AfCFTA Will Increase Demand for Transportation Infrastructure in Africa, Experts Say

24 November 2020

Addis Ababa — Demand for transportation services in Africa will be on the increase as the African Continental Free Trade Area (AfCFTA) agreement goes into operations in January next year, transport sector experts said today.

Speaking on the second day of Nigeria's National AfCFTA strategy workshop, the experts said any country with an efficient transportation infrastructure necessary to facilitate the trading would be in the commanding position under the new era.

While the road, maritime and air transport sectors would remain important, they said rail would have an edge over the others when the trading bloc starts operations because of its relatively lower costs.

"There is need to employ rapid railway infrastructure within Africa as those who control the transport infrastructure will control the pattern of trade in AfCFTA," said Dina Adeolu, a railway transportation specialist.

Vince Onyejeli, Associate Director and Market Lead, Infrastructure and Major Projects for the global tax, audit and advisory service group KPMG Nigeria, said there is an urgent need to expand Nigeria's rail network in order to compliment road, air and water means of transportation.

He said there had been an increased attention on the rail industry in the past decade which has resulted in significant investments and financial commitments, resulting in new and modern Chinese-built lines and the revival of old ones.

The theme of the three-day workshop is: Nigeria - the transportation hub for Africa under the trading bloc.

Nigeria announced on 11 November that it would ratify the AfCFTA agreement, more than a year after it signed it in July 2019. The AfCFTA agreement entered into force on 30 May 2019 after the treaty was ratified by 22 countries - the minimum number required by the treaty. Trading was earlier scheduled to start on 1 July this year but was postponed for six months owing to the COVID-19 pandemic.

The AfCFTA aims to create the world's largest free trade area with the potential that brings together more than 1.2 billion people with a GDP of over $2.5 trillion and usher in a new era of development. It has the potential to generate a range of benefits through economy of scale, trade creation, structural transformation, productive employment, and poverty reduction.

Through its African Trade Policy Centre, the ECA has been working with the AUC and member states to deepen Africa's trade integration and effectively implement the agreement through policy advocacy and national strategy development. Under the project, the commission is supporting Nigeria to develop a national AfCFTA strategy.

The ECA also collaborates with the International Trade Centre (ITC), the UN Conference on Trade and Development (UNCTAD), and a selection of independent trade experts with the financial support of the European Union (EU) to support the implementation of the AfCFTA across the continent.

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