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3. Medium/Long-Term Port Development Plan (Target Year: 2030)

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3. Medium/Long-Term Port Development Plan (Target Year: 2030) CHAPTER 3 The Preparatory Survey on Nacala Port Development Project in the Republic of Mozambique 3. Medium/long-term Port Development Plan (Target Year: 2030) 3.1. Development potential of Nacala Corridor and Nacala Port In this section, the development potential of Nacala Port and Nacala Corridor is analyzed. 3.1.1 Development targets The Port and the Corridor are expected to play an important role in realizing the following two important targets for the development of the regional socio-economy: (1) Industrial development of northern Mozambique Northern region of Mozambique, which consists of three provinces, i.e. Nampula, Cabo Delgado, and Niassa, is less developed compared to the southern and the central regions; while 33.5 % of the country’s population is found in the northern region, the GDP share of this region accounts for only 12.8%. Therefore, it has been a priority policy of the Government to eradicate poverty by promoting industries in this region. The major industry in northern Mozambique is agriculture in which potential is high due to the rich and fertile land of the region. However, commercialized agriculture has not been developed and the productivity of the agricultural sector is very low, which is the principal reason for the low economic performance of the region. The Government has been making efforts to develop the agricultural sector in the region, and international development partners including Japan have been proactively providing technical and financial aid to promote agricultural production. The Port and the Corridor are expected to guarantee efficient and reliable access to the world market, and to improve the competitiveness of the agricultural sector in northern Mozambique. The Port and the Corridor are also expected to become a low-cost supply route of fertilizers. Thus, the Port and Corridor should contribute to the development of agricultural sector in northern Mozambique. And at the same time, the Port and Corridor should be developed in line with the growth of the agricultural sector; in other words, a synergistic relationship between the agricultural sector and the Port and Corridor will be formed. In 2007, GOM established Special Economic Zones in two districts surrounding the Port, Nacala and Nacala a Velha, with the aim of developing the areas along the Corridor. Export processing industry which imports raw materials from overseas and exports products to the foreign market is the most promising industry in the SEZ adjacent to the international sea port. The deepest port in the region makes the export processing zone (EPZ) in Nacala SEZ very unique and competitive. The SEZ is expected not only to be a pure export processing zone but also to be a “gateway processing zone of the Corridor”. Agricultural, forestry and mineral products produced in the corridor area shall be manufactured in the gateway processing zone, and exported to world markets, or imported raw materials, such as wheat and other cereals, shall be manufactured in the gateway processing zone and be delivered to the corridor area. Private investments in mining and afforestation are increasing. For these industries, provision of efficient mass transport service is crucial. In mining development, in particular, the capacity of the Port and Corridor is the decisive factor of the production capacity. Therefore, the Port and the Corridor are expected to increase their capacity in order to play an important role in the promotion of these investments. The Port and Corridor should be the catalyst to industrial development of northern Mozambique, and should guarantee the sustainable development of the region. 3-1 The Preparatory Survey on Nacala Port Development Project in the Republic of Mozambique (2) Trade and transport facilitation for LLCs and landlocked region in Mozambique Trade and transport facilitation through provision of efficient international transport routes is crucial for economic development of LLCs and landlocked regions, which is the one of the most important issues in the context of African development. The Port has historically been the principal gateway port of a greater hinterland area including Malawi and Zambia as well as the northern part of Mozambique. During the 1970s, about 95 % of import and export cargoes of Malawi were handled at the Port. However, once the Corridor was damaged during the civil war, no transit cargo was shipped at the Port. Though the cargo volume at the Port has been recovering in recent years, the Port handles only 14% of the transit cargoes to and from Malawi, while almost all the cargoes to and from Zambia are hauled all the way to South Africa or Tanzania and shipped there. The Port and the Corridor can provide the shortest access from Malawi to the international maritime transport network, and a competitive transport route from Zambia to the Middle East or Asia. The Port and the Corridor are expected to resume and to strengthen the gateway function by being rehabilitated and upgraded. The Port and Corridor can bring a large benefit to LLCs. And at the same time increased volume of transit cargoes will bring a large benefit to the Mozambican transport sector and related industries. The increased volume attracts a larger number of container vessels and this enables the local industry to enjoy frequent and competitive liner service. 3-2 The Preparatory Survey on Nacala Port Development Project in the Republic of Mozambique 3.1.2 SWOT analysis SWOT analysis is conducted to evaluate the potential of the Port and the Corridor to realize the above mentioned development targets. The results of the SWOT are shown below: (1) Industrial development of northern Mozambique Strengths Weaknesses • Well-sheltered deep-water port • Inefficient container operation • On-going road rehabilitation project • Inefficient land use in the Port • Remaining capacity of the Port if it is properly • Shortage of water depth for bulk cargo handling operated • Insufficient investment in port and railway • Direct liner service to Asia and Middle East • Weak financial structure of CDN • Possibility of inclusion into East African Port • Distance from the international container trunk group on the maritime network route • Existence of railway link to the Port • Absence of modernized dry bulk terminal in the • Less congested road Port • Geographical proximity to Nacala SEZ • Burden of scanning • Geographical proximity to the prospective • Absence of strategic port development plan agricultural center of the country • Less active domestic maritime transport • Possibility of synergetic effects of Port, Corridor, • Insufficient water and energy supply in Nacala SEZ, and agriculture • Possibility of collapse of port facilities due to • Possibility of operational improvement of port and deterioration railway • Shortage of spatial resources in the existing • Possibility of strengthening of financial structure of footprint of the Port for future development CDN • Capacity of urban road network in Nacala • Relatively small area of basin when port facilities are constructed on the Nacala-a-Velha side Opportunities Threats • Increased number of factories located in the SEZ • Possibility of delay of improvement of investment • Establishment of IFZs in the SEZ climate (human resources, corruption, water and • New international airport energy supply, telecommunication etc.) • On-going and planned projects in agriculture • Possibility of delay of simplification of customs sector, forestry sector and mining sector procedures • Possible assistance from international development • A downturn in world economic activity partners • Environmental sustainability of Nacala Bay • Political stability • Absence of well coordinated spatial plan of SEZ considering port development • Absence of dedicated IFZ • Relatively small amount of FDI in the SEZ 3-3 The Preparatory Survey on Nacala Port Development Project in the Republic of Mozambique (2) Trade and transport facilitation for LLCs and landlocked region in Mozambique Strengths Weaknesses • Good geographical position to serve Zambia and • Inefficient container operation Malawi • Inefficient railway operation • Existence of direct railway link between the Port • Inefficient land use in the Port and LLCs • Long dwell time for transit cargoes via railway • Well-sheltered deep-water port and weak interface between rail and sea • On-going road rehabilitation project • Insufficient investment in port and railway • Planned new railway line construction and • Weak financial structure of CDN improvement of existing railway tracks by Vale • Absence of strategy to attract transit cargoes • Existence of a single entity operating both port and • Distance from the international container trunk rail route • Direct liner service to Asia and Middle East • Absence of modernized dry bulk terminal with • Possibility of inclusion into East African Port deep-water quays group on the maritime network • Deposit system of import duty for transit cargoes • Remaining capacity of the Port if it is properly • Burden of scanning operated • Absence of pipeline connection to LLCs • Less congested road • Deteriorated rail tracks especially in Malawi • Possibility of operational improvement of port and • Absence of rail link connecting Copperbelt railway • Delay of introduction of OSBP • Possibility of strengthening of financial structure of CDN • Absence of strategic port development plan • Possibility of collapse of the port facilities due to deterioration • Shortage of spatial resources in the existing footprint
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