SADC’s Infrastructure: A Regional Perspective

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SADCs 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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  • SADCs Infrastructure: A Regional Perspective

  • Africa Infrastructure Country Diagnostic:a multi-stakeholder effort

  • Methodology and approachMethodologyData collection by local/international consultants and Bank staff based on standardized methodologyBaseline year for data is 2006, does not reflect subsequent evolutionApproach Focus on benchmarking SADCs infrastructure against other African RECs and benchmarking SADC member countries with each other

  • Key Message #1Infrastructure could be contributing much more to Southern Africas growth

  • Infrastructure contributed to over one percentage point to Southern Africas recent growth spurt

    Chart1

    0.8169906870.0229104010.078361855

    1.005284605-0.083250849-0.041413021

    0.7874155190.169397789-0.01199972

    1.040097831-0.2014208260.173907023

    1.158516431-0.0952532120.019081532

    1.065657967-0.1120786240.033147971

    Telecom

    Power

    Roads

    Additional percentage points of per capita economic growth

    Sheet1

    Column1North AfricaWest AfricaEast AfricaSouthern AfricaCentral AfricaAfrica

    Telecom0.8169906871.0052846050.7874155191.0400978311.1585164311.065657967

    Power0.022910401-0.0832508490.169397789-0.201420826-0.095253212-0.112078624

    Roads0.078361855-0.041413021-0.011999720.1739070230.0190815320.033147971

  • Catching-up on infrastructure could boost growth by three percentage points

    Chart1

    0.40.60.7

    1.32.61.3

    1.62.71.4

    1.11.40.6

    1.52.11.5

    1.221.1

    Telecom

    Power

    Roads

    Potential percentage points contribution to per capita economic growth

    Sheet1

    TelecomPowerRoads

    North Africa0.40.60.7

    West Africa1.32.61.3

    East Africa1.62.71.4

    Southern Africa1.11.40.6

    Central Africa1.52.11.5

    Africa1.221.1

  • Key Message #2Southern Africa enjoys concentration of MICs and several (potentially) strong economies

  • A more hopeful economic geographySADC faces all the standard challenges10 countries have economies
  • Topographical profile of SADC countries

  • Spatial distribution of economic activity

  • Key Message #3Road 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)Western2050728.26.00.08Central3280494.26.10.13Eastern2845825.78.10.07Southern500010027.911.60.05

  • Corridors are almost entirely paved and in reasonable condition

    ConditionType Good(%)Fair(%)Poor(%)Paved(%)Gaborone to Durban970.50100Harare to Durban 73252100Lusaka to Durban62353.100Lubumbashi to Durban 60355100Lilongwe to Nacala27601361Harare to Beira0720100Gaborone to Walvis Bay59170100Lubumbashi to Lobito38313168

  • Condition of main regional corridors

  • High levels of traffic concentrated mainly along the corridors that connect to Durban

    Percentage in traffic bands (AADT)1000Gaborone to Durban3097Harare to Durban 2395Lusaka to Durban2692Lubumbashi to Durban 5689Lilongwe to Nacala65035Harare to Beira66044Gaborone to Walvis Bay124444

  • Traffic flows along main regional corridors

  • Some alternatives to Durban apparently look quite interesting as export routes

    Chart1

    82.14151113.23

    77.00612.912.39

    119.30920.176470588213.23

    27.2402660514.714.07

    143.13811.176470588222.26

    178.78342511911.176470588233.39

    Transport

    A dministrative

    Waiting

    Costs in US$

    Sheet1

    Column1TransportA dministrativeWaiting

    Gaberone to Durban82.14151113.23

    Gaberone to Walvis Bay77.00612.912.39

    Harare to Durban119.30920.176470588213.23

    Harare to Beira27.2402660514.714.07

    Lusaka to Durban143.13811.176470588222.26

    Lubumbashi to Durban178.78342511911.176470588233.39

  • Alternatives to Durban less attractive for imports

    Chart1

    82.141520.176470588215.23

    77.00651.099411764736.39

    119.30935.176470588215.23

    27.2402660562.724.07

    143.13825.117647058822.26

    178.782911.176470588233.39

    Transport

    A dministrative

    Waiting

    Cots in US $

    Sheet1

    Column1TransportA dministrativeWaiting

    Gaborone to Durban82.141520.176470588215.23

    Gaborone to Walvis Bay77.00651.099411764736.39

    Harare to Durban119.30935.176470588215.23

    Harare to Beira27.2402660562.724.07

    Lusaka to Durban143.13825.117647058822.26

    Lubumbashi to Durban178.782911.176470588233.39

    000.00000

    0

    000.00000

    0

    000.00000

    000.00000

    000000

    000000

    00.000000

    00.000000

    000000

    000000

    000000

    000000

  • Journey of 3,000 kilometers from Lusaka to Durban takes 8 days 4 days of travel time4 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 #4Southern Africas 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 (%)GoodFairPoorPavedAngola7152471Botswana418100DRC14137318Madagascar60251578Mozambique13592878Malawi6233595Namibia494110100Swaziland58420100Tanzania45361960South Africa884899Zambia52144499Zimbabwe01000100SADC 47242974

