried out by M. Gossio in 2010 accessing the port of Abidjan in Cote d’Ivoire showed that more than 82 percent of the customs tax collection was from the port which serves as the main gate way and hub of sea borne trade in West Africa region and a regional trade exchange of more than 80 percent. Comparing the position of the port of Abidjan and Port of Douala in In Cameroon will say the port of Douala has allocation advantage to server Africa thank the later implying if well managed with the adequate facilities it will have a great impact on the Cameroon economy.
Chapter 3: Economy Overview
This chapter will give a brief overview of the present Cameroon economic situation showing the changes and future trends in the economic developments. This will mainly focus on economic factors that may affect economic development and also have an impact on port performance. These factors include economic demography, Gross domestic product (GDP), consumption level and the extent of foreign direct investment. Information from this chapter is mainly from the World Bank Report, report from African Economic Outlook, United Nation Development program, African Development Bank, OECD survey.
3.1 SPATIAL ECONOMIC STRUCTURE OF CAMEROON
Cameroon is located in the Central African region, stretching from latitude 02? N to 13? N of the Equator and from longitude 08? E to 16? E of the Greenwich Meridian. The territory of Cameroon stretches northwards from the confluence of the Sangha and Ngoko to Lake Chad and eastwards from Rio del Rey to Ngoko-Sangha confluence. Cameroon’s 475440 km2 surface area ( World bank data, 2011-2015) shares boundaries with Nigeria to the West, Atlantic Ocean, Equatorial Guinea, Gabon and Congo Republic to the South, Chad and Central Africa Republic to the East and Lake Chad to the North. The physiographic landscape is described as heterogeneous with several uplands and lowlands. The uplands comprise four main blocks: the Adamawa Plateau, the Western Highland, South Cameroon Low Plateau and Mandara Mountain while the lowlands include: the Coastal and Northern Lowlands. There is a relatively unstable seismic band known as the Cameroon Volcanic Line which extends from the Bight of Bonny (Fernando Po) to the Adamawa Plateau. It has impressive volcanic massifs like Mount Cameroon (4100m), Mount Bamboutos (2740m) and Mount Oku (3009m). Cameroon population has grown from 5.3 million in 1960 to over19.4 million in 2010 (2009 census) and up to 22,773,014 in 2015 with a growth rate of 2.5 percent from 2009. She is richly diversified with over 230 ethnic groups. Cameroon is endowed with enormous natural resources grouped into mineral, power/energy, water and forest.The mineral resources comprise of Bauxite, Gold, Limestone, Cobalt, Cassiterite, Marble, Uranium, Disthene, Iron ore, Nickel and Wolframite. The main energy/power wealth of Cameroon is grouped into renewable and non-renewable energies. Renewable energies encompass Hydro-Electric Power (H.E.P.), Solar energy and Biomass, while non-renewable energies constitute crude oil and natural gas. Further, water resource wealth of Cameroon embodies all rivers, streams, hot springs, lakes and the Atlantic Ocean. These water resources are exploited for products like H.E.P. generation, transportation of timber logs, freight, sand, irrigation and maritime export and import. Cameroon has both maritime ports and river ports. These seaports include; Douala, Limbe and Kribi while the main river port is Garoua (on the banks of river Benue). The terms of trade in Cameroon (imports and Exports) are completely dependent on those natural products. The industrial sector produces a wide range of products for the domestic and external market including consumer goods, intermediate goods, and capital goods. These products are partially distributed all through Cameroon with a greater concentration in the Southwestern and Northern regions. This can be seen in fig 3.xxxx below.
Fig 3.xxx Map of Cameroon industrial resources
(Source ; Atlas of Africa)
The mineral and energy resource wealth of Cameroon can be summarized as shown on table 1 below;
Mineral and Energy Resource Potential Location Approximate Quantity Production Capacity
Limestone Figuil 600,000 tons 160,000 tons/year
Bauxite Minim Martap, Ngaoundal, Fongo-Tongo920 Million tons 300,000 tons/year
Marble Bidzar 2,500,000 tons 640,000 tons/year
Gold Lom Valley (Betari Oya) —— 316 karats/year
Diamond Lom Valley (Betari Oya) —— 51 karats/year
Cassiterite (Tin Ore) Mayo Darle 430,000 tons 230,000 tons/year
Copper Poli, Tchollire —— ——
Iron ore Kribi, Mballam, Mayo Darle 120 Million tons ——
Manganese Mamfe depression —— ——
Crude oil Cape Limbo, Bakassi 450 Million Barrels 2 Million Barrels/year
Natural Gas Douala basin, Kribi basin (Logbaba) 350 Million cubic meters ——
Fuel wood Forested South 20 Million Hectares ——
Biofuel Shisong, Garoua —— ——
Thermal Energy Limbe, Ngaoundere, Yaounde —— ——
Solar Energy All over the country —— ——
Tidal Energy Atlantic Coast —— ——
H. E. P. Edea, Lagdo, Songloulou 1014155KW Table 1: Location and Quantity of Mineral Resources in Cameroon
Sources: Encyclopaedia of URCpp 50, Electscope No. 61/1996, www CRTV.cm.
It is worth noting that bauxite deposits uncovered in Ngaoundal and Mini-Martap are the fifth largest deposit in the world. Petroleum cracking is carried out by SONARA (National Oil Refinery) and the control of petroleum products is ensured by Societé Camerounaise de Depôt Petroliere (SCDP). Other H. E. P. projects under construction to beef up production are the Mekin Project (on River Dja), Mem’vele Project (on River Ntem) and Lom – Pangar Poject(on River Lom).
3.2 Economic situation of Cameroon
3.2.1 Cameroon Gross Domestic Product. (GDP)
The Gross Domestic Product (GDP) in Cameroon as of 2014 was over 32 billion Dollars, indicating an increase of approximately 6 Percent over the fourth quarter of the previous year. Cameroon’s annual GDP growth rate averaged 4.54 percent from 2003 until 2015, reaching an all-time high of 8.50 percent in the fourth quarter of 2013 and a record low of 1.90 percent in the fourth quarter of 2009 (Report from trading economy, 2016) due to the global Economic crises. The report also shows that the GDP Annual Growth Rate in Cameroon is expected to be 5.15 percent by the end of this quarter of 2016, according to Trading Economics global macro models and analysts’ expectations. Also, it is estimated that the GDP annual growth Rate in Cameroon to stand at 4.70 in 12 months’ time. It is projected that in the long-term, Cameroon GDP Annual growth rate trend will be around 5.50 percent in 2020. GDP Annual Growth Rate in Cameroon is reported by the Institut National de la Statistique du Cameroun.
Fig 3.xxx shows a small comparison between the GDP annual growth rate of Cameroon, Nigeria, Sub Saharan African Counties and the World year 2005 to 2014. Here you will notice that in 2005 Cameroon had the lowest GDP growth rate (2.3 percent) while the Sub Saharan African Counties had the highest (slightly more than 5 percent.). Nigeria our neighboring Country had a 3.5 growth rate. After the Global economic crises in 2009, the growth rate of Cameroon increased constantly and was even the highest in 2012 with a rate of 4.6 compared to 4.3 percent in Nigeria. By 2014 Cameroon and Nigeria to the Chart with a growth rate of 6.3 and 5.9 percentage respectively. Despite the rising oil revenues and foreign financial assistance Cameroon’s society is still marked by poverty, corruption and lack of order.
Fig 3.xxx Cameroon GDP percentage annual Growth rate
Source; World Bank report,2016
There are 3 main contributors to the Cameroon GDP namely the Agricultural, industrial and service sector with 20.6, 27.3 and 52.1 percentages respectively. Though the Cameroon agricultural sector has the lowest contribution ratio it employs more than 50 percent of its workforce. The employment ration of the 3 sectors are 70, 13 and 17 percent for the agricultural, industrial and service sector respectively.
