Friday, June 10, 2016 9:46AM /FBNQuest Research
Yesterday we attended a briefing in London with a focus on transport and infrastructure, hosted by the Africa Investment Exchange. As African countries aspire to improve productivity and economic growth, the need to meet the increasing demand for transport infrastructure has become critical.
Coverage in terms of road density and provision for other transport related infrastructure is relatively low when compared to other developing regions. This has led to increased transaction costs associated with the movement of goods across African borders and has also affected the pace of regional integration.
The common threads inhibiting expansion within the transport infrastructure across African countries are weak governance and political interference. The two constraints were highlighted as sources of frustration that affect swift project delivery. However, Côte d’Ivoire was singled out as a jurisdiction where foreign private sector investors gain support from the government.
Typically, it takes about seven years to execute a project fully (particularly roads). Kenya has a long pipeline of projects. The chief executive of the LAPSSET Corridor Development Authority, an initiative to foster transport linkages between Kenya, South Sudan and Ethiopia, was present and shared a few milestones.
The 505km Isiolo-Moyale road, which is designed to improve transport and logistics services between Addis Ababa, Lamu and Nairobi, topped his list. The project costs about KES46bn (US$460m), and is being funded jointly by the African Development Bank, the EU and the government of Kenya.
LAPSSET also has ongoing projects in rail and ports. For the last, US$5bn has been invested in the Lamu port project. The first berth will be completed in two years.
Nectar Group (a dry bulk handling services company) shared its experiences in Africa. The company manages a major coal terminal in Mozambique which has a total capacity of 5 million tonnes per year. It has also signed a 10 year agreement with the Sierra Leone government to manage and run the bulk terminal located at Freetown. Both projects have led to increased job opportunities and skill acquisition in the respective countries.
As for air transport, Funke Adeyemi, the regional head for Africa and the Middle East at the International Air Transport Association (IATA), disclosed that 23 countries have now signed the letter of solemn committed towards the implementation of the Yamoussoukro Decision and the establishment of a single air transport market in Africa.
If implemented by all participating countries, this would increase intra-African routes (at cheaper air ticket rates), and boost both trade and business across Africa.