Railways and Ports: Africa’s Arteries for Life
Africa has natural resources in abundance. Yet, mining, moving and processing those resources are often a difficult task across the continent. Limited integration and transport infrastructure often prevent the African continent from prospering and creating wealth for its rapidly growing population.
1) African railways and ports in a nutshell
Ports are gateways for 70 per cent of global trade in goods by value and 80 per cent by volume (PWC). They are vital for a country’s economic development, mostly if built and linked to railways. Africa’s 16 landlocked countries, in particular, understand this well. These landlocked countries favour cross-border railways connecting the hinterland to a neighbouring country’s port; for commodities’ export among other things (AfDB). Indeed, railways in Africa were (and still are) primarily built for freight transportation, connecting ports to inland mines and or agricultural areas (Richard Bullock).
Rapid urbanisation in African cities during the last few decades has created gridlock and logistical challenges. Railways and metros are increasingly being suggested as an excellent investment to transport passengers to and from different areas within cities, its suburbs, business centres and airports. Mass transport systems help to reduce carbon emissions and ease traffic congestion (Overseas Development Institute – ODI). However, African rail transport systems are largely underdeveloped and poorly maintained. Most ports are performing well below the standard of western economies, stifling trade; save maybe in South Africa as suggested above, and to some extent, in North Africa (The Maritime Executive).
2) Promoting sub-Saharan Africa integration and trade development via well-functioning rail and port transport systems
Currently, intra-African trade is only about 17 per cent of the total African trade (AfDB). To promote sub-Saharan Africa’s integration and trade development, especially within the context of the African Continental Free Trade Area or AfCFTA, several rail and port developments are both underway or planned (UN-Conference on Trade and Development – UNCTD). Some of them have been completed recently, for example, in Kenya, Ethiopia and Djibouti, to name but a few (Global Construction Review).
It is relevant to mention that these projects are not mainly financed by the private sector, but by China, Turkey, Japan, Dubai, Development Finance Organizations and the African States concerned. The main objectives are the same: linking supply chains and reducing freight transportation costs as well as reducing delivery times (UNCTD & AfDB). For example, by lowering sub-Saharan Africa export costs by 10 per cent, exports can potentially increase by 4.7 per cent (Hoekman and Nicita in World Bank’s WP 7532) and by saving one day in travel time, exports can potentially increase by 7 per cent (Freund and Rocha in World Bank’s WP 7532). In other words, the well-developed transport infrastructure will promote exports and competitiveness (World Bank).
However, the development and maintenance of transport infrastructure in sub-Saharan Africa, to the standard of North Africa or South Africa, are costly (usually in terms of billions of U.S. dollars). Despite its social & environmental benefits, few lines can provide good economic returns, because of among other things, a relatively low volume of freight transportation; and hence the private sector reluctance (AfDB).
3) Potential solutions to develop sustainable rail and port transport systems
a) Modernise relevant rail lines, stations and rolling stock, while focusing on freight transportation to attract the private sector investment. Service passenger demand in large urban areas where user fees are sufficient to compensate for the operating costs (Norton Rose Fulbright)
b) Invest in local research for technological advancements in the area of rail transport efficiencies and port optimisation by offering scholarships to local universities engineering graduates. A centre dedicated to rail and port research can also be created within engineering departments and financed using public funds.
c) Allow mining companies and large private banks to enter the rail and port market again, especially within the AfCFTA context. One possibility is by building and owning sustainable sections of profitable railroads. This policy will increase significant competition in the rail sector, and the latter will spur technological advancements.
d) Increase significant competition too within the port sector by promoting digitalisation (UNCTD) and fighting corruption.
This article was written by Hugue Nkoutchou and published here with the author’s permission.
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