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Transportation shortfalls can pose project challenges, offer opportunity – Richard Scott

(By chinca)

Updated: 2015-07-30 14:14:47

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In the last 18 months I have had the pleasure of visiting various of the African nations: Ethiopia, Uganda, Ghana and Togo. However, the one common denominator throughout my travels has been the poor condition of roads, the congestion on the roads and in some instances, simply the lack of roads.

It’s a perpetual problem. The absence of adequate transportation is a major hindrance to economic growth in much of Africa, particularly the sub-continent. Uganda is almost the same size as the UK yet the comparison of transportation infrastructure is quite staggering; Uganda has a total of 70,746km of roads, of which 16,272km is paved, whereas the UK had 394,438km of paved roads in 2009.

Pothole-filled roads and missing rail links get in the way of economic growth. Intra-regional trade accounts for just 13% of total commerce, compared with 53% in emerging Asia, according to a 2013 Economist report. Transportation costs can make up 50% to 75% of the retail price of goods in Malawi, Rwanda and Uganda. Shipping a car from China to Tanzania on the Indian Ocean coast is estimated to cost $4,000, but getting it from there to nearby Uganda can cost another $5,000.

There are great disparities that result from this issue of poor transportation In particular, landlocked countries are negatively impacted, as these countries depend on transit solutions in neighbouring Kenya and Tanzania. 

It takes up to 71 days to import goods to Burundi from any of the other East African Community member states, according to Trademark East Africa.

Some trade paths are improving. Governments are slowly making good on long-standing promises to invest in transportation infrastructure, and more importantly, maintain it. A quick look at  the procurement pages of the African Development Bank will show a range of transportation related projects being tendered. Some governments have removed some border restrictions and lowered tariffs. 

I live in Nairobi, where you need to plan your day around traffic. A journey from the city centre to the airport can take anything from 30 minutes to 3 hours (I have experienced both ends of the spectrum!).  In addition to learning to plan ahead and exercise patience, the solution is simple. Africa needs more roads. Many are being built, but it’s going to take time.

These problems are substantial and any business, development or construction project, must take into account these shortfalls when planning. At the same time, the work being done to develop new roads can present new opportunities for construction companies.

Even if one is building a road, the logistics of getting the materials and equipment there can be daunting. The following list provides a few issues to consider when planning a project in sub-Saharan Africa.

Road network – the transport systems of Africa varies significantly across region and countries, this includes which side of the road to drive on. Chad has only 60 km of paved roads per million people, whereas countries like Algeria, Tunisia, Namibia and Botswana boast over 2,000 km of paved roads for a similar population.  Organisations need to have a good understanding of the road network, including trade corridors.

Supply chain – when considering your project supply chain in Africa, you also need to consider the absence of all-season roads in certain areas. In many countries, a number of cities and villages are isolated during the rainy season.

Rail – the railway, a relatively inexpensive means of transportation, has also been neglected with very few rail extensions in most countries. However, the cost of rail freight is two times that of Asia and one-and-a-half times as high as in Latin America. However, rail remains an option in some countries, as there is increased investment in such networks.

Road safety – road traffic injuries are a major concern in Africa. In 2007, it is estimated that over 230,000 people died on roads in the African Region. This represents one fifth (20%) of all the road deaths, yet the region has only 2% of the world’s vehicles. Many organisations restrict any night travel, as roads are considered too dangerous.

Fuel – prices vary significant across the continent. In some countries large volumes of fuel have been smuggled across the border. For example, in Benin is estimated that 80% of the fuel is smuggled across the border. In Nigeria the fuel price is about NGN140 (USD 0.89) a litre, where in Benin it retails for NGN 250 (USD 1.59) at the pump, and NGN200 on the black market.

Transportation maintenance – you also need to understand the make of vehicles that have readily available spare parts and maintenance in the country. Finding qualified technicians to service and repair a vehicle can also  be a major challenge.