SOURCE: 2016 CIA WORLD FACTBOOK
In total, the unemployment status in Cameroon has under-gone several changes since the year 2000 which was 6.3 percent. Due to some instability it increased to 7.5 percent in 2001. From 2002 and 2006 there was a sharp decrease to 5.9 and 4.1 percentages respectively. Thereafter, it has been maintaining a constant fluctuation between 4.1 and 4.5 percent from 2006 to 2014 with the highest in 2009 and 4.3 in 2014 (CIA World fact book, 2016).
3.2.2 Household final consumption expenditure (% of GDP)
Following the World Bank report 2014, Cameroon consumer sector has a vital role in the increasing GDP ratio. Household final consumption expenditure comprised of 77percent of the GDP in 2014 showing an increase of 7 percent from 2000. The government final expenditure contribution also made a contribution to the GDP in 2014 of 12 percent comparing to the 9 percent in 2000. This change in consumption level implies higher disposable income which justifies the reason for the decrease in gross savings from 15 to 10 percent for 2000 and 2014 respectively.
3.2.3 Recent economic developments
Cameroon becomes the 19th country to reach the completion point under HIPC IN 2006. Following the report of 2016 Cameroon is one of the 39 countries eligible or potentially eligible for HIPC Initiative assistance, 36 are receiving full debt relief from the IMF and other creditors after reaching their completion points. This has led to a reduction of the portion of government revenue set aside for the repayment of debts. This can also be seen as an attribution to the rise in GDP in the recent years. Cameroon Average per capita income rose from 900 US dollars in 2005 to 1330 US Dollars in 2015 though it shows a decrease of 30 in 2014 giving an average of 1150 US Dollar between 2005 and 2015. This rise can be attributed to performance of the raw material prices and large quantity of export of coffee, timber, crude oil and cocoa. However in 2008, the poverty reduction strategy paper was revised leading to the adoption of a new plan, the Growth and Employment Strategy Paper (GESP), which began to be implemented in 2010
Cameroon faced its highest inflation rate in 2008 of 5.32 percent. Thereafter, it dropped to 1.23 in 2010. Though the inflation rate has undergone wave-like changes between 2005 and 2015, the Bank of Central African states has been able to put it under checks with prudent monetary policies and the reduction of tax and price control measures to reduce the impact at the domestic level.
The Tax Administration has included an evaluation of fiscal expenditure in its action plan for 2013 so as to be able to exercise more control. It is intended to annex this evaluation to the draft finance law for 2014 (Trade policy report WTO, 2013). The article also stated that a committee has been set up for this purpose, comprising inter alia the Directorate-General of Taxes (DGI), the Directorate-General of Customs, the Directorate of Economic Affairs in the Ministry of Finance (MINFI), INS, the Ministry of Trade (MINCOMMERCE), the Investment Promotion Agency (API) and other bodies, notably private bodies.
Chapter 4: Trade
Trade is one of the components that is very important for the economic growth of a country. None-the less, it is highly influenced by the trade agreements, competitor and also transport. In this chapter I am going to look at the size, structure, agreement and main trading partner of Cameroon. I will also examine the size and component of its imports and exports not leaving out its restrictions.
Following the world ranking in 2014, Cameroon was the 108th largest export economy and the 102nd most complex economy according to the Economic Complexity Index (ECI).
The statistic of 2014 shows that Cameroon’s total exports of $5.16B and Imports was $7.56B resulting in a negative trade balance of $2.40B. The total export and import makes a 21.74 and 31.15 percent contribution to the GDP respectively. (Source: World Intergraded Trade Solutions WITS and gobalEDGE)
Fig;xxxSource: World Intergraded Trade Solutions (WITS)
4.1 Trade agreements.
Cameroon being one of the members of CEMAC, it is very important to have trade agreements with other countries. As stated on the website of the ministry of commerce of Cameroon, the main purpose of this agreement is to enable them, through a mutually beneficial manner, to consolidate the friendship and cooperation ties existing between them; to consolidate, strengthen and diversify their trade relations in a fair manner. These agreements are on legal basis in accordance with the provisions of the World trade Organization (WTO) agreements. Recently Cameroon initiated the EPA (Economic Partnership Agreement), signed many other cocoa agreements, etc. Cameroon has different level of trade agreements which includes bilateral, Regional, multilateral and World trade agreements. Below is a brief summary of these agreements taken from the website of the ministry of commerce of Cameroon.
Bilateral trade agreement
Cameroon has trade agreements with more than fifty counties. These agreements are classified depending on the development of the country. They also outline the specific issues such as the method of payment, treatment of goods and dispute settlement mechanism. On the 10th of January 1974 Cameroon signed a bilateral trade agreement with Senegal as part of the African and Malagasy Organization for Economic and Cultural Cooperation (DAMCE) contains a preferential clause. Under Article I of the Agreement, all goods originating from the two countries shall be imported free of customs duties and taxes.
Multilateral Trade Agreements and Conventions Cameroon is a signatory to the United Nations Conventions on International Trade Law (UNCITRAL), the World Trade Organization (WTO), the Islamic Conference Organization (agreement ratified on 11 July 1983), and finally the international agreements on products.
Regional Trade AgreementsCameroon is a signatory to the EU- ACP Partnership Agreement (2000 Cotonou Agreement), the African Intellectual Property Organization (OAPI), the African Export – Import (AFREXIM Bank), the Organization for the Harmonization of Business Law in Africa (OHADA), the Inter-African Conference on Insurance Markets (CIMA), the Inter-African Conference on Social Welfare (CIPRES), the Economic and Statistical Observatory for Sub-Saharan Africa (AFRISTAT).
United Nations Convention on International Trade Law (UNCITRAL) The following conventions aim at harmonizing and standardizing international trade law:
The 1978-UN Convention on the Carriage of Goods by Sea, (Hamburg Rules);
The New York Convention on the Recognition and Enforcement of International Arbitral Awards;
The Washington Convention establishing the International Centre for Settlement of Investment Disputes (ICSID);
The Convention on the Limitation Period in International Sale of Goods as amended by the Protocol adopted in Vienna in 1980;
The UN Convention on International Bills of Exchange and International Promissory Notes (New York 1988);
The United Nations Convention on Contracts for the International Sale of Goods (Vienna 1980);
International Commodity Agreements Cameroon is a signatory to several commodity agreements established within UNCTAD to promote trade in commodities. These are:
The Agreement on the Common Fund for Commodities (1980);
The International Natural Rubber Agreement (1987);
The International Cocoa Agreement (1994);
The Agreement on the diversification of commodities.
The International Tropical Timber Agreement ;The International Cocoa Agreement (1994);
The International Coffee Agreement (1994);
The World Trade Organization
On 15th April 1994, Cameroon signed in Marrakech the Agreement Establishing the World Trade Organization ratified by Decree No. 95/194 of 26 September 1995. Hence, the Government has committed itself to implementing the agreement on goods (GATT), the Agreement on Services (GATS), the Agreement on Intellectual Property (TRIPS).
Tablexxx in the appendix shows the traditional trade agreements that facilitate the context of trade between these countries and Cameroon dating from 1962 which are still being reviewed. It also includes proposed draft preferential agreements submitted to Cameroon by friendly countries like Turkey, Morocco and Tunisia and other trade negotiations.
