Transport Infrastructure Boosts Business

Whenever I’m in Nigeria and visit a company in Lagos, I anticipate traffic jams and leave ahead of time. Once I had to travel from Lagos Business School in Lekki to the UBA (United Bank for Africa) head office on Lagos Island – 30 km or about 18 miles. Someone recommended that I leave two hours in advance – which was excessive to my mind. But I took the advice, and I arrived about 30 minutes late! This speaks to the fact that geographic distance is more than just kilometers – and this applies within as well as across countries.

Highways in Johannesburg
Highways in Johannesburg

One important factor that accounts for geographic distance is transportation infrastructure. The Global Enabling Trade Report 2014 offers some interesting information. A country’s availability and quality of transport infrastructure is given a 1-7 score based on 7 indicators related to air transport, railroad, port, and road infrastructure. Availability indicators are based on objective measures while quality indicators are taken from the World Economic Forum’s Executive Opinion Survey.

These are the countries with the highest and lowest overall scores by region:

Mauritius and South Africa win the race. Looking into the details reveals the following:

  • Air transport: South Africa is the best positioned country with the highest passenger carrying capacity (817.9 million available seat kilometers (ASK)/week), and the highest perceived quality (6.1 score in a 1-7 range);
  • Railroad transport: South Africa wins again with the highest perceived quality (score of 3.4 ) (railroad availability not considered by the Global Enabling Trade Report 2014);
  • Port transport: while South Africa is the country best connected to global shipping networks (liner shipping connectivity index = 43.0, to be compared with a value of 100 for the country with the highest index in 2004), Mauritius is the one with the best perceived quality for port infrastructure (score of 4.9);
  • Road transport: 98 % of roads in Mauritius are paved, while South Africa’s roads have the highest perceived quality  (scoring 4.9).

Intra-Africa transportation is still challenging. However, there are pockets of well-integrated transportation systems. To the extent that infrastructure improves, cross-country geographic distances decrease, making intra-Africa business travel less costly and reducing the personal hassle of doing business. In short, improving infrastructure across Africa will reduce trading times and boost intra-African investments.

Any experiences with transportation in sub-Saharan Africa?

2 thoughts on “Transport Infrastructure Boosts Business

  1. its high time souther african countries realize that it takes more than just having lands and minerals to be successful economically. its all about how you organize all the factor of production with transport being a critical enabler

Comments are closed.