This document discusses the development of the maritime industry in East Africa through regional integration. It outlines the advantages of regional integration such as closer trading links and economies of scale. Data shows trade within East African communities has increased significantly in recent years. Ways to further regional integration include increased business contracts between neighboring countries and boosting smaller markets. However, the maritime industry faces obstacles like an aging fleet and lack of efficient ports. The document proposes ways to strengthen the industry through harmonized policies, maritime cooperation, developing flag states, expanding services, and controlling piracy. It also discusses Djibouti's potential to become a major regional trade hub like Dubai due to its strategic location and growing port.

1. ‘Development of the Maritime Industry
in the Region’
East African Private Sector
Initiative on Regional Integration
Presented by : Vassilis Kyriakis & A. Elmi.Ahmed

2. Advantages of Regional Integration
• Closer Trading Links.
• Economies of Scale.
• Built of Strength and Confidence.
• Incentive for the Government.
• Stable and Predictable Business Environment.
• Synergy as Vehicle for the Integration into the World
Economy (Information Exchange).
• Collaborated Interest and Benefit Rather than
Individual Defense and Advance.

3. Regional Integration in Numbers
• Trade within the EAC - Kenya, Uganda and Tanzania -
grew from $778Mn in 2004 to over $1Bn in 2006.
• Trade within COMESA stood at $7.8Bn in 2007, up from
$4.5Bn in 2002.
• Trade among countries in Africa as a whole, in 2006,
amounted to only 8.9% of their total exports.
• 51.2% of all Asian exports, in 2006, went to Asian
countries.
• 24.3% of all South and Central America exports, stayed
within that region.

4. Ways Forward
• Synergy between Members of the Regional
Private Sector – Open Exchange of Information.
• Business Contracts Among Neighbouring
Countries - Increase of Business.
• Boost Poorer and/or Smaller Countries with very
Thin Markets.
• Regionally Organized-Trade Supporting-Private
Institutions, that Identify/Broadcast Information
on Regional Trade / Investment Opportunities.

5. African Shipping - Obstacles Ahead
• Non-open Registry Fleet, average age:
– 20.5yrs, against 12.2yrs for world fleet.
• Main Sea Routes:
– Asia / North America (Transpacific);
– North America / Europe (Transatlantic);
– Asia / Europe – Mediterranean;
• Sub-Saharan Africa - 34.5% of the total goods
loaded in Africa, or 2.1% of the worldwide cargo
(2006).
• Sub-Saharan Africa – Loaded Goods 230mln tons
vs. Unloaded Goods 70mln tons (2008).
• Economies of Scale - Cost to Shipper – Large
Shipping Lines vs. Normal Liners.

6. Ports and Regional Trade
• Ports - Regional / International Trade Nodes.
• Efficiency of Ports:
–Level of Trade.
–Development of their Hinterlands
• Inefficient Ports:
–High Trade Cost Imposition.
–Import / Export Volume Reduction
Hinterland Import Volume Reduction.

7. • Location/good Market. At Red Sea, between Far East/Europe/Arabian Gulf/Africa.
• Dubai Port World Management.
• Ethiopia is a natural hinterland of Djibouti Port.
• IT efficient (Maximo, Navis and Sage).
• EDI System for Manifest Cargo.
• Safe place (CCTV) and secure implementation of ISPS code (Port Access System).
• Regular liner services connecting about 200 ports in 71 countries in the world.
• Good performance and high productivity.
• Good equipment and infrastructure facilities.
• Most centrally located port in the COMESA market (population 380 million people)
• Modern telecommunication and banking services.
• Close proximity to Djibouti FZ with many new companies.
A STRATEGIC PORT

8. Vessels /Country, Flying National Flag

9. 1. Harmonized Shipping Policies
- Promoting Regional Fleet.
- Fostering Co-operation Between the Countries
of the Region.
2. Determine Common Positions on International
Maritime Policy and Define Strenuous Solutions
Through Regular Consultations.
3. Harmonize / Implement International Maritime
Conventions.
Objectives of a Maritime Co-operation

10. Objectives of a Maritime Co-operation
4. Bilateral / Multilateral Co-operation
– Between Maritime Administrations
– Operational Organizations Maritime
Transport.
5. Maritime Transport / Port Operations Co-
operation Between the sub-Regions/Members.
6. Establishment of sub-Regional and National
Shipping Lines / Competitive Fleets.

11. A New Dynamic Player and Hub, in
the Global Shipping Industry
• Formation of Djibouti Flag (State Registry).
– Adopt appropriate National Marine Legislation.
– Active Presence in IMO / Adopt IMO Regulations.
– Appoint Specialized Bodies for a) Dealing with Flag
Matters and b) Surveying /Certification.
• Expansion of Maritime Services.
– Technical Inspections/Surveys/Management.
– Authorization for Certification Renewal
(Class, Flag, etc.).
– Repairs/Dry Dock (Economical, Social implications).

12. Regional Piracy Map 2010

13. Piracy – Challenge for the Region’s
Shipping Development
• RISK! High Insurance Premiums.
• High Insurance Premium High Transport
Cost.
• High Transp/n Cost High Product Cost.
• Receiver/Supplier seek alternative roots.
• Piracy Control Price Control/ GROWTH!

14. "We need to strongly rethink our strategies
for development and use regional integration
- closer ties among African economies - to
promote and strengthen the current low
levels of intra-African trade.“ - UN Economic
Commission for Africa
"The time has come to enlarge our markets.“ -
Kgalema Motlanthe

15. Think BIG - The ‘Dubai’ of Africa(?)
DUBAI
 Area: 4,114 Km2
 Population: 2,262,000
 Density: 408.18/km2
 Was: Desert
 Grew on:
– Geographical Position.
– Port / Trade.
– Tourism.
– Real Estate.
– Financial Services.
DJIBOUTI
 23,200 Km2
 864,000
 37.2/km2 (space for infra/ture)
 Desert.
 Advantages:
- Geographical Position.
- Port / Regional Trade.
- Red Sea Underwater World.
- Space for Development.
- D.F.Z.