Transport costs a trade barrier for the continent

High transport costs are crippling African economies - more so than trade tariffs imposed by rich nations, UN Under-Secretary-General Anwarul Chowdhury said on Wednesday.

He told African transport ministers meeting in Addis Ababa, Ethiopia’s capital, that transport costs in Africa were up to four times higher than tariffs imposed by countries like the US, Japan and the European Union.

At the African Union (AU) headquarters, he said that Africa’s economic future was intertwined with the continent solving its crumbling infrastructure and transport crisis.

"Success or failure of trade in Africa, especially in landlocked developing countries, is largely determined by transport availability and cost," Chowdhury said.

"It is increasingly recognised that excessive transport costs create more important barriers to foreign markets than tariffs," he added.

Transport costs in African countries are twice those in other developing nations in Asia or Latin America, according to Chowdhury, and four times higher than in wealthy countries.

Shipping a car from Japan to Abidjan, Côte d’Ivoire, costs US $1,500, but shipping the same car from Abidjan to Addis Ababa costs $5,000, the UN official said.

His comments came as African transport ministers discussed targets necessary for the continent – the world’s poorest – to achieve global anti-poverty goals by 2015.

Details of these targets will be fed into a UN report later this year, which will spell out what is needed to achieve the Millennium Development Goals in the next decade.

African nations estimate they need to spend around $20 billion a year on improving the continent’s infrastructure. Current spending is less than half that amount.

Initiatives agreed by ministers include stopping the production of leaded petrol by 2010 and cutting transport costs in half by 2015. Ministers also want to impose weight limits on roads, improve air transport, and slash red tape at borders.

Giving specific examples, Chowdhury said that landlocked countries like Burundi, Chad, Ethiopia and Uganda are spending 40 percent of their export earnings on transportation and insurance.

"This is a huge burden," he told delegates at the meeting. "Priority should be given to this burden."

Incompatible rail systems in different countries and roads in poor conditions – and indeed a lack of roads - were just some of the factors holding African transport systems back, he said.

Bernard Zoba, head of infrastructure and energy at the AU, said that an efficient transport network in Africa was critical for fighting poverty.

"The large size of the continent and the widespread population inherently raise the significance of transport in almost all development decisions," he said.

Bruce Thompson, head of transport for the European Commission in Brussels, told the conference that more resources were needed on the continent. "We recognise it can no longer be business as usual," he said.