|Shipping has long been the lifeline linking The Republic of Cape Verde with the outside world, and within their own islands. It is an important means of achieving sustainable development and regional
co-operation, thus economic development, trade and maritime transport are inextricably linked.
- This is particularly evident with developing countries because exports are a growing share of gross domestic product (GDP). For example, The economy is service oriented with commerce,
transport, tourism, and public services accounting for about three-fourths of GDP. Although nearly 70% of the population lives in rural areas, the share of food production in GDP is low. About
82% of food must be imported. The fishing potential, mostly lobster and tuna, is not fully exploited. Cape Verde annually runs a high trade deficit financed by foreign aid and remittances from its
large pool of emigrants; remittances supplement GDP by more than 20%. Despite the lack of resources, sound economic management has produced steadily improving incomes. Continued
economic reforms are aimed at developing the private sector and attracting foreign investment to diversify the economy.
- To participate in and expand trade, efficient maritime transport and port infrastructure are essential. This is particularly important for small island developing States that are at geographic and
economic disadvantage. These handicaps are manifested by high distribution costs, lack of reliable shipping services, expensive transshipment charges, inadequate port facilities, limited maritime
administration and dis-economies of scale when negotiating freight rates with shipping conferences.
- For example, estimates of total freight costs for small island developing States are more than 45.5 per cent higher than for developed market-economy countries. Provides a comparison for
small island developing States with other country groups and indicates the large disparity between small island developing States. Moreover, most small remote islands incur even higher freight
costs as a percentage of import value, ranging from 12 to 18 per cent, which is almost double that of other developing countries as a group.
- Strategic Commerce International, LLC, hopes to be involved in helping Cape Verde to improve the maritime sector by focusing on two broad areas. The first area is policy formulation at
an international level to promote equitable participation by Cape Verde in the global shipping industry. The scope of issues includes international shipping legislation, protection of shippers'
interests, merchant fleet development, multi-modal transport and port development.
- The second area is technical cooperation and human resources' development. These are important complements to research and policy analysis and intergovernmental deliberations. Research
provides new insights into methods of tackling development problems.
OVERVIEW OF THE CURRENT SITUATION IN SHIPPING
- This section includes an analysis of international trade and the characteristics of the merchant fleet. The maritime transportation issues, however, are not uniform for all the islands. The group is
significantly diverse in geographic location, natural endowments and stages of economic development. Therefore, the problems of Cape Verde, with its excellent geographic location, are very
different from those of many other small island developing States.
- The Merchant Fleet – Open-registry
- Open registries are legal mechanisms used to attract merchant tonnage from countries with more stringent safety regulations and higher operating costs to countries offering more flexibility and
lower registration fees. The benefits for the open-registry countries are additional tax revenues and employment opportunities when ship management companies are established within the
country. The main benefits, however, remain with the nationals of the true owners because the share of tonnage owned by open-registry nationals is minimal.
- The age of Cape Verde's eight small ships is the second qualitative factor. All are 15 years old and over. This aging fleet leads to higher operating costs, as repair and maintenance rapidly
increase with age, and schedule delays and unreliability, as well as greater environmental risks, are associated with obsolete vessels. In brief, Cape Verde's fleet is aging and needs replacement.
- Another conclusion from the fleet ownership/vessel type data is the need for Cape Verde to increase their capabilities for serving their own trade. While this focus provides foreign exchange
earnings, employment for seafarers and diversification, it is not fully complementary to the trading requirements of Cape Verde since most manufactured goods move by container or general
Shipping Industry Changes
- Restructuring trends in the international shipping industry are another factor affecting the transportation capabilities of Cape Verde. Over the past decade, consolidation and cooperation
commercial agreements between large container operators have resulted in a concentration of services. This has created economies of scale and encouraged the expansion of hub and spoke
service patterns between major trading areas. For Cape Verde, however, the impact has been to increase the need for transshipment port services, acquire vessels with container-lifting
capabilities, invest in electronic data interchange (EDI) technology and train management personnel. Moreover, without these infrastructure investments (mainly ships and port facilities), the
ability for Cape Verde to effectively trade and sustain development will be marginal.
- To conclude, Cape Verdeans are more than ever dependent on trade and efficient shipping services. These capabilities, however, continue to deteriorate because of inappropriate and aging
ships, ever-increasing and the expansion of island hub ports that will require transshipment services.
- Despite the diversity of the islands, there are several recommendations in the maritime sector that may be selectively considered by Cape Verde.
