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24 June, 2021updated 29 Oct 2021 12:42

Will Africa’s road to prosperity be blocked by environmental concerns?

Africa's insufficient road and rail network is delaying the continent's development, but efforts to resolve the situation are being held back by worries about environmental damage.

By Jason Mitchell

kenya-africa-road

Construction of Kenya’s Nairobi Expressway has been undertaken by the China Road and Bridge Corporation, one of many China-funded infrastructure projects in Africa. (Photo by Simon Maina/AFP via Getty Images)

Africa needs roads. This much is apparent to anyone who has attempted to travel across the continent, be it between neighbouring countries or on a journey more ambitious. The African Continental Free Trade Area (AfCFTA) – a single market that covers 54 of Africa’s 55 countries – is expected to give a huge boost to highway and railway building that would improve intercontinental trade. However, environmentalists are vehemently opposed to plans to construct a Trans-African Highway that would criss-cross through rainforests and savannah land.

Founded in 2018 and with a secretariat based in Accra, the capital of Ghana, the AfCFTA started trading on 1 January 2021. It is the world’s biggest free trade area measured by the number of countries participating (54 countries have signed the agreement out of 55 on the continent, the exception being Eritrea). By March this year, 36 members had ratified it and undertaken the legal obligations for market opening and reducing barriers to trade.

How the ACFTA could transform Africa

If the agreement is implemented effectively, it has the potential to lift 100 million Africans out of poverty – including 30 million out of extreme poverty – by the year 2035, according to the World Bank. Only 16.6% of all Africa’s commerce at the moment is intra-African trade, while the equivalent figure is East Asia is between 35% and 40%. Africans trade a great deal more with people from outside the region than they do among themselves. The AfCFTA has the potential to double intra-African trade by 2035, according to its own estimates.

I believe the AfCFTA will give a huge stimulus to infrastructure development on the continent. Jon Foster-Pedley, Henley Business School Africa

However, one of the biggest obstacles to realising the agreement’s full economic potential is Africa’s poor road and railway infrastructure. Better transport infrastructure that makes local, national and regional journeys easier is vital for fostering trade across the continent. It is also critical for enhancing the connectivity of many landlocked African countries to the sea and for ensuring that natural minerals can be brought from distant mines to river and sea ports.

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Better transport links can also improve productivity, reducing Africa’s prohibitively high transport and logistics costs, and in turn enhance the competitiveness of African companies. This will be essential for their integration into global value chains, which could also play an important role in the continent’s economic transformation. The roads and railways would help to create major economic and development corridors.

Africa’s roads to nowhere

Roads are the predominant mode of transport in Africa – carrying at least 80% of goods and 90% of passengers, according to the African Development Bank. No major trunk roads exist that link West Africa to central or southern Africa, and railways are concentrated in the southern Africa region. It is a lot easier – and cheaper – to transport goods from Lagos in Nigeria to Mombasa in Kenya by ship than by road. It means that West Africa is developing economically in isolation from southern and central Africa.

Across African countries, there is an average of 204km of roads per 1,000km2, with only one-quarter paved, according to the World Bank. This lags far behind the global average of 944km per 1,000km2, with more than half paved. As well as the small number of existing major regional trunk roads linking deep sea ports to economic hinterlands –­ which amounts to no more than 10,000km – between 60,000km and 100,000km of new roads are required to provide intracontinental connectivity, according to the World Bank. Only 34% of Africa’s rural population lives within two kilometres of an all-season road, it says.

In 2018, the African Development Bank estimated that the continent’s infrastructure needs – including power and water systems as well as new roads and railways – amounted to between $130bn and $170bn a year, with a financing gap in the range of $67.6bn to $107.5bn. The Covid-19 pandemic is likely to have reduced infrastructure spending massively – African government revenues have collapsed and institutions have become far more concerned about day-to-day spending than fixed investment. It seems likely that the financing gap will have mushroomed, creating enormous opportunities for private sector investors.

KPMG estimates that the cost of transportation in Africa is on average 50–175% higher than other parts of the world as a result of poor infrastructure. Bureaucracy is also proving to be an obstacle to greater trade. The OECD says transport companies in some African countries have to handle about 1,600 documents, including permits and licences, just to have a single truck cross a border.

“I believe the AfCFTA will give a huge stimulus to infrastructure development on the continent,” says Jon Foster-Pedley, dean of the Henley Business School Africa. “Of course, there are many obstacles to improved infrastructure investment, but eventually it will happen. Often in Africa it is a case of three steps forward, two steps back.”

Africa could have $29trn economy by 2050

As well as the implementation of the AfCFTA, there are other reasons – mostly related to demographics – to think Africa will become a lot better connected in terms of new roads and railways. According to UN forecasts, the continent is expected to nearly double its population from 1.2 billion to almost 2.4 billion inhabitants by 2050, at a time when the planet’s population will rise from 7.7 billion to 9.7 billion. Africa’s share of the world’s population will jump from approximately 16% to about 25%.

