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Africa Needs an Integrated Freight Strategy

By Vishaal Lutchman

Freight rail or supporting logistics pit-to-port infrastructure in Africa is generally poor - characterised by inefficiencies, maintenance issues, long delays and consequent high cost. In fact, except for South Africa, that still has the most sophisticated rail network on the continent, no country in Africa is showing sufficient consideration of all technical and non-technical aspects in their infrastructure development or expansion plans. As a result, and despite significant planned new investments in Africa’s mining sectors, there is still insufficient funding and co-ordinated planning going into the establishment of the much needed supporting logistics infrastructure.

Freight in Africa - Picture: Reuters/Siphiwe Sibeko

The background to the mining logistics infrastructure problem in Africa relates firstly to technical challenges, in terms of long distances (in excess of 1000 kilometres) between mines and ports for exports.  Some mine sites are located in difficult terrain and harsh operating environments - all leading to upward trending costs to mine. The technical issues, however, are still easier to solve than the non-technical aspects. Some of the more challenging issues are leadership, strategic, financial, regulatory and human in nature – issues such as poor transportation strategies, legal and regulatory framework and policies, cross-border delays, security issues, weakening commodity prices, and financing – which persist as significant stumbling blocks, affecting the near to medium term viability and implementation of pit-to-port infrastructure. However, perhaps the most lacking aspect in pit-to-port infrastructure in Africa is a long-term vision and leadership.

A number of African states have launched a country “vision” for 2030 or 2050 and in these documents the governments have pledged commitments to social and economic upliftment – much of which has been planned around re-industrialising these states by leveraging off ongoing investments into the extractive industries. Though – and to put it plainly - these visions and plans don’t provide a clear-cut roadmap on how the governments intend to take the resources out the ground and turn this into tarred roads or new rail networks. This is often because many African countries don’t have the capacity to undertake the financing or construction of major mining related infrastructure themselves. The necessity then falls on the mining companies in an environment where commodity prices are falling and logistics infrastructure costs are soaring, dominating the mining infrastructure costs.

Added to this, there is generally not an enabling environment for the implementation of mine related logistics infrastructure; with conflict between governments’ needs for public and social infrastructure contrasting sharply with the mining company’s requirements for operational efficiency, control and security of the logistics chain. This is further compounded by a lack of co-operation between mining companies in terms of potential co-funding around control and operational preferential use rights to the infrastructure.

Freight in Africa - Sishen Saldanha Line  - 860 km

As a result, mining infrastructure is planned and implemented on a project-by-project basis, with not enough forethought being given to how this infrastructure connects with the country’s wider transport networks – or even the important role this infrastructure could play in a regionally integrated transport network system. This lack of forethought and future planning can in fact be debilitating to the full possible functionality of this infrastructure and future economic gains.

Therefore, to challenge the status quo and develop freight infrastructure networks that can be maximised beyond mining activities alone, a long-term vision that is underpinned by a multi-faceted approach to an integrated transportation strategy is needed. To achieve these, governments and businesses in Africa must have a meeting of minds on how to address the opportunities. Additionally, there needs to be more active engagement between all stakeholders – government, mining companies, investors and local communities – alike, and agreement on innovative and mutually beneficial solutions to establishing logistics infrastructure.

For instance, African governments should look to follow the African Union and the New Partnership for Africa’s Development (NEPAD) agenda for collaboration, as doing so will empower these governments to:

  • Establish more joint initiatives and/or projects that meet their country’s individual, as well as regional, social mandates for change and growth.
  • Share knowledge and best practices, so as to learn from the models of execution that have been used in other countries – particularly on what works and what doesn’t.
  • Properly integrate regional strategic and long-term planning - for instance in support of the Southern African Development Community (SADC) agenda and initiatives - as well as adopt the agenda by being authentically committed to the long-term shared vision.
  • Commit to an African perspective, which believes in investing within Africa, and work to enable strategic intra-Africa trade – for instance, not just focusing on international export opportunities in the short-term, but the opportunities to trade within Africa in the medium- to long-term, as well as beneficiation hubs that are strategically located.  Beneficiation hubs are highly industrialised areas at strategic locations designed to beneficiate resources such as iron-ore into steel.  Steel is a material supplied in the construction of infrastructure across the board. The intention is that instead of importing steel, these could be beneficiated in Africa to meet African demand.

 

Freight in Africa - Saldanha Bay Steel WorksFreight in Africa

With so many facets to consider, there is unfortunately no singular answer or solution to ramping up on freight infrastructure in Africa. Certainly, the technical competence and capability is available globally and within Africa itself to plan, construct, and operate optimum infrastructure solutions. However, a multi-faceted approach that adequately engages all stakeholders on their respective needs – and in the most mutually beneficial and transparent manner - and seeks improved co-operation, would still be the best first step in moving towards optimal infrastructure investment and operation. This is far easier said than done, however, and would require a willingness and co-operation, which so far, has not been seen and is often very difficult to facilitate.