Maritime lawyer, Dr. Emmanuel Kofi Mbiah, has re-echoed the need for regional value chains in Africa to be strengthened to promote the continent’s resilience and resistance to external global shocks.
His call comes on the back of significant disruptions to trade routes owing to the twin crisis—the Israel-Hamas and Russia-Ukraine wars—and their prevailing adverse effect on international trade.
From the geopolitical dimension, the Israel-Hamas war has extended into the Red Sea, where Houthi rebels have attacked ships—a worrisome situation that has forced most cargo vessels, specifically big firms like CMA-CGM and Maersk Line, to shift towards the Cape of Good.
This means that cargo ships will now sail an extra 3,500 nautical miles, with steaming time of around ten to twelve additional days.
“It is quite clear that going around the Cape of Good indeed has a bearing on the outlook of shipping going forward, remember that when that happens immediately it has consequences for insurance. Also important to bear in mind freight rates are likely to go up,” Dr. Mbiah indicated.
He further explained that while a direct effect of these events on the cost of shipping in Ghana is difficult to establish, the indirect effect is noticeable and carry-over cost would ultimately be borne by the ordinary consumer.
The former Chief Executive of the Ghana Shippers’ Authority said it is prudent for local actors in Ghana’s maritime industry to take cognizance of these developments as they plan for the year.
Meanwhile, world maritime trade saw its biggest year in 2022, so far as productivity is concerned, as a remarkable 11.2 billion metric tons of cargo were traded across the globe.
This shoot, according to the astute maritime lawyer, was a clear indicator of a rise in demand following the disruptive pandemic, whose impact on the supply chain was felt most between 2020 and 2021.
Barring any such events, and the hopeful de-escalation of geopolitical tensions, the veteran maritime expert, expects shipping to grow steadily in the next few years.
He revealed that the pandemic also affected delivery targets on new ship orders, which were intended to expand the capacity of the global fleet in order to reduce costs.