Policymakers are no exception, for whom the pandemics' uncontrollable nature has placed them in a difficult situation; the choice between the health of the nation and the economy. The impact of the lockdown has affected the supply and demand on a global scale not seen in our lifetime resulting in our first global depression. The effect will inevitably lead to an increase in inequalities and poverty, and the world may record its first increase in poverty since 1998.
Transportation and development
With a third of its population living in landlocked countries, Sub Saharan Africa has one of the lowest road densities in the world. And villages that lack direct access to main roads suffer from market exclusion. They have fewer incentives to enable them produce or even trade surplus goods. Escaping poverty in such a situation becomes nearly impossible.
Insufficient infrastructure is holding the continent back. Railway density on the continent is unimpressive: 2.7 km per 1000km2 compared to Europe’s 400 km per 1000km2. And the African Development Bank reports that a shortage of roads, water and electricity reduces Sub Saharan Africa’s economic output by 40 percent.
High transit tariffs due to inadequate infrastructure leads to an escalation of export costs, and reduce their attractiveness on the global market. Imported goods are a luxury very few local consumers can afford. Poor roads, inadequate rails and ineffecient harbours continue to drive up the prices of locally produced goods.
The cost of moving Africa’s imports inland is twice as much as that of other low income countries. The 2005 commission on Africa argued that transport costs adds 80 percent on the price of Ugandan clothing.
But transport infrastructure goes beyond trade. A village in a remote region of Ethiopia, for example, may be better off with a proper all-season road than a school funded by an NGO. The reason being that, if local farmers can transport their products to the market, they would be able to afford to put their wards in schools that work.
So how are African governments and the aid community utilising the scarce amount of capital they possess? In spite of the western rhetoric of a new colonial power in Africa, the input of low-cost Chinese companies has proven that roads, ports and railways can be afforded even by poor countries. Countries like Ethiopia have, in recent years, found it easier to contract Chinese companies for big infrastructure projects including new road networks, urban railway projects, dams and river crossings.
Correcting a wrong
The African Development Bank believes that Africa can become a middle income continent within a decade if it spends $90bn a year on infrastructure. It is only 5 percent of its GDP but double the current spending level on this sector. Although the resources exist, there is a lack of political will.
Amid arguments that local politicians spend their scarce budget funding on prestigious projects in the capital cities or by staffing the public sector with supporters, experts have indicated that conditions imposed by the World Bank and the IMF have also contributed in low state investment in the infrastructure sector. The United Nations Conference on Trade and Development (UNCTD) has also reported that African investment in transport infrastructure has been squeezed in the past 20 years as a result of sharp cuts in public spending under structural adjustment programmes.
Africa’s poor history of international co-operation in road construction cannot be separated from colonial powers, competing superpowers and regional powers who have failed to encourage road links between their respective spheres of influence. This is a wrong regional blocs can correct, by filling in the gap, coordinating plans and actions for development projects as their influence grows. One such projects is the development of the Trans-African Highway network to link the continent’s countries and regions, both vertically and horizontally, to promote intra-state trade and facilitate low cost transportation for African exports.
In recent years, West African countries especially have begun exploiting more and more minerals such as iron, ore, manganese and coal to meet growing demands. But inadequate railway networks have acted as a brake on the booming commodities sector.
Despite the dire need of a rail network in Africa, railway infrastructure is at a crossroads, with private companies failing to invest in the sector. Governments are therefore left with the burden of funding both infrastructure development and improvement in a sector that remains vital to the continent and thus should be viewed as a necessary investment opportunity.
Improved transportation is certain to ensure the continent’s economic integration. A developed transport sector will not only drive African economies but also improve education, health care and technology. A great example is East Asia, which experienced an economic boom as a result of state policies that supported development by virtue of improvements in the transport sector, the active support of local industry and efforts to improve both skilled and non-skilled labour.