1 year ago

Opportunity Issue 98

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Opportunity magazine is a niche business-to-business publication that explores various investment opportunities within Southern Africa’s economic sectors and looks to provide its readers with first-hand knowledge about South African business. Opportunity also looks to present South African business to international markets that may have interests in investing in South Africa. The publication is endorsed by the South African Chamber of Commerce and Industry (SACCI).

TRANSPORT Policy needs

TRANSPORT Policy needs to match infrastructure for Africa’s trade to thrive Hubs around ports and links to transport corridors will enable the newly-minted African Continental Free Trade Area to thrive, as a recent report by Dianna Games shows. Credit: Transnet National Ports Authority An extract focussing on transport and logistics from the discussion paper “The African Continental Free Trade Area: A Pipe Dream or Silver Bullet?” by Dianna Games. First published by The Brenthurst Foundation, May 2021. In May 2021, the bridge across the Zambezi River linking Botswana and Zambia was opened by the presidents of the two countries. The construction of the bridge, which replaces the longstanding, slow ferry service across the river, means trucks on regional routes can now cross the river in a few hours, or less, rather than the previous three days to a week. It also means they can avoid using the biggest crossing between the ports and factories of South Africa and the rest of Southern Africa – Beit Bridge, which is also one of the most congested borders in Africa. A one-stop border post at the bridge will allow easier thoroughfare. This project embodies the benefits that good infrastructure and joined-up bureaucracy offer regional trade, both of them generally in short supply. More than 250 trucks a day should be able to cross the Zambezi instead of the handful that were able to cross before, bringing down costs, increasing the security of cargo and providing an alternative route for trade to the sea for inland markets. Travelling by road across Africa can be a sobering experience, characterised by delays, inefficiency and overzealous bureaucracy. There are a range of literal and figurative potholes that are major constraints to trade. Even as trucks battle with bad roads and congested border posts, they also need to navigate a host of other issues such as roadblocks designed mostly to extort money from drivers. Transport costs make Africa one of the least competitive regions for exports and trade. The continent’s import dependence and colonial trade patterns are reflected in traffic movements – trucks laden with minerals and other raw materials heading for the sea, returning either empty or loaded with imports. This is the reality that faces Africa as it unrolls its flagship project, the African Continental Free Trade Area (AfCFTA), which started trading under the agreement in January 2021. The initiative brings together a potential market of more than a billion people and has a lofty ambition of increasing intra-African trade from under 20% currently to more than 30% in just a few years by attracting investment into manufacturing, agriculture and other sectors and building regional value chains. What could go wrong? The report details five areas where problems could arise. These are non-tariff barriers; rules of origin; manufacturing and industrialisation; connectivity and infrastructure deficits. This extract focusses on the final one. Infrastructure deficits Africa’s infrastructure backlog, regarded as the biggest constraint to improving trade, is well known. The funding gap for addressing the 38 |

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