Out from under the pall of gloom over Africa brought by COVID-19 and contracting economies emerges a deal that’ll see locomotives moving freight across the continent on the way to a brighter trading future.
This week the ink dried on a deal signed by TheloDB with the government of Ghana to repair and extend 217 kilometres of railway track to haul everything from iron ore and bauxite to cocoa for export from the coastal ports.
The railway will open up a new trade corridor and is another step towards African Continental Free Trade Area; the single market may have been postponed from July 1 to January, but political will for it appears to be growing across the continent. One of the impediments to this dream of trade on the continent is poor transport infrastructure. According to the African Development Bank, Africa’s total infrastructure needs between $130-170 billion-a-year and has a financing gap of $68-108 billion.
On top of this, the fact that this was a contract won at one end of the continent by an entrepreneur from another end of continent also bodes well for the pan-African future of business.
The entrepreneur behind it all is South African Ronnie Ntuli, the chairman of TheloDB, who worked on the deal for more than two years. He says the company is negotiating for at least two similar rail projects, one in West Africa and the other in Southern Africa.
“My passion in life, as an African, is economic development in the continent. It has to be sustainable development aimed at infrastructure and building industrial capacity,” says Ntuli.
The project will create many jobs and see locomotives shipped to Ghana from manufacturers in South Africa. TheloDB will also train workers in the Ghana run the railway and oversee its operation and maintenance on completion, expected in 2024.
It was difficult closing the project in the world of COVID-19, but Ntuli believes that the pandemic has an unintended consequence.
“Many countries around the world have a lot of capital liquidity and it is going into the capital markets right now,” says Ntuli.
“Our job is to tap into that liquidity so we can do the solid infrastructure projects that the continent needs.”
Get the best of CNBC Africa sent straight to your inbox with breaking business news, insights and updates from experts across the continent. Sign up here.