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SADC’s Infrastructure: A Regional Perspective. Africa Infrastructure Country Diagnostic: a multi-stakeholder effort. Methodology and approach. Methodology Data collection by local/international consultants and Bank staff based on standardized methodology - PowerPoint PPT Presentation
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SADC’s Infrastructure: A Regional Perspective
Africa Infrastructure Country Diagnostic:a multi-stakeholder effort
Methodology and approach
Methodology Data collection by local/international consultants and Bank staff
based on standardized methodology Baseline year for data is 2006, does not reflect subsequent
evolution
Approach Focus on benchmarking SADC’s infrastructure against other
African RECs and benchmarking SADC member countries with each other
Key Message #1
Infrastructure could be contributing much more to
Southern Africa’s growth
Infrastructure contributed to over one percentage point to Southern Africa’s recent growth spurt
Catching-up on infrastructure could boost growth by three percentage points
Key Message #2
Southern Africa enjoys concentration of MICs and several
(potentially) strong economies
A more hopeful economic geography
SADC faces all the standard challenges10 countries have economies <$10 billion6 countries have populations <10 million6 countries are landlocked Multiple trans-boundary river basins
But also enjoys some advantages5 Middle Income CountriesHalf a dozen large (or potentially large) economiesStrong gravitational pull of South Africa
Topographical profile of SADC countries
Spatial distribution of economic activity
Key Message #3
Road freight costs reasonably competitive but trade facilitation
adds high margins
Road freight transport performance is best in Africa but still expensive by global standards
CorridorLength (kms)
Road in good condition (%)
Trade density
(US$m per km)
Implicit velocity(km
/hr)
Freight tariff ($US/tonne-km)
Western 2050 72 8.2 6.0 0.08
Central 3280 49 4.2 6.1 0.13
Eastern 2845 82 5.7 8.1 0.07
Southern 5000 100 27.9 11.6 0.05
Corridors are almost entirely paved and in reasonable condition
Condition Type
Good(%) Fair(%) Poor(%) Paved(%)
Gaborone to Durban 97 0.5 0 100
Harare to Durban 73 25 2 100
Lusaka to Durban 62 35 3. 100
Lubumbashi to Durban 60 35 5 100
Lilongwe to Nacala 27 60 13 61
Harare to Beira 0 72 0 100
Gaborone to Walvis Bay 59 17 0 100
Lubumbashi to Lobito 38 31 31 68
Condition of main regional corridors
High levels of traffic concentrated mainly along the corridors that connect to Durban
Percentage in traffic bands (AADT)
<300 300-1000 >1000
Gaborone to Durban 3 0 97
Harare to Durban 2 3 95
Lusaka to Durban 2 6 92
Lubumbashi to Durban 5 6 89
Lilongwe to Nacala 65 0 35
Harare to Beira 66 0 44
Gaborone to Walvis Bay 12 44 44
Traffic flows along main regional corridors
Some alternatives to Durban apparently look quite interesting as export routes
Alternatives to Durban less attractive for imports
• Journey of 3,000 kilometers from Lusaka to Durban takes 8 days – 4 days of travel time– 4 days spent at border crossings.
