Boosting Regional Integration and Trade in West Africa: AfDB Approves a Loan of up to € 60 Million to finance the Lomé Container Terminal
The Board of Directors of the African Development Bank (AfDB) has approved a €60-million loan for the construction of a new container terminal at the Lome Port in Togo.
The project involves the construction, development and operation of a new transshipment container handling terminal. It will be executed under a 35-year concession agreement and will have an annual handling capacity of 1.5 million 20-feet container units. A Togolese company, Lomé Container Terminal S.A, will execute the project.
The Lome port in the Gulf of Guinea is one of the few deep water ports in Western and Central Africa. It serves as a transshipment hub on the West African coast because of its ideal location. It also serves as a gateway to landlocked Mali, Niger and Burkina Faso, as well as the northern parts of Nigeria.
The port’s existing capacity is estimated at 221,000 container units. This has to be expanded to meet growing Togolese needs and regional demand from Burkina Faso, Niger and Mali, while Nigeria’s cross-border trade that is also projected to increase would also benefit from the facility.
Mediterranean Shipping Company (“MSC”), the world’s second largest shipping line with a 12% share of the international container shipping market, will be the Terminal’s anchor customer. MSC will enter into a terminal services agreement committing to channel most of its WCA cargo through the Terminal.
At the regional level, the Terminal has the potential to drive operational efficiency throughout the WCA shipping market that will provide importers and exporters better access to foreign markets at reduced costs. This will stimulate competition in the regional shipping and logistics market that is expected to catalyze further regional integration. The project will encourage other port facilities in the region to improve their efficiency and infrastructure in order to remain competitive.
The LCT project is expected to spur the expansion of Togo’s maritime sector, generate tax revenues for the government, and increase consumer and shipping lines savings. Moreover, increased container traffic would enhance linkages with local transport businesses, many of which are small and medium-sized enterprises. Togo should also benefit from port operation and management know-how, resulting in skills upgrade for the local workforce.