There is no point in developing intra-country infrastructure if the flow of traffic and goods within a country is not smooth. Isaac Matshego, Nedbank

By some predictions, the continent’s population will continue to grow to reach four times its current size within the next 100 years. Furthermore, by 2050, sub-Saharan Africa’s young population – those aged between zero and 24-years-old – will jump by almost 50% to 945 million, from 628 million in 2017, according to the Bill & Melinda Gates Foundation. The continent will have the largest number of young people globally, making up almost twice the young population of South Asia and South East Asia, East Asia and Oceania. By 2050, Africa’s youth will be ten times the size of the youth population of the EU.

The World Bank believes that urbanisation will be “the single most important transformation that the African continent will undergo this century”, with more than half of the population set to live in cities by 2040. By the end of the century, none of the world’s largest 20 cities will be in China, Europe or the Americas. Africa, meanwhile, will host 13 out of the biggest 20, including the top three: Kinshasa (with 35 million people), Lagos (32 million) and Cairo (24 million). The region will have nine ‘megacities’ of more than ten million people.

Africa already has a population of 350 million middle-class people – comparable with China’s 400 million – according to the African Development Bank. As this population keeps growing, consumer spending is projected to rise from $680bn in 2008 to $2.2trn by 2030. The Covid-19 pandemic is also leading to a reconfiguration of global value chains and the growing importance of regional value chains will open new opportunities for African countries.

One investment bank, Renaissance Capital, has estimated that Africa’s GDP could jump more than tenfold to $29trn by 2050 from about $2.5trn today. To put that in perspective, the US has a $22.6trn economy in 2021.

During the next 30 years, Africa will become a lot more significant globally because of the comparative size of its overall population, its number of young people, the quantity of megacities and the size of its marketplace. Multinational companies are already eyeing up the opportunities and deciding to improve their presence on the continent. However, the region will require a network of highways and railways to connect the megacities and the various markets.

Africa has four major urban hubs that attract a high proportion of the region’s foreign direct investment: Cairo, Lagos, Nairobi and Johannesburg, according to the UN. Yet, road and rail connections between these hubs are sorely lacking.

African countries do not invest enough in infrastructure

“Even before the AfCFTA was implemented, the continent had to massively ramp up its physical infrastructure spending,” says Isaac Matshego, an economist at Nedbank, a South African banking group. “African countries really are not investing enough in infrastructure to boost their long-term productive capacity. Countries must focus on getting their domestic infrastructure right first. There is no point in developing intra-country infrastructure if the flow of traffic and goods within a country is not smooth.”

He adds that, according to his own estimates, the average fixed capital spending across African countries as a proportion of GDP is under 10% a year while in Asia it is up to 30% and, at a minimum, 20%.

For decades, the UN Economic Commission for Africa, an economic research organisation, has been pushing the idea of a network of nine highways criss-crossing the continent – known as the Trans-African Highway – covering a total distance of 60,000km. It includes highways of 8,600km in length between Cairo and Dakar in Senegal, 8,800km between Cairo and Cape Town, 6,200km between Lagos and Mombasa, and 4,700km between Dakar and Lagos. However, by 2017, only one had been largely completed: the Trans-Sahelian Highway, which runs 4,500km between Dakar and N’Djamena in Chad.

Most of the other segments of the network are only half-finished and countries are working on them section by section. The Africa Development Bank, one of the project’s financial backers, cites conflict and climatic conditions as reasons for the slow progress, especially in countries such as Angola and the Democratic Republic of the Congo. Some highway sections that had been built lie damaged as a result.

The environmental impact of Africa's highway network

New highways and railways in Africa are a highly controversial matter. Some of the highways have a clear economic benefit and should help to drag hundreds of thousands of people out of poverty, but environmentalists worry about the impact on natural habitats. In 2015, environmental researchers from James Cook University in Cairns, Australia, studied 33 road projects spanning 53,000km in Africa. At the time, ten of the road corridors were already being built, whereas 23 were at the planning stage. However, only five of the projects passed the researchers' criteria of combining a low environmental value with high agricultural potential.

No one disputes its need for food and economic development, but these corridors need to be built without creating environmental crises. William Laurance, James Cook University

“Africa is undergoing the most dramatic era of development it has ever experienced,” said Professor William Laurance, the study’s lead author. “No one disputes its need for food and economic development, but these corridors need to be built without creating environmental crises. It is the indirect effects – a panoply of evils, from hunting to illegal mining – that come in the wake of a completed project. That is what we worry about.”

He is vehemently opposed to a new highway connecting West and East Africa, for example. "It would destroy a large part of the Congo basin," he said. "It is a tropical rainforest with a a very high level of biodiversity. These roads are easily washed out and large chunks must be replaced every five to ten years. I believe the new highways also have a highly inequitable impact: land developers and government ministers benefit the most. They can pilfer off a lot of the economic benefits, but there is no guarantee the people will be better off."

