CHAPTE ONE

INTRODUCTION

1.1 Background to the Study

The rapid pace of globalization and the exponential growth of international trade have highlighted the critical role of maritime transportation in driving economic prosperity. As the lifeblood of the global economy, seaborne trade has become an essential conduit for the movement of goods, resources, and commodities across national borders. In an increasingly interconnected world, a country’s ability to efficiently and effectively leverage its maritime trade capabilities can be the difference between thriving or stagnating economically (Pradeka and Zarkos, 2014).

Maritime trade has long been recognized as a key determinant of a nation’s economic vitality, serving as a vital link in complex global supply chains and facilitating the exchange of products, services, and ideas. The sheer volume and value of goods transported by sea underscores the strategic importance of this mode of transportation. From the shipment of raw materials and energy resources to the distribution of manufactured goods and consumer products, maritime trade has become indispensable to the growth and development of both advanced and emerging economies (Pradeka and Zarkos, 2014).

It is crucial to identify them since the volume of carried commodities and services varies annually depending on the country in question. The majority of the demand for sea transportation is created by the global economy, either via the trade in manufactured goods or the import of raw materials for the manufacturing sector. Since it is one of the least expensive means of transportation and uses natural communication channels like seas and oceans, maritime transport is the most effective for facilitating international trade. Transports, which are important to the world economy, vary between river, air, train, road, and pipeline transportation (Antonellini, 2021).

In the world context, the maritime industry has and continue to be a significant factor in business sectors for importing and exporting products and industrial merchandise, with seaports serving as a gateway to countries worldwide. The faster the global trade progresses than global yield, the advancement of local economies will be greatly impacted significantly by maritime trade. Maritime trade continues to stand at an exceptional position in the economy of countries all over the world. This trade may include all business concerned with the blue economy which takes place in a country’s maritime space (Elem, 2008). Even while maritime trade significantly boosts the economy in terms of GDP, foreign reserves, and debt repayment, it is good to note that more may be achieved with the support of capable and reliable frameworks. According to international standards, a nation’s economy must adopt certain distinctive and flexible state-of-the-art methods (Valentine et al, 2013).

In Greek shipping industry can be seen as a source of development and a role model in global maritime transports. The industry is responsible and serves as the highest contributor to the Greek economy and accounts for the most important export sector. Because it is properly utilized and efficiently managed, the shipping fleet assets contributes immensely to the Greek economy. The maritime industry also provides huge number of employments for the citizens of Greece (Pradeka and Zarkos, 2014). As stated in the problem statement, regardless of the significant impact of maritime trade to the economy, negative impacts also exist in the shipping industry. Trade flows are complex networks because they are created by global supply chain. Such structure does not only affect the development of a nation but also impacts their ecosystem.

In Sierra Leone a small developing country in West Africa understands the significant role maritime trade and shipping can play in the sustainability of its economy. In definition, Maritime trade can be defined as a trade in which goods and services are exchanged amongst two or more countries using sea transportation (UNCTAD Stat, 2020).  It can be either international or national business trade transactions. Nations which are considered developed in the world significantly rely on the contribution of both national and international maritime trade for the growth of their economy. The sustainability of Sierra Leone’s economy largely depends on maritime trade because majority of its trade transactions are through the use of sea transportation. The country is largely known internationally for its produce of ores and metals, agricultural raw materials, fishing products, manufactured goods and other food items (UNCTAD Stat, 2020). Most of these goods are not produced for and cannot be beneficial for domestic markets. Hence, the use of maritime trade by Sierra Leone and her regional trade collaboration are significant for the exporting of these goods which can positively contribute to the economy.

Cameroon is considered and has been rated among the poorest countries in the world. Despite its natural resources and potential for economic growth, high levels of corruption and political instability have hindered its development. Efforts to improve governance and attract foreign investment are ongoing to address these challenges. Although this central African country has significant natural resources such as mineral resources, fish, forests, oceans, and marine resources, which can help the growth of the economy through international maritime trade, it continues to face challenges in effectively utilizing these resources due to inadequate infrastructure and a lack of proper management. The government is working towards implementing reforms to improve the management of natural resources and promote sustainable economic development. However, she is yet to be exceedingly productive, effective, and remarkable in the function of maritime trade and global shipping. The government is also seeking partnerships with other countries and international organizations to enhance its capacity to manage and utilize natural resources. By addressing these challenges, the country can fully harness the potential of its maritime resources for economic growth and development. It is clearly seen and a fact that approximately ninety percent (90%) of goods coming in and going out of Cameroon are through the ports of the Douala Sea. Improving the efficiency and effectiveness of maritime trade in Cameroon is crucial for boosting economic growth and maximizing the country’s potential. By leveraging partnerships and strategic alliances, Cameroon can further strengthen its position as a key player in global shipping and trade. According to the United Nations Conference on Trade and Development (UNCTAD) statistics, 291 ships were noted in the Douala Sea ports in the year 2020 (unctadstat.unctad.org, 2020). Additionally, enhancing infrastructure and implementing modern technologies can help streamline operations and reduce delays at the ports, ultimately benefiting both importers and exporters. This will not only attract more investment but also improve the overall competitiveness of Cameroon’s maritime industry on a global scale.

1.2 Statement of the Problem

Cameroon, one of the world’s poorest nations, faces political instability and corruption despite its abundant natural resources. Despite these challenges, the country’s maritime trade is thriving, with the Douala Sea ports handling 90% of commodities. To maximize its potential and promote economic growth, Cameroon needs to improve its maritime trade efficiency and success. By forming alliances with other nations and international organizations, Cameroon can strengthen its position as a major participant in international shipping and trade. Modern technology and improved infrastructure can expedite processes, reduce delays, and benefit importers and exporters, enhancing the maritime industry’s global competitiveness and attracting investment.

Douala sea port faces significant challenges related to corruption, which hinder the country’s economic development and maritime trade operations. While Cameroon’s maritime trade is thriving, with the Douala Sea ports handling commodities, the country needs to improve the efficiency and success of its maritime trade activities to maximize its potential and promote economic growth. Additionally, the country’s maritime industry lacks modern technology and improved infrastructure, which can lead to delays, slow processes, and reduce the global competitiveness of Cameroon’s maritime trade. This, in turn, may be hindering Cameroon’s ability to attract investment in its maritime industry, further limiting its economic growth and development. Therefore, this study seeks to analyze the economic benefits of maritime transport and its contribution to supply chains; the case of Douala Sea Port.

1.3 Research Questions

1.3.1 Main Question

What are Economic Benefits of Maritime Transport and Its Contribution to Supply Chains; the case of Douala Sea Port?

1.3.2 Specific Questions

• What are the economic benefits of maritime transport to Supply Chains; the case of Douala Sea Port?
• What are the challenges faced by maritime transport to Supply Chains at the Douala Sea Port?
• What are the strategies to address the challenges faced by maritime transport to Supply Chains at the Douala Sea Port?

1.4 Research Objectives

1.4.1 Main Objective

To examine the economic benefits of maritime transport and its contribution to Supply Chains; the case of Douala Sea Port.

1.4.2 Specific Objectives:

• Analyze the economic benefits of maritime transport and Supply Chains; the case of Douala Sea Port.
• To identify the challenges faced by maritime transport and Supply Chains the case of Douala Sea Port.
• To identify strategies to address the challenges faced by maritime transport and Supply Chains the case of Douala Sea Port.