• Though trucks run at 50-60 kms/hr effective speed is no more than 12 kms/hr
• Cost of delays for an eight axle interlink truck estimated at US$300/day (or US$50 mn/yr)
Delays at borders greatly slow down speed of road transit
Key Message #4
Southern Africa’s regional road network generally very good,
with only couple of exceptions
Network generally in reasonable condition except for stretches in DRC, Zambia
Traffic flows visibly concentrated on north-south axis with much less on east-west
Very strong performance on regional roads across SADC with few exceptions
Condition (%) Type (%)
Good Fair Poor Paved
Angola 71 5 24 71
Botswana 41 8 100
DRC 14 13 73 18
Madagascar 60 25 15 78
Mozambique 13 59 28 78
Malawi 62 33 5 95
Namibia 49 41 10 100
Swaziland 58 42 0 100
Tanzania 45 36 19 60
South Africa 88 4 8 99
Zambia 52 14 44 99
Zimbabwe 0 100 0 100
SADC 47 24 29 74
Key Message #5
Southern Africa enjoys extensive regional rail network but border crossings remain problematic
Interconnection of seven national rail networks creates an extensive regional network
Southern African railways generally perform relatively well (with some notable exceptions)
Labor productivity
Locomotive productivity
Carriage productivity
Wagon productivity
Freight yield
Passenger yield
Angola, CFM 580 30 4,046 950
BR, Botswana 722 41 2,391 987
Congo DRC, SNCC 38 4 275 317 13 3
Malawi, CEAR 131 3 1,176 82 6 1
Mozambique, CCFB 281 13 750 476 3 1
Mozambique, CDN 710 25 3,333 260 5 1
Namibia, Transnamib 484 25 805
South Africa, Spoornet 3,308 33 913
Zambia, RSZ 502 25 3,286 377 4 1
Zimbabwe, NRZ 390 8 195
Railway Concessions 350 23 2,945 491 5 2
Most railways outside South Africa and Zimbabwe are only lightly used
• Journey of 3,000 kms from Kolwezi (DRC) to Durban (RSA) takes 38 days:– 9 days of travel time – 29 days associated with customs clearance and
(primarily) loading and interchange
• Though trains run at 25-30 kms/hr effective velocity is no more than 4 kms/hr
• Cost of delays estimated at US$205 per day per freight wagon (or US$120mn/yr)
Tardy locomotive exchange at borders greatly slows down speed of rail transit
Key Message #6
Port of Durban plays a dominant role in regional trading patterns
Despite numerous ports traffic highly concentrated in Durban
Southern African ports though best in Africa lag global price and productivity benchmarks
East Africa Southern Africa
West /Central Africa
Global best practice
Performance
Container Dwell Time (days) 5–28 4–8 11–30 <7
Truck Processing Time (hours) 4–24 2–12 6–24 1
Crane Productivity (containers per hour) 8–20 8–22 7–20 20–30
Crane Productivity (tonnes per hour) 8–25 10–25 7–15 >30
Charges
Container handling (US$ per TEU) 135–275 110–243 100–320 80–150
General cargo handling charge (US$ per tonne) 6–15 11–15 8–15 7–9
Efficiency of ports in South Africa and Namibia far above rest but costs are high
Cape Town Durban
East London
Port Elizabeth Walvis Bay Beira Luanda Maputo
South Africa Namibia Mozambique Angola Mozambique
Performance Container dwell time - average (days) 6 4 7 6 8 20 12 22Truck processing time for receipt and delivery of cargo (hours) 5 5 2 5 3 7 14 4Container crane productivity (container per hour) 18 15 8 15 10 7 11
Prices
Container cargo handling charge (USD per TEU) 258 258 258 258 110 125 320 155
General cargo handling charge (USD per ton) 8 8 8 15 7 9 6
Key Message #7
Relatively advanced air transport market despite slower
market liberalization
Strong hub and spoke structure evident around Johannesburg
Southern Africa records high usage and air transport connectivity
Steady increase in air transport internal to SADC region
Southern Africa plays a dominant role in the top few air transport routes in Africa
Regional air traffic heavily concentrated on routes from South Africa to Zambia
All countries have relatively frequent connectivity with South Africa
Aircraft fleet has shifted towards mid-sized planes rather than smaller planes as elsewhere
Southern Africa has made very limited progress with air transport liberalization
CommunityGeneral status of YD implementation
Status of air services liberalizationOverall implementation score
AMU No implementation. No liberalization within the AMU initiated, but need is recognized. 1
BAG Principles of the YD agreed upon in a multilateral air services agreement.
Up to fifth freedom granted, tariffs are free, and capacity/frequency is open. 4
CEMACPrinciples of the YD agreed upon in an air transport program. Some minor restrictions remain.
Up to fifth freedom granted, tariffs are free, and capacity/frequency is open. Maximum two carriers per state may take part.
