UK development finance institution CDC Group and Dubai-based ports operator DP World have signed a partnership agreement worth more than a billion dollars to boost Africa’s ports.
The partnership, covering a “long term investment period”, will support the modernisation and expansion of ports and inland logistics across Africa, starting with the ports of Dakar (Senegal), Sokhna (Egypt) and Berbera (Somaliland).
DP World is contributing its stakes in the three existing ports initially and expects to invest a further $1bn through the platform over the next several years. CDC is committing approximately $320m initially and expects to invest up to a further $400m over the next several years. The expansion in Senegal alone is expected to be the country’s largest ever onshore foreign direct investment (FDI) at nearly $1bn.
The transaction is subject to final regulatory approvals.
Trade enabled by the three initial ports will support 5m jobs in the wider economies, according to the partners, of which 138,000 are expected to be created by the ongoing port expansions and modernisation.
By 2035, an estimated $51bn in additional trade is forecast to pass through the ports, equivalent to 3% of Senegal’s GDP, 3% of Egypt’s GDP and 6% of Somaliland’s GDP. Ports modernisation is also intended to improve access to critical goods and staples including food; which is expected to have benefit areas further afield including the wider Horn of Africa and parts of the Sahel. The ports will also boost export industries currently stymied by logistics inefficiency.
“This partnership with CDC offers us greater flexibility to accelerate and capitalise on these opportunities, and will enable us to increase our investment in ports and logistics infrastructure across Africa,” says Sultan Ahmed Bin Sulayem, group chairman and CEO of DP World. “The partnership will create transformational opportunities for millions of people over the next decade.”
Nick O’Donohoe, chief executive of CDC Group, said: “Africa’s full potential is limited by inadequate ports and trade bottlenecks, putting the brakes on economic growth in some of the world’s fastest growing economies and undermining social resilience in the least developed parts of the world. This platform will help entrepreneurs and businesses accelerate growth with access to reliable trade routes and it will help African consumers benefit from the improved reliability and reduced cost of vital goods and food staples.”