The case for the Africa50 fund

decharles.com
Africa 50
Africa’s Infrastructure
The case for the Africa50 fund
De Charles
De Charles
We build products, strategies and
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Technology + Africa
Made in Africa Foundation is a non-profit founded
in 2011 by Savile Row tailor Ozwald Boateng,
Nigerian businessman Kola Aluko, and Barrister
Chris Cleverly, to support master plans and feasibility
studies for transformational developments, and
large-scale infrastructure projects across the
African continent.
www.madeinafricafoundation.co.uk
The New York Session | What Africa can be in the next 50 years
Made in Africa Foundation and The New York Times sat down with
representatives from the AfDB, industry, and politics, to discuss
Africa’s potential and future in October 2013.
Photos by Kiara Kabukuru
Contents
Preface1
Executive Summary
2
The Report
2
Key Findings 2
Conclusion3
Power Infrastructure
4
Africa’s Power Supply 4
Power and Growth 5
Power Diversification 6
Power & Growth Feature - Nigeria 8
Transportation Infrastructure
Africa’s Roads
9
9
Africa’s Rail Network
10
Africa’s Travel Market
11
Africa’s Ports
14
Water Management
Water & Sanitation Access
16
18
References
20
References
21
De Charles
1
Preface
Ringing the NASDAQ opening bell in New York on 26th September 2013, Made in Africa
Foundation (MIAF) launched their Africa 50 fund, alongside Oscar-winning actor and
long-time MIAF supporter Jamie Foxx, African Union Commission Chairperson Nkosazana
Diamini-Zuma, and Sam Kutesa, Uganda’s Minister of Foreign Affairs soon to be the
President of the United Nations General Assembly. Initiated with half of its US$500 million
target already raised, the fund seeks to boost the state of African infrastructure by
backing feasibility studies and the early tasks that define new ventures rather than
providing project finance for those in existence.
According to Tas Anvaripour, head of Africa50 “African infrastructure projects are
increasingly capturing the attention of investors worldwide. However, the number of
bankable infrastructure projects brought to market is still insufficient, even though they
offer an excellent way to diversify investment portfolios and steady, long-term, and above
average returns.” Approximately US$55 billion or 57% of capital allocated for financing
African infrastructure development was unspent in 2009 and 2010 alone1, due to a lack
of credible projects. With increasing foreign interest in the continent, as well as the rise in
intra-Africa investments and capital raised by development banks, the Africa 50 fund aims
to reduce the time taken to develop infrastructure projects in Africa and ensure that there
remains a robust, steady, and investment-ready supply into the medium future.
Savile Row tailor Ozwald Boateng one of the co-founders of Made in Africa Foundation
stated “US$400 million of funding for feasibility studies and master plans across
sub-Saharan Africa would develop over US$100 billion of infrastructure projects, which in
turn would create a trillion dollars of value across Africa”. Through its findings, this report
attempts to encourage the establishment of further African investment vehicles.
De Charles
Building Africa | Mckinsey Global Institute, 2013
1
2
Executive Summary
Africa lacks access to power infrastructure. However, as shown in this report, a far larger
percentage of the continent exists in partial darkness since insufficient capacity – amongst
other issues – mean many Africans experience a sporadic electricity supply. The
continent’s poor transport network makes trans-African travel difficult and increases the
financial and temporal cost of business; additionally, transport has significant effects on
the rural poor increasing their price of kerosene by up to 170% when compared to urban
areas2.
To continue the rapid economic growth that begun across Africa at the beginning of this
century, dramatic levels of investment in infrastructure must occur, to build a foundation
capable of supporting new and growing businesses and a larger consuming class. An
additional incentive to catalyse infrastructure growth is for the continent to reap the
dividends from its population. By 2040 there will be approximately 1.2 billion people in
Africa’s workforce, which will be the largest in the world. With a significant proportion of
this number in employment, Africa could transition into a global economic force. However,
with unemployment especially among the youth currently high on the continent, if the
state of infrastructure does not drastically increase to further economic growth and create
new opportunities, through social unrest, Africa’s population could become its curse.
