Lagos: the City that can’t Stop Growing

Lagos: the City that can’t Stop Growing

Nobody knows exactly how many people live in Lagos, but they all agree on one thing – Nigeria’s biggest city is growing at a terrifying rate.

The UN says 14 million. The Lagos State government thinks it’s nearer 21 million, as rural Nigerians are drawn by the hope of a better life to one of Africa’s few mega-cities. By 2050 Nigeria will have twice the population it has today, more than half will live in cities, and about 60% of them will be under 25. There are few good jobs and housing is in high demand, but at least there are opportunities.

Every week tens of thousands of people arrive in Lagos, heading to neighbourhoods where friends and relatives have come before – many end up in the slums. But Lagos State is planning tower blocks and transformation, reclaiming land from the sea for ambitious new developments.

In a rush to transform the city, the waterfront slums are being cleared, court rulings are being ignored, and luxury apartment blocks are springing up. In about 30 years Nigeria will overtake the US to become the world’s third most populated country behind China and India.

It contends with South Africa for the status of the continent’s biggest economy, but it’s now in recession – beset by a drop-in oil prices, and having to fund the fight against both Boko Haram Islamists and separatists targeting oil pipelines in the Niger Delta.

Like everywhere else in Africa trying to break out of poverty, Nigeria hopes fast population growth will bring it a ‘demographic dividend’ – a young workforce that can drive economic growth. If they can all be put to work. Already there’s migration north to Libya and on to Europe, and the young who are left idle and without much hope are easily radicalised by Boko Haram. More than half the population in Lagos is already under 25, and if there was work for them to do, and the birth rate was to slow down, the economy would get a welcome boost. This is where the ‘demographic dividend’ pays off.

It’s going to take great management, smart politics and increasing security and stability to turn rapid population growth into a positive and avoid the potential for disaster. Lagos is in an urban age and people are going to keep coming, they will have to start finding more creative ways to accommodate people.

Lateef Sholebo, head of Lagos State Urban Renewal Agency, has said “Lagos has no choice but to go up”. He has already completed one modern housing project. A multi-storey apartment block, gleaming and towering above the Eyo Parade Route. This however took years to build and was hugely expensive, too expensive for the Lagos government to continue to roll out across the city. Other countries like India, Mexico and even the UK experienced an ‘industrial boom’ of sorts. Rural economies that turned themselves around with a generation, mainly through manufacturing. However, the window of time to take advantage of the ‘demographic dividend’ is short, lots of jobs are needed now.

Djibouti: Tiny State, Massive Status

Djibouti: Tiny State, Massive Status

When Djibouti gained its independence in 1977, no one thought the tiny African state would last. 40 years later, Djibouti is a geopolitical powerhouse.

Alright, Djibouti isn’t quite a household name, we admit that, but its status is steadily growing. Djibouti, a country about the size of Wales, has a population of 900000 and is sandwiched between Eritrea, Ethiopia and Somalia. It looks out to Yemen, between them lies the 20 miles wide Bab-el-Mandeb Strait, a vital shipping lane that connects the Red Sea and the Gulf of Aden. It is this geography which has defined Djibouti.

In recent history, the former French colony has been exploited for military strategy. The United States has Camp Lemonnier, an overseas military base, in the country’s capital, Djibouti City. Originally a French air base, the camp is attached to the Djibouti-Ambouli International Airport. The US took control in 2002 to operate drone strikes for its post-September 11 counterterror efforts. The US was attracted to Djibouti because of its access to high terror areas like the Middle East.

There are similarities between modern Djibouti and 1940s Casablanca, due to foreign military activity. Lemonnier accommodates French and German troops and Japan has its only overseas base in Djibouti, established to combat piracy threats to commercial ships off the coast of Somalia. Nevertheless, the Americans have the biggest military presence in Djibouti.

Well, at least they did because China’s building a new naval base just a few miles from Lemonnier.

China wants to be a global superpower and is strengthening its military. Beijing is predicted to spend US$232 billion on its forces come 2020, that’s more than all western countries put together. This overseas base is a first for the People’s Republic and marks its international growth.

China has cited anti-piracy operations as motivation for the new base. The Gulf of Aden is a notable piracy hotspot but hijacking in the area has been relatively dormant for the last five years. So the new base has the US concerned.

