Why do Transport and Logistics Matter for Development in Africa?

By
Dr. Aminu M. Yusuf, FCILT
Director General/Chief Executive
Nigerian Institute of Transport Technology
Zaria, NIGERIA

 Introduction.
 Transportation and Development:The Nexus
 Objectives.
 Abridged Profile of the Continent.
 Conceptual Definition:Transport and
Development.
 International Best Practices inTrade facilitation
byTransport and Logistics.
 Recommendations.
 Conclusion.
 Further Reading.
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DrAminu M.Yusuf,FCILT.Presented at CILT InternationalConference,Maritius,
March,2016.

 Transport and logistics play value-added
role in the globalized economy;
 This role underlines the inevitability of
transport and logistics in the socio-
economic development of any continent,
particularly Africa.
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 Ironically, the speed of transport system and
logistics processes on the continent is ridiculously
slow,
 For instance, freight trains speed is average at 30
Km/ hour in some of the countries;
 Rail networks are generally in even worse shape;
 In many countries, most rail lines are still left over
from the colonial period and are in poor repair and
worn out.
 Hence, most freight are transported via road
network, that is characterized by potholes,
congestion and increasing rate of accidents.

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 Seaports systems operation are slowed down
by red-tapeism, particularly due to inefficiency
in custom processes and other logistics
functions.
 Thus, trade and commerce facilitation through
value addition by different modes of transport,
that are capable of engendering diverse
developments, eludes the continent,

 The link is both direct and indirect,
because, as transport and logistics
facilitate international trade transactions,
they:
- boost national income,
- reduce poverty, and
-consequently contribute to economic
and social development.
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FREIGHTTRAIN FREIGHT CORRIDOR
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To:
 Highlight the link between transport and
logistics and development,
 Identify challenges of transport and logistics
development on the continent of Africa,
 Proffer solutions for a better transport system
and; consequent socio-economic
development of the continent.
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 The continent has 1.1 billion persons
accounting for 15% of world population as at
2013.
 Extremely rich in multicultural diversity,
with more than 2000 ethnic groups and 3000
distinct languages.
 From 2001 to 2010, six of the world’s ten
fastest growing economies are in Sub-
Saharan Africa, partly due to natural
resources.
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 The top-ranking:Angola and Nigeria have
both benefitted significantly from oil exports;
 The continent has a very low connectivity/
accessibility among countries.
 For instance,Angola has just 4km of roads per
100 square kilometres of land;
 Ghana’s road density is more than 10 times as
high.

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 South Africa has 62km of roads per 100
square kilometres,
 Road quality across the continent is very
poor,
 Hence, ‘in 2011, total intra-African trade
represented only about 11% of African
trade with the world’. (Africa gearing up.
www.pwc.com/africagearingup)

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 There is increasing growing rail integration in
the Southern and Eastern parts of the
continent, but virtually nearly non-existent in
theWest .
 Seaports are the most important entry point
to the African continent, with most goods
travelling by ship;
 But there are not enough ports to handle
existing traffic, or potential growth in traffic.

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 Although, there are few number of on-
going ports development projects across
the continent, viz:
-West: Barra do Dande (north of
Luanda), Lobito in Angola and Lekki in
Nigeria,
- East at Lamu in Kenya and Musoma in
Tanzania.
 However, capacity and efficiency remained
key challenges of the existing ports.

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 Africa has a number of international
airports for passenger traffic across
the continent;
 Transporting air freight is more
difficult, in large part due to security
issues;
 And,West Africa still lacks a strong
hub-and-spoke structure.

 The problem of trade facilitation and
consequent socio-economic development of
the continent can be categorized under 2-
factors, namely
-Dearth of transport infrastructure, and
-Slow and poor logistics process.
 The poor logistics process challenge can be
sub-divided into the following operational
issues:
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-higher inland travel costs,
-higher port and terminal handling fees,
-higher customs clearance and technical
control fees,
- higher costs of documents and letters of
credit preparation.
-long dwell times of import containers in
most seaports at average of 14 days
instead of 3-day.
-poor connections to the hinterland and;
- red tape at customs are at play at most
border posts.

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 According to the World Bank, it takes just 12
days to export a container from Egypt, at a cost of
US$625.
 The journey lasts four times as long – over a
month and a half – to export a container from
Angola, at nearly triple the cost and it can get
even trickier. if you need to cross borders within
Africa.
 In contrast, at the world’s largest ports in Hong
Kong and Singapore it takes just five days to
export a container at a cost of US$575 and
US$456 respectively.

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 Trade and transport infrastructure remains
a serious constraint in Africa, because of
the poor state of the transport systems and
the prevailing logistics process;
 Partly the increasing poverty rate ,
unemployment among other
developmental challenges, is attributable
to the poor state of the transport system
and the logistics process on the continent.

