The Role of Digitization in Transforming African Ports into Global Trade Hubs
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The Role of Digitization in Transforming African Ports into Global Trade Hubs
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By Muinde Mwanzia
Feb, 2025
Ports are the main gateways for global trade as they handle more than three quarters of the world’s cargo by volume and also by value. It is therefore of the utmost importance that countries should invest in port infrastructure to advance trade across the globe. However, such investments should not be haphazardly made, instead they should be channels to ensure financial sustainability and economic growth. Efficient ports promote trade competitiveness, reduce delays and provide an enabling environment for economic expansion. Research conducted by PwC reveals that a 25% improvement in port performance is likely to increase the GDP of a nation by 2%. This direct correlation between port effectiveness and trade competitiveness is important as the same increase in port efficiency translates to a $3.2 billion decrease in the cost of imported goods in Sub-Saharan Africa. While physical infrastructure remains critical in modernizing ports, digitalization presents a greater opportunity to transform African ports into globally competitive trade hubs. Digital solutions can help African ports manage higher cargo volumes and attract global shipping operators. Strategic investment in digital infrastructure, coupled with supportive policies, will be key to overcoming operational inefficiencies and reducing reliance on traditional chokepoints.
With African port throughput expected to increase to 2 billion tons by 2040, African ports should be well-positioned to take advantage of this increase in maritime traffic. Africa has 54 nations of which 38 are coastal or island states and they have a combined 100 port facilities, including major hubs like Durban and Port Elizabeth in the south, Mombasa and Dar es Salaam in the east, and Tema in the west.90% of Africa’s imports and exports travel by sea into the continent yet many of these 100 port facilities operate below optimal efficiency due to outdated operational systems and infrastructure.
African ports face several challenges in taking advantage of the expected increase in throughput. Most port facilities still rely on paper-based operating systems which end up slowing down operations and increasing congestion in the ports. Some African ports have taken initiatives to adopt digital and automation technologies, however, this progress has largely been very slow because the necessary infrastructure needed is not widely available. Also, most of these investments are capital intensive and since African governments are heavily reliant on foreign investments or partnerships for port development such as British International Investment’s long-term partnership with DP world to modernize and expand the ports in Dakar, Sokhna, and Berbera. Similar partnerships have also been struck between the International Maritime Organization and Singapore’s Port Authority (PSA) to introduce the Maritime Single Window system at Angola’s Lobito Corridor Port which has translated to faster ship clearance and cargo handling at the port. The Mediterranean Shipping Company Group has also acquired Bollore Africa Logistics in a bid to secure its stakes in over 16 container terminals. These partnerships showcase the potential of digital interventions to transform African ports to become global trade hubs.
Port digitalization significantly improves the rate of information exchange among the different players, creating opportunities for better coordination and smooth port operations. Traditionally, ports competed on throughput however, the focus of modern ports is shifting towards service quality where congestion has emerged as a key performance indicator of efficiency. In a bid to address congestion, ports globally have either chosen to develop smart ports, digital, automation friendly and data-driven ports, or integrated ports that seek to improve the coordination between rail, road, and port infrastructure. Research conducted to test the efficiency of these two approaches concluded that smart ports are more effective in reducing port congestiona s they enable efficient scheduling thereby minimizing delays and wait times for the users. This strategy has been adopted by the larger ports like Rotterdam, Singapore, and Hamburg and also, smaller ports like Queen Salote International Wharf in Tonga. The direct impact of digital maturity on port performance is unclear; however, research firmly establishes that integrating port community systems significantly enhances coordination between shipping lines, customs, and logistics providers. Through automation, port users should expect expedited cargo handling, a reduction in human error and improved security thereby resulting in reduction of turnaround times. African countries stand to gain from adopting advanced digital solutions that facilitate cargo movement in ports with greater transparency and efficiency.
Port throughput across African ports is likely to increase significantly by 2040. Therefore, African ports should be proactive in preparing for future demands. The government may have focused on infrastructure development, however, with constrained resources the approach needs to be more strategic and inclined towards digitalization. Many african ports operate below capacity due to reliance on manual processes making it necessary for African ports to adopt digital solutions that will improve operational efficiency, strengthen their positions in global trade and drive economic growth across the continent.
Muinde Mwanzia is an Analyst at Botho Emerging Markets Group