4.2 Structure of import
Source: World Intergraded Trade Solutions (WITS)
From figxx above you will see that Cameroon is more an importing country than an exporting one. Its imports have constantly increased since 2000 with a slight fall in 2009 following the world economic crises. Cameroon imports in total 3643 different types of products with 162 import partners (Source; gobalEDGE, 2014). In 2014 the total import was $7.56B showing a rise of approximately 13 percent from 2012. The major part of the import is from consumer goods
with approximately 32 percent followed by raw material, intermediary and capital goods with 27, 22 and 19 percentages respectively. (source: UN Comtrade, 2014).
Fig; xxx Percentage composition of Cameroon’s import 2014,
Source: World Intergraded Trade Solutions (WITS)
From 2012 to 2014, the largest import commodity was “Petroleum oils, crude” (see table xxx). The top three partners for merchandise imports were China, Nigeria and France, accounting for respectively 33.89, 17.97 and 17.89 percent of total imports (see table xxx).
Table xxx: Top 10 import commodities 2012 to 2014 Value (million USD)
Comodities2012 2013 2014
All Commodities. 6515.1 6657.2 7561.1
Petroleum oils, crude 1300.9 999.4 1429.9
Petroleum oils, other than crude..565 445.4 551.3
Rice 306.9 430.7 282.6
Fish, frozen, excluding fish fillets 239.4 281.4 292.9
Wheat and meslin196.6 194.2 192.1
Medicaments (excluding goods of heading 30.02, 30.05 or 30.06) 165.8 168.3 218
Portland cement, aluminous cement, slag cement 137.8 179.4 200.9
Motor cars and other motor vehicles principally designed for the transport 147.1 145 15903
Electrical apparatus for line telephony or line telegraphy… 62.3 154.9 222.6
Motor vehicles for the transport of goods 100.3 106.4 108.8
(source: UN Comtrade, 2014)
Table xxx Cameroon Top 10 import partners
Top 10 ImportPartners Import Volume ($)
United States $263,708,950
Source; gobalEDGE, 2014
4.3 Structure of Export
The statistic of 2014 shows that Cameroon exported 1469 products making a total of $5.16B in Exports with 114 export partners. This shows a decrease of approximately 17 percent from the 2012 figure. The major part of export goods raw material (mineral products). Following the report from WITS the raw materials constituted the highest percentage of the total export while the least was capital goods. Raw materials contributed 70 percent followed by intermediary goods 17 percent, consumer goods 10 and capital goods 3percent (see fig xxx). (Source: UN Comtrade, 2014).
Fig xxx Fig; xxx Percentage composition of Cameroon’s export 2014
From 2012 to 2014, the largest export commodity was “Petroleum oils, crude” (see table xxx). The top three destinations for merchandise exports were Spain, China, and The Netherlands, accounting for respectively 16.69, 14.69 and 10.43 percent of total exports.
Table xxx: Top 10 export commodities 2012 to 2014 Value (million USD)
Comodities2012 2013 2014
All Commodities. 4275 4520.9 5159.5
Petroleum oils, crude..1834.1 2204 2469.2
Cocoa beans, whole or broken, raw or roasted…. 394.8 453.5 563.6
Petroleum oils, other than crude…. 527.5 258.2 321.1
Wood sawn or chipped lengthwise, sliced or peeled 279.8 274.7 300.7
Cotton, not carded or combed 143.7 173.7 160.6
Wood in the rough, whether or not stripped of bark or sapwood 121.8 145.9 176.7
Natural rubber, balata, gutta-percha, guayule, chicle 121.5 122.2 91.8
Unwrought aluminium52.6 64.5 147.9
Bananas, including plantains 74.9 83.5 77.1
Coffee, whether or not roasted or decaffeinated. 87.3 40.2 63.9
(source: UN Comtrade, 2014)
Table xxx Cameroon Top 10 import partners
Top 10 ExportPartners Export Volume ($)
United Kingdom $218,315,001
United States $165,515,337
Source; gobalEDGE, 2014
Since the 1990s, the government of Cameroon has been engaged in many IMF and World Bank projects aimed at promoting business investment, increase efficiency in agriculture, improve trade, and recapitalize the nation’s banks. The IMF has ever since then continued to call for economic reforms, including privatization, increased budget transparency and poverty reduction programs. Due to the government’s subventions to food, electricity and fuel, the country’s budget has been diverted from other areas such as education, healthcare, and infrastructure. The government has invested significant resources to many large infrastructure projects currently under construction, including a deep seaport in Kribi and the Lom Pangar Hydropower Project. Cameroon’s energy sector continues to witness diversity with recently launched projects like the natural gas-powered electricity generating plant. However, the government continues to seek foreign investment to improve its inadequate infrastructure, create jobs, and improve its economic footprint.
These investments are expected to spur economic growth. Growth expressed as a ratio of investment (I) to output productivity (Q) with ?Q/I. That is, growth output is ?Q/Q = I/Q x ?Q/I (1) Growth is therefore expressed in two components: the productivity of investment (?Q/I) and the ratio of investment to output (I/Q) of a country. Hence slow growth is due to either low output or
a low investment ratio. This implies that more investment resources would generate faster growth. A rapid change in output would be a result of increased investment.
Chapter 5: Transport networks.
5.1. Road Transport Network
Fig xxx Cameroon Infrastructural network
https://www.researchgate.net/figure/257875343_fig1_Fig-1-Map-of-Cameroon-showing-geopolitical-boundaries-road-and-rail-network-and-majorCameroon’s total road network density is 72 kilometers per 1000 km2, which is higher than the average of 59 kilometers per 1000 km2 for Africa’s resource-rich countries. Nonetheless its road density is still less than the level of the continent’s middle-income countries, having an average of 318 kilometers per 1,000 km2. (AICD, 2011). This report further state that only 27 percent of Cameroon’s rural inhabitants have access to all-season roads, , following the geographic information system (GIS) tools, which is slightly above the average GIS rural accessibility in resource-rich countries with 51 percent of the rural population lives within 2 kilometers of an all-season road following a household survey. From fig xxx the pink lines show the major road linking mainly the main cities and border countries. Information from the Ministry of Public Works November 13, 2015 shows that only 23 per cent of the 122,108 km road network in good shape.
Road transport network in Cameroon can be grouped into tarred, classified and unclassified roads. These roads are very unevenly spread across the territory. For instance, of the 50.000Km classified road network, the Littoral Region has 25%, the Centre Region 21%, North-West 16%, North and Far North 17% while the remaining regions have just 27%. This discrepancy in the road transport network distribution is accounted for by both natural and anthropogenic causes. The natural causes include; the nature of the topography, thickness of the vegetation, drainage and soil characteristics, while the anthropogenic causes involve; economic reasons, demographic reasons, political factor, rapid urbanization and colonial legacy. The road transport network is further grouped into Trunk A (National Roads) and Trunk B roads.
The Trunk A roads link up major towns and regional headquarters in the country. Following the North – South orientation we can distinguish four main Trunk A road axis (Lines);
Line 1 is the Limbe – Nkambe Line that moves from Limbe through Kumbam Mamfe, Bamenda and Kumbo to Nkambe. This includes the Bamenda – Wum – Nkambe Ring Road.
Line 2 starts from Douala to Kousseri passing through Nkongsamba, Bafoussam, Foumban, Banyo, Tibati, Ngaoundere, Garoua and Maroua.
Line 3 or Central Line starts from Douala to Yaounde up to Yoko and meets with Line 2 to continue to Kousseri.
Line 4 starts from Douala through Yaounde, Bertoua, Meiganga and meets Line 2 in Ngaoundere.
The Trunk B roads are secondary roads that originate from hinterlands and link upto Trunk A roads. They are more numerous but just a few are tarred while others are either untarred or having patches of tar. Some include; the Buea – Kumba – Mamfe road (only Buea – Kumba has been tarred), the Bamenda – Batibo – Mamfe – Ekok axis and the Maroua – Mora – Waza – Kousseri axis (tarred).