5
COMESA
Full liberalization agreed upon (“legal Notice No. 2”), but application and implementation remain pending until a joint competition authority is established.
Pending. Operators will be able to serve any destination (all freedoms), and tariffs and capacity/frequency will be free.
3
EACEAC council issued a directive to amend bilaterals among the EAC states to conform with the YD.
Air services are not liberalized, as the amendments of bilaterals remain pending. 3
SADC
No steps taken toward implementation, although the civil aviation policy includes gradual liberalization of air services within the SADC.
No liberalization has been initiated. 2
WAEMU The YD is fully implemented. All freedoms, including cabotage, granted. Tariffs have been liberalized. 5
South African Airlines has significantly lost market share to subsidiaries and other players
Airline 2001 2004 2007South African Airways 34.7 28.6 24.1British Airways P.L.C. 10.9 0.0 0.0Air Zimbabwe (PVT) Ltd. 7.5 3.6 7.9Air Botswana Corporation 6.6 5.8 4.7Air Namibia 6.4 9.6 7.7Air Mauritius 4.7 4.1 4.5TAAG Angola Airlines 4.2 3.6 2.5Zambian Airways 1.6 0.8 7.3SA Airlink d/b/a South African Airlink 0.0 6.3 8.0Comair Ltd. 0.0 6.5 5.8South African Express Airways (Pty) Ltd. 0.0 7.2 5.3Other 1.9 2.5 5.2
Air safety standards in Southern Africa vary substantially across countries
There has been a renewal of the aircraft fleet over the last few years
Key Message #8
Regional power trade could save SAPP area US$1 bn pa (and 40 million tons of CO2)
Regional power transmission network already relatively advanced in SAPP area
SADC has highest availability of power and is relatively efficient, despite which access is low
SAPP was doing relatively well at meeting power demand as of 2005
Total net demand in
2005
% suppressed demand as a share of net
demand (2005)
Market demand 2015
Social demand with national targets 2015
Total net demand 2015
Angola 2.1 21 6 1.9 7.9Botswana 2.4 0 4 0.2 4.2Congo, DR 4.7 7 7.4 6.2 13.6Lesotho 0.4 2 0.8 0.1 0.9Malawi 1.3 4 1.9 0.4 2.3Mozambique 11.2 4 15.7 0.7 16.4Namibia 2.6 1 4.2 0.1 4.3South Africa 215 0 316 3.2 319.2Zambia 6.3 2 9 0.4 9.3Zimbabwe 12.8 4 18 0.8 18.7SAPP 258.8 1 383 14 396.9WAPP 31.3 42 69.6 24.8 94.3EAPP 100.6 1 144.8 24.2 169CAPP 10.7 9 17.1 3.1 20.2
Deepening regional power trade saves SAPP $1.1 billion annually
(US$ billion) Trade expansion Trade stagnation
New Investment
7.5 7.5 -Generation
4.5 4.9 -Inter-connectors
0.4 0 -Distribution
2.6 2.6
Refurbishment 2.6 2.6
Variable cost 8.4 9.4
Total cost 18.4 19.5
Volume traded has potential to increase from 45 to 146 terra-watt hours a year
Trade Expansion Trade Stagnation
Source: Authors’ original research.
