The Port of Toamasina, strategically located on the East Coast of Madagascar, holds a pivotal role as the country’s primary port, designated as a « Port of National Interest ». Equipped with state-of-the-art facilities, it efficiently handles long-haul vessels’ loading and unloading operations.
In compliance with Law No. 2003-025 and Decree No. 2004-702, the port operates under autonomous management by the Autonomous Port Management Company of Toamasina (SPAT), with the state actively participating in its capital structure. Given that the Port of Toamasina accounts for 76.6 % of the national maritime traffic, this case study delves into its significance and economic impact, serving as a crucial gateway for Madagascar’s overall growth. The objective is to offer an informed perspective on the challenges and opportunities shaping the country’s economic development.
Glimpse into the Port’s History
The Port of Toamasina, evolving from a modest harbor during the 18th-century explorations by European navigators along the East Coast of Madagascar, has emerged as the sole deep-water port and a preferred gateway in the Indian Ocean.
By 1925, the port comprised key installations:
- A basic ferry dock within the customs building.
- A wooden house (20m long and 5m wide) opposite Customs for passenger boarding and disembarkation.
- Warehouses situated behind the dock.
- A 300m-long metal wharf erected in 1927.
- Railways were introduced in 1943 to streamline port operations, imparting a commercial and industrial character.
- Attained the status of an autonomous port in 1971, officially named the autonomous port of Toamasina (PAT).
- Transitioning to a « State Company » in 1976 on the commercial platform.
- Under various governments and with support from international financial organizations, the Toamasina Autonomous Port Company (SPAT) has overseen port management since 2018.
Toamasina: Crucial hub for Madagascar’s maritime operations
In 2017, backed by the Japan International Cooperation Agency (JICA), Toamasina embarked on a modernization journey, elevating its infrastructure to international standards. Noteworthy enhancements encompassed:
- Expanding the Container Terminal C4 dock by 474 meters.
- Revamping existing docks (C1, C2, C3).
- Extending the breakwater by 345 meters to fortify port facilities.
- Conducting dredging operations to deepen the port.
The planned duration of the ongoing works spans seven years, commencing in 2018 and slated for completion in 2025. At the project’s culmination, the Port of Toamasina’s capacity is set to triple, ushering in optimal container flow management by 2026.
Furthermore, Toamasina is located in a region rich in natural resources, making it an attractive investment zone. Due to its proximity to major African and international markets, the city is a significant stopover for transiting ships.
Strengthening Port Infrastructure Resilience
Situated in a region prone to tropical cyclones, Toamasina faces potential impacts on the port and surrounding infrastructure. The city’s bay, shielded by coral reefs facilitating ship anchoring and movement, is pivotal in protecting against such natural phenomena.
Madagascar heavily relies on exports, including coffee, vanilla, shrimp, textiles, and minerals. The Port of Toamasina is the primary gateway to international markets for these commodities. Investing in modern infrastructure capable of withstanding climatic uncertainties ensures the continuous operation of vital trade activities year-round.
Crucial Hub for International Trade
The Port of Toamasina plays a pivotal role in Madagascar’s foreign trade, accounting for approximately 80 % of the nation’s total. Its substantial capacity for commercial transactions positions it as an indispensable gateway for the country’s economic activities. As an intermodal port, our infrastructure efficiently manages various types of cargo while strictly adhering to the safety standards outlined in the International Ship and Port Facility Security Code (ISPS).
The port is critical in overseeing the export of essential commodities, including vanilla, cloves, coffee, cocoa, shrimp, and minerals. Additionally, it manages the influx of manufactured goods and fuel imports.
Financial and operational landscape
In 2022, the Port of Toamasina demonstrated robust performance, handling a total traffic volume of 11.5 million tonnes of goods, reflecting a substantial 6.8 % increase from the previous year. As reported by the General Treasury Directorate, SPAT’s financial statements for the year 2022 indicate noteworthy figures. Liabilities reached 1,482 billion MGA, significantly rising compared to the 1,099 billion MGA recorded at the end of 2021.
As of December 31, 2022, SPAT’s equity stood at 440.634 billion MGA, encompassing undistributed profits of 289.124 billion MGA and premiums and reserves totaling 118.354 billion MGA.
Furthermore, the Port of Toamasina has notably improved the port sector. According to the Container Port Performance Index (CPPI) 2022, a collaborative publication by the World Bank and S&P Global Market Intelligence, the Port of Toamasina now holds 227th out of 348 in the global container port ranking.
