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T he UN predicts that Africa’s population will nearly double from 1.2 billion to almost 2.4 billion by 2050. Much has been said about the continent’s “demographic dividend” but this untapped potential is also a potential source of destabilisation in the near future. This is due to archaic economic structures and a lack of regional integration that undermines countries’, and the continent’s, ability to effectively compete on the global stage. The African Development Bank (AfDB) notes that intra-African exports sits at 16.6% compared to 60% in Asian countries. Accelerating regional integration, facilitating ease of movement of people and good across boarders, and heavily investing in enabling hard infrastructure will go a long way in giving the continent’s young population a fighting chance. 

The African Union’s (AU) Agenda 2063 is the continent’s 50-year development framework. Any significant developmental plans, including the African Continental Free Trade Agreement (AfCFTA), sit within it and it guides the actions of African governments, bilateral trading partners and multilateral institutions. Increased investment in transportation infrastructure, particularly road and rail, must be viewed through this lens.

Paving the way

The development of the Trans-African Highway, Trans-African Railway and African Integrated High-Speed Railway Network are seen as being instrumental to unlocking Africa’s economic potential. The continent falls woefully behind regional counterparts. Africa averages 31 kilometres (19 miles) of paved roads per 100 square kilometres (62 square miles) of land while comparative low income regions average 134 kilometres (83 miles). The earmarked road and rail routes poised for development are set to not only facilitate trade, but to increase its effectiveness while gradually reducing poverty.

While there is concerted effort and the political will at a continental level, insecurity across the Sahel will place a drag on the development of some of these new highways in the medium term. The Economic Community of West African States (ECOWAS) has taken a strong stance against recent coups in the region. Six coups in half as many years underscores an acute security crisis facing the region. The Sahel links North and West Africa; ensuring regional stability is a precursor to boosting trade. Ultimately a political solution, rather than threats of regional military intervention, is what is needed to bring back a semblance of security to wayward member states. Addressing the drivers of insecurity that lead to endemic poverty, banditry and militancy across porous borders is a pre-requisite to courting any serious investors and seeing any infrastructure developments to fruition.  

East and Southern Africa have comparably better road links and less challenging geography to navigate when it comes to new road developments. Central Africa has the least developed road network. Geographical and climatic challenges in the region mean it is of lesser priority than other stretches of the Trans-African highway. This does not preclude a strong push by national governments to attract investment into the sector, but its relatively lower prioritisation by continental bodies means the status quo will likely persist for Central African states in the medium to long term. 

IMF Mean Speed (MS)* scores

IMF Mean Speed (MS)* scores

The IMF measures cross-country road quality based on the average speed that it takes to drive between two cities 80 kilometres (50 miles)| apart. The Mean Speed (MS) score serves as an effective proxy for evaluating road quality and accessibility.

Switching gear

New transportation infrastructure will aid African companies’ global competitiveness. Transport and logistical costs are prohibitively high, up to 75% in some instances according to the AfDB. Roads still account for over 80% of freight and passenger transport in Africa. However, overloading of trucks, poor workmanship and an inconsistent approach to maintenance of roads has led to the premature deterioration of some key roads. The well-established mining sector has historically taken advantage of existing road networks but agricultural produce, light manufactured products as well as fast-moving consumer goods also contribute significantly to cross-border trade.  

The AfDB estimates that there is a USD 100 billion infrastructure financing gap that only public-private partnerships will likely solve. Railway development is more likely to access green financing than investments in road infrastructure. Railways reduce road traffic, noise and environmental pollution. Freight and not passenger volumes, irrespective of government subsidies of fares, are essential. As was highlighted in our previous article, the transportation of metals and minerals from mine site to ports, as well as agricultural produce, is a key element to ensuring the commercial viability of new rail projects. 

Road transportation is complimentary as it enables low-cost last mile connectivity. However, maintenance is often neglected and past precedent indicates that governments are typically not best placed to carry out this function. This is often due to maladministration of funds designated for road maintenance and repairs. In instances where tolls or other revenue generating schemes have been introduced, these are poorly run or there is non-compliance by motorists, particularly if penalties are haphazardly enforced in urban areas.

The continental agenda is ambitious and clear. Investors will expect several things including greater transparency around sovereign debt and demonstrable commitment to better road fund management before coming to the table. Previous shortfalls and missteps can provide fresh opportunities for African governments – relinquishing responsibility for road maintenance, deepening counter-party due diligence and refining contract negation skills as traditional and new partners seek to join the road trip.