Railway development in Africa: Why is this a good idea?
Dr. Lubinda (Mufalo) Sakanga, acting as a delegate for both the Southern Africa Railway Association and the Southern African Development Community (SADC), recently gave an influential speech at the African Development Bank Transport Forum 2024, held in Abidjan. His discourse highlighted the pressing need for a significant change in the strategy for railway development throughout Africa. Dr. Sakanga, emphasizing the crucial role of railway transport, carefully outlined three key areas that need to be addressed for future growth: a shift in policy focus, the development of a holistic railway ecosystem, and the application of effective economic regulation.
Shifting the Policy Focus for Railways
In his comprehensive presentation, Dr. Sakanga expressed the necessity to move away from the outdated colonial design of railways, primarily used for the extraction of African resources and the import of foreign equipment. With the introduction of the Africa Continental Free Trade Agreement, promoting intra-African trade, he argued that railways should now concentrate on economic feasibility and enhancing connectivity within the continent. This involves a shift from a basic port-to-port transport model to a complex network that connects cities like Lusaka and Harare, or Tanzania and the Democratic Republic of the Congo. Dr. Sakanga highlighted the estimated infrastructure demand of $400 billion over the next 20 years, calling for an economic approach that meets Africa's industrial needs.
Developing a Railway Ecosystem
Dr. Sakanga proposed the novel idea of a railway ecosystem, drawing a thoughtful comparison with the agricultural sector. He explained that just like successful agriculture depends on fertile land, quality seeds, competent human capital, and suitable equipment, a thriving railway sector also requires strong manufacturing capabilities, research-oriented universities, and a well-integrated industry. He noted that currently, Africa's railway manufacturing base is weak or non-existent in many countries. With the forecast of needing 200,000 wagons, he questioned the reasoning behind importing all this infrastructure when a manufacturing plant could be set up for less than $100 million. Dr. Sakanga advocated for the establishment of railway manufacturing centers, promoting a sustainable ecosystem that forms strategic partnerships with the agricultural, energy, and education sectors.
Projects like the Africa Integrated High-Speed Railway Project, which are large in scale, also require power generation and dependable energy sources. The planning for such advanced rail systems must be thorough and aligned with both national and regional master plans. Without energy, manufacturing, and human capital, high-speed railways would be unachievable.
Applying Effective Economic Regulation
Dr. Sakanga highlighted the crucial need for the implementation of appropriate economic regulation in the railway sector, focusing on the complexities of concessions, vertical integration, and vertical separation. While recognizing the individual benefits of each model, he emphasized the importance of finding a balance between public and private sector interests. The public interest includes the concerns of the government and its citizens, while the private sector's interests are key in driving investment, structuring incentives, and setting subsidies within the railway sector.
Regardless of the economic regulatory model that is eventually chosen, Dr. Sakanga highlighted the necessity of policy guidance, the protection of customer rights, the assurance of service quality, and the establishment of a regulatory body responsible for infrastructure management and dispute resolution between customers, operators, and infrastructure managers. Most importantly, he stressed the essential role of human capital, which fuels innovation and strengthens the railway ecosystem.
Conclusion: Advocating for Pragmatic Steps
In his final remarks, Dr. Sakanga referred to the Forum on China-Africa Cooperation’s (FOCAC) pledge to invest $50 billion, urging for a calculated allocation of a part of these funds to strengthen Africa’s railway manufacturing sector. His hope is that this forum will lead to practical steps that will push the continent's railway development forward, focusing on strategic, continental railway initiatives that are set to drive Africa's advancement.
