Will Africa’s Transportation Infrastructure Development Be Sustainable?

Written by D.A. Barber

Strong transportation infrastructure can be a boost for jobs, economic development and quality of life. But the condition of roads, railways and ports has long been slowing local business and foreign investment in Africa.

On Oct. 28-30, the first Ministerial and Policy Conference on Sustainable Transport took place at UN Environment Program headquarters in Nairobi, Kenya, to explore integrating sustainable policies into Africa’s needed transportation development.

And much of that integration revolves around energy.

According to the International Energy Agency’s Africa Energy Outlook report released Oct.13: “As urban areas grow significantly in size in sub-Saharan Africa, urban development policies can play an important role in guiding users of transport services towards private or public forms of transportation, and therefore influence future transport energy demand.”

But whether or not Africa’s railways, ports and road infrastructure development will be “green,” it will be expensive – estimated to need $100 billion annually for improvements. But according to the African Development Bank, “Africa invests only 4 percent of its collective GDP in infrastructure, compared with China’s 14 percent.”

“These numbers vary from who you’re quoting and it’s different if you’re looking at sub-Saharan Africa or the whole continent,” Vivienne Sequeira, the Corporate Council on Africa’s Director of Infrastructure told AFKInsider. “So it has to be qualified.”

The Corporate Council’s 6th U.S.-Africa Infrastructure Conference on Oct. 7-8 in Washington, D.C., had the theme “Building Resilient Cities” and highlighted how Africa is coping with rapid urbanization – including intermodal transportation.

“The infrastructure in cities is where the most immediate infrastructure deals can be made, I think, and that’s why we put the emphasis on that,” Stephen Hayes, president and CEO of the Corporate Council on Africa told AFKInsider.

“What we tried to do is give U.S. companies and others there a greater range of potential financing and where it might come from beyond U.S. banks and the Ex-Im Bank. And what’s also been very helpful is that the Africa Development Bank has joined Corporate Council on Africa, and that also sure helps U.S. companies as well,” Hayes added.

The African Development Bank launched the Africa50 Fund earlier this year with the long-term strategic aim of investing $10 billion and facilitating total project investments of $100 billion by enticing investors.

There is a lot of work to be done. The World Economic Forum’s Global Competitiveness Report 2014 – 2015 of 144 world economies ranked sub-Saharan Africa’s infrastructure. While the report found transport infrastructure in Mauritius (ranking 42nd), South Africa (32nd) and Namibia (52nd) “good by regional standards,” other countries don’t fare so well. According to the report: Tanzania (130th) has “poor roads and ports;” Mozambique (128th) needs to make “critical investments across all modes of infrastructure;” and in Angola (139th) “the continent’s second biggest oil exporter — infrastructure is one of the least developed globally.”

Transporting Costs

The African Development Bank estimates that costs for transporting goods are 63 percent higher in Africa than in developed countries, hampering international and local business.

“The biggest issue is the talk of transporting goods on the continent,” Corporate Council’s Sequeira told AFKInsider, noting there was some discussion at the Council’s conference about long-haul roadways across the continent.

Mwangi Kimenyi, senior fellow and director of the Brookings Institute Africa Growth Initiative says if you look at the new projects, such as the new railway from Mombasa to the interior of Kenya, they are “trying to open up the interior.”

“The minister of Uganda discussed the new road that’s being built between Kisangani in the DRC all the way to the coast,” says Sequeira. “So, that one is really helping intra-Africa transportation.”

Another future project discussed was building a road from Cape Town to Cairo, which is part of the New Partnership for Africa’s Development’s (NEPAD) ambitions.

“They are considered regional projects. There are several roads now linking east African countries that are what we call the ‘East African Community Roads’ – again, trying to open-up the region for trade and movement of people in the area,” Kimenyi told AFKInsider.

One way to cut costs and function in a more sustainable way is through intermodal transportation – the coordinated movement of goods through the interconnection of ports, railways and trucking.

“Several of the panelists across the conference talked about the long time it takes to get goods through ports,” Sequeira told AFKInsider. “Most of the ports are at full capacity.”

The massive Lamu Port and New Transport Corridor Development to Southern Sudan and Ethiopia (LAPSSET) demonstrates Kenya’s push to become East Africa’s transit hub by linking landlocked countries to the port for exporting the region’s oil and gas overseas. With LAPSSET, Kenya would ultimately becomes the global gateway for 11 East African countries.

With Turkish funding, the Somali government is rebuilding the country’s airport and seaport. The international airport in Mogadishu is expected to be completed in 2015 and Somali authorities handed over management of the Port of Mogadishu to the Turkish firm Al Bayrak Company for upgrading to international standards.

Nigeria also has shipyard infrastructural opportunities for private investors in the on-going development of the Nigerian Maritime Administration and Safety Agency’s dockyard in Okerenkoko, where ground breaking took place early this year.

Meanwhile, Tanzania’s government announced on Oct. 27 that construction of a Chinese-funded $10 billion port at Bagamoyo will start in July 2015 north of Dar es Salaam.

China’s Train Factor

It is estimated that 30 percent of all new projects in Africa stem from Chinese investment to ensure the free flow of the mineral resources it needs from the continent. And that flow requires railroad infrastructure.