A new report from the African Development Bank Group finds that the infrastructure gap, particularly in the road sector, is hampering Africa’s ability to reap the benefits of the Africa Continental Free Trade Area (AfCFTA).
The report, titled “Cross-Border Road Corridors Expanding Market Access in Africa and Nurturing Continental Integration”, found that roads are the primary mode of transport on the continent, but only 43 per cent of the continent’s main population have access to an all-season road.
According to the report, Africa’s road infrastructure is inadequate, leading to increased transaction costs and low levels of Intra-Africa trade, while only 18 per cent of goods traded within the continent are transported by road.
The publication, released at the Africa Investment Forum 2023, disclosed that only 53 per cent of roads in Africa are paved, emphasising a significant gap in infrastructure. This lack of paved roads, according to the AfDB, is impeding access to basic services, economic opportunities, and social development. It noted further that the situation is especially acute in rural areas, where people may have to travel long distances to access healthcare, education, and other critical services.
The report recommends increased investment in road infrastructure to reduce production and transaction costs and enable the free movement of goods, people, and services across the continent.
Dwelling on this, a panel discussion at the Africa Investment Forum 2023 highlighted the importance of regional corridors in connecting Africa and fostering integration. Government representatives, regional economic communities, development partners, and private sector service providers all stressed the need for collaborative efforts to improve connectivity, lower transport costs, and improve regional trade and competitiveness.
Akinwumi Adesina,president of the African Development Bank urged all stakeholders to work together to accelerate the integration of African economies and improve the continent’s prospects for development.
Adesina emphasised that for Africa to realise its full potential, it must be a fully interconnected continent with robust regional corridor infrastructure and innovative financing instruments to drive economic opportunities and enhance the competitiveness of national and regional value chains.
Adesina announced that the Africa Investment Forum will establish a dedicated boardroom to promote collaboration, co-financing, and faster development of regional corridors.
Adesina suggested five key areas for optimising the benefits of regional corridors in Africa These include dedicating pooled financing facilities to corridor projects; building special industrial zones around the corridors to optimize existing infrastructure; adopting a systematic approach and platform to syndicate around the development of strategic regional corridors.
To maximize the benefits of developing regional corridors, Adesina recommended one-stop border posts to streamline trade and reduce travel times, as well as concessional financing to support low-income countries. He also proposed concessional financing, such as the African Development Fund, which offers low-income countries unmatched resources to commit to developing regional corridors.
Adesina reaffirmed the AfDB’s commitment to infrastructure development, citing the institution’s $44 billion investment over the last seven years in developing road corridors, ports, railways, and power pools. This, he explained, demonstrates the bank’s commitment to interconnecting countries and boosting regional trade.
The AfDB president listed some of the bank’s recent commitments to include $500 million for the development of the Lobito Corridor, a $20 billion Desert-to-Power initiative to develop 10 GW of solar power in the Sahel zone, the $259 million Kazungula Bridge in Zambia and Botswana, the $2.7 billion Nacala rail and port project in Mozambique, and the $15.2 billion Lagos-Abidjan highway project.
As of 2022, the African Development Bank said it had financed 25 transport corridors, built over 18,000 kilometres of roads, 27 border posts, and 16 bridges for a total investment of $13.5 billion.
Danae Pauli, a senior advisor for the US-led Partnership for Global Infrastructure and Investment (PGII), said that the project demonstrates the US government’s commitment to partnerships with African nations and institutions, rather than relying solely on traditional aid models.
The Lobito Corridor project, she said, is not about rail for the sake of rail, but rather about catalysing investments in multiple sectors to spur economic growth and improve people’s lives. She also projected that the project could be operational by 2028.