Many countries need to invest in cross-border interconnectors and a few in additional hydro
(MW) Interconnectors Additional hydro
SAPP 23,839 8,912
Angola 2,120 0
Botswana 2,141 0
DRC 5,984 7,640
Lesotho 0 0
Madagascar 0 0
Malawi 227 0
Mozambique 1,400 900
Namibia 556 0
South Africa 547 0
Swaziland - -
Tanzania 266 279
Zambia 7,526 0
Zimbabwe 3,072 93
Financial gains? Burden of power spending needs varies widely depending on trade
One major exporter, and five countries that could import more than 50 percent of power
Trade expansion Trade stagnation
Regional power trade increases reliance on hydro-power saving 40 million tons CO2 a year
Increasing hydro brings annual savings of 41 million tons of CO2
WAPP SAPP EAPP CAPP Total WAPP SAPP EAPP CAPP Total
Production difference (TWh) Emissions savings (M ton)
Coal -41.5 0.7 -40.8 -37.8 0.6 -37.2
Diesel -0.8 -0.3 0.3 -0.8 -0.6 -0.2 0.2 -0.6
Gas -9.2 -5.3 -42.4 -56.8 -4.7 -2.7 -21.5 -28.9
HFO 0.2 0.4 -4.9 -4.3 0.1 0.3 -3.6 -3.2
Hydro 11.5 47.5 43.4 5.1 107 0
Total 1.6 0.5 2.4 0.3 4.7 -5.2 -40.7 -20.4 -3.6 -69.9
Economic gains? Trade shaves about one cent per kilowatt-hour from cost of power
(US cents/kWh) Trade expansion Trade stagnation Difference
CAPP 7 9 -2
EAPP 12 12 0
SAPP 6 7 -1
WAPP 18 19 -1
Angola 6 11 -5
Botswana 6 6 0
DRC 4 4 0
Lesotho 6 7 -1
Malawi 5 5 0
Mozambique 4 6 -2
Namibia 11 12 -1
South Africa 6 7 -1
Zambia 8 8 0
Zimbabwe 8 9 0
Rate of return on regional power trade infrastructure can be very high
Country Price gain
(US$/kWh)
Net power trade (TWh)
Annual benefits
(US$mn pa)
One time investment
(US$mn)
Rate of Return
(%) EXPORTERS
Congo, Dem. Rep. 0.04 49.6 2,381 7,480 32Mozambique 0.04 3.1 149 2,156 7IMPORTERS Angola 0.05 6.0 395 870 45Botswana <.01 4.3 0 100 0Lesotho 0.01 0.7 90 0 NAMalawi <.01 1.5 0 10 0Namibia 0.01 3.8 43 300 14South Africa 0.01 36.4 3,192 10 319Zambia <.01 1.8 0 1,420 0Zimbabwe 0.01 3.5 187 370 51
Key Message #9
Completing regional fiber optic backbone is low hanging fruit with potentially high returns
Southern Africa’s regional fiber optic backbone in the midst of major expansion
Access to ICT is relatively good but the region faces high prices for critical services
SADC ECOWAS CEMAC COMESA EAC
Broadband subscribers (per 100 inhabitants) 0.36 0.03 0.01 0.04 0.02International Internet bandwidth (per capita) 19 16 11 9 11Internet subscribers (per 100 inhabitants) 0.53 0.24 0.06 0.09 0.05
Main telephone lines outside largest city (per 100 inhabitants) 1.89 0.39 0.2 0.53 0.24Mobile telephone subscribers (per 100 inhabitants) 31 25 22 12 21Prices (US$) Prepaid mobile monthly price basket 11.32 14.04 15.11 9.09 12.18Price of a 3 minute call to USA 1.5 0.83 5.68 2.2 1.37Price of the 20 hour Internet basket 75.6 79.98 67.97 50.91 95.7Price of the fixed telephone monthly price basket 13.27 9.35 12.59 6.85 13.33
Substantially cheaper to call within SADC than elsewhere in SSA
Significant progress with intra-regional roaming but mainly on post-paid plans
No single operator dominates region, but several have important multi-country presence
Until recently only three countries were connected to submarine cable
Situation is changing rapidly with completion of various cables along the east coast
Despite submarine connections, costs of ICT services are high due to lack of competition in international gateways
Share of
countries
(%)
Price per minute
for a call within
Sub-Saharan ($)
Price per
minute for a
call to US ($)
Price for 20 hours
per month of dial-up
Internet access ($)
No access to
submarine cable
67 1.34 0.86 67.95
Access to
submarine cable
32 0.57 0.48 47.28
Monopoly
international
gateway
16 0.70 0.72 37.36
Competitiveinternationalgateways
16 0.48 0.23 36.62
Southern Africa can complete a basic regional fiber optic network with modest investments
Gaps (kms)
Necessary investment
(US$mn)Angola 782 21Congo DR 1,781 48Lesotho 2 <1Madagascar 637 17Malawi 477 13Mozambique 21 1South Africa 12 <1Tanzania 1,220 33Zimbabwe 226 6Total 5,158 139
