Transport Prices And Costs In Africa

Transport prices for most African landlocked countries range from 15 to 20 percent of import costs. This is approximately two to three times more than in most developed countries. It is well known that weak infrastructure can account for low trade performance. Thus, it becomes necessary to understand what types of regional transport services operate in landlocked African nations and it is critical to identify the regulation disparities and provision anomalies that hurt infrastructure efficiency, even when the physical infrastructure, such as a road transport corridor, exists. Transport Prices and Costs in Africa analyzes the various reasons for poor transport performance seen widely throughout Africa and provides a compelling case for a number of national and regional reforms that are vital to the effort to address the underlying causes of high transport prices and costs and service unpredictability seen in Africa. The book will greatly help supervisory authorities throughout the region develop and implement a comprehensive transport policy that will facilitate long-term growth.

"The median landlocked country has only 30 percent of the trade volume of the median coastal economy. Halving transport costs increases that trade volume by a factor of five. Improving the standard of infrastructure from that of the bottom quarter of countries to that of the median country increases trade by 50 percent. Improving infrastructure in Sub-Saharan Africa is especially important for increasing African trade"--Cover.

The government of Malawi is pursuing an export led agricultural growth strategy, and therefore improving transport quality between major urban areas, as well as between rural areas and ports of trade or market centers, is a key pri-ority (DTIS, 2014). For this reason, being able to assess travel distances, times, and costs for major commerce routes is an important first step. Despite this, there exists a lack of basic data relating to the geographic and economic as-pects of road travel in many of these countries. The purpose of this technical brief is to describe the procedure taken for the estimation of transportation costs for use in the development of a spatially disaggregated, market level model of the Malawian agricultural sector, which is being done as part of BioSight’s ongoing work on the sustainable intensi-fication of agriculture in Africa, south of the Sahara. Modelling exercises such as these require estimation of the mar-keting margins of agricultural inputs and outputs traded across regions. The transport cost makes up a significant component of the marketing margin. High quality data on transport costs is therefore crucial for the parameterization and application of market models such as these. This technical brief describes a procedure for estimating transport distances, times, and costs between three major urban areas in south, central, and north Malawi. The difficulties around obtaining reliable spatial data and how to use these to develop and assess specific transport routes are dis-cussed.

'The Cost of Being Landlocked' proposes a new analytical framework to interpret and model the constraints faced by logistics chains on international trade corridors. The plight of landlocked developing countries (LLDCs) has naturally received special attention for decades, leading to a specific set of development priorities based upon the concept of dependence on the transit state. Therefore, the standard approach used to tackle the cost of being landlocked has been predominantly aimed at developing regional transport infrastructure and ensuring freedom of transit through regional conventions. But without sufficient attention given to the performance of logistics service delivery to traders, the standard approach is unable to address key bottleneck concerns and the factors that contribute to the cost of being landlocked. Consequently, the impact of massive investment on trade corridors could not materialize to its full extent. Based on extensive data collection in several regions of the world, this book argues that although landlocked developing countries do face high logistics costs, these costs are not a result of poor road infrastructure, since transport prices largely depend on trucking market structure and implementation of transit processes. This book suggests that high logistics costs in LLDCs are a result of low logistics reliability and predictability, which stem from rent-seeking and governance issues. 'The Cost of Being Landlocked' will serve as a useful guide for policy makers, supervisory authorities, and development agencies.

This book will be of interest to governments in the region and to multilateral and bilateral aid and lending agencies, as well as to graduate students, faculty, and researchers in African studies and transport studies. --Book Jacket.