Road network is the more reliable due to the availability of carriers and the national coverage. However, the major bottleneck is the poor nature of the roads. The untarred roads make transportation expensive since most trucks either refuse to travel to certain areas, or are unable to reach these areas.
6.2. Rail transport network
The rail transport link in Cameroon is called Trans-Cameroon Railway and owes her emergence to the colonial masters. The first railway installations were planted by the Germans and were oriented in two directions, namely;
Line 1 or Western Line (over 172km long) extended from Douala to Nkongsamba,
Line 2 or Central Line (over 160km) extended from Douala to Yaounde.
After the Germans, the French extended the Central Line up to Eseka (over 134.7km long), connected Otele to Mbalmayo (37km long) and Bonaberi to Douala after the construction of the Wouri Bridge.
The post-independence period saw the extension of the Western Line from Mbanga to Kumba (over 29 km long) and the Central Line was extended from Yaounde to Ngaoundere for over 622km. Today the railway network measures over 1170km controlled by CAMRAIL after the privatization of National Railway Company (REGIFERCAM).
Cameroon is also a natural hub for the region, with the port of Douala serving as the main entrance. Douala is the starting point of the CAMRAIL railway, and extends 1,100 kilometers toward Chad but stops short of the border. The Douala-Bangui and the Douala-Ndjamena corridors are essential to the landlocked countries and provide greater trade integration within the sub region of the Economic Community of Central African States (CEMAC). About 60 percent of the non-mineral traffic from Douala to the borders with Central African Republic and Chad (AICD, 2011).It is worth noting that the railway network development is hindered by problems such as accidental topography, thick equatorial forest, poor drainage, inadequate maintenance, obsolete rolling stock and deteriorated infrastructure etc. while on a visit in Cameroon to gather some information I noticed that the railway transport is very insignificant as it is only available in just four regions in Cameroon. They trains are very old and the rails poor couple with poor management. Recently was a train derailment causing the death of over 70 people leaving hundreds seriously wounded. This accident was due to excess over loading of the trains. The inadequacy of rail transport network in the country makes rail transport not to be a reliable mode transport for goods to move from and to the seaport. This not only makes it expensive but it increases lead time and consequently unpredictable delivery dates. A more extensive rail network, newer and more performant infrastructure would improve performance and fluidity of goods to the port and vice versa.
6.3. Inland water transport
Inland shipping in Cameroon involves mainly river transport. Most of these rivers are either not navigable or navigable only for a short distance due to natural constraints like seasonal fluctuations in volume of discharge, the presence of waterfalls/rapids and sandbanks at the coast. However, River Benue is the main inland shipping route navigable for over 800km from Garoua to Port Harcourt in Nigeria between Mid-July and Mid-September. In the dry season, volume of discharge drops drastically hindering the floating of boats up to Garoua. Items transported along this route are people and goods. The total volume of freight or traffic handled
by this route is declining considerably, that is, from 21700 tons in 1976 to 8551 tons in 1980 and even lower today. This drop is attributed strongly to the irregular flow of River Benue and stiff competition from other transport modes like, road and rail as well as the Port of Douala.
Inland water transport has little or no contribution to the transportation network in Cameroon. The river port of Garoua is mainly used in the rainy season to trade with Nigeria and thus has no link to the port of Douala.
CHAPTER 6; MARITIME INFRASTRUCTURE
This chapter studies the maritime infrastructure of Cameroon with great emphasis on the characteristics of seaports, port investment measures and bottlenecks. Cameroon has an extensive coastline stretching over 410 km from the banks of Akwa Yafe River on the frontier with Nigeria to the Ntem River on the frontier with Equatorial Guinea. This opens Cameroon to a vast section of the Atlantic Ocean, which is favourable for maritime transport. This has led to the development of a couple of seaports along the coastline. These include; the Douala – Bonaberi, Kribi, Bota – Limbe and Tiko Seaports. Each time maritime transport is mentioned in Cameroon all attention goes to the Douala – Bonaberi Seaport due to its size which accounts for over 95% of all sea transport in the country. This is because she is the main centre for maritime investment in Cameroon and gateway to some landlocked countries like Chad and Central Africa Republic.
6.1. Main port organs and their functions
6.1.1. Department of Maritime Affairs and Navigable Waterways (DAMVN)
According to Cameroon governments Decree No. 2012/220 of 1 June 2012, maritime transport in Cameroon is under the control of Department of Maritime Affairs and Navigable Waterways (DAMVN) of the Ministry of Transport. This body is responsible for;
Formulating and implementing government policy as regards maritime transport,
Drafting and implementing regulations relating to maritime transport and inland waterways,
Monitoring the implementation of international agreements as regards maritime transport,
Monitoring negotiations, agreements and conventions and international conferences relevant to its area of competence,
Managing issues relating to maritime and river safety and the protection of the maritime and lake environment in conjunction with the competent ministries,
Organizing maritime traffic,
Administration of vessels,
Administration of sea-fearers,
Studying of files relating to the licensing of companies involved in the maritime sector,
Monitoring of maritime and para-maritime professions,
Ensures compliance with rules of competition in the maritime sector,
Managing rescue and search operations at sea,
Manages attributions relating to state sovereignty in the maritime, river and lake fields.
6.1.2. National Ports Authority (APN)
This organ was created by law No. 98/021 of December 1998 and organized by degree No. 99/126 of June 15, 1999, the National Ports Authority (APN) is an administrative public establishment with a legal personality and financial autonomy. Its principal mission of the APN is to ensure the implementation of the national port’s policies as laid down by the state. Its objective is to make the port sector more dynamic and competitive; hence it is particularly responsible for the following;
Planning national port development. For this purpose, it formulates, in collaboration with the country’s autonomous ports, the port sector master plan which must seek to promote competitiveness,
Formulating and monitoring the implementation of port security policy in accordance with requirements laid down by special instruments,
Monitoring the implementation of laws and regulations regarding the protection of the port environment,
Monitoring port performances,
Ensuring compliance with rules of competition in the exercise of port activities,
Monitoring the implementation of port cost reduction plans,
Participating, where and whenever necessary, in negotiations of agreements to be signed by the government in the for area of Ports,
Defining the framework, terms and conditions for the exercise of port activities.
Based on these objectives, the APN has recorded the following realizations;
Study on the issue of ports autonomy in Cameroon.
Study on the operational capacities of the Garoua and Kribi ports, within the framework of their autonomy.
Comparative study of the instruments governing the five regulatory boards in Cameroon.
Study on the definition of a framework relating to the mode of transfer, to the private sector, of trade and industrial activities.
Study relating to the formulation of port safety standards and mechanisms for monitoring their implementations.
Study the problems of providing assistance to shippers within the frame of port sector reforms.
Study on the problems of competition in the exercise of port activities.
Publication of an annual report on the state of the national port sector.
Study on the formulation of measures for the protection of the port environment at the Douala Port.
Study on the evaluation of the port community in the organization of the national goods transport chain.
Study on containerized traffic and impact on Cameroon ports.
Study on the assessment of actions taken to reduce port costs.
Study on the analysis of tariffs charged by various port sector players.
Preliminary study on the formulation of a plan for reducing port costs.
Monitoring the implementation of port concessions.
Study relating to the putting in place of a technical data bank for the Douala port site.
Putting in place of a framework of collaboration and data exchange between the APN and port operators.
