Time for Tema: Investment in the country’s largest port continues

Tema, around 20 km to the east of Accra, is Ghana’s largest port, handling around 70% of its international maritime trade, and most of its imports. It is also an important maritime gateway for the landlocked countries to Ghana’s north, though it faces rising competition from other coastal neighbours. The port is home to one of the country’s most successful public-private partnerships (PPPs), often cited as a model for future transport infrastructure projects.

Tema entered a new phase of development in 2002, when the Ghana Ports and Harbours Authority (GPHA) launched a port upgrade programme. This involved the authority shifting towards being a landlord of parts of the port instead of the main operator, with private investors encouraged to take the lead in the development and management of a new container terminal. The tender was won in 2004 by Meridian Port Services (MPS), a joint venture between APM Terminals, a Netherlands-based part of shipping giant Maersk Group, and France’s Bolloré Group (each with a 35% stake), also including the GPHA, (30%), with a concession to run the container terminal for 20 years, with operations starting in 2007.

Feeling The Effects

In 2014 Tema felt the effect of Ghana’s economic slowdown, with a dip in volumes on most measurements, though it still handled far more traffic than five years previously, at a time when Ghana was near the peak of its boom. The port had 1504 vessel calls in 2014, down from 1553 in 2013, while cargo volumes slipped to 11.126m tonnes, from 12.181m tonnes; exports dropped from 1.494m to 1.463m, and imports from 10.014m tonnes to 8.923m, according to data from the GPHA. Transit volumes dropped to 577,227 tonnes from 620,668, while trans-shipment rose to 163,305 tonnes, from 51,748.

Tema’s container terminal handled 732,382 twenty-foot equivalent units (TEUs), down from 841,989 in 2013. In 2012 the port handled 1521 vessel calls, 11.469m tonnes of cargo, 1.477m tonnes of exports, 9.383m tonnes of imports, 530,457 tonnes of transit cargo, 50,403 tonnes of trans-shipment cargo and 824,238 TEUs of containerised cargo.

The port’s strong medium-term performance over the past five years is expected to continue, despite the dip in 2013-14. Fundamentals are strong: Ghana’s economy is expected to grow by 6.4% in 2016, 9.2% in 2017 and 6.9% in 2018, according to the IMF. Ghana remains an important trading conduit for countries to the north, particularly Mali and Burkina Faso – though competition from Togo and Côte d’Ivoire is growing, with those countries able to leverage rail networks.

Investment Continues

In June 2015 MPS said it would be investing $1.5bn in a new 3.5m TEU-capacity deepwater port and logistics centre in Tema. The project includes a new, greenfield port development outside the existing port, and upgrades to the surrounding road network. The project is expected to take four years to complete. The new port will include four deepwater berths, a new breakwater, and an access channel with draft of 16 metres – deep enough to handle the world’s biggest container vessels. The investment partners expect to create 5000 jobs in the process. MPS says that its current container terminal at Tema is close to capacity, and that the outlook for Ghana’s growth prospects, its political stability and the outlook for Africa-wide containerised cargo volumes justifies the investment.

The investment in Tema is intended in part to strengthen its position as a trading centre for the region. However, the port faces constraints. While red tape and bureaucracy have been eased by greater use of technology, they remain issues. More challenging for a port competing with Abidjan in Côte d’Ivoire is the lack of a fully-functioning inland railway network. Abidjan is connected to Burkina Faso by railway, while Togo has a fairly extensive inland rail network. Still, with Ghana’s economy on the up again, and the current port outgrown, Tema’s expansion seems timely.