Trading goods in Africa is relatively costly because many parts of the continent have a poor transport infrastructure. According to estimates of the Infrastructure Consortium of Africa, the cost of goods traded in Africa is 30-40% higher because of the shortcomings in transport infrastructure. Infrastructure projects are needed improve trade conditions.
Andre Pottas, advisory leader for sub-Saharan Africa at Deloitte summarizes the problem and its effect as follows: “The world is eager to do business with Africa, but finds it difficult to access African markets, especially in the interior, due to poor infrastructure.”
There are some substantial projects underway that may lead to improvement. China has agreed to fund the construction of a new East African railway to connect Mombasa and Lamu with the wider region. China Civil Engineering Construction Corporation signed a $13.1bn contract to develop railways in Nigeria.
Japan has also signed an agreement to provide $232m out of the $300m needed to redevelop the Port of Nacala in Mozambique’s Nampula Province, where the Japanese International Cooperation Agency is particularly active. The Japanese are already financing the construction of the second container terminal at Mombasa, as the Japanese government seeks to provide some competition to China’s growing influence in Africa.
Further reading on africanbusinessmagazine.com