Growth across Nigeria's ports is set to remain healthy during 2014 with none of the country's ports seeing less than 7% growth year-on-year (y-o-y) over the next 12 months. Leading the way will be Port Harcourt (10.47% y-o-y growth), forging ahead of regional peers the Port of Tincan Island (9.74%) and the country's largest port the Port of Apapa (7.70%, which is a rise on last quarter's estimate).
As we mentioned last quarter: 'The arrival of the largest vessel to call at APM Terminals (APMT)'s West Africa Container Terminal (WACT) in Nigeria, the 4,500TEU Maersk Copenhagen, is a sign of the rapid container throughput growth at the Nigeria's ports.' We believe port expansions in West Africa are a developing trend on the back of strong macroeconomic conditions in the region that are spurring demand for containerised goods.
Nigeria's biggest export partner is the US and we expect that stronger external demand and reduced reliance on energy imports due to greater domestic crude oil production will see the US external account position strengthen again in 2014. We forecast the current account deficit will narrow to 2.1% of GDP this year from 2.3% of GDP in 2013. We believe that the multi-year trend of narrowing in the US current account deficit is set to continue in 2014, driven by both cyclical and structural dynamics.
Internationally, accelerating economic activity among key trade partners will see growing demand for US goods and services exports. On the imports side, while we expect a stronger consumer to push import growth higher this year, a long-term shift toward greater domestic energy production will continue to reduce demand for energy imports. Given these dynamics, we forecast the current account deficit to narrow from 2.3% of GDP in 2013 to 2.1% of GDP in 2014, the narrowest shortfall since 1996.
|Steady Medium Term Beckons|
|Port Of Lagos Tonnage Throughput, 2008-2018|
The Port of Lagos is forecast to see total tonnage grow by an average 6.15% y-o-y to reach just over 35mn tonnes by the end of our current five-year forecast period to the end of 2018. This will also see the Port of Lagos remain ahead of its domestic peers over our forecast period in terms of tonnage carried, with Port Harcourt remaining in second place.
Sub-Saharan Africa trades more with Asia than with any other region, and economic ties between the two continents will become even closer over the coming years, with Nigeria's shipping sector well placed to benefit. While Asian demand for African resources is a key driver of increasing trade, so are booming African imports of capital goods and consumer products.
Containers at the APM Terminals (APMT)-run port should continue to see healthy growth on the back of increasing private consumption, and the development of APMT sister company Maersk Line's West Africa Maximum (WAFMAX) vessels, with capacity of 4,500 twenty-foot equivalent units (TEUs) each, should ensure that this continues. At present, BMI does not make container throughput forecasts due to a lack of relevant available data.
A key development over the medium term is represented by the 1mn TEU expansion currently under way at the port of Lagos. It is one of a raft cropping up across the West Africa region, including plans at the Ivorian port of Abidjan and the Togolese port of Lomé (both operated by Bolloré) to increase capacity to 1.5mn TEUs.