CDC Group & Dubai's DP World to jointly invest $1.7bn in Africa’s ports

The UK's development finance institution, CDC, and Dubai's DP World have recently announced a significant collaboration to jointly invest a total of $1.7 billion in the development and expansion of seaports across Africa. The partnership aims to drive economic growth, increase trade, and create thousands of new jobs in the regions served by these ports. In a recent interview with CNBC Africa, Tenbite Ermias, the head of CDC in Africa, shed light on the details of this collaboration and the potential impact it could have on Africa's outbound and inbound trade trends. The initial commitment of $320 million will be invested in three key ports located in Dakar, Barbary, Witson, Somaliland, and Ansognah in Egypt. The funds will be used for the expansion and modernization of these ports, with the expectation of creating up to 140,000 direct jobs and impacting 5 million indirect jobs in the regions they serve. Additionally, it is projected that these investments will drive incremental trade of about $51 billion over the next 15 years, contributing significantly to the GDP of the respective regions. One of the key aspects of this collaboration is the existing concession rights for the ports, which have already been awarded to DP World. The investment from CDC will focus on operationalizing and expanding the capacity of these ports to enhance their ability to process goods efficiently. The goal is to not only create economic opportunities but also to facilitate trade enablement by investing in infrastructure that supports Africa's growing middle class and working population. Despite the inherent risks associated with such large-scale investments, CDC remains committed to partnering with capable private sector entities like DP World to achieve their development and impact objectives. The focus is on leveraging the experience and track record of DP World, which has over 20 years of experience in developing and operating ports globally. While concerns may arise from past legal battles or challenges faced by partners in the industry, CDC's approach is to assess each investment on a risk-adjusted basis, weighing the potential benefits against the risks involved. The long-term vision is to continue expanding investments in ports, inland terminals, and special economic zones to unlock Africa's trade potential and drive sustainable development across the continent. With plans to commit an additional $400 million over the life of their partnership with DP World, CDC aims to further expand its footprint in Africa and contribute to the growth of multiple ports and trade corridors. The collaboration between UK's CDC Group and Dubai's DP World signals a significant step towards enhancing Africa's infrastructure and fostering economic development through strategic investments in key seaports.