Africa’s transport sector will not only strongly benefit from the African Continental Free Trade Area (AfCFTA) but it has the potential to create 160 million jobs if countries boost it.
This was noted February 7, during the fifth Africa Business Forum organized by the United Nations Economic Commission for Africa (UNECA) in hybrid format on the margins of the 35th ordinary session of the African Union Summit.
The Executive Secretary of UNECA, Vera Songwe, said: "If we were able to ensure that our transport sector was well, we could create 160 million jobs. This is how we create prosperity.”
To make things really work, she indicated, countries need railroads, airlines and shipping.
"When we look at the continent, today, we still need two million trucks if we were going to be able to generate the kind of ambition that the AfCFTA is promising. We are in a deficit of two million trucks to be able to move goods around continent.”
"This is going to cost US$ 345 billion. So, there is investment [opportunity] for the private sector. It is a no brainer that if we have that kind of investment we can get where we want to.”
Implementing AfCFTA and planned infrastructure projects would result in the need for 2,213,579 trucks, 169,339 rail wagons, 135 vessels and 243 aircraft, Songwe highlighted. The estimated cost of trucks required as a result of AfCFTA is $345 billion.
On the continent, as noted, while Europe has surpassed 17 per cent, rail currently transports just 3% of total intra-Africa freight. This, as she noted, increases to 6.8% with the implementation of AfCFTA.
"$36 billion is what is needed to boost that to 6 per cent.”
The estimated cost of equipment required by different transport modes to cope with AfCFTA is about U$411 billion. The estimated cost of aircrafts required as a result of the trade pact is $25 billion.
The estimated cost of shipping vessels required as a result of the trade deal is $4 billion.
During the forum held under the theme "Investing in multimodal transport infrastructure to optimize the benefits of the African Continental Free Trade Area: a focus on air transport and tourism,” findings of an ECA research on the implications of the AfCFTA for the transport industry with a particular focus on air transport and tourism were presented.
Also noted was that the AfCFTA requires 1,844,000 trucks for bulk cargo and 248,000 trucks for container cargo by 2030. This increases to 1,945,000 and 268,000 trucks respectively if planned infrastructure projects are also implemented.
The largest demand for trucks to support the agreement is within West Africa (39%); while demand from West to Southern Africa is 19.8% and from Southern Africa to Western Africa by 9.9%
The AU Commissioner for Infrastructure and Energy, Amani Abou-Zeid said efficient and affordable transports are key to the effective operation and success of the AfCFTA.
She said: "However, Africa still lags in the area of trade competitiveness. Transport costs in Africa are among the highest in the world and harm our continent’s productivity and competitiveness on local and international trade markets.
"High transport costs in Africa are partly due to insufficient and unreliable transport networks. On average, transport costs in Africa are 53 percent higher than in developed countries. ”
She added that the situation has also been worsened by the Covid-19 pandemic movement restrictions across borders.
"The need to boost investment in aviation became more evident in the pandemic since planes transport life-saving vaccines,” she said.
Now, she noted, 35 countries in Africa representing 91% of Africans have now joined the Single African Air Transport Market (SAATM).