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African rail overhaul could boost trade, cut costs: Report

Wednesday, 14 February 2024 04:22
African rail overhaul could boost trade, cut costs: Report

(Ecofin Agency) - In a bid to boost free trade under the implementation of the African Continental Free Trade Area (AfCFTA), several models have been proposed to revamp the railway system. These proposals aim to address existing transportation hurdles and enhance intra-African trade efficiency.

In Late December, South African trade research group Tralac issued a report proposing cheaper alternatives to rebuilding Africa’s outdated rail, potentially easing trade bottlenecks and speeding up continental trade. Instead of a costly rebuild, the group suggests gauge reconfiguration and interconnecting existing lines.

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Currently, the continent uses approximately nine different gauges. While some countries have chosen the Cape gauge of 1.067 m, which is the most common and represents 61.3% of the continental network, others use the metric gauge of 1.000 m (19.2% of the network) or the standard gauge of 1.435 m (estimated at 14.5% of the network). The report suggests using modern engineering techniques to convert railways based on models that allow for near-uniform widths, facilitating the movement of trains from one state to another.

Another issue identified that needs to be addressed is the challenges of interconnection, which result in the discontinuity and lack of meshing of several lines on the continent. Most railways, except in a few Southern and Northern African countries, are simple links penetrating inland from coastal seaports, with very little interconnection. Furthermore, 16 countries on the continent still do not have railways, according to another report by the International Union of Railways (published in 2018). The report proposes a plan to construct the missing links for better meshing to achieve a continental-type rail system.

The potential impacts of these solutions could be significant. According to estimates by AGL, cited by the African Development Bank in its report “Rail Infrastructure in Africa Financing Policy Options”, a complete reconstruction would require an investment of over $100 billion.

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Existing Network - Source: African Development Bank, 2015

These models could also reduce the time required for reconstruction, given the size of the continent. This could accelerate the implementation of the AfCFTA, which, according to official projections, will increase demand for intra-African freight by 28% over the next few years. At present, only 0.3% of total intra-African freight is carried by rail, compared with 80% by road.

With advantages such as volume optimization for freight shipments, rail transport, according to the AfDB, is proving more competitive than road transport over distances of more than 500 km. It can even replace a large fleet of trucks with a few railcars. This option, which favors a shift from road to rail, could have a major positive impact on logistical constraints such as costs per tonne-kilometer, shipment lead times, traffic congestion, road network sustainability, greenhouse gas emission reduction, and the development of efficient, high-capacity transport corridors to effectively achieve the objectives of the AfCFTA.

In addition to these technical problems, which should be largely resolved if the African Union’s Agenda 2063 is realized, many other factors are limiting the potential of the African rail system and free trade, such as network management models, domestic legal provisions such as those governing customs and immigration, among others.

Henoc Dossa 

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ECOFIN AGENCY offers a selection of articles translated from AGENCE ECOFIN. Founded in 2011, Agence Ecofin is a leader in Francophone Pan-African economic news, particularly in West and Central Africa. The agency publishes daily news on nine African economic sectors: Public Management, Finance, ICT, Agribusiness, Energy, Mining, Transport & Logistics, Communication, and Training.

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