  • Key Message #5Southern 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, CFM580304,046950 BR, Botswana722412,391987 Congo DRC, SNCC384275317133Malawi, CEAR13131,1768261 Mozambique, CCFB2811375047631 Mozambique, CDN710253,33326051Namibia, Transnamib48425805 South Africa, Spoornet3,30833913 Zambia, RSZ502253,28637741Zimbabwe, NRZ3908195 Railway Concessions350232,94549152

  • Most railways outside South Africa and Zimbabwe are only lightly used

    Chart1

    0.090140845

    0.172131148

    0.214090909

    0.2700491

    0.406127258

    0.461279461

    0.469483568

    0.475341652

    0.6

    0.662460568

    0.826530612

    0.9

    0.901776006

    1.4

    1.5

    2.426914277

    3.9

    Million Traffic Units per route km

    Sheet1

    Malawi, CEARCongo, Dem Rep, CFMKCongo, Dem Rep, SNCCMozambique, CDNZambia, RSZZambia, TAZARAAngola, CFMNamibia, TransNamibEast AfricaMozambique, CCFBBotwsana, BRCCentral AfricaZimbabwe, ZRWest AfricaZimbabwe, BBRSouth Africa, SpoornetSouthern AfricaNorth Africa

    0.0901408450.1721311480.2140909090.27004910.4061272580.4612794610.4694835680.4753416520.60.6624605680.8265306120.90.9017760061.41.52.4269142773.94.7

  • 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/hrCost 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 #6Port 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 AfricaSouthern AfricaWest /Central AfricaGlobal best practicePerformanceContainer Dwell Time (days)52848113030ChargesContainer handling (US$ per TEU)13527511024310032080150General cargo handling charge (US$ per tonne)615111581579

  • Efficiency of ports in South Africa and Namibia far above rest but costs are high

    Cape TownDurbanEast LondonPort ElizabethWalvis BayBeiraLuandaMaputoSouth AfricaNamibiaMozambiqueAngolaMozambiquePerformanceContainer dwell time - average (days)64768201222Truck processing time for receipt and delivery of cargo (hours)552537144Container crane productivity (container per hour)181581510711PricesContainer cargo handling charge (USD per TEU)258258258258110125320155General cargo handling charge (USD per ton)88815796

  • Key Message #7Relatively 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

    Chart1

    9071365.33333335

    9594992.33333332

    12386447.6666667

    SADC

    Sheet1

    200120042007

    SADC9,071,3659,594,99212,386,448

  • 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

    Chart1

    0.1309237895

    0.6303935998

    0.1198669471

    0.1035176537

    Column1

    2007

    Sheet1

    General AviationColumn1

    Widebody13.09%

    CitiJet63.04%

    Com Prop11.99%

    Com Jet10.35%

    Chart1

    0.26

    0.54

    0.15

    0.04

    Column1

    2001

    Sheet1

    General AviationColumn1

    Widebody26.00%

    CitiJet54.00%

    Com Prop15.00%

    Com Jet4.00%

  • Southern Africa has made very limited progress with air transport liberalization

    CommunityGeneral status of YD implementationStatus of air services liberalizationOverall implementation scoreAMUNo implementation.No liberalization within the AMU initiated, but need is recognized.1BAGPrinciples of the YD agreed upon in a multilateral air services agreement.Up to fifth freedom granted, tariffs are free, and capacity/frequency is open.4CEMACPrinciples 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.5COMESAFull 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. 3EACEAC 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.3SADCNo steps taken toward implementation, although the civil aviation policy includes gradual liberalization of air services within the SADC.No liberalization has been initiated.2WAEMUThe 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

    Airline2001 2004 2007South African Airways34.728.624.1British Airways P.L.C.10.90.00.0Air Zimbabwe (PVT) Ltd.7.53.67.9Air Botswana Corporation6.65.84.7Air Namibia6.49.67.7Air Mauritius4.74.14.5TAAG Angola Airlines4.23.62.5Zambian Airways1.60.87.3SA Airlink d/b/a South African Airlink0.06.38.0Comair Ltd.0.06.55.8South African Express Airways (Pty) Ltd.0.07.25.3Other 1.92.55.2

