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00:00Now, data from the World Trade Organization trade barometer shows global goods trade appeared
00:05to remain steady in the fourth quarter of last year and looks set to continue growing
00:10in the first months of this year. However, the report notes increased trade policy uncertainty
00:15and the prospect of new tariffs could weigh on trade in the medium term. Meanwhile, the
00:20shipping agencies, clearing and forwarders, employers, associations are also raising fresh
00:25concerns around taxes in the maritime sector. Highlight and high port charges are driving
00:30businesses to neighboring countries. Well, Moses Enemwale, co-founder and chief executive
00:35officer, joins me now for more on these trends and developments within the maritime space.
00:41Thanks a lot for joining us on the show today. Now, let's start off the conversation with
00:45your assessment of what's going on in the global space from a tariff perspective. We've
00:50seen the trade tariff wars, the countermeasures, the responses so far, and the shift in dynamics
00:56or introductions this is bringing to the fore at this moment. For you, how dire does the
01:01picture get? So, I think, thank you very much, first of all. I think these are very interesting
01:06times and I think it creates both challenges and opportunities. So, challenges are, yes,
01:13it is uncertain and it's going to have an impact on the consumer because these costs
01:17are going to get passed down. So, price of goods are going to increase for a lot of participating
01:21countries and even non-participating countries. And overall, the risk appetite. Exactly. And
01:25so, there's going to be that effect. But also, I think it creates an opportunity for a lot
01:28of countries and businesses to find new routes to trade with and new partners to trade with.
01:35It creates an opportunity for us in Africa as a block to obviously tap into a lot of
01:39those markets. Chinese manufacturers are now going to be looking for raw material from
01:44other markets and then that's where we come in. So, on one side, you can say, yes, there
01:48are lots of challenges with the uncertainty, but also there's a lot of opportunities and
01:51I think that we can take advantage of that. And talking about opportunities and how we
01:54also have a fit-for-purpose block at this moment now leveraging the African continental
02:00free trade area, how do you see us leveraging this and also consolidating in some of the
02:04wins we've also had beyond the continent? Yeah. So, again, like I said, it's a perfect
02:09time for us to jump in because the AFTA makes us very competitive. In its full implementation,
02:1590% of goods traded within participating countries would be duty-free. That makes it significantly
02:20cheaper for us to trade with other African countries than, say, China, for example. So,
02:25that makes us very competitive. And so, I think it's coming in at the right time. We
02:28need to really expedite the execution of the implementation phase and get things rolling
02:34because it's an amazing opportunity for us as a block. And so, I think that with everything
02:38happening in the global stage, Africa is probably the time for Africa to step in. But, you know,
02:43connecting Africa still definitely has its own challenges at this moment now. We're yet
02:47to really scale the huddles from an infrastructure point of view at this moment. But when we're
02:52looking at local and international shipping trends and some of the intricacies here, let's
03:00weigh two scenarios. We have air cargo and then sea cargo, the transportation, the quality
03:06of service delivery here. How do you see this trend shaping up for the rest of this year?
03:12Yeah. So, I think the good news is we're on the right path. We're definitely moving in
03:16the right direction, yes. So, we've seen a lot of countries, participating countries
03:19as well, make a lot of investments with AFTA in mind. Nigeria is one of them. Building
03:25out coastal highways is very important. That's part of the infrastructure you spoke about.
03:29Yes. Sort of like the Nigerian-Togo highway. Ghana has made a lot of infrastructure investments
03:34as well. Egypt, Kenya as well. So, we're definitely moving in the right direction.
03:38This is not going to happen overnight, right? And we don't have all the tools necessary
03:42yet, but we're moving in the right direction. But one of the tools we have at this moment
03:46is technology and we definitely need to leverage that much more. But let's also talk about
03:51how Top Ship is also leveraging technology at this moment when we're also looking at
03:55opening up the channels here between B2B, B2C, shipping transactions, the sort of volumes
04:01you expect this can also carry along. Yes. So, by way of volumes, we expect that this
04:06is going to significantly increase volumes, especially within participating countries.