The Report
This report was produced by De Charles in collaboration with Made in Africa Foundation
to further highlight the state of Africa’s infrastructure, in particular power, transportation,
and water. The report draws on economic analysis, research and insight from De Charles
partners, and the opinion of Made in Africa Foundation and senior industry figures based
in Europe and across Africa.
Key Findings
Power
Africa’s power capacity is insufficient, evinced by sub-Saharan Africa’s 49 countries
collectively having approximately four-fifths of the UK’s capacity. The fact that most of the
continent’s power stations were commissioned before 1990 illustrates the shallow levels
of investment the sector has historically received, and that less than 5% of the total global
power project deals to have taken place between 1990 and 2010 were African, shows that
capacity growth is not rising fast enough.
De Charles
The True Cost of Kerosene in Rural Africa | IFC & World Bank, 2012
2
3
The continent unsurprisingly has the lowest power capacity density, which – alongside
poor power management – engenders blackouts. Electricity is unavailable in Nigeria for
on average eight months of the year, and the severity and frequency of these blackouts,
particularly in West Africa, has affected the cost and ease of carrying out business.
Transportation
Africa’s infrastructure deficit has given it the highest logistics costs globally. Fast and
efficient travel within the continent is difficult whether by road, rail or air, due to poor rail
and road network densities and conditions, and for air transport, a lack of the
ground-based navigational aids required to direct air traffic.
The movement of freight within the continent is being restricted by limited infrastructure.
Although Africa has a similar rail density to Asia, unlike Asia its share of global rail freight
has failed to grow with any significance, and stands at 1% compared to over 30% for Asia.
Though Africa is only involved with about 3% of global merchandise trade its ports in
general are almost at full capacity, with many key ports such as Durban, South Africa
operating above their rated container capacity.
Water
Blessed with significant amounts of water that include surface magnitudes second only to
South America, and newly researched groundwater reserves measured at over a
hundred times its renewable freshwater resources; Africa’s irregular rainfall and poor
water management renders some of its regions amongst the driest on earth. The
consequences include over 40% of sub-Saharan Africans without access to clean
drinking water, over half a billion Africans lacking adequate sanitation, and an
expectation that the continent will fail to meet the UN’s 2015 Millennium Development
Goals for drinking water access and – alongside South Asia – sanitation.
Conclusion
With its glut of natural resources and the inventiveness of its people, Africa defied odds
derived from its derelict infrastructure, and in the last decade grew at a rate second only
to emerging Asia. Therefore, as investment vehicles such as the Africa 50 fund aimed at
ameliorating Africa’s structural issues increase, it would be sensible to assume that Africa’s
growth will develop in its diversity and robustness. For the world, this would no doubt
provide a new economic power, and, for the continent itself, a new level of confidence and
vibrancy that it has not broadly experienced for over a hundred years.
De Charles
4
Power Infrastructure
Africa’s Power Supply
With 49 countries and a population of 826 million, sub-Saharan Africa has an installed
power generation capacity of only 78GW – approximately 83% of the UK’s capacity – even
though it has thirteen times its population. Close to 60% or 44GW of sub-Saharan Africa’s
capacity resides in South Africa, which with a population of only 53 million reduces the
installed capacity for the remaining population of 773 million to 34GW. This is a generating
capacity similar to that of Sweden that has a population of 9.5 million, and gives
sub-Saharan Africa an installed capacity per capita of just 0.04.
Discrepancies Between Generation Capacity and Density 2010
Installed Capacity GigaWatts
120
1500
90
1000
60
500
30
0
Africa
South Africa North Africa
SSA
Brazil
UK
Capacity Densities (kilowatt per thousand people)
2000
150
Capacity Density
Installed Capacity
0
Source: US EIA; UN World Population Prospects 2012 Revision; De Charles Analysis
There are an estimated 600 million people living without access to electricity in Africa.
