DP World, a world leader in global supply chain solutions, and CDC Group, the UK’s development finance institution and impact investor, are entering into a long-term partnership to accelerate Africa’s long-term trade potential and transform the prospects of millions of people.
Africa has a sixth of the world’s population, but accounts for just 4 per cent of global containerised shipping volumes[i]. Ports are vital to the long-term prosperity and wellbeing of people. But many ports and logistics facilities in Africa remain constrained, lacking in capacity to meet the needs of local economies.
This partnership, which has been worked towards for four years, will help change that. It will help address the stark imbalance in global trade through supporting the modernisation and expansion of ports and inland logistics across Africa, starting in the ports of Dakar (Senegal), Sokhna (Egypt) and Berbera (Somaliland). The platform covers a long-term investment period. DP World is contributing its stakes in the three existing ports initially and expects to invest a further $1 billion through the platform over the next several years. CDC is committing approximately $320 million initially and expects to invest up to a further $400 million over the next several years. The transaction is subject to certain final regulatory approvals.
Better performing trade infrastructure allows businesses to expand and to create jobs. It can improve the quality of life for millions of people by reducing the cost of living for many who currently overpay for vital imported goods. Trade enabled by the three initial ports will support 5 million jobs in the wider economy (of which 138,000 are expected to be created by the ongoing port expansions and modernisations), and will improve access to critical goods and staples including food; this will benefit over 35 million people across the three geographies, including further afield to the wider Horn of Africa and parts of the Sahel.
By 2035, an estimated $51 billion in additional trade is forecast to pass through the ports, equivalent to 3 per cent of Senegal’s GDP, 3 per cent of Egypt’s GDP and 6 per cent of Somaliland’s GDP.
The ports will also provide a gateway to international markets for countless African businesses and entrepreneurs, as well as supporting the growth of nascent export industries currently stymied by logistics inefficiency.
Sultan Ahmed Bin Sulayem, Group Chairman and CEO, DP World, said: “DP World views Africa as a long-term growth market and the opportunity landscape remains significant. 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. The partnership will create transformational opportunities for millions of people over the next decade.”
Nick O’Donohoe, Chief Executive Officer, CDC Group, said: “Stable and flourishing economies are built on reliable access to global and intra-continental trade. 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.
“We are proud to support DP World to do even more in Africa, charting a stronger course for African trade around the world.”
UK Foreign Secretary, Liz Truss, said: “We are working with allies and partners to finance clean and reliable infrastructure in developing countries. This new partnership with CDC and DP World will boost jobs and drive economic growth in these countries, helping improve millions of lives across Africa.”
About DP World
We are the leading provider of worldwide smart end-to-end supply chain logistics, enabling the flow of trade across the globe. Our comprehensive range of products and services covers every link of the integrated supply chain – from maritime and inland terminals to marine services and industrial parks as well as technology-driven customer solutions.
We deliver these services through an interconnected global network of 181 business units in 64 countries across six continents, with a significant presence both in high-growth and mature markets. Wherever we operate, we integrate sustainability and responsible corporate citizenship into our activities, striving for a positive contribution to the economies and communities where we live and work.
Our dedicated, diverse and professional team of more than 56,000 employees from 140 nationalities are committed to delivering unrivalled value to our customers and partners. We do this by focusing on mutually beneficial relationships – with governments, shippers, traders, and other stakeholders along the global supply chain – relationships built on a foundation of mutual trust and enduring partnership.
We think ahead, anticipate change and deploy industry-leading technology to broaden our vision of more efficient, transparent and resilient world trade. We achieve this by leveraging disruptive innovation to create the smartest and most effective logistics solutions, while ensuring a positive and sustainable impact on economies, societies and our planet.
Source : CDC
