Covid-19 and the Competition for a Central Maghreb Corridor
The efforts to develop a Europe-to-Africa corridor through the Central Maghreb presently revolve around Algeria’s road connectivity within the Trans-African Highway system, starting in the country’s capital Algiers. The recently formed Turkey-Italy-Tunisia transportation network that slices across the centre of the Mediterranean, creating an arc of commercial connectivity from the Maghreb to the wider Black Sea is currently the leading aspirant to form a Europe-to-Africa corridor via the central Maghreb that utilizes Algeria’s connectivity. However, the main challenge emerging to Turkey-Italy-Tunisia network is being posed by China’s effort to construct El Hamdania, a large-scale transshipment port in Cherchell.
The Turkey-Italy-Tunisia network’s central hub is Italy’s deep-sea port of Taranto located on the Italian peninsula’s southern tip in the strategic heart of the Mediterranean Sea. Managed by Turkish port operator Yilport, the Taranto port began servicing the Turkey-Italy-Tunisia network in early July 2020. The Taranto-Tunisia segment of the network simultaneously forms the core link of a potential Europe-to-Africa commercial transportation corridor, by connecting North Africa’s coast to the major markets and manufacturing centres of Italy, Germany, and northern Europe via Italy and Europe’s high-speed rail systems. From Tunisia’s Bizerte port, the corridor can also link by highway to Algiers, the Mediterranean coastal terminal for the Trans-Saharan Highway (Route 2 in the Trans-African Highway (TAH) system), potentially extending the Italy-to-Tunisia corridor southward into West Africa as far as Lagos, Nigeria.
The Turkey-Italy-Tunisia network is a multi-modal transportation route whose Europe-to-Africa segment extends from the network’s central node at Taranto to Malta and then the port of Bizerte in Tunisia. The Taranto-Malta maritime link is also supported by the European Union as the southernmost link in the EU’s own “Scandinavian-Mediterranean Corridor,” one of the nine core network corridors of the European Commission’s Trans-European Transportation Network, or TEN-T, programme. TEN-T’s Scandinavian-Mediterranean Corridor is the EU’s central north-south transportation artery, a route spanning the Scandinavian peninsula, Denmark, Germany, Austria, Italy, and Malta. Because the Turkey-Italy-Tunisia network’s Taranto-Malta segment was previously designated as TEN-T’s Scandinavian-Mediterranean corridor’s southern terminal link, Turkey could become the operator of the hub of what may become the most prized Europe-to Africa corridor. By interconnecting the EU’s Scandinavian-Mediterranean Corridor with Africa’s Algeria-to-Nigeria Trans-Saharan Highway, the Turkey-Italy-Tunisia network’s Italy-Tunisia segment potentially forms the vital link for the creation of a mega-corridor spanning Europe and Africa from 60o N. latitude to 6o N. latitude.
The Turkish port operator Yilport Holding has been assembling the transformative connectivity of the Turkey-Italy-Tunisia network (Tanchum, 2020b). On July 30, 2019, Yilport committed to an investment of a total of €400 million for Taranto’s renovation and expansion to 4 million TEU by 2028 (Louppova, 2018). CMA CGM, the world’s fourth largest container transportation company, in which Yilport’s chairman is a 24% stakeholder, began service to the Taranto port on July 10, 2020. CMA CGM’s TURMED service now links Taranto and Tunisia via Malta’s Freeport Terminal at the Marsaxlokk port operated by Yilport, which is majority-owned and operated by Yilport Holding. Roughly equidistant between Taranto and Tunis, Yilport’s Malta terminal forms an important logistics centre for the Africa-to-Europe segment of the Turkey-Italy-Tunisia corridor.
With its general focus on Italo-Tunisian-Algerian energy interconnectivity, Italy has literally laid the groundwork for the expansion of the Turkey-Italy-Tunisia corridor’s extension to Algeria through the involvement of Italy’s leading construction firms, such as ITALCONSULT and Anas International, Algeria’s mega-project East-West highway traversing the entire length of Algeria parallel to the country’s coast. Without having coupled Algeria’s transportation infrastructure development with investments in local industrial production linked to a manufacturing value chain, Italy’s role in Algeria’s commercial connectivity remains far from certain as Turkey’s military presence in Libya is increasing Ankara’s political and economic clout in neighboring Tunis and Algiers.
Turkey has made a strong inroads in Algeria through $3.5 billion dollars of investments, ranking Turkey as one of the country’s top foreign investors (Tanchum, 2020b). One month into Turkey’s game-changing Libya intervention, Turkey’s President Recep Tayyip Erdoğan visited Algeria on January 26, 2020, where he announced the goal of raising Turkey-Algeria bilateral trade to $5 billion. Declaring Algeria as “one of our strategic partners in North Africa,” during his January 2020 visit, Erdoğan explained, “Algeria is one of Turkey’s most important gateways to the Maghreb and Africa” (Hürriyet Daily News, 2020). Italy’s position in Tunisia is being undermined by the sizable investments of Turkey’s strategic partner, Qatar, whose approximately $3 billion of investments (Gulf Times, 2020) ranks it as Tunisia’s second largest investor, behind France but leapfrogging ahead of both Italy and Germany (Tanchum, 2020b).
While the Turkey-Qatar partnership has gained economic and political influence in the central Maghreb, it has not secured a dominant position in the development of central Africa-to Europe corridor either. Bizerte and Tunisia’s five other medium-sized ports, do not provide an economy of scale to sustain an economic corridor. With an expected 20% contraction of the Tunisian economy in 2020 (Asala, 2020), it remains unclear when construction will begin on Tunisia’s proposed deep-sea port at Enfidha. In the absence of a modern deep-sea port, the Turkey-Italy-Tunisia network could become a sub-system in China’s Belt and Road Inititiative (BRI) architecture.
The incorporation of the Turkey-Italy-Tunisia network into a BRI-oriented central corridor may be accomplished with China’s construction of El Hamdania port in the Algerian municipality of Cherchell. Following China’s CITIC Construction’s success in building most of Algeria’s East-West highway, Algiers inked a deal in 2016 with the China State Construction Engineering Corporation and the China Harbor Engineering Company to construct El Hamdania as a massive transshipment port located about 60 km west of Algiers (Bonface, 2016). With a container capacity of 6.5 million TEU, El Hamdania could function as the hub of an Africa-to-Europe corridor linked to the Taranto port.
In July 2019, the Algerian government ratified and confirmed by presidential decree its September 2018 Memorandum of Understanding with China in which Algeria agreed to participate in Beijing’s BRI programme (Xinhua, 2019b). Slowed but not deterred by the COVID-19 pandemic, nor Algeria’s changing political environment, Beijing’s China International Development Cooperation Agency signed, on 11 October 2020, an economic and technical cooperation agreement with Algiers to deepen Algeria’s BRI participation (APS, 2020). Nonetheless, requiring seven years of construction at a current estimated cost of $6 billion (Agenzia Nova 2020), whether and when El Hamdania will actually be completed remains uncertain, as Algeria’s economy has been forecasted to contract by 5.5% in 2020 (IMF, 2020) forcing a reduction of the planned investments of its state-owned energy company Sonatrach by 50% (Reuters, 2020b).
While a sufficiently strong recovery in energy prices could push Algeria’s positive economic growth in 2021, Algiers would require an oil price of $157.2 to balance its budget. Despite depleting its foreign reserves, Algeria has so far been reluctant to seek assistance from the International Monetary Fund (M’vida, 2020), leaving it more vulnerable to increasing its dependence on China, Russia, and Turkey.