Most of these people reside in rural areas where, due to Africa being sparsely populated,
the cost of transmission and distribution is exacerbated. In rural areas, the kerosene
lantern is one of the most widely used solutions for lighting. In addition to it being a health
risk due to the toxicity of its by-products emitted from burning, procurement of the fuel in
remote rural areas can amount to 70% of a family’s monthly income3. This restricts socioeconomic development by severely limiting the amount that can be spent on education,
healthcare and business capital.
Furthermore, large bands of the people who are connected to the transmission network
are in ‘partial’ darkness, experiencing a heavily disrupted and sporadic service. Due to
blackouts, power is unavailable for use in African countries for on average of 10% of the
year. This has resulted in businesses and more affluent individuals securing their own private supply using diesel generators.
De Charles
The True Cost of Kerosene in Rural Africa |Lighting Africa, 2012
3
5
Although it is the second largest African economy and most populous country on the
continent, electricity is unavailable in Nigeria for an average of almost eight months each
year, second to Sierra Leone where it is down for an average of 10 months. West Africa is in
general the most unreliable power market, with an average power downtime of two and a
half months of the year, leading to 17% of its power generation being based on diesel fuel4.
Power and Growth
Most of the continent’s existing power stations were commissioned before the 1990s, and
compared to the rest of the world Africa has invested far less in its power infrastructure.
In the two decades leading up to 2010, 119 out of the 2,653 global power project deals,
less than 5%, were closed in Africa. Approximately half of the continent’s deals were closed
between 2005 and 2010. Africa had the lowest overall growth in installed power
generation capacity in the two-decade period of 61%; however, more importantly due to
its fast population growth its power capacity density actually reduced.
The Continent’s Power Problem
Avg. Power Downtime
(% of a year)
The map illustrates the severity of The power problem in individual coutries, and notes the
percentage of surveyed businesses that noted power supply as an issue adversely affecting trade.
8.9%
Downtime > 40%
Downtime < 35%
Downtime < 20%
26.5%
30.7%
30.0%
Downtime < 15%
37.7%
24.2%
26.1%
Downtime < 10%
Downtime < 5%
69.0%
42.5%
70.7%
64.9%
No Data
43.9%
48.2%
69.2%
60.2%
80.0%
60.4%
39.6%
XX.X% -
Percentage of companies that cited
electricity supply as a business constraint
15.1%
9.7%
41.3%
9.0%
21.4%
Source: World Bank; Foster & Steinbuks 2008
De Charles
Prospects for the African Power Sector | IRENA, 2012
4
6
With a population growth of 64%, double that shown by Asia (30%) and Latin America
(34%), Africa experienced a 2% decrease in its power capacity density. Conversely, Asia
and Latin America the two other fast growing regions in the period experienced density
growths of 152% and 45% respectively.
At the start of the 21st century Africa began experiencing rapid growth, which led to it
having a compound annual growth rate second only to Emerging Asia over the last decade.
Although its power situation has been stabilising since the turn of the century, evinced by
a 2% power density growth between 2001 and 2010, the general state of the sector points
to Africa’s remarkable growth so far being down to only a narrow band of industries, since
non-pervasive power access economically constrains the broadening of sectors. For robust
growth to continue over the coming decades it is clear that power generation, transmission
and distribution must be principal considerations.
Power Diversification
To future-proof the power network and further decouple its markets from global
conditions, it is in Africa’s interest to seek to diversify its sources of power in this relatively
early developmental stage. Compared to other regions, Africa’s power is currently
generated from the narrowest range of sources, and it is also behind the others with the
proportion of power it generates from wind, solar and other renewables aside from hydro.
Number of Power Related Project Deals Closed 1990 - 2010
800
700
Darker regions indicate deals closed between 1990 & 2000
Lighter regions indicate those between 2001 & 2010
657
658
600
Projects closed
2001-2010
500
351
400
300
200
119
39 deals
100
0
Ea
st
So
As
ia
La
tin
ut
&
hA
Pa
c
sia
ific
Source: Private Participation in Infrastructure Database
De Charles
Su
b-
Am
er
ica
Sa
ha
ra
n
Af
ric
a
7
South Africa is the only country on the continent that has a portion of its power generated
from nuclear fission, which amounts to approximately 2.5% of its total installed capacity.
