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Africa Needs Transportation Capacity Now, Experts Say

By Charles W. Corey  

No matter how good your product is, if you cannot transport it locally or internationally to market in a timely fashion, it will not sell. That is why improved transportation capacity and infrastructure are so important to Africa's long-term economic growth and development.

A group of Africa transportation and logistics specialists explored these ideas at the 2008 U.S.-Africa Agribusiness Forum, held recently in Chicago and hosted by the Corporate Council on Africa.

John M. Roller, an executive and partner with Africa Transportation and Logistics; Kevin Boyd, director of the Office of Africa at the U.S. Department of Commerce; and Carl Shoup, business liaison manager for KJAER Group, a large automotive distributor in Africa, told the audience that improving the transportation infrastructure is crucial to boosting agribusiness in Africa.

In Africa, "transportation capacity-building needs to happen now" and "can happen now," Roller said.

"It is much less expensive and has an immediate impact and needs to happen up front, before infrastructure development. It will increase competition, lower prices, and empower local small and medium-sized enterprises to participate," he said.

Roller said transportation costs to, from and among African nations are 2.5 times higher than anywhere else on the globe, with transit times running two to four times higher than anywhere else. This results in "lost dollars" and a lower rate of economic growth for Africans. He said Africa lacks three things: infrastructure, competition and capacity.

In many parts of Africa, he said, roads and ports are nonexistent, railroads dilapidated, waterways in need of dredging and power unpredictable.

He termed Africa's infrastructure needs "almost overwhelming" and said solutions are extraordinarily long in coming. "This is not going to be an overnight fix by any means, but requires complicated multilateral agreements between the governments" and private sector support, he said. "Can Africa wait?" he asked rhetorically.

"Without market access, there can be no success," Roller said. He cited Gabon, where oil from the interior can be transported to shipment points only by barge over inland waterways. There is little capacity on those barges to serve other businesses in Gabon, he said. He also cited Congo-Brazzaville, where there are only six locomotives to serve the entire country, along with a few dilapidated rail wagons.

He said that in many African ports, if two ships pull in at the same time, one ship must wait - at great cost - because all trucks in the port are transporting goods from the first ship.

Roller's company, which supports locally owned or African small and medium-size companies in a franchise model, said most transportation companies servicing Africa are European-owned and not open to the African entrepreneur.

Kevin Boyd, who directs the Africa office at the U.S. Department of Commerce, provided some perspective. He cited a recently published World Bank study that ranks 150 countries worldwide on logistics, customs and transportation procedures.

Only one African country, he said, finished in the top 50 performers, but more than half of the bottom 50 countries came from Africa. "Clearly, transportation is quite a significant challenge on the continent," Boyd said.

He cited another study, which calculates that a day lost in getting a product to market equals a 1 percent tariff. "For those producers counting on a tariff preference [and thus a cost advantage], if you lose three to five days in transit at some point ... your cost advantage has just gone away."

Boyd said what is important is cost, time and, most of all, predictability.

"You may take a longer time to hit some place, but as long as you can hit your target, companies can plan their supply chains accordingly," he said.

If a company is used to receiving a product in five days and suddenly that moves to 12, he said, the seller probably will lose that customer due to missing deadlines.

Carl Shoup, who represented KJAER Group, which has distributed automobiles across Africa for more than 40 years, said his company faces logistical and transportation headaches in shipping vehicles into Africa, particularly into its many emergency zones.

Shoup, who lived in Africa for 18 years, said it often is considered normal for an African trucker to be stuck seven days at a border crossing while his documentation is being processed.

Despite such delays, he said that he remains optimistic. He acknowledged that Africa gradually is beginning to reduce transportation barriers. As a result, he said, more and more vehicles are being shipped to Africa. Some 3,000 to 4,000 used cars are shipped each month from Baltimore for unloading in Cotonou, Benin, he said, with many of them bound for Nigeria.

"What you find is that the small farmer and businessman are getting mobile," wiring money to the United States to pay for a new or used vehicle, he said. There are an additional 5,000 cars coming in monthly to Zambia, Zimbabwe and Malawi from Japan, he added.

Shoup credited Africans with "seeking solutions on their own as individuals" rather than depending on the government to solve their problems - which, in terms of transportation, logistics and infrastructure, can be daunting.

Source: U.S. Department of State

judythpiazza@newsblaze.com