- In the past 10 years, DP World has solidified its presence in over 40 countries, including in nearly 10 ports in Africa, boosting the continent’s blue economy.
- Senegal is one of the biggest beneficiaries of DP World overseas investments in ports.
- In June, Tanzania engaged DP World to run two berths in the Port of Dar es Salaam.
DP World, one of the largest marine terminal operators is assuming a bigger role Africa’s blue economy. In the past 10 years, the Dubai based multinational has solidified its presence in over 40 countries, including nearly 10 ports in Africa.
With every eye gunning for Africa’s vast natural resources, what role is DP World playing in advancing Africa’s blue economy? The blue economy is one of the oldest economic activities by human beings. Blue economy encompasses a wide range of sectors, including fisheries and aquaculture, maritime transport, renewable energy (such as offshore wind and wave energy), tourism, biotechnology, coastal management, and marine research.
DP World – a brief history
We can trace the origins of DP World or Dubai Ports World back to 1972. It is at this point that Sheikh Rashid started one of the largest marine terminal operators. His goal was to establish a functioning marine economy within his region.
The completion of the Jebel Ali Port led to the establishment of the state-owned Dubai Ports Authority in 1991. At the time, the DPA had complete control over both ports leading to the formation of Dubai Ports International. DPI would later administer the first national projects outside the UAE at Jeddah Islamic Port in Saudi Arabia.
Decades later, after Port Rashid, DPI and the DPA merged on September 2005 forming DP World. The primary objective of this new marine terminal operator was to expand operations and projects in logistics, marine life, and supply chain management on a global scale.
The DP World provided a new point of view for the region’s blue economy. Due to its close relationship with the state, the ruling families of the Emirates and the government of Dubai, DP World is backed by massive resources to finance global expansion.
Dubai World, a globally operating holding company, holds 80% of DP World while the remaining 20% trades on the Nasdaq Dubai. Therefore, the Emirates of Dubai retains control of the company and thus decides on a majority of its investments. As DP World expands internationally, African ports are becoming its primary targets.
Also Read: DP World partners with Standard Bank to establish a foothold in Africa
DP World in Africa
In 2022, according to the World Bank, Africa’s blue economy accounted for nearly $300 billion in wealth for the continent. The sector created over 49 million jobs. Aside from agriculture, Africa depends on its marine resources for incomes. Countries such as Cape Verde, Comoros, Guinea-Bissau, Mauritius, Sao Tome and Principe, and Seychelles heavily rely on their ports for economic wellbeing.
Within the past decade, DP World has prioritized taking a lead role in ports across Africa. Initially, it had invested in three vital blue economies: Dakar (Senegal), Sokhna (Egypt) and Berbera (Somaliland). Currently, the multinational also has presence in Djibouti, DRC, Mozambique, Algeria, and Rwanda.
Senegal is one of the biggest beneficiaries of DP World overseas investments. In 2020, Senegal partnered with DP World to build Port Ndayane, 50km from Port of Dakar. DP World initially invested $1.1 billion in the port’s construction.
In Somalia, DP World initiated the first phase of Berbera Port expansion. The project plan shows it will increase Berbera’s yearly capacity from 150,000 Twenty-Foot Equivalent Units (TEUs) to 500,000 TEUs.
Further, DP World initiated the development of the New Berbera Economic Zone (BEZ). This investment will transform the Horn of Africa’s blue economy to a great deal. The BEZ initiative has already attracted British International Investment (BII) and the UK’s Development Finance Institution (DFI).
The BEZ is located 15km from the port along the Berbera-Wajaale road that connects travelers with Addis Ababa. According to DP World CEO, the BEZ project will catalyze the opening of multiple sea gateways. This would not only enhance Africa’s industries but also provide additional opportunities for entrepreneurship.
What’s more, DP World is also growing footprint in South Africa. The company announced it would pay up to $887 million to acquire all shares of Imperial Logistics. Through this deal, DP World will assimilate Imperial Logistics operations in 25 countries in Africa and Europe. Additionally, DP World has also established an African Investment platform, together with the British CDC Group. According to the plan, the marine terminal operator will contribute its stakes in three existing ports and add $1 billion to the platform.
DP World began construction on Banana Port in the Democratic Republic of the Congo (DRC) in February 2022. According to the corporation, Banana will be a cutting-edge port of international stature and a game-changer for the DRC. Once finished, it will draw larger ships sailing from Asia and Europe in more direct visits, considerably improving the country’s access to global markets and supply chains.
In June, DP World partnered with Standard Bank to offer trade finance services jointly with the DP World Trade Finance. This collaboration will grow the financial services towards Africa’s blue economy while expanding the bank’s reach.
Additionally, DP World is gaining presence in Tanzania. In June, Tanzania announced that it is entering into an agreement with the Dubai-based firm to run two berths in the Port of Dar es Salaam. The port handles a significant share of Tanzania’s international trade, serving as a vital link to and from overseas markets. It handles various types of cargo, including containers, bulk cargo, and petroleum products.
Also Read: DP World to run Tanzania port as harbours in Africa go private
The future sought by DP World
DP World’s current trajectory and plans for Africa’s blue economy are taking an economic and geopolitical shape. According to the CEO, the marine terminal operator envisions itself managing several central gateways for cargo transport to and from Africa.
Being the largest natural resource and using water transport for most of its exports, Africa is offers great potential for DP World’s growth. The UAE has invested heavily in agriculture in Africa as part of grand plan by Abu Dhabi and the continent of 1.2 billion people to achieve food security.
UAE, a largely arid land with vast sand deserts, heavily relies on food imports. To ensure steady food supplies, UAE has agribusiness investments in Zambia, Uganda, Ethiopia, Angola among others. And DP World is responsible for several of these food security investments. For instance, the marine terminal operator has a stake in a multipurpose terminal in Luanda. This investment is part of UAE’s MoU with Angola to expand agro-industrial cooperation between both countries.
By strategically positioning DP World in numerous African ports, UAE is also fortifying its position as a gateway to African markets, and giving it access to agricultural produce.
DP World also intends to reduce logistic costs through corporate tax incentives. Doing this will not only free repatriation of profits but reduce custom duty on goods and equipment imported within its establishments. Furthermore, since the organization works for the public and private sectors, it is earning dividends from both sides. It has the reachability that most private marine terminal operators lack while still maintaining adequate funding that most public entities struggle with.
With over 20 years’ presence in Africa, DP World has has created a substantial network within the market. This is opening more trading routes for African ports while enhancing trade networks between regions.
Its vast network in African ports also supports African-based entrepreneurs seeking entry into global markets. Overall, DP World is solidifying its footprint in Africa, boosting the continent’s blue economy.
Also Read: Dubai’s DP World seeks to transform trade in Africa