  • Air safety standards in Southern Africa vary substantially across countries

  • There has been a renewal of the aircraft fleet over the last few years

    Chart1

    18.7666237379

    28.8464845571

    37.5634854819

    14.0115181485

    2001

    2001

    Sheet1

    200120042007

    Western somewhat recent18.8

    Western recent28.8

    Western old37.6

    Western age unknown14.0

    Chart1

    13.5692522874

    41.2140871274

    23.1368407132

    20.9148369496

    2001

    2001

    Sheet1

    200120042007

    Western somewhat recent13.6

    Western recent41.2

    Western old23.1

    Western age unkown20.9

  • Key Message #8Regional 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 2015Social demand with national targets 2015Total net demand 2015Angola2.12161.97.9Botswana2.4040.24.2Congo, DR4.777.46.213.6Lesotho0.420.80.10.9Malawi1.341.90.42.3Mozambique11.2415.70.716.4Namibia2.614.20.14.3South Africa21503163.2319.2Zambia6.3290.49.3Zimbabwe12.84180.818.7SAPP258.8138314396.9WAPP31.34269.624.894.3EAPP100.61144.824.2169CAPP10.7917.13.120.2

  • Deepening regional power trade saves SAPP $1.1 billion annually

    (US$ billion)Trade expansionTrade stagnationNew Investment7.57.5 -Generation4.54.9 -Inter-connectors0.40 -Distribution2.62.6Refurbishment2.62.6Variable cost8.49.4Total cost18.419.5

  • Volume traded has potential to increase from 45 to 146 terra-watt hours a yearTrade ExpansionTrade Stagnation

    Source: Authors original research.

  • Many countries need to invest in cross-border interconnectors and a few in additional hydro

    (MW)InterconnectorsAdditional hydroSAPP 23,8398,912Angola2,1200Botswana 2,1410DRC5,9847,640Lesotho 00Madagascar00Malawi2270Mozambique1,400900Namibia5560South Africa5470Swaziland- - Tanzania266279Zambia7,5260Zimbabwe3,07293

  • Financial gains? Burden of power spending needs varies widely depending on trade

    Chart1

    0.0060.01

    0.0120.012

    0.0070.029

    0.0390.04

    0.0280.058

    0.0440.059

    0.0180.062

    0.1320.065

    0.0790.07

    0.2570.262

    Trade expansion

    Trade stagnation

    Spending needs as percentage GDP

    Sheet1

    AngolaLesothoBotswanaRSANamibiaZambiaMalawiDRCMozambiqueZimbabwe

    Trade expansion0.0060.0120.0070.0390.0280.0440.0180.1320.0790.257

    Trade stagnation0.010.0120.0290.040.0580.0590.0620.0650.070.262

  • One major exporter, and five countries that could import more than 50 percent of power

    Chart1

    -369-16

    -33-12

    104

    1718

    18-62

    58-60

    650

    6868

    72-17

    93-117

    Trade expansion

    Trade stagnation

    Net imports of power as percentage domestic consumption

    Sheet1

    DRCMozambiqueSouth AfricaZimbabweZambiaMalawiAngolaLesothoNamibiaBotswana

    Trade expansion-369-331017185865687293

    Trade stagnation-16-12418-62-60068-17-117

  • Trade expansionTrade stagnationRegional power trade increases reliance on hydro-power saving 40 million tons CO2 a year

    Chart1

    0.34

    0.59

    0

    0.07

    Power generation portfolio

    Sheet1

    Power generation portfolio

    Hydro0.34

    Coal0.59

    Gas0

    Other0.07

    To resize chart data range, drag lower right corner of range.

    Chart1

    0.25

    0.66

    0.02

    0.07

    Sales

    Sheet1

    Sales

    Hydro0.25

    Coal0.66

    Gas0.02

    Other0.07

    To resize chart data range, drag lower right corner of range.

  • 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 -41.50.7-40.8-37.80.6-37.2Diesel -0.8-0.30.3-0.8-0.6-0.20.2-0.6Gas -9.2-5.3-42.4-56.8-4.7-2.7-21.5-28.9HFO 0.20.4-4.9-4.30.10.3-3.6-3.2Hydro 11.547.543.45.11070Total 1.60.52.40.34.7-5.2-40.7-20.4-3.6-69.9

  • Economic gains? Trade shaves about one cent per kilowatt-hour from cost of power

    (US cents/kWh)Trade expansionTrade stagnationDifferenceCAPP79-2EAPP 1212 0SAPP 67-1WAPP 1819-1Angola611-5Botswana66 0DRC44 0Lesotho67-1Malawi55 0Mozambique46-2Namibia1112-1South Africa67-1Zambia 88 0Zimbabwe89 0

  • Rate of return on regional power trade infrastructure can be very high

    CountryPrice gain (US$/kWh)Net...

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