Transport in Africa
Get a move on: Africa’s booming economy needs modern trade routes
Feb 16th 2013 | WADI HALFA |
UNLESS you take to the air or the high seas, the only reasonably safe passage from north Africa to the rest of the continent is a weekly ferry on a lake on the eastern edge of the Sahara. The few roads that cross the vast desert are either broken or infested with kidnappers. So every Monday morning a horde of turbaned migrants lines up at a concrete pier in the southern Egyptian city of Aswan on Lake Nasser, a dammed-up bit of the Nile, for the overnight journey of 500km (300-odd miles) to WadiHalfa in northern Sudan. They bring carpets from Cairo, bubble-wrapped fridges from Tripoli and bicycles bought with wages earned in Algiers. All are stowed in the white steel hull of the 30-metre-long good ship Sinai—and around her engine and in the stairways and under the lifeboats and in the lifeboats; every surface is covered with bags, parcels and boxes.
When Sudan approaches, after a cold night under the stars on deck, the men roll up blankets and their wives braid the hair of young daughters. Squinting into jewelled sunlight bouncing off the water, more and more of the shore comes into view on both sides: craggy hills that once formed the top of the Nile valley where early human civilisations erected tombs and temples. Some were moved to higher ground when the dam in Aswan created the lake half a century ago. The rest slide by, below the keel. Coming off the ferry, the migrants will take a flyblown bus to Khartoum, the Sudanese capital, from where some plan to carry on to Cameroon, on the Atlantic side of the continent, a journey of several more weeks.
Transport is a perpetual problem in Africa. Potholed 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. Landlocked countries suffer the most. Transport costs can make up 50-75% of the retail price of goods in Malawi, Rwanda and Uganda. Shipping a car from China to Tanzania on the Indian Ocean coast costs $4,000, but getting it from there to nearby Uganda can cost another $5,000.
Some trade paths are improving. Governments are slowly making good on long-standing promises to create free-trade zones. Officials from countries in the East African Community and the Common Market for Eastern and Southern Africa have removed some border restrictions and lowered tariffs. Roads are being built. Aswan and WadiHalfa will soon be connected by a double-lane tarmac highway with its own border terminal, the first dependable road across the Sahara. It will link to a brand new 1,000km-long desert road going south to Khartoum along the green banks of the Nile.
Africa needs much more of this. The continent could easily end hunger if only farmers were able to get produce across borders, according to a new World Bank report, “Africa Can Help Feed Africa”. Paul Brenton, the author, says obstacles such as export and import bans, variable import tariffs and quotas, restrictive rules of origin and price controls all prevent consumers in one place from benefiting from staple foods and other resources (such as fertiliser) in nearby areas. Subsistence farmers who sell surplus crops typically receive less than 20% of the market price. The rest is eaten up by transport and transaction costs, limiting the incentive for farmers to grow more food. One of the most stubbornly persistent problems is roadside checkpoints, which cause delays and attract policemen demanding bribes.
Citadel Capital, a Cairo-based private-equity firm, has an ambitious plan to create transport links away from Africa’s roads. It is putting together a privately run corridor across the Sahara and into east Africa, connecting the Mediterranean and the Indian Ocean, to move cargo more than 6,000km by rail and river, by far the cheapest way. According to the firm’s calculations, five litres of fuel can carry a tonne of cargo 100km by road but 333km by rail and 550km by boat.
Parts of the corridor already exist. Citadel Capital is running 42 barges along the length of the Nile in Egypt and has built or refurbished seven river-ports between Alexandria and Aswan, mostly to ship grain, coal, slag and clay. Two years ago it carried the first-ever shipping container on the Nile, long neglected as a transport route. Even though 95% of Egyptians live by the river, less than 1% of the goods they need are moved on it. In Sudan Citadel Capital has struck a deal with the government to use the state-owned rail network, and in South Sudan it operates 12 barges on the Nile to move supplies for oil companies and the World Food Programme. Further south in Uganda and Kenya, it has invested in the Rift Valley Railway, a British colonial-era line that runs 2,300km from the coast to the interior, as depicted in “Out of Africa”, a Hollywood epic.
These investments were made possible by privatisations and the opening of markets once dominated by state-owned enterprises. But governments can still be an unwelcome presence. Egypt’s barge business loses money because the state subsidises fuel, giving road transport a competitive advantage. Egyptians pay only $0.15 for a litre of diesel, at great expense to their exchequer. Similar distortions exist in other countries, such as Nigeria.
Rolling home
And yet new railway lines are planned across Africa. Some will carry passengers, though most are for freight, especially minerals, a booming sector. A 1,000km line is to bring iron ore from Guinea’s interior to the coast. Some are designed from scratch whereas others, such as the colonial-era Benguela line in Angola, are revivals. Most track-builders as well as much of the rolling stock come from Asia. In 2011 Ghana signed a contract, apparently worth $6 billion, with a Chinese firm to build a line across the country. According to Africa-Asia Confidential, a newsletter published in London, at least 25 current African railway projects have Asian backers.
New rail lines also feature in the plans of Citadel Capital. The northernmost spur of its Rift Valley Railway investment in Uganda stops 300km short of its barge port on the Nile in Juba, the capital of South Sudan. The firm says World Bank funding is needed to complete the line. Further gaps in the cross-Saharan corridor need closing. Nile barges cannot pass the dam in Aswan because it has no locks or ship lifts. The licence to use rail tracks in northern Sudan exists so far only on paper.
Like many investors in Africa, the firm also faces political problems. The revolution in Egypt has messed up management of the Nile: new officials are withholding navigational charts from barge captains and allowing water levels to sink as low as 60cm. In Sudan, the border between north and south was closed for much of this year while the two nations were on the brink of war. In Uganda and Kenya politicians refuse to clear away traders squatting on railway lines who use them as retail space, causing havoc for the already decrepit line that today carries a fifth of the load it didtwo decades ago.
Still, demand for more and better transport undoubtedly exists, and the dream of a continuous link between north Africa and the rest of the continent is a powerful one. “In the long term it will happen,” insists Ahmed Heikal, the founder of Citadel Capital, waving his hands as if holding a magic wand.
From the print edition: Middle East and Africa