Challenges and structural concerns
Despite its pivotal economic role, the Port of Toamasina grapples with several challenges hindering its growth potential. The primary concerns include:
Infrastructure Optimization
The surge in cargo volume, attributed to the economic growth of Madagascar and its regional trade hub status, has strained existing facilities. According to the Toamasina Port Authority statistics for 2022, container traffic witnessed a substantial 12% increase from the previous year. This heightened business activity has led to congestion on docks and within warehouses, compromising the efficiency of port operations and resulting in additional delays and increased operational costs for businesses.
A 2023 World Trade Organization (WTO) study revealed an aging fleet of handling equipment at the Port of Toamasina. Modernization is imperative to enhance efficiency. The need for more investment in modern cranes, forklifts, and other handling equipment restricts the port’s capacity to process goods promptly, hindering its responsiveness to the growing commercial demand.
Addressing these challenges is paramount for the Port of Toamasina to maintain its economic significance and support the evolving demands of Madagascar’s growing economy.
Preserving competitiveness amidst challenges
The Port of Toamasina faces critical challenges, including overcrowding, congestion, and a lack of modernization, contributing to a decline in competitiveness compared to neighboring ports. The superior infrastructure and efficiency of neighboring ports in countries like South Africa and Mauritius have become magnets for investments and commercial activities, placing the Port of Toamasina at a disadvantage.
According to the Global Competitiveness Report 2019 by the World Economic Forum, Madagascar dropped 11 places in the global competitiveness ranking, positioning it as the 8th least competitive country out of 140. This decline underscores the challenges the Port of Toamasina faces and the broader economic landscape.
Limited land connectivity
Compounding these challenges is the issue of limited land connectivity. The road network linking the port to supply and production areas often needs better conditions, resulting in elevated business logistics costs. Furthermore, only three national roads (RN) connect Toamasina to other regions:
- Toamasina-Antananarivo via RN2, where the ongoing TATOM rehabilitation project is integrated into the revision of the Master Urban Plan
- Toamasina-Maroantsetra via RN5.
- Toamasina-Vavatenina via RN5 and RN22.
This limited road connectivity forces most freight to transit through the capital before reaching the port. Using maritime routes connecting other ports in Madagascar (Mahajanga, Tolagnaro, Antsiranana, Toliara, etc.) to the Port of Toamasina remains the sole viable alternative. Addressing these connectivity issues is imperative for the Port of Toamasina to regain and maintain competitiveness in the global market and stimulate economic growth for Madagascar.
Addressing Administrative Challenges
The Port of Toamasina faces significant administrative constraints that warrant immediate attention. Addressing these issues is crucial to meet or improve objectives concerning customs procedures, ensuring the smooth flow of import and export activities. Delays in customs procedures can adversely impact the operations of both importers and exporters.
The Customs of Madagascar, operating through the Customs Clearance Time Observatory(ODD), has established clear objectives:
- Clearing goods imported by sea within a timeframe of 48 hours.
- Minimizing export delays, contingent on declarations under the definitive export regime.
Moreover, companies navigating the process must undergo several stages and engage with various government agencies to secure necessary authorizations, leading to a potential surplus of administrative formalities.
Holistic Renovation for Enhanced Efficiency
A comprehensive approach is necessary to renovate the Port of Toamasina, transforming it into a more efficient gateway for exports and imports. This transformation holds the potential to elevate Madagascar’s role in global value chains and position the island as a pivotal player in international trade within the Indian Ocean region.
It is imperative to recognize the Port of Toamasina’s role in facilitating and securing international trade operations through its single-window electronic system. This system involves collaboration among relevant port stakeholders and public administrators. The port, already contributing to revenue generation and direct and indirect employment, is vital in promoting industrialization and territorial economic development.
Elevating Madagascar as a Global Hub through Port Advancements
Enhancing Madagascar’s logistics efficiency and global market competitiveness hinges on strategic improvements in port infrastructure, customs procedures, and land connectivity. A robust port management system is pivotal in reducing transportation costs, attracting foreign investments, and fostering economic growth.
Moreover, efficient port operations open avenues for economic diversification, steering development beyond raw material dependence and mitigating vulnerability to fluctuations in commodity prices.
A concerted effort is essential to realize this vision, necessitating collaboration among the government, international institutions, and the private sector. The shared objective is to implement requisite reforms and cultivate a business-friendly environment that propels Madagascar into a significant hub on the global stage.
Sources:
Observatoire du Territoire – Plan d’Urbanisme Directeur (PUDi) Antananarivo
Douanes Madagascar – Observatoire du Délai de Dédouanement (ODD)
Agence Japonaise de Coopération Internationale (JICA)
Université de la Réunion – Document sur hal.univ-reunion.fr
Rapport-gratuit.com – Organigramme de la Société du Port à Gestion Autonome de Toamasina