The Emerging Africa Infrastructure Fund (EAIF) mobilises capital from public and private sources to lend to companies creating, improving or expanding infrastructure in sub-Saharan Africa. "We look very closely at the environmental and social impact of any project that we help to finance," says Roland Janssens, a director at the EAIF. "Definitely some projects must be rerouted if they run through a national park, for example. If the project goes around the national park, we may look at it. Of course, individual countries have their own environmental standards that apply there."

Some experts are more optimistic that the economic and social benefits from huge new infrastructure projects can be realised without too much environmental impact.

"The continent is in urgent need of new infrastructure," says Amadou Wadda, senior director, project development and technical solutions, at Africa Finance Corporation, a pan-African multilateral development financial institution. "However, environmental impact studies can really slow down the implementation of projects. It takes at least one year to see the impact of a new road, for example. Its impact during the dry season and the wet season is looked at. A way must be found to shorten the length of time environmental impact studies take. Of course, proper environmental management measures must be taken. If trees are chopped down, they must be offset by new trees being planted."

China looks to dominate African infrastructure

From a Western perspective, one of the most concerning aspects of physical infrastructure development in Africa is the role of China. For almost a decade, Xi Jinping, the Chinese president, has been pushing the Belt and Road Initiative to link China by sea and land through an infrastructure network modelled on the old Silk Road that took in South East and central Asia, the Middle East, Europe and Africa. Under the plan, Beijing has pledged $126bn to African countries for new ports, pipelines, roads, railways and power plants. These will be built and funded by Chinese companies and lenders.

Big opportunities exist for the private sector and foreign investors to become involved in [the railway] industry under Senegal's public-private partnership framework. Victoria Billing, British Ambassador to Senegal

Inaugurated in 2017, the $3.2bn standard gauge railway connecting Mombasa to Nairobi – the biggest investment in Kenya since its independence – is a flagship Belt and Road project in East Africa. It forms part of a massive project, the $13.8bn East African Rail Master Plan, a proposal to rejuvenate lines among a number of countries including Kenya, Uganda, Rwanda, South Sudan and Ethiopia.

The $4.2bn electric railway from Addis Ababa to Djibouti – where China established its first overseas naval base and has stakes in a strategic deepwater port – is another huge project under the Belt and Road Initiative. It is about 70% financed by China’s Exim Bank and was built by China Railway Group and China Civil Engineering Construction. It is the first electric train service on the continent and is expected to make a dramatic impact on trade. Each train can carry loads equal to 200 trucks, and it does the 750km route in 12 hours instead of the three days that it takes by road.

The Kenyan government is also pushing a number of other large initiatives. The Lamu Port-South Sudan-Ethiopia-Transport Corridor Programme is East Africa's largest and most ambitious infrastructure project, bringing together Kenya, Ethiopia and South Sudan. This megaproject consists of seven key infrastructure projects, including ports, pipelines, roads and railways. Its total cost is estimated at more than $25bn; the Kenyan government plans to pick up the tab for the project but is paying for it in phases.

Kenya is also building a 969km standard gauge railway from Mombasa to Malaba on the country's western border with Uganda at a cost of $9.9bn.

However, economists say that Kenya's massive infrastructure spending spree has contributed to a steep rise in government debt and that governments must be careful not to become overly indebted when they embark on huge infrastructure projects. The country's total public debt stands at about 70% of GDP, up from about 45% when President Uhuru Kenyatta assumed office in 2013.

The 4,010km Trans–West African Coastal Highway is another important intra-country road project linking 12 West African coastal nations from Mauritania in the north-west of the region to Nigeria in the east, with feeder roads already existing to two landlocked countries, Mali and Burkina Faso. The corridor between Dakar and Lagos follows mostly along the coastal line and it connects the capitals of the countries involved. The project is being pushed by the Economic Community of West African States, a regional political and economic union of 15 countries located in West Africa.

"In West Africa, there is a strong need for infrastructure across borders, that connects ports with landlocked countries, for example," says Victoria Billing, British Ambassador to Senegal. "A big proportion of the freight on Senegalese roads is destined for Mali, for instance. It is very important that that country has a good road link to the new port that is planned close to Dakar. Senegal itself is quite a flat country and is ideally suited to railway development. The government already has plans in place to redevelop its railway network. Big opportunities exist for the private sector and foreign investors to become involved in that industry under the country's public-private partnership framework."

Sub-Saharan Africa requires a new road and railway network if the AfCFTA is ever going to fulfil its economic potential. The nine road connections that make up the Trans-African Highway are vital if the region is to have economic growth of more than 6%, the level that is needed to lift hundreds of thousands of people out of poverty. However, it is essential that decision makers take into account the environmental impact of new projects and ensure that new roads and railways are routed around significant natural habitats. Somehow Africa must have economic progress but not destroy what makes the continent special.

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