Build Africa and reignite the continent

(iStock)
(iStock)

Many of us still recall, with a frisson of mortification, The Economist magazine’s cover depicting Africa as the “hopeless continent”.

The defenestration of our continent was brutal – Africa was an omnishambles – with maladministration, corruption, looting and despotism ruling the roost.

Only the most hopeless pessimist, however, would abjure the sheer hope and optimism we now witness throughout our continent.

From Cape Town to Ivory Coast, the spirit of entrepreneurship is thriving, with start-ups flourishing across the continent.

This frenzy of activity will, however, amount to naught without a solid bedrock of infrastructure support.

Access to power, water, telecommunications and transport is what determines the success of business.

A continent mired in a Dickensian darkness will not beget entrepreneurs.

A compelling case for infrastructure development was highlighted by Columbia University last year. Research showed that, between 2006 and 2014, internet connectivity caused a huge jump in employment in a number of African economies, in areas with access to broadband internet infrastructure. Companies were able to set up websites to sell their goods abroad.

The study found that, once countries acquired fast internet connections, the number of new start-ups rose and companies increased their exports.

It resulted in a skilled workforce earning higher wages.

Infrastructure development is key to solving the socioeconomic problems of our continent.

Over the years, poor infrastructure has severely impacted intra-African trade – currently sitting at about 16%.

As the 2017 African Economic Outlook report pointed out, trade among African countries expanded from 10% in 2000 to about 16% in 2014.

This is a vast improvement, but compare it with trade within Europe at 60% and trade within Asia and North America, both at 40%.

The combination of years of underinvestment and exploitation has meant that African ports, roads and railways were mainly designed and built to facilitate transportation of raw materials and resources to markets outside the continent.

In addition, weak policy in sectors such as transport held back investment in African countries.

Unlocking industrial activity, intra-African trade and growing Africa’s share of global trade is crucial for the continent’s development.

Effective transport networks are a key component of the investment climate, enabling easy access to markets and reducing the costs of doing business. The efficiency of ports and logistics is particularly important for Africa’s 15 landlocked countries, whose average transport costs are nearly 50% higher than for coastal economies.

Fortunately, there is a growing movement towards regional collaboration to facilitate trade along key transport corridors.

It is vital therefore, that companies such as Transnet build relations on the continent in order to create African partnerships to deliver projects, rather than these being delivered by foreign companies.

Greater connectivity within the regional freight system is a key objective for Transnet.

As such, Transnet’s international strategy offers a compelling vision for infrastructure growth on our continent.

We are explicitly positioning ourselves as an African state-owned company with extensive experience, deep capabilities and unique expertise across the logistics supply chain.

We are actively seeking new markets through geographic expansion.

In doing so, we aim to deliver competitive, innovative, end-to-end logistics solutions by creating partnerships across our continent in order to catalyse infrastructure growth.

As an illustrative point, Transnet this week delivered to Zimbabwe rolling stock for the National Railways of Zimbabwe.

This is part of our efforts to strengthen regional integration, intra-African trade and aid in the revitalisation of the Zimbabwean railway network. This historic transaction, when completed, is estimated at a cost of just under R5 billion.

In the interim, we delivered locomotives, wagons, passenger coaches and power vans to Zimbabwe.

Infrastructure upgrades, wagon manufacturing and maintenance facilities will be revived to support a road-to-rail renaissance to promote an investment climate being created in Zimbabwe.

In Nigeria, a consortium of Transnet, PowerChina, General Electric and APM Terminals has been awarded preferred bidder status to fund, rehabilitate and operate Nigeria’s eastern and western narrow-gauge rail lines.

In Zambia, we are actively working towards the revitalisation of the country’s rail network in partnership with Zambia Railways Limited.

In order to address the country’s immediate market needs, we have proposed an interim solution whereby Transnet helps resuscitate the rail network, ramps up operations, invests in rolling stock and upgrades local skills.

These undertakings show that Transnet is bold in its thinking and brave in its actions.

Our aim is visionary: we want to be there to design ports, dredge harbours, build coaches, train our fellow Africans and revitalise rail networks.

Reigniting the African infrastructure landscape will improve intra-African trade and create a huge African market, while reducing dependence on other markets.

This could serve as a springboard for Africa’s development, lead to beneficiation and improve our continent’s manufacturing capacity.

Our vision will finally lay to rest professor Ali Mazrui’s pithy admonishment that “Africa produces what it does not consume and consumes what it does not produce.”

Only then will we fully realise Pixley ka Isaka Seme’s vision of an Africa with “her Congo and her Gambia whitened with commerce, her crowded cities sending forth the hum of business and all her sons employed in advancing the victories of peace, greater and more abiding than the spoils of war”.

Gama is CEO of Transnet.

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