COUNTRY GDP US$ Billion Logistics
Performance Index
(LPI)/155
Algeria 209.3 125 (2.41)
Angola 115 138 (2.28)
Republic of Congo 17.2 143(2.21)
Egypt 256.7 57 (2.98)
Nigeria 270.2 121 (2.45)
Ghana 40.4 108 (2.51)
Kenya 40.7 122 (2.43)
South Africa 384.3 23 (3.67)
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 According to Hoyle and Knowles (1998)
the nexus between transport and
development in Africa as shown in the
Taaffe, Morrill and Gould Model, 1963
link political , economic and transport
development in Ghana and Nigeria, pre-
and post colonial period, are rooted both
physically and historically, in seaports.
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 The bottom line as regards the
interrelationship between transport
and development, according to Taaffe,
Morrill and Gould (1963) as stated by
Hoyle and Knowles (1998) is that
“the intimate interrelationships
between transport and development
provide an essential underpinning”.

 Evidence from literature has shown that
inasmuch as transport and logistics facilitate
production, trade and commerce; it at the same
time impact positively on the socio-economic
development of any geographic areas both
directly and indirectly.
 For, as much as production continues more
and more people will be engaged thus
minimized the poverty level among the people
across board.
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DrAminuM.Yusuf,FCILT.PresentedatCILTInternationalConference,Maritius,
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 Also, a well developed integrated transport
and logistics system will not only facilitate
trade, it guarantees employment as well as
improve quality of life of the people
through steady flow of cash to the people.
 It is on this premise, African countries are
encouraged to prioritize the development
of integrated physical and “soft” transport
and logistics infrastructure across the
continent.

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Again, report by OECD highlighted that transport and
logistics engender development, because they:
-Facilitate International trade and consequent economic
growth and poverty alleviation.
-Enhance trade liberalization which reduces poverty,
particularly if the right complementary policies are put
in place;
-Promote economic and social development through
increased productivity and decreased poverty;
-Enabled a complex network of producers and
assemblers in a different country.

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-Ensure effective participation in agrifood
value chains,.
-Guarantee transferability and affordability of
socially important goods, such as basic
foodstuffs,
-Create access for producers, including
agricultural smallholders, by bringing them
closer to local and regional markets.
-Make it possible for farmers to access entirely
new markets, either in different regions, or,
potentially, internationally.

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- Allows countries that are geographically
isolated—including landlocked countries and
Small Island developing states— to link with
world markets.
-Key to the achievement of important social
development goals, such as the distribution of
vaccines and;
-Proffer a veritable source of direct and
indirect source of employment.

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 But, the great challenges of poor connectivity of
network of infrastructure, and deficient logistics
processes, especially at most sea and airports,
have not allowed Africa to harness its potential
towards socio-economic development;
 The continent therefore needs better transport
infrastructure, more connectivity across borders
and an improved business environment to reach
its potential

Private sector development in Brazil
 Two private sector companies,APM
Terminals andTerminal Investment Limited,
have together invested over USD 1 billion in a
new container terminal at the Port of Santos.
 It is expected to increase capacity by up to
40% and productivity by up to 10%.
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Case of Indonesia
 Shortly after publication of the 2007 LPI
report, government officials launched a wide-
reaching public- private dialogue on transport
and logistics issues in the country.
 This process led to the preparation of an
action plan focusing on trade costs in its
major ports, and the particular challenges
faced by the country.

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 The government took a number of steps to
improve port performance, such as offering
24-hour service throughout the week.
 Although a number of issues still remain to
be resolved, these initial reforms are
perhaps starting to bear fruit: the country’s
LPI rank increased from 75th to 59th
between the 2010 and 2012 reports.

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Automated System for Customs
Data (ASYCUDA)
 In partnership with bilateral
donors and multilateral
organizations—such as UNCTAD,
which developed the Automated
System for Customs Data
(ASYCUDA)

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World Custom’s Organization Intervention
 WCO’s approach in East and Southern Africa,
under a project financed by the Finnish
government.
 The overall objectives of the project is to have:
- customs administrations in the region
efficiently managed,
- good governance;
- modern working methods,
- provide smooth trade facilitation and;
- strict law enforcement.

 One of the most important factors in Africa’s future
development will be increasing cross-border trade,
both within Africa and with the rest of the world.
 That means solid road and rail networks that span
regions, and the continent.
 There are already a number of trans-African
highways, and several, like the Lagos-Abidjan
highway through West Africa, already include
expansion plans.
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 However, for transport to make contributions to
sustainable development several issues needed to
be addressed, namely:
-Political priority/ Will,
-Redirecting investment,
-Government/ private sector/ civil society
partnerships,
-Capacity building and knowledge, and
technology exchange, and
- Coordination action at all levels (city-
national-regional-global)

 By contrast, physical infrastructure such as
roads, rail links, ports, and air ports remain in
serious need of upgrading and maintenance in
many Africa countries.
 The private sector is an important source of
investment to bridge the Africa infrastructural
gap.
 However, authorities at regional and continental
levels need to provide this private sector the
enabling operating environment that guarantees
returns on investment.
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 Therefore appropriate regulatory regime that
will encourage private investment in rail, road,
inland waterways, ports and airport
infrastructure should be created, such that a
stable and consistency in development pattern
on the continent can be realized soon.

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Thank you for listening

Why do Transport and Logistics Matter for Development in Africa?

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