Transport and logistics infrastructure

There remains a significant deficit in physical transport infrastructure (roads, rail, ports, etc.) in Africa, and this  clearly needs to be addressed. However, The World Bank’s Logistics Performance Index (LPI) illustrates that the quality of infrastructure is only one of several factors contributing to transport and logistics cost and inefficiencies. The LPI analysis indicates that the inefficiency of customs and border management, for example, is as important a factor in the relative underperformance of many African countries.

Countries, such as Morocco, that are  making substantial improvements in transport and logistics, are  the ones that have implemented long-term and comprehensive reforms and investments across the transport and logistics supply chain. While there is no “cut- and-paste” approach, case studies indicate that, as important as investment in physical infrastructure is for improving transport and logistics in most African countries, so too is related improvements in customs, border management and regional facilitation and integration.

To read more: Africa Attractiveness

Four Lessons for Transforming African Agriculture

Food processing is attractive to many governments because it is both a source of demand for agricultural products and a job creator. For export goods, downstream processing may be discouraged by US and European tariff regimes, which favor raw over processed goods. African countries can, however, counter this problem by cutting their export taxes on those goods. Côte d’Ivoire and Ghana have used this approach to increase their share of cocoa processed in-country to 40 to 50 percent today, from less than 10 percent in 2000.

Meanwhile, as African countries urbanize, processing for domestic use will become more attractive. The challenge is to ensure that quality standards and infrastructure—especially power—make the industry competitive. Reliable domestic sources of demand are particularly important in countries where poor transport connections or a lack of comparative advantages constrain the ability to export.

To read more: Four lessons for transforming African agriculture

In Ethiopia, for example, improved seed and good weather led to a surge in maize production in 2002. Farmers couldn’t sell the surplus, however: the country had little export infrastructure, while high domestic-transport costs and low purchasing power made it uneconomic to move the maize to cities or regions with food shortages. Maize prices eventually fell by more than 50 percent, forcing farmers to let the crop rot in the fields. The government’s goal of doubling cereal production will therefore require substantial investment in transport, storage, and processing.