Completing regional fiber optic backbone looks to be a very high return investment
Broadband price
(US$/mo.)Broadband Subscriptions
(‘000s)
Benefts (US$mn/yr)
Costs (US$mn)
Rate of Return (%) Baseline 2008 Induced Baseline 2008 Induced
Angola 98 16 65 28.6 21.0 135Lesotho 31 0.10 7 0.8 0.1 1,629Madagascar 63 4 11 3.3 17.0 19Malawi 308 3 1 4.9 13.0 37Mozambique 50 10 14 4.4 1.0 443South Africa 17 426 2126 154.4 12.0 1,287Tanzania 40 6 44 7.1 0.3 2,231
Key Message #10
Regional spending needs of $2.1 billion a year affordable for region
but insurmountable for some countries
Achieving regional integration would take $2.1 billion a year mainly in power investment
Transport ICT Power Total Total
Needs
Inv O&M Inv O&M Inv O&M Inv O&M Total
Needs
Angola 34 36 2 0 88 125 36 160Botswana 12 23 9 21 23 44
Congo DRC 139 69 5 0 748 892 69 961Lesotho 0 0 0 0 0 0 0
Madagascar 15 23 2 0 17 23 40Malawi 2 11 1 0 1 5 11 16
Mozambique 14 36 0 0 216 229 36 265Mauritius 0 0 0 0 0 0 0 0Namibia 37 34 30 67 34 101
Seychelles 0 0 ? ? 0South Africa 11 79 0 0 2 14 79 93Swaziland 11 26 0 0 0 11 26 37Tanzania 28 32 3 0 44 76 32 108Zambia 10 34 141 151 34 185
Zimbabwe 4 7 1 0 73 77 7 84SADC 319 409 14 1 1,352 0 1,685 410 2,095
Regional spending needs just 0.6% of GDP, but burden weights very heavily on a few nations
Regional spending needs look high relative to historic infrastructure spending in some cases
Regional integration in surface transport: achievements, challenges and promise
Sector Achievements Challenges Promise of regional integration
Roads Road are paved and in good quality along several major intra-regional corridors
Corridors that do not connect landlocked countries to the port of Durban have poor quality roads
Ports Several ports particularly in South Africa and Namibia have attained global good practices in terms of efficiency.
Ports charge very high prices for container and cargo handling
Rails Spoornet in South Africa is the best performing railway network in the continent. Most railways in the region have higher performance standards than railway benchmarks for non-state owned rails
All railways other than those in South Africa and Zimbabwe have low traffic density
Regional integration in air transport: achievements, challenges and promise
Sector Achievements Challenges Promise of regional integration
Air Transport
High levels of inter-regional connectivity across the REC and heavily concentrated around Johannesburg and Lusaka
Very little progress on achieving liberalization of the air transport sector
Regional integration in power: achievements, challenges and promise
Sector Achievements Challenges Promise of regional integration
Power
Electrification rates are high relative to other regions.
Principle of regional trade already well established
Utility collection rate is amongst the lowest in the continent
Deepening regional integration would save the SAPP area US$1 billion in annual energy costs, and annual savings in carbon emissions of some forty million tons of carbon.
Long-run marginal cost of power in the SAPP would fall by US$0.01 per kilowatt-hour.
The overall rate of return on regional integration investments is 168%.
Regional integration in ICT : achievements, challenges and promise
Sector Achievements Challenges Promise of regional integration
ICT
Access to ICT services amongst highest in Africa. Significantly cheaper to call within SADC than it is to call the US or outside the REC
Associated regional telecom regulators have been active in promoting harmonization.
Despite the lowest prices in the continent, countries face relatively high prices.
Several countries are not connected to the submarine cable
Even where submarine connections exist costs remain relatively high due to lack of competition on the international gateways.
Achieving regional integration of ICT will cost only US$139 million for the next decade but could yield very high returns on the investment