How investing in road infrastructure can unlock Africa’s trade potential

Transportation in Africa has long been an issue that has hindered economic growth and development on the continent. Ali Mbogo, Chairman of Lapsset, emphasized in a recent interview the importance of improving trade logistics and infrastructure in order to unlock Africa's trade potential. Mbogo highlighted that compared to other parts of the world, transport in Africa takes much longer and is more expensive, making African products less competitive. He noted that investing in road infrastructure plays a crucial role in addressing these challenges, particularly in the East Africa region. Mbogo explained that by reducing the distance through improved road networks, the competitiveness of African products can be enhanced as costs are lowered. However, Mbogo underscored that logistics alone is not sufficient to drive trade growth. He stressed the significance of having an efficient documentation process to facilitate smooth trade operations. Mbogo provided an example of the impact of delays in documentation on shipping operations, leading to significant financial losses. He emphasized that an efficient customs system and streamlined documentation processes are essential components of a robust logistics system. Warehouses, road transport, and cargo offloading facilities are all integral parts of the logistics supply chain that need to be optimized to enhance trade efficiency. When discussing the importance of investment in the logistics sector within Africa, Mbogo highlighted the need for intensive financing and the role of good governance in attracting investors. He pointed to Rwanda as a prime example of a country that has made significant progress due to its good governance practices, which have attracted foreign investment and fostered economic growth. Mbogo emphasized that stability, transparency, and efficiency in government processes are key factors in enticing investors to support infrastructure projects and trade initiatives in Africa. Mbogo called for improvements in governance, stability, and the reduction of corruption and bureaucracy to create a more investor-friendly environment in African countries. He shared his optimism that with the right governance structures in place, Africa could become a magnet for investment opportunities, leading to increased economic prosperity and development. Mbogo cited the examples of Rwanda and Kenya, where proactive leadership and a commitment to Pan-Africanism have been instrumental in driving economic growth and trade partnerships within the region. In conclusion, Mbogo reiterated the need for African countries to work together towards a common goal of enhancing trade efficiency and reducing barriers to cross-border transactions. He advocated for the establishment of a central bank for Africa and the adoption of a common currency to simplify trade transactions and reduce reliance on external financial systems. By addressing bureaucratic hurdles and promoting good governance, Mbogo believes that Africa can realize its full economic potential and attract a wave of investments that will fuel sustainable growth and prosperity on the continent.