04:10But Top Ship is a very global shipping platform. What we really do is we use technology to
04:15make the international shipping process tremendously easy for businesses. What that means is price
04:20transparency is now significantly easy. Getting quotes is now significantly easy. Tracking
04:24and visibility is now significantly easy. Picking the right shipping option for the
04:29type of goods you want to ship is now a very, very easy process. And so technology brings
04:34all those very big challenges and makes it significantly simple. And that's what Top
04:38Ship does. So, when we look at the sort of like the landscape, this is also a great opportunity
04:42for us to really help a lot of these countries and those on the continent to sort of make
04:47shipping significantly easy. I think when you combine what the regulatory progress has
04:51been done with regards to AFTA and technological change that we've made with companies like
04:55Top Ship, I think it's a great time to do business. Well, you know, when we also look
04:58at our key markets on the continent, Nigeria still remains one of the focal points. However,
05:03the level of competitiveness is whether or not we understand the language of competitiveness
05:07and how we should position in the bigger African picture and the continental global picture
05:12still remains quite skewed. Now, from a pricing perspective, the sort of levies, charges we
05:19have here, we have the suspension of the customs 4% FFE levy. But right now we've pressed forward
05:25with that 15% charge. When you look at the exports or the transactions from here now,
05:31an average service charge would be about $200,000 on the back of this 15% hike. For Ghana, we
05:39have that at about 15% for the same tonnage, so to speak. Cotonou 26 within that same range.
05:46Do you think we really understand the gravity of what we're doing right now and how this
05:52is creating a sort of disincentive and shifting the business focus to our neighbouring countries?
05:57So again, that's also another tricky topic. You know, the NPA's argument is we need this
06:01revenue to make investments on the ports to make our ports more competitive. The operators'
06:06arguments are these costs are making us... It's bird on top.
06:09Exactly. And so it's a chicken and egg scenario, sort of, right? And I think ultimately, yes,
06:13it makes us the most expensive ports in the West African region. It makes us be probably
06:17the second most expensive port in the entire continent and maybe the fifth most expensive
06:21port in the world at large. So that's very difficult, right? Very difficult to navigate.
06:26And now a lot of cargo is being diverted to neighbouring countries because of the costs
06:29involved. Look, I think at the end of the day, dialogue needs to come in and then we
06:33need to find a middle ground because the arguments from the regulator is valid. Yes, they haven't
06:38raised prices in 32 years. That's noble on their part. So we need to give them some credit
06:42there. But the operators are saying, look, this is not a good time. This is not a good
06:46time to raise prices. So I think at some point we need to find a middle ground. Some people
06:50are saying we need to stagger it 5% over three years. Who knows? But I think there has to
06:54be a middle ground somewhere.
06:55But as we also paint the bigger picture of how we also see business sustainability at
07:00this moment. Now, let's also talk about, yes, we have the African continental free trade
07:05area and then the difference of nationals also taking their own agenda. But the challenges
07:09of fragmented regulatory environment still remains a big issue when we're looking at
07:14how businesses like yourself expand into new markets. What are some of your experiences
07:19and how are you also manoeuvring this into the new markets you're focusing on?
07:23Yes. So we've taken a different approach and we've said, look, we're not going to expand
07:27geographically. We're going to look at new routes that have potential for increased demand.
07:32For example, Vietnam, Nigeria, for example, or Mexico, Nigeria. And so for us, we've taken
07:37that approach because geographically, yes, it has been significantly difficult to expand
07:41to other African markets. There's a regulatory hurdle that you need to cross there. And so
07:45a lot of businesses have taken a different approach as opposed to saying, hey, let's
07:50look at our neighbours and expand towards that. But I think that's going to change.
07:54So what should we expect from Topship?
07:55Look, I think from Topship, you can expect new routes, especially with the changing winds
07:59now. A lot of change is going to happen in terms of how shipments move. Vietnam, Cambodia,
08:04Peru is going to become even more influential than they were before. Mexico as well.
08:08And the categorisation of cargoes?
08:10So categorisation of cargoes, look, I mean, I think a lot of raw materials are still going
08:15to continue to leave Africa. That's not going to change any time soon. But we're also going
08:18to see consumer products leave Africa. Rwanda is now becoming a smartphone manufacturing
08:21hub. Nigeria started to make automobiles. So I think we'll start to see manufacturing
08:26equipment and automobiles leave the continent as well.
08:27Yes, and definitely the boom in e-business. We're also having cosmetics and other range
08:31of products. Thanks a lot for joining us on the show today, Moses. It's been a pleasure
08:34speaking with you. That is Moses Enewali, co-founder and chief executive officer of
08:40Topship.