For some time China and the US have been strategic rivals. Both have an arsenal of intercontinental nuclear missiles, both snoop on one another with satellites and, occasionally, both face off in contested waters. But the two have always kept a good distance, however, this is too close for comfort for the US, who believe China can take a good look at its counterterror operations.

But, China has genuine trade interests. The Port of Djibouti has significance in the ‘One Belt, One Road’ project. The project defines the Chinese economic offensive to control international trade using East/West shipping lanes, so Djibouti is of strategic importance. China’s connectivity scheme develops key infrastructure through Myanmar, Sri Lanka and Greece. The plans will use the ever-expanding and state funded Cosco Line to export Chinese made goods through Asia, Africa and Europe.

China’s new naval base can help manage the belt’s operations. The Horn of Africa is renowned for piracy and, even if the situation has quietened over the past years, China needs a strong protection force for the project to be a success.

This seems like the same old story for Djibouti. But, it’s not just a new base the People’s Republic is building.

There has been a remarkable investment into Djibouti’s logistical capabilities. Beijing has invested US$3.5 billion in a ‘Free Trade Zone’ in Djibouti City. Currently, the Port of Djibouti is used for transhipment and refuelling but the investment by the state backed China Merchant Holdings is set to realise Djibouti’s potential. A new container terminal and a multi-purpose terminal alongside new stacking yards will revitalise the port.

With the new electric railway connecting Djibouti City to the Ethiopian capital, Addis Ababa (again, built by Chinese state owned companies) the Port of Djibouti could become a gateway for Eastern Africa and extend the belt’s reach.

Furthermore, Chinese investment extends to new fuel pipes, new water pipes and 2 airport proposals with a new high tech hospital already financed and constructed.

China has additionally considered mediating the Dumeira border dispute between neighbours, Eritrea and Djibouti. Both claim the Dumeira Islands and tensions have recently escalated with heightened patrols at the border. Qatar originally had peacekeeping responsibilities but pulled out as it entered a diplomatic crisis of its own.

China’s interest in the dispute is for its own good. Historic instability has plagued many states along the belt and if tensions continue to fluctuate there will be damages to China’s trade initiative. These investments are supposed to cement diplomatic relations so Eurasian trade prospers.

So, why should America be concerned? Well, they’ve had a tough time in Djibouti. The US has never had good public relations in Djibouti. US troops are prohibited from leaving Lemonnier and many locals wonder why as there’s no pressing threat to American safety.

Drones have also caused a nuisance, some have crashed into local neighbourhoods and Djiboutian air traffic controllers have rejected them from taking off or landing out of resentment. In response, the US paid to retrain the controllers but many refused to attend lessons and American teachers were locked outside the control tower.

The US has tried to make up some public relations by providing free dental care for Djiboutians but this is nothing compared to what the Chinese promise. The US pays a whopping US$70 million a year for Lemonnier and that’s incentive for the Djiboutian government. Lemonnier is easy income but the Djiboutians may start to favour the Chinese considering the new crops of investment.

But the US shouldn’t be too concerned because Djibouti needs all it can get. With a mostly arid climate, there is very little Djibouti is able to accommodate yet its GDP has steadily risen since 2002 thanks to Lemonnier, and it should expect more of the same.

Djibouti will see its GDP grow thanks to Chinese investment and China will to see its trade prosper thanks, in part, to Djibouti. And the US? It will see all this happening from the front row.

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Myanmar in the 21st Century Board Game

Myanmar in the 21st Century Board Game

Like a huge geopolitical board game, Myanmar has found itself at the centre of plans for key infrastructure and connectivity initiatives linking East to West.

After 50 years of isolation, Myanmar is set to feature in Chinas new Silk Road development, it’s expected to open trade doors for countless countries. The city of Mandalay will become part of the route stretching from Kunming to Kolkata, running through China, Myanmar, Bangladesh and India.

China isn’t the only player on the board though. India is working hard to create its own network of alternative trade and transportation. With this frontier country recently coming into its own, Myanmar is also at a point where the interests of China and India both intercept. Last year, Prime Minister Narenda Modi and President Htin Kyaw met and signed four new agreements, two of these based around connecting the two countries. They depict a stronger relationship between India and Myanmar.

