The AfCFTA will increase transport demand by 50%

by MMC
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The transport sector is expected to be one of the big winners from the implementation of the African Continental Free Trade Area. Busani Bafana highlights the findings of a report by the United Nations Economic Commission for Africa.

The 2030 Agenda for Sustainable Development has integrated sustainable transport into many SDGs and targets, particularly those related to food security, health, energy, economic growth, infrastructure, as well as ‘to cities and human settlements.

Experts agree that Africa needs a smooth and efficient transport sector to achieve the trade boom envisaged with the implementation of the African Continental Free Trade Area (AfCFTA); in other words, transportation stimulates trade.

Estimates show that the African Continental Free Trade Area (AfCFTA) will increase demand for road, rail, maritime and air transport by 50%. This is a huge undertaking, requiring a similar deployment of infrastructure necessary for Africa to transport massive quantities of goods and support intra-African exchange of services and movement of people.

The AfCFTA is a free trade zone launched in 2019 by African countries to create a single continental market with a population of approximately 1.3 billion and a combined GDP of approximately $3.4 billion. Once fully realized, the AfCFTA, whose mandate is to eliminate trade barriers, will be the world’s largest free trade zone, uniting all 55 countries on the continent as member states.

In absolute terms, more than 25% of gains from intra-African trade in services would go to transport alone; and nearly 40% of the increase in service production in Africa would concern transport.

Sharp increase in freight demand

The effect of full implementation of the AfCFTA on transport in the movement of goods and services is presented in a report by the United Nations Economic Commission for Africa (ECA): Implications of the African Continental Free Trade Area on the demand for transport infrastructure and services. The report indicates that integrated trade and transport planning will bring more benefits to AfCFTA signatories due to the growing demand for different modes of transport.

“We assessed the investment opportunities the AfCFTA offers to the transport sector and the infrastructure investments required for different transport modes,” writes ECA infrastructure expert and lead author Robert Lisinge.

“(The study) also forecasts the demand for equipment for different modes of transport – trucks for roads, rolling stock for railways, aircraft for air transport and ships for maritime transport – as a result of the AfCFTA , coming into force in 2021,” he adds.

Lisinge says the introduction of the AfCFTA will result in an overall increase in intra-African freight demand of around 28%, compared to a scenario without the AfCFTA.

“Our analysis also highlights an increase in demand for all modes of transport and the vehicles that serve them.

“Currently, the demand for intra-African freight transport is strongly oriented towards road transport, with almost no share for rail transport. We know that this distribution on the ground of transport can improve, thanks to efforts to improve African transport policies to expand the railway network, combined with trade policies to implement the AfCFTA,” says Lisinge.

By 2030, once the AfCFTA is fully implemented and the continent’s plans for improved freight infrastructure and services are realized, the share of rail transport will increase from 0.3% to around 7%. %, the report said, noting an expected decrease in the share of freight transport. by the road.

Boom in transport infrastructure and equipment

The AfCFTA offers enormous investment opportunities to the transport sector. According to Lisinge, the AfCFTA projects a need for 1,844,000 trucks for bulk goods and 248,000 trucks for containerized goods by 2030. This figure increases to 1,945,000 and 268,000 trucks respectively if the projects planned infrastructure are also implemented.

The railcar fleet is expected to increase to 132,857 units for bulk cargo and 36,482 units for containerized cargo, from a low starting point in 2019; while the ship fleet is expected to increase by 188% for bulk carriers and 180% for container ships, compared to the 2019 fleet; and the aircraft fleet is expected to increase by 141% compared to the 2019 fleet.

The largest demand for trucks to support the AfCFTA is in West Africa, followed by demand from West to Southern Africa and from Southern Africa to West Africa, forecast at 9 .9%.

The increase in inter-African demand due to the implementation of the AfCFTA also requires expanding national vehicle fleets in order to meet the increase in internal trade.

Saving the SDGs in Africa – learn more

The United Nations Sustainable Development Goals (SDGs) are a comprehensive set of global goals aimed at ending poverty, protecting our planet and improving living conditions for the world’s people. To assess where Africa stands in achieving these crucial goals, we invited Antonio Pedro, Acting Executive Secretary of the United Nations Economic Commission for Africa, to guest edit a special issue of the magazine New African timed to coincide with the 2023 United Nations General Assembly. To access more articles Click here.

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