Leaders meet to discuss boosting African transport, the key to continental free trade
Addis Ababa, 2 February 2022 (ECA) - The Economic Commission for Africa (ECA) is pleased to announce that it will host, along with its partners, the flagship initiative, the Africa Business Forum, on Monday 7th of February on the margins of African Union summit in Addis Ababa.
Bringing together heads of state with CEOs and other stakeholders, the focus of the Forum this year will be Transport – a sector that is critical to maximising the benefits of the African Continental Free Trade Area. (AfCFTA).
AfCFTA came into force in 2019, to increase intra-African trade by eliminating import duties. Such trade would double if non-tariff barriers were also reduced. The ECA has found that one of those barriers is inadequate transport infrastructure and services.
A new study by the ECA found that:
- Implementation of the Free Trade Area would lead to an increase in demand for intra-African freight of around 28% by 2030, compared to a scenario without its implementation.
- The share of rail services out of all modes of transport is expected to increase from 0.3% to 7%; thus representing a 20-fold increase in percentage terms.
- Africa would require close to 2 million additional trucks, over 100,000 rail wagons, 250 aircraft, and more than 100 vessels by 2030, if the Free Trade Area is fully implemented; and
- Aircraft demand to support trade flows within West Africa will increase by 13.2% by 2030. Trade between North and West Africa would increase demand for aircraft by 12.9% while demand within Southern Africa will increase by 12.2%.
The Executive Secretary of the ECA, Vera Songwe, said the ECA's study showed that "Reaping the full benefits of the AfCFTA requires integrated planning of trade and transport. And it demonstrates tremendous investment opportunities in the transport sector. Leaders are meeting to discuss this potential at the Africa Business Forum."
The Forum will also look in detail at air transport and tourism, which are both recovering from a financial crisis induced by the COVID-19 pandemic. It will examine opportunities thrown up by the pandemic such as an increase in intra-Africa trade, a growth in domestic and regional tourism in some parts and the pivot to cargo transport when airlines were faced with passenger travel restrictions. Private investors will be essential to supporting the development of air transport, especially in a context of limited public funding.
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The fifth ABF is being organized on the margins of the African Union Assembly of Heads of State and Government, under the theme "Investing in multimodal transport infrastructure to optimize the benefits of the African Continental Free Trade Area: a focus on air transport and tourism."
In-person and online participants will have the opportunity to follow high level public-private sector debates on new market developments and opportunities which will enable the African transport sector to sustainably meet the new demand presented by the AfCFTA.