However, 90% (40GW) of South Africa’s power generation comes from fossil fuels, in
particular the very polluting coal. Continent-wide, 78% of installed electricity capacity
uses fossil fuels as an energy source, but worst still, due to the prolific unreliability of
supply that leads to private generation from diesel, the total electricity generated annually
from both public and private entities has a far higher proportion produced from fossil fuels.
Africa is somehow fortunate to have a power sector at such a nascent stage, as it provides
the opportunity to plan and implement a diverse and more sustainable power generation
network. Based on its climate, geography and water resources, Africa could theoretically
generate enough renewable electricity to cater for the whole world. However, the
investment needed for new generation capacity is approximately the same as that needed
for its transmission and distribution network5.
Total Installed Power Generation Capacity
A breakdown of different continents’ power generation industry by type of source
Non-Renewable
North America
Nuclear
Latin America
Hydro
Europe
Non-Hydro Renewables
Asia & Ocenia
Africa
0
20
40
60
80
100
%
Source: US EIA Database; De Charles Analysis
With the global community’s desire to move towards sustainability and the volatility
inherent in global fossil fuel markets, the world cannot afford for a region that is projected
to be one of the most populous and economically significant in the coming century, to have
an economy predominantly based on non-renewables.
De Charles
World Energy Outlook 2011 | IEA
5
Power & Growth Feature - Nigeria
The Correlation of Power and Growth - 1990 to 2010
Time-series and correlation analysis of annual public power production and GDP for Nigeria and Brazil.
GDP is referenced at 2005 US dollar value.
Nigeria
200
Power Production
30
GDP
GDP (USD Billion)
25
140
20
80
15
20
1990
1995
2000
2005
2010
Brazil
Power Production
1200
500
GDP (USD Billion)
1000
800
325
600
400
01’-02’ Brazilian Energy Crisis
1990
1995
2000
2005
2010
Brent Crude Spot Prices
100
GDP
80
115
40
US$ per Barrel
60
20
30
1990
1995
2000
Source: World Bank; US EIA; Thomson Reuters; De Charles Analysis
De Charles
De Charles
150
Figure 2
Nigeria
200
Annual Govt. Power Production (TWh)
GDP
Source: World Bank; UN Database; De Charles Analysis
Amongst the background of growth,
the percentage of Nigerians living
on less than US$2 per day rose from
80.4% in the early 90s to 84.5% in
2010, equating to its poverty
population growing by 54 million in 20
years . Until the supply and
distribution of power increases,
growth in resource-rich countries like
Nigeria will remain less than robust
and benefit the few.
10
Figure 1
Source: World Bank; UN Database; De Charles Analysis
Nigeria’s low power capacity
density implies that its steep GDP
rise was mainly driven by a few
sectors, as limited and unreliable
power access is not conducive to
sector diversification. Although
Nigeria is populous with several
opportunities and saw a 524%
rise in household consumption
between 2000 and 2010, analysis
in figure 3 points to Nigeria’s oil
exports being chiefly responsible.
Annual Govt. Power Production (TWh)
Relative to Brazil, Nigeria’s
annual power production
correlates weaker with its GDP.
Brazil is the more advanced
economy which unlike Nigeria has
power distributed to its entire
population. Regardless, Nigeria
grew rapidly, which in context
indicates that significant private
generation filled power shortfalls.
GDP (USD Billion)
8
2005
2010
0
Figure 3
Source: World Bank data ;UN World population Prospects 2012 revision; UN Databse; US EIA statistics;
Thomson Reuters statistics; De Charles analysis
9
Transportation Infrastructure
Due to its huge infrastructure deficit, Africa reportedly has the highest transportation
costs in the world. At 12.1% of transported goods value, land transport costs are
approximately twice the global average and a third higher than those in other emerging
markets; while costs in landlocked countries are significantly higher with 56% of goods
value being reached in Malawi6.
