Transcript
Page 1: SADC’s Infrastructure:  A Regional Perspective

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Page 2: SADC’s Infrastructure:  A Regional Perspective

SADC’s Infrastructure: A Regional Perspective

Page 3: SADC’s Infrastructure:  A Regional Perspective

Africa Infrastructure Country Diagnostic:a multi-stakeholder effort

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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

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Key Message #1

Infrastructure could be contributing much more to

Southern Africa’s growth

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Infrastructure contributed to over one percentage point to Southern Africa’s recent growth spurt

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

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Key Message #2

Southern Africa enjoys concentration of MICs and several

(potentially) strong economies

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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

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Topographical profile of SADC countries

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Spatial distribution of economic activity

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Key Message #3

Road freight costs reasonably competitive but trade facilitation

adds high margins

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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

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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

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Condition of main regional corridors

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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

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Traffic flows along main regional corridors

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Some alternatives to Durban apparently look quite interesting as export routes

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Alternatives to Durban less attractive for imports

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• 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

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Key Message #4

Southern Africa’s regional road network generally very good,

with only couple of exceptions

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Network generally in reasonable condition except for stretches in DRC, Zambia

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Traffic flows visibly concentrated on north-south axis with much less on east-west

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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

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Key Message #5

Southern Africa enjoys extensive regional rail network but border crossings remain problematic

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Interconnection of seven national rail networks creates an extensive regional network

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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

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Most railways outside South Africa and Zimbabwe are only lightly used

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• 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

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Key Message #6

Port of Durban plays a dominant role in regional trading patterns

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Despite numerous ports traffic highly concentrated in Durban

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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

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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

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Key Message #7

Relatively advanced air transport market despite slower

market liberalization

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Strong hub and spoke structure evident around Johannesburg

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Southern Africa records high usage and air transport connectivity

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Steady increase in air transport internal to SADC region

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Southern Africa plays a dominant role in the top few air transport routes in Africa

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Regional air traffic heavily concentrated on routes from South Africa to Zambia

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All countries have relatively frequent connectivity with South Africa

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Aircraft fleet has shifted towards mid-sized planes rather than smaller planes as elsewhere

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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

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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

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Air safety standards in Southern Africa vary substantially across countries

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

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Key Message #8

Regional power trade could save SAPP area US$1 bn pa (and 40 million tons of CO2)

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Regional power transmission network already relatively advanced in SAPP area

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SADC has highest availability of power and is relatively efficient, despite which access is low

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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

Page 50: SADC’s Infrastructure:  A Regional Perspective

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

Page 51: SADC’s Infrastructure:  A Regional Perspective

Volume traded has potential to increase from 45 to 146 terra-watt hours a year

Trade Expansion Trade Stagnation

Source: Authors’ original research.

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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

Page 53: SADC’s Infrastructure:  A Regional Perspective

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

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

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Trade expansion Trade stagnation

Regional power trade increases reliance on hydro-power saving 40 million tons CO2 a year

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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

Page 57: SADC’s Infrastructure:  A Regional Perspective

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

Page 58: SADC’s Infrastructure:  A Regional Perspective

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

Page 59: SADC’s Infrastructure:  A Regional Perspective

Key Message #9

Completing regional fiber optic backbone is low hanging fruit with potentially high returns

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Southern Africa’s regional fiber optic backbone in the midst of major expansion

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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

Page 62: SADC’s Infrastructure:  A Regional Perspective

Substantially cheaper to call within SADC than elsewhere in SSA

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Significant progress with intra-regional roaming but mainly on post-paid plans

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No single operator dominates region, but several have important multi-country presence

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Until recently only three countries were connected to submarine cable

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Situation is changing rapidly with completion of various cables along the east coast

Page 67: SADC’s Infrastructure:  A Regional Perspective

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

Page 68: SADC’s Infrastructure:  A Regional Perspective

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

Page 69: SADC’s Infrastructure:  A Regional Perspective

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

Page 70: SADC’s Infrastructure:  A Regional Perspective

Key Message #10

Regional spending needs of $2.1 billion a year affordable for region

but insurmountable for some countries

Page 71: SADC’s Infrastructure:  A Regional Perspective

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

Page 72: SADC’s Infrastructure:  A Regional Perspective

Regional spending needs just 0.6% of GDP, but burden weights very heavily on a few nations

Page 73: SADC’s Infrastructure:  A Regional Perspective

Regional spending needs look high relative to historic infrastructure spending in some cases

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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

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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

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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%.

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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


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