Apart from these realizations, the APN currently has the following ongoing projects;
The formulation of a national port sector master plan,
The formulation of an observatory of port transit tariffs and costs,
Monitoring of the evolution of the Limbe Deep-Sea port project,
Formulation of a blueprint for monitoring actions aimed at protecting the port environment,
Formulation of a coastline development and protection master plan,
Formulation of an inland waterways development and exploitation master plan,
Development of a Kribi and Limbe port sites technical data bank,
Putting in place of a platform for co-operation with the National Competitiveness Committee,
The development of a port professions and skills directory,
The competitiveness of Cameroonian ports with respect to other ports on the West African coast.
6.1.3. Ports Authority of Douala (PAD)
Since the 15th century, the Ports Authority of Douala (PAD) has been involved in international activities making it the main seaport in the Atlantic coast of Cameroon. This estuarine port covers an approximate surface area of 1000 hectares 60% of which is currently in operation.
The PAD was established by Law No. 98/021 of December 1998 in accordance with the enabling decree No. 99/130 of June 1999 governing port reforms in Cameroon. It is a State-owned Corporation with legal personality and financial autonomy.
The main mission of PAD is ensuring the management, promotion and marketing of the Port of Douala. In this respect, it is therefore responsible for;
Providing assistance to and receiving ships,
Equipping, carrying out port maintenance and expansion and creating and developing industrial port zones,
Managing, maintaining and renovating port facilities that are assigned to it,
Ensuring the security and safety of port operations,
Supervising projects entrusted to specialized firms, including dredging, and
Promoting the port of Douala.
6.2 FEATURES OF MARITIME INFRASTRUCTURE
Cameroon has four autonomous ports: the port of Douala, the maritime port of Kribi, the port of Tiko and the port of Limbe. There is also the river port of Garoua. The port of Douala provides about 95 percent of national port traffic. It is thus the main port of Central Africa and serves neighboring landlocked countries including Chad, the Central African Republic (CAR) and the North of the Republic of Congo. The regulations on the organization of the autonomous port of Douala are defined by Decree No. 99/130 of 15 June 1999. A Single Window for Foreign Trade Operations (GUCE) was created in 2000 to coordinate and host in a single-point all the stakeholders in the process of import and export of goods. It is operational since 2002. Several industrial and commercial activities of the Douala port were privatized in 2003 and 2004: the container terminal was granted to Douala International terminal (DIT), a consortium of leading operators of the port which includes Bolloré (Saga, SDV, SOCOPAO) and Maersk.
6.2.1 Port of Douala
The Douala Seaport is the main seaport in Cameroon handling about 95 percent of goods entering the country and it is also the main port serving most of the landlocked countries of the Sub-Sahara African region including Chad, Central Africa Republic and even Northern Congo-Brazzaville. Following an interview with the Minister of transport Mr. Robert Nkili by the Cameroonpostline February 13, 2012 he stated that the port of Douala is considered to be Cameroon’s biggest income earner. It further stated that in 2011 the number of vessels received at the port was 1,200 for a total traffic of 9 million tons of cargo. Cargo handling capacity at the port of Douala is estimated to be 7.5million tons with a storage capacity of 11 million tons per year. The Douala seaport is linked by 20km tarred roads and a 20km-long railway line with a 10Km long quay for terminals. The Port of Douala is accessed through a channel measuring 50km and needing continuous and costly dredging. The dredging cost for a period of 24months amount to 15.9billion FCFA (Approximately 24 million Euro). The port has nine conventional berths, two container berths and a shipyard. Bananas, gasoline, timber, cocoa, cotton, aluminum and bauxite are the most common export products. The leading operator of the Douala seaport is Bollore a leading transport and logistics company in France. The contract was signed in 2005 and they have broadly invested in the terminal, with the aim of modernizing the infrastructures, to increase the container storage areas, to acquire new equipment, and to optimize the terminal operating system. This has led to a 60 percent increase in the number of containers processed between 2005 and 2016. Due to the increase in containers inflow with no increase in space the average cargo dwell time is 22 days at Douala, according the World Bank.
The Port of Douala is subdivided into several geographic areas of operation, namely,
The city of Douala is home to more than 80% of Cameroon’s industries, and most of them are within the port area and surroundings (Bonaberi, downstream upstream zone), where a lot of activities are carried out such as cement production, agro-industries, fertilizer and chemical production, petrochemical production, ship repairs and other food processing.
The Container Terminal
After it’s complete modernization and renovation in 2003, the Container Terminal has one of the highest handling rates in Africa. The storage capacity is near 18000 TEUs while the theoretical annual capacity is 530000 TEUs.
The Timber Terminal
The timber terminal facilities of this terminal are found around the lower basin and include: 20 acres of stretch of water, 85 ha of land for preloading and marketing of timber, three launch pads for floatable wood. It can accommodate about 2 million tons of wood per year.
The Fruit Terminal
This terminal takes both conventional traffic and fruits traffic, mainly bananas, pineapples and cereals. The Fruit Terminal has a 600m – long wharf, 6500m2 – storage sheds, modern facilities for fruit handling.
The Ore Terminal
This terminal handle alumina imports and aluminum exports. It comprises: a 280m – long and 8.50m – deep quay, 8 conveyors belts, 6 silos of 1600 tons each.
The Oil Terminal
This terminal is composed of a berth intended for docking oil tankers, tankers located 200m from the left bank of the Wouri River. A berth is temporarily assigned to tankers due to unavailability of the mooring and berthing dolphins.
The Fishing Port
Fisheries-related activities are organized around the upper basin which has the following facilities: a 700m – long quay, an ice plant with a capacity of 150t a day, a refrigerated warehouse of 4500m2, a fish market of 3600m2 and complex comprising 5 cold stores with a total capacity of 2011t.
Douala port performance assessment
The Douala port is characterized by inadequate infrastructures and high cost of transportation. High transportation cost is a major factor hindering growth and increasing poverty in Africa, which makes African countries less competitive in the global market. The efficiency and performance of a seaport can be measured using different indicators. Following the analysis of G.De Monie, 1987 the key indicators were the duration of ship stay in port, Quality of cargo handling and the quality of service to the hinterland. These three factors are also supported by the World Bank report of Ximena et al, 2004,and V. Flitsch, 2012. Estimating the magnitude of time cost and effect of trade by Hummels (2001) trade reduces with an increase in transport time. We can therefore deduce from this that longer dwelling time of ships at the port has a negative effect on trade. This consequently has a negative impact on trade since trade is one of the determinants of GDP. This can further be explained by the fact that delays and unpredictability increase inventories and prevent integration into global supply networks (Gael et A, 2012). Trade based on assembly operations for export is impracticable without speedy import processes.
