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Infrastructure is a means to an end

Africa Investment Forum 2012 Transport: Roads, Rail and Ports Niels Rasmussen, Director of Transport, West Africa Trade Hub Accra April 4, 2012. Infrastructure is a means to an end. Africa Union vision: Political union - economic integration – increased trade - prosperity.

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Infrastructure is a means to an end

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  1. Africa Investment Forum 2012Transport: Roads, Rail and PortsNiels Rasmussen, Director of Transport, West Africa Trade HubAccra April 4, 2012

  2. Infrastructure is a means to an end Africa Union vision: Political union - economicintegration– increasedtrade - prosperity The Charter of the Organisation of Africa Unity (OAU), adopted in 1963, defines economic integration as a prerequisite for political unity. Improving the African road network is a priority and the Trans African Highways is defined as the basic elements of such a network. Total net length 52,450 km

  3. Infrastructure spendingneeds Source: Africa Infrastructure Country Diagnostic (World Bank 2010)

  4. Type and sources of spending

  5. Efficiency and funding gaps

  6. Privatesector participation

  7. Observations • Africa’s infrastructure inefficiencies: USD 17 billion per year • Most flagrant inefficiency: failure to maintain infrastructure assets • Reforms are needed where widespread administrative and regulatory bottlenecks prevent facilities from being fully used • Regional integration can contribute significantly to reducing infrastructure costs by allowing for economies of scale • Closing Africa’s infrastructure financing gap is critical to the region’s prosperity • (From the Africa Infrastructure Country Diagnostic report)

  8. Infrastructure and Trade Facilitation • Trade facilitation has two dimensions: • the first being a “hard” dimension directly linked to tangible infrastructure, namely, roads, ports, highways and telecommunications; and • the second being a “soft” dimension related to transparency, customs management, the business environment and other institutional aspects that may be intangible • The USAID West Africa Trade Hub works with the “soft” dimension of Facilitation

  9. The USAID West Africa Trade Hub Overview • Works to • Facilitate regional and international trade • Increase West Africancompetitiveness • Promote export from West Africa • Expand access to finance • Improve the business environment • Promote regional integration

  10. What we do to facilitate trade & transport • Road Governance • Transport Costs • Business Environment • Advocacy • (Borderless Alliance & CSOs)

  11. How it started Why the road Governance project: UEMOA: Implement Decision No15/2005/CM/UEMOA Maximum 3 checks (No checkpoints!) per corridor: - at departure (port) - at border and - at final clearance USAID/Trade Hub: Reduce poverty through increased trade Implemented in Ghana with the Ghana Shippers’ Authority

  12. The Road Governance Project

  13. Regional overview: Recent Improvements Note: 4th quarter 2011 data are draft

  14. Why so many checkpoints? • Safety and security are important But, is it achieved by fixed checkpoints? • Smuggling and fraud must be eliminated But, why must a sealed transit truck be stopped and “inspected” 18 times (in Ghana) along the corridor? The multitude of fixed checkpoints is a barrier to trade, increases transport costs, makes trade costs unpredictable, discourages investments and makes life more difficult and expensive for everybody than it has to be! But there are many more serious problems preventing West African transport from being competitive.

  15. Corridor Transport & Logistics Costs

  16. Transport Cost Studies - Findings • Not many surprises : • High Costs • Long delays • Uncertainty in time and costs • Corruption • (About 10% of total transport & logistics costs)

  17. Issues on the Tema –Ouaga corridor?

  18. Improvements can & do happen • Comparisons between Tema-Ouaga (2008), Lome-Ouaga (2009-2010) and Tema-Bamako (2010 shows that • Dwell time in Tema port was reduced from 11 to 7 days from 2008 to 2010 • Dwell time in Ouagarinter was reduced from 6 to 2.4 days from 2008 to 2010

  19. Some recommendations for reducing transport and logistics costs in West Africa • Deregulate the trucking market • (eliminate first-come-first-served and bilateral sharing agreements – allow “cabotage”) • Eliminate customs escort and convoy systems • (use GPS tracking if necessary) • Promote the use of containers • (increase safety and security, reduce overloading, and discourage fraudulent practices)

  20. Moving forward: A West Africa Transport & Facilitation Observatory • The UENOA/USAID Trade Hub Road Governance initiative will be expanded • To cover all of ECOWAS and geographically • To include more indicators and transport cost and performance data • To document regional as well as transit trade • Jointly hosted by ECOWAS & UEMOA and supported by USAID and the EU

  21. Other Hub initiatives to facilitate trade • Promote regional integration(ECOWAS Trade LiberalizationScheme – gap analysis) • Building partnerships(Border Information Centers & Express lanes) • SupportingAdvocacy(Civil Society Organizations& the Alliance)

  22. How to invest in “soft” facilitation Steps Completed: • Private sector stakeholders formed the Borderless Alliance to increase trade across West Africa – May 2011 • Borderless Alliance registered as a non-profit organization • Temporary housing/funding provided by West Africa Trade Hub • Interim Executive Committee appointed • “Internal Regulations” & “Code of Ethics” drafted • First Transport Stakeholders Conference held in Accra on Nov.09, 2011; more than 50 participants

  23. Advocacy in action: Reduceborder crossing times Seme-Krake 28 hrs 15 hrs Aflao-Kodjoviakope 65 hrs 41 hrs Noe-Elubo 14 hrs 37 hrs Hillacondji-Sanveecondji 10 hrs 13 hrs

  24. Initiatives to reduce border crossing times • Business Information Centers at the Ghana/Togo border • Express Lane at Ghana/Togo border Aflao- in partnership with the GSA Kodjoviakope- in partnership with ALCO Parking area identified by Ghana Customs for Express Lane pilot joint-border meeting at Kodjoviakopé on Express Lane Pilot, Aug. 25, 2011

  25. First Borderless Conference to focus on West Africa's business environment, increasing trade across West Africa – the Borderless vision Attendance is open to private and public sector organizations; all details available at our exhibition booth and at our website:www.borderlesswa.com

  26. Thankyou for your attention For more information: www.watradehub.com www.borderlesswa.com

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