African Business 2020 edition

OVERVIEW Transport and

OVERVIEW Transport and logistics Far-sighted plans for freight can lift African trade. Sector Insight Trains between Tangier and Casablanca travel at 320km/hour. also contribute to economic growth in minor urban centres and rural areas. Road Of the 15 big goals that the African Union (AU) has set in its Agenda 2063 programme, four are strongly related to transport and logistics: • Integrated high-speed train network: The project aims to connect all African capitals and commercial centres to promote the movement of goods, services and people. • Establishment of the African Continental Free Trade Area (AfCFTA): Accelerate intra-African trade and boost Africa’s trading position in the world. • Introduction of an African passport and facilitation of the free movement of people. • Establishment of a single African air-transport market (SAATM). The importance of transport and logistics is shown by the relative expenditure on transport infrastructure in Africa. Nearly 40% of all the money that is spent on infrastructure on the continent is spent on transport. This amounted to nearly -billion in 2015 and 2016. Africa’s first railways were built to serve the occupying colonial powers whose only concern was to get cash crops or minerals to the nearest port. This has made it difficult to trade and travel within Africa. Integration and coordination are integral to modern transport and logistics planning. An emphasis on developing functional corridors between the main centres in Africa and to ports is a feature of current regional plans. Corridors should The vast majority of freight within Africa is carried by road. In Nigeria the figure for passengers and freight is close to 90% but in that giant West African country, as elsewhere on the continent, there are plans to bolster the rail network and to move freight from road to rail. All of Sub-Saharan Africa had 3 700km of highways in 2015, compared with 24 000km in India and 111 000km in China. A quarter of Africa’s road are paved against 60% in India (African Development Bank). There is no shortage of activity on the road-building front. Individual countries such as Ethiopia have built 2 700km of asphalt roads every year for the last four years. Most road-building in Africa is happening within a broader framework. The Trans-African Highway (TAH) network is a transcontinental road project overseen and developed by the United Nations Economic Commission for Africa (UNECA), the African Development AFRICAN BUSINESS 2020 56

OVERVIEW Bank (AfDB), the African Union (AU) and regional bodies such as ECOWAS and SADC. Nine highways are envisaged in the scheme which would eventually stretch more than 50 000km. TAH has been a long time in the works but regional actors have been building bits of it more quickly in recent years. Rail African development corridors are normally based on existing or planned railway systems. For landlocked countries, rail links to ports are the lifeblood of trade. A good symbol of the revival of the Ethiopian economy in north-eastern Africa was on display at the official opening on 1 January 2018 of the new, standard-gauge, Addis Ababa- Djibouti railway. Almost all Ethiopian trade passes through the ports of Djibouti and Doraleh and the new railway is one of the most important elements in that country’s new railway network. The Economic Community of West African States (ECOWAS) bases its integration plans for the region on the development of an integrated rail network. The rail component is critical to the ultimate success of the Northern Corridor, the multimodal trade route linking the countries of the Great Lakes Region with the port of Mombasa in Kenya. Creating standardised infrastructure is a vital part of all regional planning. In the rail context, this includes the standardisation of brakes, couplings and gauge. The Mombasa-Nairobi Standard Gauge Railway project is Kenya’s most ambitious infrastructure project since independence. China has been a leading funder of rail projects on the continent. This includes large projects in Angola, Djibouti, Ethiopia, Kenya and Nigeria. The goals set out in the 2018-2022 Strategic Plan of the Southern African Railways Association include increasing rail market share to at least 40% and advocating for pro-rail policies. The AU has plans for an African Integrated High-Speed Railway Network (AIHSRN) among its goals. AUDA-NEPAD, the development agency of the AU, has hired a consultant for AIHSRN and a first experts meeting was held in April 2019. The Kampala-Nairobi route is operational but not operating at full speed, unlike the Tangier- Casablanca line in Morocco, Al-Boraq, which can reach speeds of 320km/hour. The continental plan is to build on existing networks by delivery new infrastructure along six east-west routes and four north-south lines. Ports Improving efficiency, increasing volumes and reducing costs: these are the most important priorities for African ports. The cost of using African ports is about 40% higher than the global average, and up to 70% of the delays in delivering cargo that are experienced are because of the time that containers spend in ports (AfDB). The number of large containers handled by Sub-Saharan ports rose rose to 15-million in 2014 but dropped to 14.1-million in 2016 (World Bank). Egypt deals with the most containers on the continent, followed by South Africa but Algeria has shown strong growth. West Africa is also increasing its capacity. All across Africa there are port expansion projects underway or new ports are being built. A notable example is the Lamu Port on the Kenyan coast. Lamu is the final (eastern) point in a new transport and infrastructure corridor linking Kenya’s coast with South Sudan and Ethiopia, thus extending the concept of the hinterland beyond Rwanda, Burundi and Uganda. The LAPSSET Transport Corridor encompasses railways, highways, pipelines and even airports, at Lamu, Isiolo and Lake Turkana. There is a significant amount of competition on the east coast, with Tanzania’s Dar es Salaam also in the business of receiving and sending cargo. ■ Online Resources AUDA-NEPAD: www.nepad.org Ethiopian Railways Corporation: www.erc.gov.et LAPSSET Corridor Development Authority: www.lapsset.go.ke Ports Management Association of West and Central Africa: www.agpaoc-pmawca.org Southern African Railways Association: www.sararail.org 57 AFRICAN BUSINESS 2020