At the National Level
(a) Provide assistance to help Cape Verde by investing in port infrastructure, modern ships for intra regional transport, port reception facilities for ship wastes and the development of managerial and
- (a) Promote investments in modern ships through fiscal policies that encourage investment. These include, rapid depreciation allowances, investment credits and reducing personal income taxes
- (b) Upgrade maritime safety and environment administration by advanced training through IMO and by sending government officials to specialized training and academic institutions;
- (c) Encourage the development of ship repair facilities through favorable fiscal policies and custom exemption for essential equipment and ship components;
- (d) Provide and upgrade reception facilities for ship waste;
- (e) Strengthen or encourage shippers' councils to act as focal points for the protection of shippers' interests;
- (f) Support port infrastructure investments through direct loans or by guaranteeing loans from development agencies;
- (g) Consider, the need for a licensing scheme and mail subsidies to private ship companies;
- (h) Ratify United Nations conventions pertaining to the maritime sector, namely, the Convention on a Code of Conduct for Liner Conferences, the United Nations Convention on Conditions for
Registration of Ships, the United Nations Convention on International Multi-modal Transport of Goods, the United Nations Convention on the Carriage of Goods by Sea, 1978 (Hamburg
Rules) and the International Convention on Maritime Liens and Mortgages, 1993);
- (i) Provide additional management training for private and public sector personnel;
- (j) Gradually phase out existing over-age vessels and ban imports of ships exceeding 15 years old that cannot meet minimum IMO safety regulations;
- (k) Improve managerial skills through a human resources programme or national ports staff;
- (l) Actively participate in UNCTAD and IMO meetings pertaining to global shipping policy, port development and maritime safety/pollution;
- (m) Upgrade maritime safety and environmental protection procedures:
- (i) Consider applying international instruments adopted by the Paris Memorandum of Understanding on Port State Control, including the International Convention on Load Lines, 1966; the
Protocol of 1988 relating to the International Convention on Load Lines, 1966; the International Convention for the Safety of Life at Sea, 1974; the Protocols of 1978 and 1988 relating to the
International Convention for the Safety of Life at Sea, 1974; the International Convention for the Prevention of Pollution from Ships, 1973, as modified by the Protocol of 1978 relating thereto;
the International Convention on Standards of Training, Certification and Watch-keeping for Seafarers, 1978; the Convention on the International Regulations for Preventing Collisions at Sea,
1972; and the Convention concerning Minimum Standards in Merchant Ships, 1976
- International Level
- In view of the large investments involved in the development of infrastructures and acquisition of the means of maritime transport, efforts of Cape Verde at the national and regional levels need to
be supplemented by international assistance. The international community is urged to:
functional skills for maritime transport;
(b) Support regional efforts at improving regional maritime transportation, including maritime safety and marine pollution.
The improvement in maritime capabilities for Cape Verde within the context of sustainable development will require multilateral actions. These include decisions by government; however, to obtain
economic and political leverage, regional and international cooperation is also necessary. Conversely, without coordination, Cape Verde will continue to be marginalized by larger groups that already
dominate economic and maritime policy in the area.
SCI/CV Maritime Initiative Program
SCI - Marine Initiatives to assist Cape Verde – To Improve Shipping in Cape Verde
- In order to improve marine shipping to and around Cape Verde;
- 1. Building regional maritime capacity: This covers ship management, marine surveys & audits, maritime information systems, maritime law, port & security, maritime administration, business
excellence, port operations and supply chain logistics will no doubt contribute to improved shipping in Cape Verde. Regional maritime associations: The work being undertaken by the various
regional associations including, the Area Countries Ports Association - reviewing the basis of its fees and charges and the implementation of the business excellence framework will benefit
- 2. In-country transport study: Undertaken a number of in-county transport studies that will contribute to improved shipping in among the islands.
- 3. Commodity mapping & trade study: Explore the commodities used by Cape Verdeans with reference to their country of origin, quantity, demand, and current route, trade arrangements and
trends. By matching those to the major ports in the area and to work out which port(s) would be best suited to collect or consolidate the incoming and outgoing cargoes or commodities. The
closer the market the cheaper the transport cost; thus benefiting the consumers.
- 4. Island hub & transshipment ports: Refers to the practice where shipping lines call into one major port within Cape Verde, rather than at several ports in the same vicinity. It has proven to be
an economical and effective means for the transfer of cargo or commodities from its port of origin to its destination. Cape Verdeans Feeder Ships then transship passengers and cargoes from
hub ports to neighboring islands.
- 5. Utilizing Cape Verde resources: Regional focus on utilizing the feeder shipping services to the 10 islands, the utilization of the ship repair facilities and the increased employment of regional
- 6. Purpose-built ship [donor-funded]: The capability and limitation of island ports should determine the effective size of the ships used.
- 7. Maximize cargo on shipping: To explore opportunities to maximize cargo loading on sub-island shipping by identifying available products for regional exports, develop/facilitate and address
shortcomings, etc. A full ship load will enable costs to be contained or reduced to the benefit of consumers.
- 8. With the expected expansion: Of tourism within the next decade new models and approaches will have to be implemented.
- It must be noted that no system is perfect but innovative approaches and a concerted regional effort can provide a sound and sustainable framework for developing appropriate shipping services
to meet the region’s need.
- Handbook of International Trade and Development Statistics, (United Nations publication, Sales No. E/F.95.II.D.15),
- Review of Maritime Transport, (United Nations publication, Sales No. E.95.II.D.17), p. 34.
- UNCTAD secretariat, based on data from the Statistics Division of the United Nations Secretariat.
- Lloyd's Maritime Information Services Ltd, London.