Communities, business owners and government are all going to be impacted on by these massive projects. The country’s economy has mainly been supported by the agricultural production of rice. Rice farms span over 60% of the country’s total land area. But this fast-developing country is catching up on decades of underdevelopment. Myanmar is planning on adding more diverse types of energy across the country, but say that they will keep renewable energy as their top priority. With renewable energy at the fore front of industrial strategy, this makes the country even more desirable along a trading route.

Chinas Belt Road Initiative (BRI) could been viewed as a narrow China focus. All other initiatives (when put together) could offer a more comprehensive integration of trade connectivity between Europe and Asia.

Both India and China want control over key waterways in and around towns such as Sittwe and Kyauk Phyu in Myanmar. Their joint focus is on key zones and facilities like these in Rahkine, which are in very close proximity to one another.

Myanmar is currently host to this 21st century game, but it’s safe to say a lot more moves need to be played before the winner is revealed.

Myanmar Infographic

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Destination to Watch: Myanmar

Destination to Watch: Myanmar

Myanmar (Burma) is a name increasingly appearing in our booking systems. After 50 years of isolation, the recent surge in interest has stirred our creative team to investigate the new ‘destination to watch’.


The country’s economy is mainly supported by the agricultural production of rice. Rice farms span over 60% of the country’s total land area. But this fast developing country is catching up on decades of underdevelopment. The business opportunities are becoming vast and the country is becoming a key centre for resources.

90% of the world’s Rubies originate in Myanmar, prized for their purity and hue, with neighbouring Thailand buying the majority of the countries gems. The mountainous Mogok area, boasts “the valley of rubies” and visitors are able to gaze on the rare pigeon’s blood rubies and blue sapphires.

Thailand is not the only country benefiting from Myanmar’s growth as China and India have both formed strong bonds. Leading businesses are already operating in Myanmar for various sectors, including oil and gas exploration, IT, hydro power and port/building construction.

The new Silk Road development is expected to open trade doors for countless countries and Myanmar too is set to feature. The city of Mandalay will become part of the route stretching from Kunming to Kolkata, running through China, Myanmar, Bangladesh and India.

With renewable energy and our planets future becoming more and more prominent in policy and politics, Myanmar faces some major energy challenges. It has one of the lowest electrification rates in the world – only a third of the population have access to affordable and reliable electricity. With the world turning to technology more and more, it’s expected that the demand/need for electricity is said to increase by 700% by 2030.

Currently, 70% of Myanmar’s domestic energy is generated by hydro-power, as amazing as this is, it can be problematic due to unpredictable weather. The government is planning on adding more diverse types of energy to the country but have said that they will keep renewable energy as their priority. Solar and wind energy are great potential sources of energy for the developing country. With large scale infrastructure naturally comes opportunities for transportation companies. Huge, specialised equipment needed in infrastructure projects will require transportation especially as much of the investment is external.

Some of the key benefits for UK business exporting to Burma include:

  • strong historical and trading links with the UK with a recognition of British brands
  • increasing demand for products, equipment and services resulting from incoming foreign investment and a growing middle class
  • strong economic growth to date and positive future forecasts
  • Potential strengths of the Burma market:
  • access to 40% of the world’s population living in bordering countries
  • abundant natural resources
  • commitment to political and economic reform with strong international donor backing
  • proven agricultural capacity

With all this to consider perhaps we can expect many more bookings to Myanmar over the coming years.

 

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Port Salford Expansion

Port Salford Expansion

2017 may be the start of an exciting time for North West as the completion of the Salford Port expansion looks to restore the Manchester Ship Canal to its former glory.


In January 1894 the notorious Manchester ship canal opened; a river system expanding 36 miles, following the route of 7 different rivers. The canal originates at the Mersey estuary and travels to Salford Quays. In its time it was the largest river navigation canal in the world helping the Port of Manchester to become Britain’s third busiest port, despite the city being 40 miles inland.

 

7 Different Rivers

  • River Bollin
  • Glaze Brook
  • River Mersey
  • River Irwell
  • Bridgewater Canal
  • Shropshire Union Canal
  • Weaver Navigation
Over time however traffic passing through the canal declined as ships grew too large and the docks at Salford closed. But now it looks as though the historic river system has been given a new lease of life thanks to Peel Ports, who are in the midst of £138 million regeneration project.
The plans include huge redevelopment to the canal and surrounding area, with long term aims to boost capacity at the Port of Salford from 8,000 containers a year to 100,000 by 2030.

