Consequences for Port Developments in Mozambique
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Bachelor Thesis Economic Development and Resource Boom in Southern Africa: Consequences for Port Developments in Mozambique ERASMUS UNIVERSITY ROTTERDAM Erasmus School of Economics Department of Urban, Port and Transport Economics August, 2013 Supervisor: Dr. Michiel Nijdam Name: Leif-Bastian Sandhop Student Number: 330047ls E-mail address: [email protected] Map of Mozambique and its Transport Corridors, and neighboring Countries 2 Table of Contents List of Abbreviations ................................................................................................................................ 5 Chapter 1: Introduction ........................................................................................................................... 6 1.1 Problem Definition .................................................................................................................. 6 1.2 Research Question .................................................................................................................. 7 Chapter 2: Theoretical Background ......................................................................................................... 8 2.1: Framework to Analyze Maritime Infrastructural Needs .............................................................. 8 2.2: Review of Further Literature ...................................................................................................... 11 Chapter 3: Application of the Framework to Mozambique .................................................................. 14 3.1: Layer One: Economy ................................................................................................................... 14 Mozambique’s Economic Situation ............................................................................................... 15 Spatial Economic Structure ........................................................................................................... 18 Mega Projects and Resource Endowment Situation ..................................................................... 20 3.2: Layer Two: Trade ........................................................................................................................ 22 3.2.1 Openness and Competitiveness ........................................................................................... 25 3.3: Layer Three: Logistics ................................................................................................................. 26 3.3.1 Maputo Development Corridor and the Logistics value chain ............................................. 27 Products Transported along the Maputo Corridor ....................................................................... 29 3.3.2 Beira Corridor, the Moatize coal basin and the Value Chains of coal exports and agricultural products ......................................................................................................................................... 31 3.3.3 Nacala Corridor and the Logistics Value Chain ..................................................................... 33 3.3.4 The north of Mozambique and Natural Gas of the Rovuma Basin ...................................... 36 3.4: Layer Four: Transport ................................................................................................................. 37 3.4.1 Transport forecasts Port of Maputo ..................................................................................... 38 3.4.2 Transport Forecasts Port of Beira ......................................................................................... 41 2.4.3 Transport Forecasts Port of Nacala ...................................................................................... 43 3.4.4 Transport Forecasts for Liquid Natural Gas .......................................................................... 45 3.4.5 Consequences from regional and national strategic transport plans and policies .............. 47 3.5: Layer Five: Transport Infrastructure .......................................................................................... 49 3.5.1 Transport Infrastructure of the Maputo Transport Corridor ............................................... 52 3.5.2 Transport Infrastructure of the Beira Transport Corridor .................................................... 54 3.5.3 Transport Infrastructure of the Northern Transport Corridor (Nacala Corridor) ................. 58 3.5.4 The natural gas in the Rovuma Basin and Infrastructure Requirements ............................. 62 3.6: Layer Six: Maritime Infrastructure ............................................................................................. 64 3.6.1 Maputo Port Infrastructure .................................................................................................. 65 3 3.6.2 Beira Port Infrastructure ...................................................................................................... 67 3.6.3 Nacala Port Infrastructure .................................................................................................... 69 3.6.4 Natural gas in the Rovuma Basin and Port Developments in Northern Mozambique ........ 71 3.6.5 Future Maritime Infrastructure Megaprojects ..................................................................... 73 Chapter 4: SWOT Analysis ..................................................................................................................... 76 4.1 SWOT Maputo Port ..................................................................................................................... 77 4.2 SWOT Beira Port .......................................................................................................................... 79 4.3 SWOT Nacala Port ....................................................................................................................... 80 4.4 SWOT for Port Facilities at Natural Gas Cluster in Rovuma Basin ............................................... 82 4.5 Conclusion of the SWOT Analysis: Main factors that influence the further development of the Port System ....................................................................................................................................... 84 Chapter 5: Overall Conclusion ............................................................................................................... 89 Bibliography ........................................................................................................................................... 93 4 List of Abbreviations AICD Africa Infrastructure Country Diagnostic BAGC Beira Agricultural growth Corridor CEAR Malawi's Central East African Railway CLIN Northern Integrated Logistical Corridor DWT Dead weight tons ENI National Hydrocarbons Authority Italy FDI Foreign Direct Investment FRELIMO Front for the Liberation Army GDP Gross Domestic Product GJ Gigajoule HDI Human Development Index JICA Japanese aid agency JSPL Jindal Steel and Power Limited LNG Liquid Natural Gas LPI Logistics Performance Index MDC Maputo Development Corridor mtpa million tons per annum NRCP Nacala Road Corridor Project PPPs Public Private Partnerships SADC South African Development Community SDCN Northern Corridor Development Company Tcf trillion cubic feet TEU Twenty-foot equivalent units TFR Transnet Freight Rail TSP Transport Sector Master Plan TTRI Trade Tariff Restrictiveness Indiex UN United Nations UNCTAD United Nations Conference on Trade and Development USD United States Dollar 5 Chapter 1: Introduction In an article published by the World Bank titled “Yes Africa Can: Success stories from a Dynamic Continent” Mozambique is one of the first countries that is mentioned as a positive example. In 1992, after an economically crippling Civil War it was one of the poorest countries in the world and second lowest on the Human Development Index. It still is one of the poorest countries in the world but economically a lot has changed in the last 20 years. It has become the fastest growing non-oil economy in Sub-Saharan Africa. The gross domestic product (GDP) growth rate from 1993 to 2010 has averaged 8 percent, and in a country report by the Economist Intelligence Unit (2012) it is forecasted to remain at the same level at least until 2015. This growth rate has mostly been backed by its political and macroeconomic stability. High levels of foreign direct investment, in particular the mining sector, have allowed for increase in output, consumption and export. In recent years, Mozambique has been blessed with promising discoveries of natural resources. Large fields of coal and natural gas have been discovered. Mozambique is developing an emerging role as one of the world’s most important coal exporters, and it is on its way to become the first liquid natural gas supplier in Sub-Saharan Africa (Ford 2012). The future appears to be promising; however, the main challenge currently is to ensure that sufficient rail and port capacity is in place in order to ensure all exports can be handled. 1.1 Problem Definition Underdeveloped ports and other transport infrastructure are major constraints to economic growth. The transport sector is vital because an economy cannot be productive, allocative and overall pareto efficient without an effective, well functioning transport sector (de Langen et al., 2010). Especially the importance of ports for a healthy economy has been understood. Even at a time where the global financial crisis in 2009 was at a high and almost every sector in