TRADE CORRIDORS: THE LONG ROAD TO OPEN MARKETS

IN TRADE, TIME IS MONEY. FROM CONGESTED BORDER POSTS TO FRAGMENTED TRANSPORT NETWORKS, AFRICA’S TRADE AMBITIONS DEPEND AS MUCH ON EFFICIENT LOGISTICS AS THEY DO ON POLICY REFORM.

- By Freddie Hiney

Let's rewind to October 2021 at southern Africa's busiest border crossing: Beitbridge, the only official post between South Africa and Zimbabwe. A system fault brought traffic to a standstill, triggering a 15-kilometer gridlock. Some drivers remained stationary for more than 17 days.

Delays are costly for a border through which billions of dollars worth of commercial cargo traverses each year, and also for the informal traders transporting perishables with expiry dates that demand on-time deliveries.

The financial consequences extend far beyond spoiled goods. The South African Institute of International Affairs calculated that a delayed truck at Beitbridge costs operators upwards of $400 per day, adding to the price of the goods being delivered.

The problem is not isolated. It's a logistical headache common amongst African trade corridors. One technical error or geopolitical upset can set off a sequence of consequences for employees, corporations, and governments.

World Bank data comparing sub-Saharan Africa (SSA) with high-income countries in the Organization for Economic Cooperation and Development (OECD) illustrates the scale of the gap.

On average, SSA exports travel for 196 hours (more than eight days) at a cost of around $813, compared to the 15 hours and $186 in the OECD. Imports take 251 hours (over 10 days) before reaching their destination, against just nine hours in OECD nations.

In trade, time is money. And by that measure, Africa is at a structural disadvantage.

According to International Monetary Fund (IMF) data, intra-African trade accounted for just 16% of Africa's total trade in 2023, while intra-European Union trade reached some 70% and intra-Asian trade around 60%.

Over $1 trillion worth of imports flow in from abroad, leaving Africa exposed to global supply chain shocks and currency volatility. Perhaps more damaging is the value that leaves domestic markets.