The Douala seaport is overwhelmed by a long waiting time by ships waiting at the entry gate into the port and equally a long dwell time of ships waiting to be offloaded. It is imperative that the management of the port’s operation be reviewed and enhanced in order to significantly reduce both the time spent by ships waiting to dock and also the dwell time. An economic literature (Wilson et al, 2003a, 2003b, 2004; Clark et al, 2004) demonstrates that poorly-performing ports can strongly reduce trade volumes and may have a greater dampening effect on trade for small, less-developed countries like Cameroon, than many other trade frictions and that port efficiency and services infrastructure have a positive impact on African trade (Djinke et al, 2008). Undeniably, the simplification of trade and the facilitation of transportation is a key component in the performance and efficiency of a seaport. Without these key components, the process of integrating markets will not yield benefits to the economy of a country. This is because a lower transaction and transportation cost will reduce the gap in prices between domestic and imported goods and raw materials thereby benefiting both consumers and producers. The following section is going to assess the performance of the port of Douala relating to cargo dwell time and transport network,
Cargo Dwell time:
Dwell time figures have become a major commercial instrument to attract cargo and generate revenues (Gael et A, 2012). Comparing with other ports in Sub Sahara Africa (SSA) Cameroon has an average dwell time of 22 days which is more than the average dwell time of the SSA ports excluding the Durban port in South Africa. See table below;
Tabxxx Average dwell time in SSA ports (days)
The average global dwell time at the Port of Douala is five times higher than that of Durban, twice of the Port of Mombasa, 1.5 times of Dar es Salaam; it exceeds by 22 percent the global dwell time at the Port of Lome and by 10 percent the Port of Tema. In major ports of Asia and Latin America, the global dwell time is on average less than a week,” the World Bank said in a 2015 study on the inefficiencies of the Port of Douala. The lengthy dwell at the port of Douala time is also due to the fact that small ferries are used to carry in goods from vessels larger than 15,000 deadweight tonnage that cannot berth at the shallow port. Looking at the composition of the dwell time of all imports cargoes at the port taken from the World bank data from Cameroon customs, 58.34 percent of the time is from vessel discharged to declaration registration, from declaration to issuing of permits takes 19.87 percent followed by the time taken from declaration assessment to payment which is 18.54 percent. After issuing of exit permit to gate exit 7.98 percent of the dwell time is used. The rest of the time is taken to start declaration and registration of declaration, declaration to assessment, vessel arrival to discharge with 4.8, 1.83 and 0.71 percentages respectively. This shows that most of the delay is from the custom declaration to the time to get the exit permit. In my quest to find out why this delay I have an interview with a Belgian exporter who exports container to Cameroon and a few Cameroonians importing from The Netherlands, Germany and Belgium their main frustration was on the pre-shipment inspector (SGS) and the brokers. Due to the so many documentations and the monopolistic nature of SGS goods are bound to spend extra days at the port, worse of all since your good can only be cleared by a broker you are bound to have little knowledge of the exact clearing cost. With this so many of them will cause the delay so as to ease fraud asking for extra payments without justification. This is one of the reason why Cameroon is being ranked 145 out of 175 least corrupt nation according to the corruption perception index in 2016 by transparency international.
These delays are also caused by incomplete documentations by the importer and also lack of finance especially for small and medium size businesses who must make a deposit of 1 000 000FCFA ( Approximately 2000 Euro for each container before the declaration process. In addition the port mainly depends on human labor for unloading and loading with only 3 gantry cranes.
The increase in the number of containers with no increase in space has led to a serious congestion in the port. Following the interview of Mr. Manga Elvis Captain of Custom at the Douala port in December 2016 all the warehouses at the port were full forcing some ships to wait for more than a week at the buoy base. This is because most importers use the port as warehouses to stock their goods while others abandon their goods at the port due to high clearing cost. In addition to this due to the depth of the sea several massive cargo vessels are obliged to dock in nearby ports like Pointe Noire in Congo and the goods transported to the Douala port by littles ships. This leads to loss of port revenue to neighboring ports.
Inadequate Transport Network.
It is essential for the transportation of goods from inland to the port of loading and vice versa to be smooth, easy and affordable. High transport cost reduces significantly the profit margin derived from goods. Shippers face a lot of pre- and post-shipment difficulties on import or export (administrative bottlenecks and harassment by police, too much paperwork, lack of reliable infrastructure) amongst others. It is therefore important that these issues be rectified. It is often said that: “the sea battle is won on land”, which means that the commercial strategy of sea carriers is to cover land transport as well.
Cameroon’s road network, both paved and unpaved, is poorly maintained. Cameroon has road crossing points to each of its 6 neighboring countries. According to official statistics, there are about 50,000 km of roads, of which 5,000 km are paved. The country’s road density is estimated at 7 km for each 1,000 km2. During the wet season, only paved roads remain usable by heavy carriers like trucks. Traffic on unpaved roads may be restricted by rain barriers. Trucks can therefore be stuck for many hours, which results in an increase of their lead time. On many bridges the traffic of trucks is banned. They are forced to use deviations through rivers, which in itself is impossible during the rainy season when waters are high. Transportation to the seaport is also very difficult due to the high congestion on the single road that leads to the port. On average it will take about 3 to 5 hours during rush hours to cross the port area.
Apart from the inadequate transport network, the transport sector in Cameroon also suffers from the absence of a coordinated approach to intermodal transport. This has made Cameroon one of the lowest countries in the world with the ability to move goods and connect manufacturers and consumers with international markets. Following the Logistics performance index in 2016, Cameroon ranked 148 out of 160 countries with an LPI of 2.15. (World Bank report, 2016).
The trucking capacity in Cameroon, estimated more than 35,000 units exceeds the normal domestic transport demand. However, the majority are very old (more than 30 years of age). During cotton or fertilizers campaigns for instance, the demand is very high, it remains possible to find trucks for any given transport. The isolated areas might be an exception during the wet season. The transporters might refuse to go to these areas, unless the price of the transport is remarkably increased. This makes it difficult for exporters to move goods to the port. The transit cargo from Cameroon to the neighbouring countries namely Chad and CAR is regulated by conventions implementing a regime of quota respectively applied and managed by official recognized structures.
The Cameroon railway is operated by CAMRAIL, a subsidiary of Bolloré logistics. CAMRAIL operates about 1,100 track kilometers of rail. The network is principally connected from the Port of Douala, through Yaoundé and up to Ngounderé.
Douala-Yaoundé, Central line: 258 km. Traffic of goods is estimated at 5 to 10 heavily charged trains daily. Yaoundé-Ngaoundéré, Northern line: 626 km. Traffic of goods on Yaoundé-Douala line, with 5 to 10 fully charged trains daily.
The Cameroon rail system plays an important part in domestic freight transport. It is also the main link with the northern half of the country, Chad and the Central African Republic.
In 1999, under a 20 years convention, a joint-venture between the French group Bolloré and COMAZAR of South Africa took over the management of the national railway corporation. Despite privatization, the service has not yet been much improved. The reputation of the new company, CAMRAIL, has suffered owing to frequent derailments. This limited access of transportation network makes transportation very costly and time consuming for not only the goods but also workers.
6.2.2 Other Ports
The construction of the Kribi port is almost completed. Kribi port complex is intended to provide facilities to serve the needs of industrial companies, especially those involved in mining, transporting and receiving heavy equipment for mineral extraction. It will also be a container hub. The Kribi Deep seaport will handle iron ore in-puts and iron ore final products for exports extracted from the deposits at Mamelles situated 30km south east of Kribi and Mbalam, 600km from Kribi. The port will reportedly serve as a hub for the importation of petroleum products.
The Kribi Seaport with a depth of 15 meters, will be equipped during its first phase with high technology port infrastructures including a terminal container accessible to the vessels carrying 8,000 containers at thesame time. With its 615 m of quay for the first part, the Kribi port can receive in same time 2 vessels of 290 m carrying 50,000 MT of commodities more than the double of Douala port which maximum is 20,000 MT. Three operational porticos of 68 MT, 35 MT and 25 MT will reduce the stand-by of the vessels.
Limbe – Tiko is a complex of two ports: Limbe Port (4°00’N, 9°12’E), Tiko Port (4°4’N, 9°24’E)
The facilities at this port are destined for handling of petroleum products for the refinery unit of Limbe and export of timbers. However, with the current construction of a shipyard and the planned establishment of a cement company in Limbe, the government has planned to improve the facilities of this port.
The annual traffic at the port of Limbe is estimated at some 20,000 tons.
The Limbe-Tiko Port Complex equipment includes:
a berthing wharf ;
4 warehouses of 1,638 square meters each;
a shed equipped with a slipway ;
a timber stocking yard ;
3 fixed cranes.
