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African Business 2021

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The 2021 edition of African Business is the second issue of this useful guide to business and investment on the continent. The positive reception accorded the inaugural edition in 2020 was encouraging and we are optimistic that this publication and future issues will continue to meet the need for timely and relevant information in an exciting time for African business. African Business 2021 has articles on recent trends plus overviews of the key economic sectors on the continent and regional and country profiles. There is an in-depth analysis of the implications for trade on the continent of the introduction of the African Continental Free Trade Area agreement (AfCFTA) and an article on the growth and importance of exploration for minerals, gas and oil. Namibia and Botswana feature in an article on how cooperation can drive economic growth and an opinion piece focusses on the role that digital technology can play not only in the financial sector, but in the driving progress in a broader sense. Global African Network is a proudly African company which has been producing region-specific business and investment guides since 2004, including South African Business and Nigerian Business, in addition to its online investment promotion platform: https://www.globalafricanetwork.com

OVERVIEW Transport and

OVERVIEW Transport and logistics Open access railway lines have doubled freight volumes in Tanzania. SECTOR INSIGHT Imperial Logistics healthcare and consumer business plans to double its activity. Credit: Railnet International African development corridors are based on existing or planned railway systems. For landlocked countries, rail links to ports are the lifeblood of trade. 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. 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. 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. The existing line that runs from Zambia to the coast of Tanzania, known as the Tazara line, provides freight and passenger services along a 1 860km route. The decision in 2018 to make this an “open access” line, allowing a number of rail operators to use the line, has led to a doubling of freight volumes. This option is now being explored for the route linking Dar es Salaam with the Great Lakes. Freight operator Traxtion, which is in a joint venture on the Tazara line called Calabash, is lobbying for open access to become the norm in South Africa where the state-owned entity, Transnet, currently has a near-monopoly on infrastructure and operations. An ambitious idea has been put forward by Angola’s authorities, to build another line to link to Tazara that would start at the port of Lobito in Angola, thus spanning the continent from west to east. In March 2020, the government of Zambia signed an agreement with Railnet International to do studies on the plan to build new rail infrastructure which would link the Copperbelt Province to the Port of Beira in Mozambique, passing through the Zimbabwean capital city of Harare. Railnet International has put forward the figure of -billion that would be spent across the three nations in a private-public partnership. A new rail link has been proposed between Ethiopia AFRICAN BUSINESS 2021 38

OVERVIEW and Sudan which has the potential to assist regional integration and development. The NEPAD Infrastructure Project Preparation Facility (NEPAD-IPPF), a multi-donor special fund administered by the AfDB, is contributing towards the costs of the project. The transformative nature of 1 500km of railway line linking Khartoum with the coast via the Ethiopian capital of Addis Ababa would be difficult to understate. Ports Improving efficiency, increasing volumes and reducing costs 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). 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. There are port expansion projects underway and new ports are being built across the continent. 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 airports, at Lamu, Isiolo and Lake Turkana. Tanzania’s port of Dar es Salaam also in the business of receiving and sending cargo. Logistics A first Africa Supply Chain in Action (ASCA) virtual conference and exhibition was held in August 2020. The event was co-hosted by SAPICS, the Professional Body for Supply Chain Management, and Smart Procurement. Sixty speakers covered topics ranging from Covid-19’s impact on supply chains to the rise of informal economies and the circular ONLINE RESOURCES Association for Supply Chain Management: www.ascm.org AUDA-NEPAD: www.nepad.org Ethiopian railways corporation: www.erc.gov.et LAPSSET Corridor Development Authority: www.lapsset.go.ke Southern African Railways Association: www.sararail.org economy, blockchain, drone technology, skills development, sustainability and e-commerce. The annual SAPICS Conference for supply chain professionals, held in November 2020, has been running for more than four decades. Imperial Logistics intends using money made in the sale of its European shipping business to expand and improve its operations in Africa. Market Access, the group’s consumer and healthcare company, has a presence in more than 20 African countries and has plans to double its non- South African activity in the short term. Road The vast majority of freight within Africa is carried by road. 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 (AfDB). There is no shortage of activity on the road-building front. Ethiopia has 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 including nine highways covering more than 50 000km. ■ 39 AFRICAN BUSINESS 2021

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