Is This Country the New Commercial Gateway to Southern Africa?
WHY YOU SHOULD CARE
Because Namibia’s David could slay the South Africa Goliath again.
By Nick Dall
The quaint town of Swakopmund is Namibia’s fastest-growing tourist destination. Visitors flock here to experience the incongruity of German colonial buildings on the edge of an African desert, the allure of the treacherous Skeleton Coast and the promise of seeing 1,500-year-old welwitschias growing in the so-called Moon Landscape. What the weiss-sipping, pumpernickel-munching tourists don’t know is that barely a mile from the town’s iconic wooden jetty, an ever-swelling army of trucks is ferrying cargo from the port at nearby Walvis Bay to destinations all across southern Africa.
The natural deepwater port at Walvis Bay has been prized by seafarers ever since the Portuguese first set anchor there in 1485. But only in the past five years has it started to fulfill its potential as a regional logistics hub. When the private-public partnership known as the Walvis Bay Corridor Group (WBCG) was established in 2000, the port handled about 30,000 20-foot containers per year — almost all of them Namibian imports or exports. Last year 370,000 containers passed through Walvis Bay en route to places as far-flung as Lusaka in Zambia, Lubumbashi in the Democratic Republic of Congo and Gaborone in Botswana.
After wrestling with South African ports, it’s a pleasure to work with people in Walvis Bay who are so accommodating.
Mike Johnston, logistics consultant, Johannesburg
The Walvis Bay port currently is undergoing a massive expansion that’ll enable it to handle 1 million containers annually by 2019. And with Namibia already boasting the best roads on the continent — the 2016–17 World Economic Forum Global Competitiveness Index rated them 23rd in the world, above those in South Africa and the U.K. — there’s a very real feeling that “the sky’s the limit for Walvis Bay,” says Mike Johnston, an independent logistics consultant based in Johannesburg.
By identifying strategic corridors and bringing together key players from government and the private sector, both in Namibia and across borders via memos of understanding, the WBCG has been able to create an all-inclusive proposition where “unlike South Africa, everyone is pulling in the same direction,” says Johnston. It hasn’t been easy, says WBCG CEO Johny Smith, who describes having to “literally clear the bush” to establish the transportation corridors, but he is proud to report that, in the past five years, “clients have been calling us, not the other way around.”
Global logistics come down to time and money, and the WBCG has both on its side, according to Gavin Thomas, executive director of Capital Fisheries in Lusaka. More than 10 years ago the congestion, red tape and constant downtime at the port of Durban, South Africa, led him to search for an alternative, and since first using Walvis Bay for rice in 2006, he “hasn’t looked back.” He’s grown his operation from five containers per month to between 40 and 50, and he’s launched a trucking subsidiary that has nearly 40 vehicles plying the Walvis Bay–Lusaka route. Thomas uses Walvis Bay only, even if he’s bringing in goods from China or Thailand: Ports on the east coast of Africa, Durban or Dar es Salaam, Tanzania, would make more sense geographically, but he finds the Walvis Bay route on the west coast both faster and more affordable — and so do a growing number of his colleagues in landlocked Zambia.
Other markets have been less receptive. Even though businesses trying to get product in or out of Johannesburg, Gaborone and Harare, Zimbabwe, can easily save seven days by choosing Walvis Bay over Durban, South Africa’s largest port still handles around seven times as much cargo as its Namibian competitor. “Logistics companies are very stuck in their ways,” says Smith, “and all of the big decisions are made in Johannesburg.” Johnston agrees with this assessment of the industry to a point but notes that the WBCG’s concerted marketing efforts — “they’re at all the trade shows and in all the right journals” — are finally reaping rewards. The next step for Smith and his team is to persuade international companies that “don’t have ties to Johannesburg” to headquarter their African operations in Walvis Bay.
The other focus of concern for the WBCG is its over-reliance on road freight. Less than 5 percent of the containers passing through Walvis Bay travel by rail, says Smith, when ideally “all bulk commodities” should travel that way. This rail problem cannot be marketed away: The same WEF report that gives high marks to Namibia’s roads ranks the railroad infrastructure as 50th in the world, 10 places behind South Africa. Although Smith has noticed improvements in railroad maintenance and the quantity of rolling stock in the past few months, he is the first to concede that “a lot more needs to be done in this regard.”
While improved railroads would further bolster the WBCG’s offering, they’re only one part of the overall package. “South Africa is meant to be the gateway to Africa,” Johnston tells OZY, but thanks to the power of the unions and crippling red tape, the region’s largest economy is “blowing that option.” Businesses and governments are rightly looking for alternatives, and although money is being plowed into the ports at Dar es Salaam, Maputo (Mozambique), Luanda (Angola) and elsewhere, Walvis Bay remains a very attractive option: “They have ample capacity and great management,” says Johnston. “After wrestling with South African ports, it’s a pleasure to work with people in Walvis Bay who are so accommodating.”
For now Walvis Bay (pop. 61,000) is still best known for the flamingos in its lagoon and the ever-present stench from its fish-processing factories (a recent Facebook petition against the odiferous industry garnered more than 100 signatories), but Thomas reports seeing “improvements every time I visit.” If things go according to plan, it’ll “be bigger than Windhoek in 20 years’ time,” says Smith. Scary thing is, that’s a conservative time frame.
- Nick Dall, OZY Author Contact Nick Dall