Port of Garoua (River Port):
The river port of Garoua is a seasonal and found on river Benué. The port serves the northern regions of Cameroon and its traffic is mostly with the neighbouring country of Nigeria. The port is active only for three to four months a year during the wet season, which ranges from May to August in Northern Cameroon. The hostilities in Nigeria border following the closure of the borders in the mid 1980’s as a result of the Bakassi Peninsula disputes, added to the current violence caused by the terrorist group of Boko Haram have heavily penalized the activities of the port of Garoua. Also, the construction of a hydro-power dam at Lagdo, near Garoua has contributed to the decrease of the volume of the drained water at River Benué which supplies Garoua port, consequently, the small traffic by Nigerian wooden boats has sharply decreased. It was also reported that the build-up of sand over the last years has left the port virtually abandoned.
6.3 Development Needs to improve the efficiency of the Douala Seaport
The efficiency of ports depends on its quality of service. With such bottlenecks like dwell time and fluidity added to the transport inefficiencies around the port and the country, the port of Douala’s contribution to the economy of Cameroon is restricted. Surmounting challenges to align with international ports’ standards should be non-negotiable. Below I will look at measures that can be taken to reduce dwell time as well as the transport network to improve the performance of the Douala seaport.
6.3.1 Measures to reduce dwell time
Over the past decade, the government of Cameroon has embarked on policies that can improve maritime infrastructure in Cameroon. This is as a result of the significant role the seaports of Cameroon are supposed to play in the economy of the country. Measures have been taken to promote the attractiveness of the port of Douala and increase its efficiency. Also, maritime infrastructure investments like the construction of the Kribi seaport have been implemented.
Also, the government has tackled major issues increasing dwell time by: modernizing the customs administrative procedures, increasing the fight against corruption and informal practices as well as corruption at border control points. All these efforts organized over the past decade with the goal of reducing dwell time to 7 days at the port of Douala has not yet yielded the expected outcome. The dwell time still stands at three times that target I.e. 21 days. From a breakdown of the reasons of dwell time mentioned above, we can conclude that the main reasons for high dwell time are structural and should be resolved accordingly. The structural problems include weak coordination of stakeholders, monopolies of the port and the PSI operators, informal trade practice, and the use of the port as cheaper warehouse by shippers. ( ) To resolve this, the stakeholders need to prepare and adopt and implement an all-inclusive reform plan. Furthermore, to reduce the dwell time and hence improve the efficiency of the port of Douala other steps that should be adopted include: Implementation of an inclusive structural reform, Continuous Investment in the modernization of the port of Douala, Update the Port’s Legal framework, Creation of a sensitization mechanism for importers on procedures.
Implementation of an inclusive structural reform
In order to implement a successful structural reform, all the stakeholders must be in consensus. With the clear objective of achieving sustainable reduction in dwell time, stakeholders all need to adopt good practices that will reduce the occurrence of delays like administrative drags, allowing goods for long periods at the seaport without clearing or using the port’s warehouse as a cheaper alternative.
Based on the experience of two Ports, a recent study led by Raballand et al. (2012) has identified key components of a reform policy that could lead to a sustainable reduction in dwell time: (a) political impetus of the State, (b) regular meetings of stakeholders at a decision-making level, (c) audit teams to reengineer the processes, and (d) a comprehensive approach to changing the behavior of stakeholders.
Some cases in Africa include the port of Durban and the port of Dar Es Salaam:
Source: Raballandetal.in Why does cargo spend weeks in Sub-Saharan African Ports, lessons from six countries, chapter 6, pp88-92.
The port of Durban
Following recurrent mutual complaints between Transnet Port Terminals and private stakeholders on dwell time and its causes, an interim advisory board was created, co-chaired by a manager from Transnet and a chief executive officer from the private sector, with the mandate to identify the key measures that should be implemented to reduce dwell time. Over a period of three years, this committee met fortnightly. The committee included the Port operator (Transnet Port), the rail operator (Transet Freight Rail), cargo owners (container Liner operators forum); landlord and marine services, the National Ports authority and freight forwarders. An audit team was added to the group to provide an independent view on what should be done. This team was commissioned on an ad hoc basis to give technical advice on the measures to be taken. It was composed of a representative of a shipping line, a representative of the road freight association, a representative of Portnet, and a representative of an engineering firm.The lessons from Durban show that the terminal operator first needs to reengineer its internal processes and procedures and then to agree on measures to change the behavior of private stakeholders, such as shipping lines, transporters, customs brokers, and so on. It is also critical to resolve high-impact problems first and then to agree with port users on the problem to be resolved. In this regard, it is important to demonstrate that dwell time can be reduced. Durban stakeholders used a comprehensive “enabling block” approach which changed the incentives for crane operators, changed port tariffs, altered the opening hours of container yard operators, established a queuing system for trucks, and invested in software and equipment. Average dwell time that stood at seven days in 2002 was reduced to three days in 2004.
The port of Dar es salaam.
In Dar es Salaam, a multi stakeholder workshop on dwell time identified 205 issues in June 2008 and proposed actions to improve the performance of dwell time. The process was championed by a high-level intervention led by the president and prime minister, which resulted in the formation of a multi stakeholder Port Decongestion Committee, which met fortnightly. Moreover, stakeholders commissioned a committee of specialists to identify key measures to reduce dwell time. The setup and functioning of the Port Improvement Committee (PIC) is similar to the approach taken in Durban. For example, participation is at the chief executive level, both private and public-sector agencies are represented, meetings are held fortnightly, and two subcommittees—one on dwell time and another on standard operating procedures—convene to tackle specific technical assignments on behalf of the PIC. The subcommittee on procedures undertakes audits on choke points in any area of port operations. It took about one year to develop the strategy for increasing storage throughput and altering the behavior of the various participants. Out of 205 issues identified through stakeholder consultations, the PIC summarized 10 priority actions to reduce dwell time and improve productivity in the port. Reports by the PIC indicate that dwell time was reduced from 25 days to 15 in 2009 and then to 13 in 2010.
Continuous Investment in the modernization of the port
The port of Douala will not witness a significant reduction in dwell time if the manner of offloading ships is not modernized. A good percentage of goods are still offloaded manually. To increase the speed of offloading and thereby reduce dwell time of cargo, latest generation gantry cranes need to be used. Lately the authorities announced an investment in gantry cranes, which they qualify as “highly efficient, capable of simultaneously accosting two containers both at loading and offloading”.
The acquisition of these four gantry cranes which went operation in August 2014 has reportedly increased the DIT’s productivity and accelerated container handling.
Necessary construction work is also needed to establish the ports boundaries in order to put into use the unused available space. This can be used for the construction of more warehouses so as to reduce the time spent by ships waiting to be offloaded due space unavailability.
The acceleration of the modernization of the port of Douala together with the implementation of other best practices like deadlines for the clearing of goods need immediate action to reduce dwell time and increase the efficiency of the port. Visible actions in this light are already in place as on January 18, 2018, 55 families illegally occupying in sensitive zones of the port were dislodged. Investments to step up the logistics zone for better port activities will very much improve efficiency of the port.
Update the Port’s Legal framework
Many factors amongst which is the use of the port as a storage facility is a key point to review and revise should be. The revision should discourage such practices by adopting reforms which would upgrade the 1985 law of the ports operations. Suggested actions should be a substantial increase in the warehousing fees as well as strict implementation of penalties such as those proposed in the 2003/07 finance law. This law stated that cargoes should be immediately removed on issuance of the authorization granted by the customs. Sanctions should be put in place if this law is not respected. The penalties which should be financial in nature, should be increased compared to what is already in place so as to have a significant impact on the behavior. It should however be noted that article 108 of the CEMAC stipulates a 90 days period within which failure to clear goods will lead to confiscation and placed on auction.
