Piracy: Threat to African Economies, Opportunity For Entrepreneurs

Piracy: Threat to African Economies, Opportunity For Entrepreneurs

There is a long history of seaborne piracy in Africa’s waterways, particularly between the Red Sea and Indian Ocean off the Somali coast. But piracy affects all of Africa, and it’s expanding.

In some areas, a do-it-yourself attitude to maritime security has bolstered the boat-building industry.

As crackdowns increase, piracy is shifting to new waters, moving from East Africa to the West, and causing concern globally.

According to the World Bank, piracy affects African and non-African countries including Comoros, Djibouti, Kenya, Mozambique, Madagascar, Mauritius, the Seychelles, Somalia, Tanzania, Yemen, Pakistan and countries of the Persian Gulf.

“Virtually every day, a passenger ship, an oil vessel or the one loaded with goods is intercepted by heavily armed pirates on the Gulf of Guinea,” said Simon Ateba, a Lagos-based, News Magazine & P.M.News  senior correspondent who has covered piracy for years. “It drives away businesses, tourists and brings down commercial activities between countries. Piracy at sea is one of the biggest threats facing many African countries at the moment.”

Somali pirates roam the waters off the Horn of Africa and drastically affect the economics of neighboring countries, according to a World Bank report. While hijackings in the region have actually dropped since 2012, piracy could still cost the global economy an estimated $18 billion annually, according to a  CNN report, “Pirates of Somalia: Ending the Threat, Rebuilding a Nation.”

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Western countries have in recent years increased their own patrols into Nigerian and West African waters. The U.S. has had several ships pass through the region to conduct training exercises for Nigeria’s Navy and special forces on anti-piracy operations, Yahoo reports.

U.S. military forces have even offered training to Cape Verdean law enforcement to help protect the country’s waterways. Cape Verde, just off the coast of Senegal, is in strategic position, leaving it vulnerable to pirates.

“Piracy has shifted to West Africa,” Adrienne S. O’Neal told AfkInsider. O’Neal is the U.S. ambassador to Cape Verde. “Anything that risks destabilizing democracy and transparency is a threat to economic development and private investment.”  But she said this shift will not affect U.S. investment interest in the country. “In the near term, we don’t see that as an impediment to investment, and in Cape Verde, we are encouraged by the continued and increasing quality of maritime security.”

Apart from making international trade more expensive, the threat of piracy in one of the world’s most important trade gateways is also an economic blow for neighboring East African countries, particularly tourism and fishing, according to CNN.

The World Bank report found that exports of fish products from piracy-affected countries have dropping by 23.8 percent since 2006.

The African oil industry has also suffered because of piracy. And the pirates are getting inside help, some claim. Militants steal millions of dollars of crude with the apparent help of security agencies. Pirates can make up to $2 million in profit for offloading 3,000 tons of fuel, it is estimated.

Earlier this year, a chemical tanker with 20 Indian crew members on board was hijacked by suspected pirates off the coast of West African nation of Gabon, reports Business Standard. The Turkish-owned, Maltese-flagged tanker was awaiting berthing in the Gulf of Guinea at the time of the hijack.

While the attacks target ships throughout the Gulf of Guinea, now rated by London insurers as being just as dangerous as the waters off Somalia, the majority happen along Nigeria’s coastline, Yahoo reports. Due to threats of piracy, cargo shipments have dropped in the region, leading to calls for armed private security contractors to protect vessels.

Security is a growing concern. The Gulf of Guinea has experienced a major escalation in violent pirate attacks from low-level armed robberies to hijackings and cargo thefts, Yahoo reports.

“If governments are not going to step up to the plate… others are going to move in,” Alex Vines, the African research director for London-based Chatham House, told Yahoo.

This do-it-yourself attitude to maritime security has bolstered the boat-building industry. Boat-building is growing in South Africa’s Western Cape region as piracy concerns mount in West Africa, according to a Business Day Live report. Boat building generates more than $100 million for the Western Cape’s gross domestic product annually and creates jobs for more than 2,500 residents. These boats are most often used in patrolling the waterways.