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African Transport Corridors – the key to unlocking Africa’s potential

African Transport

The topic of "African Transport Corridors" was the topic of a panel discussion hosted by Aurecon at the Southern African Road Federation (SARF) and International Road Federation (IRF) conference held at the CSIR Convention Centre, Pretoria in September 2014.

The discussion was attended by representatives of road agencies, funders, private sector transporters and consultants, and moderated by Abbas Jamie, African and Middle East Transport Leader at Aurecon.

Transport corridors have been on the African agenda since the 1970s.

Africa’s trade with itself is low and declining in comparison with other regions: 11-15% of African trade is with itself and Africa’s contribution to global trade is only 2-3%. Solving this challenge is inextricably linked to country economic objectives of increasing primary exports while diversifying the economy. The solution will also mark the achievement of a vision: a continent capable of growing and sustaining itself.

A transport corridor needs to efficiently connect hubs of economic activity and areas of potential growth along its alignment. The African continent has the highest transport costs in the world, accounting for above 20% of the total imported price of goods within landlocked countries. This inefficient and expensive transportation restricts business activity, global competitiveness and intra-regional trade, consequently stunting job creation and poverty reduction.

“Trade is by its nature cross-border and potentially multimodal,” remarked Paul Lombard, General Manager for the Rest of Africa and Middle East at Aurecon, during the introduction to the discussion. With 92-97% of Africa’s international trade passing through ports, while 80% of intra-African trade takes place via road, being able to plan and incorporate multimodal chains, including rail, into transport corridors is an important factor in efficiency. To an even greater extent, is the recognition that a corridor consists of operational systems as well as hard infrastructure. Much of the requirement for efficient corridors extends beyond better provision of road infrastructure, although this is important.

The Federation of East and Southern African Road Transport Associations (FESARTA) Executive Director, Barney Curtis, raised the example of one stop border posts which were implemented along the Northern Corridor in East Africa. During implementation, surveys showed dramatic reductions in border transit times with delays of days receding to under 6 hours. These gains in productivity and cost reduction for transporters were based on improved coordination resulting from operational changes rather than infrastructure remodelling, which is often seen as a panacea for border performance. While not all one stop border posts were producing the intended results, Curtis pleaded for them not to be abandoned. The closure of TradeMark Southern Africa (TMSA) and the East Africa Trade Hub was regretted since they had contributed to infrastructure and policy development and trade facilitation.

Wim van Schalkwyk, formerly from TMSA and now a development planner at Aurecon, provided the background on how information systems were crucial to the virtuous cycle of better coordination, planning and implementation. He emphasised that there was a still a need to avoid duplication, and to integrate all the datasets and information management systems into a single open data platform across the tripartite regional economic communities.

The COMESA-EAC-SADC Tripartite is a platform for harmonising policies and programmes within those regional economic communities. Information openness was also raised as a factor in ensuring that corridor performance remained accountable and transparent. However, interested stakeholders in the audience advocated for real-time monitoring as the next step to achieve true transparency - a move that would require further donor or regional body funding.

Good corridor development and optimisation requires coordination of multiple stakeholders to be successful. Lovemore Bingandadi, Programme Manager of the Tripartite Transport and Trade Facilitation Programme (TTTFP), spoke of the complicated nature of this multilateral process whereby the movement from technical and economic studies to consensus on harmonisation of transport laws, regulations and technical standards was in itself a very slow process. This was only exceeded by the tedious procedure of domestic consultation and then ratification and implementation within multiple national governments.

It was up to regional coordinating bodies such as the TTTFP to provide technical assistance to governments in domesticating the protocols.

Corridor projects and trade facilitation harmonisation is initiated through a ministerial and technical level committee consisting of the countries that will stand to benefit. Bingandadi noted that at present, there are 5 or 6 corridor management committees out of the 18 that are required, indicating both evidence of some progress as well as the magnitude of work yet to be undertaken if the goal of an economically and physically integrated continent by 2028 is to be achieved.

In terms of infrastructure project development, Adama Deen of the New Partnership for Africa’s Development (NEPAD) Infrastructure Strategic Business Unit provided an overview of the organisation’s role and the mechanisms by which infrastructure projects were being rolled out. NEPAD does not act as project owner but facilitates project development for implementation by member states. In January 2012, NEPAD heads of state approved the Programme for Infrastructure Development in Africa (PIDA). PIDA consists of 51 programmes and projects, which Aurecon translated into over 400 project fiches that could be taken to project preparation and fundability stages.

Deen presented an overview of the financing model approved at the recent Dakar Financing Summit. The African Development Bank (AfDB), through its Africa50 Fund, would fund and support the financing of infrastructure projects with special purpose vehicles (SPVs). This is similar to a financing model employed in China and involves the development of PIDA SPVs that can be listed across bond and equity markets in Africa, utilising private sector financing through shares, bonds and subordinated loans. The SPVs will still be guaranteed by governments, the AfDB, Africa50 and BRICS nations, with concessions granted to the SPVs by the national governments involved.

At a project implementation level, the infrastructure project would involve robust coordination between multiple governments, navigation of harmonised and non-harmonised regulations and policy, as well as coordination with the SPV and its appointed facility managers.

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