Finally, the legal working hours should be adopted be revised. The current working hours which is from 7:30 to 3:30 needs to be adapted to the current situation of congestion in the port. More flexible working hours would be helpful. A 24H a day presence by port operators and custom officers would be the ideal situation.
Creation of a sensitization mechanism for importers on procedures
In order to reduce the financial unpreparedness of importers, they need to be sensitized on the latest trading procedures. This can be done through the organization of training workshops, and the implementation of alert systems on their cargo so to keep them informed on location, arrival dates, and other requirements. This will help the importers to anticipate and prepare financially for the various financial costs involved in clearing of the goods. The Cameroon National Shipper’s Council plans to organize a series of workshops to improve the awareness of importers. These workshops should be on a basis to guide importers on the trade procedure.
Data from ASYCUDA can be used for the setting up of an alert system. The alert system should include both SMS and E-mail. This will be to directly inform importers on the level of progress of their cargo as well as documents at the customs clearance office. Awareness of such a tool also needs to be done extensively. Ongoing activities to reinforce the GUCE will make the application of these options very possible. The GUCE website should also be filled with transshipment information to make it easy for importers to have a view of relevant traceability with regards to their goods. Finally, an online simulator can be provided in order to enable importers get estimates of import duties and other taxes that they will incur on the arrival of their cargo.
6.3.2 Improving the efficiency of the transport system
A flexible and reliable transport network increases the productivity of input factors, increases turnover of goods, creates predictability of supplies and provides a smooth business cycle which improves economic growth. According to Potter and Skinner, (2000), as cited by Ducruet et.al (2009), transport integration, is the linking of disjointed and often incompatible transport systems. Rodrigue and Notteboom (2000), observes that maritime shippers are becoming increasingly active in the management of hinterland flows in many ports, namely through alliances and contracts with rail and road transport companies and have synchronized more efficiently inland distribution capacities with port-maritime distribution capacities while coping with congestion and the costs associated with a high throughput maritime – land interface. Jacobs and Notteboom, (2009) observers that through a vertical integration of their activities market players such as shipping lines, forwarders, transport operators and logistics groups seek to reduce costs, to improve efficiency, to generate revenue and to deliver value and a ‘one-stop shop’ service to the customer. Third party logistics providers may arise from vertical integration of shipping line, terminal operator and hinterland transport providers. Here I will consider three factors that will help improve transport efficiency namely road and rail.
126.96.36.199 Development of the road network
Since the economic crisis between 1985 to 1995, financing for the development of transport infrastructure dried up. This has led to the deterioration of the state of existing roads due to poor maintenance. Also, very few roads have been developed over the years, and many projects were abandoned. This has contributed to the increase in cost of transportation. Also, the congestion in the roads have delayed goods reaching their final destinations on time.
All the above problems make the economic activities slower and costlier than it would otherwise be. This causes an overall impact on the economic growth which becomes slower than it will be if costs were lower, turnover of goods were faster and predictable.
To improve the transport network, more roads should be constructed and maintained as a larger stock of transport infrastructure fuels economic growth.
Case Study – The Douala Infrastructure Project
Road infrastructure plays an important role to maritime activities in Douala. To improve the state of roads leading to the port of Douala, a loan was granted by the International Development Association (IDA) with an objective of increasing the volume of goods shipped.
Douala is one of the major industrial centers of Central Africa and equally Cameroon’s main outlet to the sea. The economic crisis that hit Cameroon between 1985 and 1995 affected the city of Douala significantly. The crisis led to a drop in public investment and expenditure on infrastructure maintenance, resulting in a significant deterioration of the road network. Transportation became difficult and slow to and from the port and the industrial areas. Transportation and even travelling became very costly and time-consuming for workers, trucks, and goods. This resulted to the efficiency of the port and city of Douala to decrease. Many main arteries were barely usable, which caused major bottlenecks. In 2001, the Douala Urban Community launched an emergency rehabilitation program to address urban transport needs. This initiative gave birth to the Douala Infrastructure Project. By the year 2010 travel time reduced by an estimated 87 percent while the daily volume of vehicle travel has increased compared to years before the completion of the project.
The outcome of this project did not only increase the number of vehicles travelling on these roads, it reduced cost of transportation. It reduced the time taken by goods to travel to the final consumers. Also, secondary economic benefits like new businesses sprouting, higher demand for rented properties amongst others.
Finally, the Urban council reports that the Douala Infrastructure Project brought about road improvements and reduced vehicle operating costs by 59 percent.
188.8.131.52 Improvement of the railway links
Rail transport is the second most important mode of transport after road. It offers a good alternative for transporting bulky produce for both local and export markets. However, the Cameroon Railways do not operate at their full capacity.
The Cameroon Railways needs works closely with the Cameroon Ports Authority in transportation of bulk commodities.
The railway is very important for transportation of cargo to neighboring countries. It is an attractive alternative to road transport due to the fact that is and more reliable.
The rail network needs development to link the maritime zones to the hinterland. The rail company has some projects which if implemented, will help increase the number of rails and the distances covered.
On 19 October 2015, Cyrille Bolloré, president of Bolloré Transport Logistics, announced that the Bolloré Group will finance the feasibility studies and construction works for the railway that extends from Ngaoundéré in the Northern part of Cameroon to Ndjamena, Chad’s capital city.
In addition to the railway extending to Chad and estimated at a cost of 1,160-1,400 billion FCFA, the leader in logistics for Sub-Saharan Africa also eyes the Edéa-Kribi-Lolablé railway project. “We have told Cameroonian authorities we desire to finance the construction for the Edéa-Kribi-Lolablé railway as part of our contribution in the project for Kribi’s industrial-port complex,”Cyrille Bolloré says.
The Edéa-Kribi-Lolablé railway will help boost the exploitation of Kribi’s deep water port which should go online within the next months. During the phase 2 of its construction, the port of Kribi will host, among other new infrastructures, a hydrocarbon terminal and an iron ore terminal, in preparation of upcoming exploitation of gas liquefaction unit in Kribi, and that of iron ore mines in Eastern Cameroon.
These projects need to be implemented so as to help increase the efficiency of the transport network within Cameroon and to other landlocked countries namely Chad, CAR and Congo.
The congestion at the port of Douala coupled with the poor nature of the transportation network is a critical issue for the movement of goods imported as well those exported. More than 90% of Cameroon’s international trade is carried out by the shipping industry. The import and export of goods on the scale necessary for economic viability would not be possible without shipping. As Seaborne trade continues to expand, consumers and producers can only benefit through competitive freight costs.
Maritime infrastructural development is therefore of utmost importance for economic growth. From the above report, we have seen that the Douala port accounts for 95% of all sea transport. The Cameroonian government declares the Douala seaport as the number one income earner for the government.
In this report, increased efficiency of the seaport of Douala and its effect on the economic growth in Cameroon has been studied. I have concluded that globally maritime investment has positive influences on economic growth. The level of its impact on the economy would however depend on several factors, including cost, speed, and reliability.
Structural reforms are needed to improve the efficiency of the Douala seaport as well as the maritime sector as a whole but other infrastructure investments that are key to economic growth of Cameroon are in the areas of:
investment in the modernization of the Douala seaport
investment in the transport network (both road and railway in the maritime industrial zones as well as to the hinterland)
For the maritime sector of Cameroon to contribute to economic development it must meet the changing demands of trade. Ports have been described by the World Bank as adaptive entities. Ports should therefore adapt to changes in trade and trade patterns, the types of ships should be innovated, and major innovations should also be done in cargo carrying and handling equipment.
There is a clear correlation between the world production growth and maritime demand. Various forecasts suggest that world production is expected to grow by 3% a year in the next decade and maritime demand is expected to follow the same pattern. (Ma, 2005, p.17)