Trains Imperative for African Development

African conditions are perfectly suited to rail transport solutions, due to long distances interspersed with rich mineral deposits and dense population centres. The fact that our rail infrastructure is somewhat lacking is testament to past policy and implementation failures, but rail still offers vast opportunities for our continent.

The question is how to unlock these potential benefits for the good of our people without the process becoming derailed by the inefficiencies that have plagued earlier developments. “The answer lies in developing policy and finance solutions that encourage all stakeholders to make the system work,” says Andiswa Dlokolo of Gibb.

Poor infrastructure
In general, Africa’s rail infrastructure is poor, a view echoed by the African Development Bank’s 2015 report Rail Infrastructure in Africa: Financing Development Options. However, as that report also found, there remains a crucial role for rail to play in the sustainable development of the continent.
“Personal experience in West Africa has born this out. There are policy moves to reinvigorate the region’s infrastructure, to return national lines to service and to build regional integration between the Economic Community of West African States (Ecowas) countries through a coastal rail link.”

The existing state of rail is mixed. However, the objective potential for rail to assist in the African revival cannot be denied.

In South Africa, there has been an element of policy inertia, which has slowed down planning momentum, but also astonishing innovations in public-private partnerships and network design that led to the great success of the Gautrain commuter system.

Across Africa, the most successful design and funding models are those tailored for their own particular purpose.

Funding issues
Funding might come from state, public-private or foreign investors. In some cases, government will substantially contribute to the infrastructure side of capital funding, while private investors will fund the operations and the rolling stock.

This plays to the respective strengths of what government and the private sector do best and allows the two to build financing models around these competences. The funding may come from debt or equity structuring, but it is crucial to the viability of the projects.

“It’s interesting that in many projects across the continent, the determining factor in who wins a major rail contract will be which consortium can secure the best interest rate on their debt. This is where Chinese groups can have the advantage, with their banking and engineering firms all aligned to an overarching state policy,” adds Andiswa.

“This policy coherence holds lessons for national governments across Africa. If China can apply its vision across the planet in service of its national goals, our governments should be able to build regional partnerships that serve our passenger and freight needs more effectively, at greater scale and more sustainably.”

Sustainability is one of rail’s defining advantages. It has a fraction of the carbon footprint of road transport, and large projects allow for training and upliftment of large numbers of young professionals.

Projects on the table
Ambitious rail projects are on the table such as the Trans-Africa railway from Senegal to Djibouti. The North-South Rail Corridor from Durban to Zambia link is another. Whether these make the transition from planning to implementation is the province of national policy.

Similarly, where there is a business case for high-capacity freight corridors, the demand for rail solutions will increase. This will provide the motive to link landlocked African countries to the coast and to other markets.
“Rail in Africa has a future. There are obstacles that need to be overcome, and several countries need to be more effective, but there is likely to be demand for rail solutions that are fit for purpose, particularly in urban and inter-city transport and along established trade corridors,” Andiswa concludes.

Andiswa Dlokolo
Tel: (011) 519 4600