How Rail Can Drive Africa’s Economic Development

Rail Networks​

Africa’s rail network, including connecting railways, are currently outdated​

• As is well documented, Africa’s rail infrastructure, network and rolling stock requires significant investment to bring it up to world standards and to fulfil its potential​
• Africa needs significant extension of its network, connectivity and capacity, modernization, rehabilitation, improved maintenance, modern communications, better supply and stocks of spare parts and more rolling stock, maintenance vehicles and equipment​
• Further, interoperability is impeded both by the differing gauges in use and the incidence of many single track non-electrified networks, with the latter requiring diesel locomotives​

AfCFTA Incentive​

Ongoing progress in facilitating intra-Africa trade​​

• With the African Continental Free Trade Area (“AfCFTA”) progressively removing tariffs and addressing non-tariff trade barriers, the United Nation’s Economic Commission for Africa predicts that it will increase intra-African trade by about 40%. This would also significantly increase traffic flows and transport equipment needs across road, rail, shipping and aviation​
• Africa’s population – and therefore consumer demand – is rapidly growing, while the gathering momentum of urbanization continues to accelerate, as does the demand for industrial parks, special economic zones and ports​
• These structural changes need to be accompanied by an ecosystem development approach. To realize maximum potential, they also need the social and economic infrastructure​

Identifying the rail projects and requirements​

Pursuing the correct rail and infrastructure projects

Projects and Requirements​

• Critical hubs must be developed to consolidate freight. They need to be conveniently located for customers (not just the railway) and the overall transport service needs to be tailored to the requirements of individual customers or groups of customers​
• Many railways in the SSA region are locating container hubs in inland cities. The railway typically moves the containers between the hub and a port, and the hub may also be a dry port offering clearance services to customers​
• Furthermore, the renaissance and transformation of the SSA region’s railways requires the implementation of good governance, adequate funding and building traffic to enable it to contribute to economic growth in a climate-friendly way and to enhance transport to improve lives​

Gaining market share from road freight​

Consolidating market share within the wider transportation industry

Market Share

• Currently the majority of on-land African freight transport is carried by road, emphasising the potential for rail, especially for long distance deliveries​
• Over the 14-year period 2006 to 2019, annual African rail freight remained in the range of 131.08 to 156.97 billion tkm​
• To redress the balance and attract greater market share – when the rail network and capacity is in place – Africa’s railways need to compete on transport cost (including last mile), delivery time, service frequency and reliability. With sufficient investment this can be achieved
• Railways have high fixed costs, particularly in respect of infrastructure, but comparatively low variable costs, thus positioning the sector favourably for dense traffic flows