Southern Africa lags in logistics infrastructure development

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Magreth Nunuhe

 

Windhoek – West and East Africa are the biggest game players in the investment and construction of ports, rail, roads and bridges, while Southern and Central Africa lag behind due to a downturn in their economies and other challenges.

West Africa has the greatest investment budget of US$95.5 million in logistics infrastructure, with East Africa following close on its heels with a total investment of US$94.2 million.

This is a far cry from Southern Africa’s total budget of US$48.4 million and Central Africa’s US$4.4 million in logistics infrastructure.

These statistics provided by PricewaterhouseCoopers’ (PwC), Dr Andrew Shaw, indicate that West Africa, with an investment in rail (US$45.4 million) and ports (US$22.6 million), beats all other African regions.

There are major port expansions in Abidjan, Ivory Coast; Tema, Ghana; and Lagos-Apapa, and Onne in Nigeria.

A second container terminal is also under construction at Abidjan, while new ports are being developed at Takoradi, Ghana; and Lekki and Olokola in Nigeria.

East Africa’s investment in roads and bridges with a combined value of US$53.9 million makes it the top investor in that sector, followed by West Africa with an investment of US$27.4 million.

Southern and Central Africa’s investment in roads and bridges are only US$12.1 million and a US$3.4 million, respectively.

However, Southern Africa’s investment in rail has picked up to US$30 million to come on par with West Africa’s US$45.4 million and East Africa’s US$32.8 million.

Central Africa, on the other hand, has only invested US$3 million in rail, but it surpasses both Southern Africa (US$6.1 million) and East Africa (US$7.4 million) in ports with an investment of US$8 million. 

Central Africa’s Djibouti is constructing a new container terminal and a second terminal at Mombasa, Kenya, while terminal expansions and modernisation are underway in Dar es Salaam, Tanzania and at Doraleh, Djibouti. 

In Southern Africa, Durban’s (South Africa) port is expanding and upgrading its two piers, while Walvis Bay (Namibia) is building a new terminal. Maputo, Nacala and Matola (Mozambique) are also expanding their ports.

According to Shaw, Southern Africa’s rail projects are mainly driven by Angola, while there is very little investment in infrastructure in other parts of that region besides South Africa.

Angola has invested heavily in roads, railways and bridges and has also identified rail opportunities from Lobito in Benguela Province for cargo going to Eastern DR, which could be a game-changer for the region. 

Shaw identified Zimbabwe as another potential area in the Southern African region that can also be a game player, especially due to the elections.

“There is a lot of interest from an investment perspective (in Zimbabwe). There is an investment base from various parts of the world willing to support that base, which could enhance the region,” he added.

Another project that could also enhance the region is the extension of projects from Angola to Namibia, while the huge investments in roads and bridges in Zambia and Zimbabwe are also to benefit the region.

When it comes to economic growth in Sub-Saharan Africa, Shaw said there was a strong economic growth of a lower base in East Africa with the gross domestic product (GDP) expected to average around 5.9%, driven by Kenya, Ethiopia and Djibouti.

West Africa’s GDP is projected to rise to 3.8% in 2018, driven by Nigeria’s strong impact on the region, which contributes around 70% to the regional GDP. 

Southern Africa’s economic growth is estimated to average around 2%, as the region continues to face major headwinds, including high unemployment, weak commodity prices, fiscal strain, increasing debt and high inflation.

 

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