By Saidu Ahmed
“It’s okay to have your eggs in one basket, as long as you control what happens to that basket” -Elon Musk
Transportation has changed the accent of the global economy, at a time when the stratagem to power and progress is not only filtered for the praise of economics and what humanity has achieved in a classical sense, whether these filters are contemporarily changed by dialectical realities of Post-pandemic economics or not, we do not need superior sociology to educate our civilization that transportation is changing the contours of global trade and cultural transactions, but if we truly want to study or discuss development reforms in a premise of liberal democracy, we must begin to deeply engage our political sensibilities to understand what policies choices we are making or preparing for the future of our transport economy.
It is not out of sheer plutocratic arrogance or a sententious demonstration of economic power on the world stage that China is heavily investing in the Road and Belt project. In the spirit of boom and bust, the future will end and begin again with a new name for wealth, prosperity and power. The rise of AI has justified this proposition and what that will mean for humanity will be seen in our constant quest for speed, diversity and precision. The ability to meet these demands will supply the oxygen that will keep our economies alive.
Still, we must be ready to drive out any form of allusion about what might be that force that will keep us safe and prosperous in the global or regional battle for comparative advantage. We have already discovered and succeeded with one of them, which is digital communication. The other one will amaze you; whether we tilt our economic reforms to it or not, it’s like the laws of gravity in Physics, it will always act on you, in this context, it is called the transport economy.
In his interview a few days ago, Minister of Transport, Senator Saidu Ahmed Alkali said, ‘the ministry plays a key coordinating role in both the railway and broader transport sectors. Recently, we sought intervention from the president regarding infrastructure, including roads, and he has approved the construction of port terminals in each geopolitical zone. The Ministry of Transportation is collaborating with the Ministry of Finance to secure funding from the International Monetary Fund (IMF) for these terminals. Once completed, these terminals will be concessioned to ensure long-term sustainability.
In late 2022, the United States Department of Transportation unveiled an allocation of over USD 703 million to finance 41 port upgrade projects across 22 states and one territory. These projects aim to enhance port facilities and will be conducted under the Maritime Administration’s Port Infrastructure Development Program.
Looking at further examples worldwide, for instance, in Southeast Asia, Cambodia has unveiled plans for constructing a logistics and multipurpose port in Bokor, Kampot, with an estimated value of USD 1.5 billion. The project is anticipated to be completed by the fourth quarter of 2030.
In South America, active construction is underway for the Aracruz Industrial Port Terminal project, situated on a 35.4-hectare site in Barra do Riacho, Aracruz, Espirito Santo, Brazil. The project carries an investment value of approximately USD 223 million and is slated for completion by the second quarter of 2025. Upon its conclusion, the port will be able to accommodate vessels of up to 120 meters in length and manage 2,000 tons annually.
Prominent economies in South Asia, including China, Japan, and India, are investing in infrastructure projects to expand their influence in the Indian Ocean region. These endeavors are driven by the desire to secure access to valuable resources and tap into the growth potential of markets in the Middle East and Central Asia. Notable initiatives such as India’s Sagarmala project and China’s development of the deep-sea Angola port are poised to serve as key platforms for potential growth in the port infrastructure market within the region.
Maritime transport handles over 80% of global merchandise volume, making ports essential to global trade and economy. They’ve evolved into multifunctional hubs, fostering economic growth in their respective regions. In 2022, over 900 ports were servicing global liner shipping networks, handling 171 million 20-foot equivalent units (TEU) of containerized trade and generating over 800 million TEU of world containerized port traffic. Given ports’ pivotal role in global trade, monitoring their performance is vital for trade efficiency, cost-effectiveness, and sustainability.
Looking at logistics on the other hand, the global logistics market is expected to reach $6.55 trillion by 2027, growing at a compound annual growth rate (CAGR) of 4.7% between 2022 and 2027.
The freight & logistics market includes the sale of services by companies that transport goods and commodities via rail, air, roads, and water, using large vessels in the process of planning and executing the efficient transportation and storage of goods from point A to point B to meet consumer needs in a timely and cost-effective manner.
The 2030 Agenda for Sustainable Development, Sustainable Development Goals, and the Paris Climate Agreement have also emphasized the need for all economic sectors, including maritime transport to monitor and measure performance and track progress towards the achievement of relevant economic, social, and environmental targets.
Renewed hope National Single Window (NSW) initiative
The construction of the port terminals across the geopolitical zones by the Ministry of Transportation is a fantastic development that will further enhance the realization of the $2.7 billion annual revenue projection with the launch of the National Single Window, which is an electronic portal linking all agencies and players in import and export processing to an integrated platform.
President Tinubu said it is time for Nigeria to join countries such as Singapore, Korea, Kenya and Saudi Arabia, which have experienced significant improvement in trade efficiency upon adopting single window system. We can not afford to lose an estimated 4 billion in US annually to red tape, bureaucracy, delays, revenue leakages and corruption at our ports.
Bringing Nigeria to the center stage proper, Senator Saidu Alkali’s move to secure funding from IMF for the construction of port terminals is going to be a game changer in the Renewed Hope administration’s drive for a sustainable transport economy.
Ahmed is Special Assistant, Research and Strategy to Minister of Information and National Orientation.