The dearth of options available to global investors in government debt may end up working in South Africa’s favour as Moody’s continues to delay action on the country’s last remaining investment-grade rating.
The port of Conakry: key to trade
The modernisation of the Port Autonome de Conakry (PAC) has finally begun, and not before time. Traffic through Guinea’s largest port has been rising steadily to meet the demands of mining projects. Saturation point has been reached, despite the plan to upgrade the terminal launched over ten years ago. In 2004, the European Investment Bank and the French aid agency Agence Française de Développement had each agreed to put $12m into the project, with the German development bank KfW donating the final $12m, but the plan was torn up in favour of finding private operators to run a ‘build, operate and transfer’ concession for a 225-metre wharf with storage facilities. The KfW grant had been spent on upgrading port security and electricity infrastructure, as well as building port authority offices and hazardous-waste storage facilities.
Several companies were fighting over the concession, including Bolloré, Maersk and Getma International, but it was Getma that won the contract in October 2008, provoking cries of malfeasance and a media frenzy in Conakry. The urgency of port reform cannot be overstated. At least 90% of trade transits through the PAC, some 5.8m tonnes, 40% of which are imports and 60% exports. Bauxite constitutes 80% of exports and alumina 14%. New mining projects and the possibility of a railway could lead to the creation of a deepwater port. But regional port competition is growing, especially from a Côte d’Ivoire which is slowly returning to a state of normalcy. This serves as another reason not to delay the PAC’s face-lift any further.