 

Peel Ports plan to expand the Port Salford creating an inland port facility on the Barton Strategic Site next to to the Manchester ship canal. Blue prints show a distribution facility with around 50,569 sq. ft. of warehouse space, 10,118 sq. ft. office space, including 81 car parking spaces and 16 trailer parking spaces.

The development sits within peel ports £50 billion ‘Atlantic gateway’ vision combing operations at the Port of Liverpool with the Manchester Ship canal to combat road congestion. The new Salford port expansion will be the UK’s first inland tin modal port facility and distribution park with terminal operations set to commence at the end of 2017.

 

Some more news you may be interested in…

Breaking Bad? The Story of Alang Ship Breaking Yards

Breaking Bad? The Story of Alang Ship Breaking Yards

As overcapacity plays havoc with the shipping industry, a record number of ships have been sent to scrap this year at ship breaking yards around the globe.

With many industry experts suggesting that ship recycling is a reluctant solution to industry woes, we take a closer look at ‘the world’s biggest ship graveyard’, Alang Ship breaking yard, India.


Where’d all the ships go?

On the search for economies of scale Maersk began building mega ships capable of handling greater capacity. With shipbuilding taking years and orders to honour from the glory days of growing global trade, the industry is now suffering large scale overcapacity, with the global idle fleet standing at 7.6% in October, an all-time high.

Subsequently freight rates have plummeted, hammering profits and even causing the collapse of the 7th biggest shipping line in the world. But even with Hanjin’s demise and idle box ship fleet at an all-time high the problem still remains. Shipping is in dire straits and the industry is hurting.

So how do you solve overcapacity? Re-balance the books. If there’s a slump in demand? Reduce the supply. Enter Alang, the world’s ship breaking capital.

Alang Shipbreaking Yard

The six mile stretch of land was once one of the poorest areas of India. Now at least 200 ships stand on the beach waiting to be dismantled by shipbreaking workers.

It takes anything from 2 weeks to a year to complete an entire ship, bringing in around a million dollars in steel alone. 2016 has seen a ship scrapping bonanza, with almost 147 vessels, around 507,000 TEU sent to ship breaking yards this year to date.

Working Conditions

Alang has been thrust into the spotlight recently after Maersk once again defended its controversial use of the regions shipbreaking yards.

It’s no secret that working conditions and safety measures on the beaches of Alang are some of the worst in the world, with over 50 people losing their lives since 2010, and some claiming that many deaths go unreported.

Alang Shipbreaking Yard

With high turnovers of largely migrant workers and uncooperative yard owners it has been difficult to establish any regulatory measures in the industry.

So considering Maersk’s stance on sustainability, it’s understandable why the news raised industry eyebrows. In May the company announced their commitment to more responsible recycling options with the delivery of the first two vessels to Shree Ram, a Hong Kong Convention approved facility in Alang.

But recent reports of a blast at Pakistan’s Gaddani shipyard, in which 20 workers lost their lives and over 100 workers suffered injuries, has once again posed the question how safe, responsible and ethical is the ship recycling industry?

Change to come?

This month the Indian Ministry of Shipping announced $1.5 million investment to support capacity building and safety training of the 20,000 workers based in Alang. But even with positive steps to improve working conditions the environmental impacts of ship breaking along the coast of Alang are undeniable.

Ship breaking releases harmful and dangerous pollutants into the coastal waters and surrounding sea bed, having a catastrophic effects on local marine life. In fact ship recycling is one of the most polluting industries in the world.

These hard facts make the sustainable initiatives celebrated by the world’s biggest carriers and their new super-efficient vessels all too ironic. When we build these new ships do we just brush Alang under the carpet? Dumping on those less armed to deal with our waste? Out of sight out of mind? Or is the ship breaking industry a much needed lifeline to developing regions that without it would starve?

It’s a question with a thousand responses. But the more the ship breaking industry faces such scrutiny, the harder it is to hide from the changes that have to come.


Find more industry viewpoints on our blog below…

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