Africa bets on roads to boost business climate

By Luke Anami and John Njiraini

Transport inefficiencies are the biggest impediment to growth in Africa, a Tripartite Conference on infrastructure heard on Tuesday.

Taking place in Nairobi, the conference heard that transport costs on the continent are prohibitively high and act to limit investment, which is key to economic growth.

"Today, it costs about $5,000 (Sh500,000) to ship a car from Abidjan to Addis Ababa—but just $1,500 (Sh150,000) to ship the same car from Japan to Abidjan," Sindiso Ngwenya, Secretary General Comesa said.

"It costs about $1000 to ship a 20 ft container from Japan to Mombasa, but it cost $5,000 (Sh500,000) to ship the same container from Mombasa to Rwanda and Burundi."

The regional economic blocs — the East African Community (EAC), Southern African Development Community (SADC), Comesa and Intergovernmental Authority on Development (IGAD) also referred to as the Tripartite Conference heard that without reliable and competitively priced freight transport systems, delivered on the foundation of sturdy infrastructure, different regions have little hope of trading their goods profitably.

Comesa hopes that with funding from investors and adequate political will from governments, the region will start making in-roads towards proper development in the very near future.

Economic growth

"If our farmers cannot transport their produce to market from isolated rural areas, they will be unable to break out of subsistence agriculture," Ngwenya added.

"If they cannot transport their children to schools and clinics, the next generation will fare no better. Efficient transport system makes markets work."

For Africa’s economic growth to take pace with its booming population, the continent needs investments of some $100 billion a year in infrastructure alone.

Private lending arm of the World Bank—IFC— has estimated that Africa invests $10 billion each year into energy but actually needs investments of $40 billion annually in this sector alone.

Only last week, the African Development Bank, the principal financier of the Thika town-Nairobi link said that it will up its financing in infrastructure in case of a recurrence of the global financial crisis.

Today, it is also funding the Athi River-Namanga-Arusha road.