Africa’s Roads
Road coverage in Sub-Saharan Africa is lower than in any other area. The region’s average
road density with respect to its land area is just less than two-thirds that of Indonesia and
approximately a third of China’s. The lack of a widespread road network is illustrated by
comparisons with Canada and Australia. The two countries are ranked second and sixth in
the world by land area, and 228th and 233rd for population density7. These nations’ road
networks, like their people, are concentrated within cities and towns, between which there
exists ample undisturbed environments. Sub-Saharan Africa’s population density is over
ten times greater than both countries’ figures, but its road density with regard to
population is a tenth that of the their value.
Comparison of Road Density Measurements
Road population density - km of road per thousand population
Road area density - km of road per thousand sq. km of country land
40
280
32
210
24
140
16
70
8
0
Nigeria
South Africa
Kenya
SSA
Australia
Canada
Road Population Density
Road Area Density
350
0
Note - SSA represents the average of values in sub-Saharan Africa
Source: World Bank; AICD Database; UN World Population Prospects 2012 Revision; De Charles Analysis
6
De Charles
Africa’s Transport Infrastructure | World Bank, 2011
7
UN department for Economic and Social Affairs
Pop. Density
Area Density
10
Only 23% of classified roads in sub-Saharan Africa are paved, which translates to 16% of all
roads in the region including those unclassified. None of the classified roads are
considered in very good condition, defined as requiring no road works, while 39% of
classified roads are said to be in a state that requires strengthening or partial
reconstruction. As is most likely, if all unclassified roads are included in this bracket, it
would translate to 58% of all roads in sub-Saharan Africa requiring strengthening or some
degree of reconstruction in order to become suitable conduits for passage. Mauritius
recorded the highest number of roads in good condition at 77% of those classified, while
the republic of Congo had the highest amount in need of rehabilitation at 74%.
Africa’s Rail Network
Between 1995 and 2005 the rail network within sub-Saharan Africa was predominantly
used for transporting freight as opposed to passengers. On average 80% of traffic in the
region was entirely freight related. Even some of the most prominent economies such as
Uganda and South Africa had 100% and 99% of their traffic respectively made up of freight
goods. However, Africa is the region that by a significant amount transports the lowest
volume of goods by rail worldwide, which in conjunction with the previous statistic
illustrates its limited rail network, the length of which is the lowest globally. In 2012 the
continent had a fifth of Europe’s freight traffic, and transported the equivalent of only 1%
of global railway goods traffic.
Regions’ Share of Global
Rail Freight Market
Regional Rail Densities
km per million people
Percentage of total
Billion Tonne-kilometres
400
350
300
Americas
33%
*The region includes Turkey
**The region includes Russia
250
200
Asia, Ocenia
& Middle East
37%
150
100
68.4
72.9
Africa
1%
50
0
Europe*
Africa
Americas
Asia & Oceania**
Source: UIC Rail Database; UN World Population Prospects 2012 Revision; De Charles Analysis
Russia
33%
Europe
6%
In the same year Africa and the Americas both each facilitated the equivalent of 1% of the
world’s total passenger traffic across their rail networks. Passenger travel on railways in
the Americas – the US in particular – has been in decline since the 1950s, with passengers
choosing instead to use automobiles and aeroplanes for intra-city and cross-country travel
respectively. The Americas region however has over five times the railway density with
regards to population and facilitates over twenty-times Africa’s freight traffic across its
lines.
De Charles
11
Although slightly lower, Africa does have a similar rail density to Asia, and, if Russia is
excluded from the Asian continent8, Africa’s density actually becomes minutely higher.
Regardless, and even with Russia excluded, Asia’s rail network handles the highest
passenger traffic of any region at 76% of the global total, and since 2009 – when it
overtook the Americas due to its post-recession decline – it has also facilitated the most
freight traffic equivalent to 37% of the total global figure.
Africa’s comparatively low passenger and freight traffic, indicate a system that is currently
too underdeveloped to be an attractive option for a range of passengers, or an
economically feasible one for a suite of freighters. Even with a similar rail density due to
its large populace, Asia illustrates with its globally competitive costs for rail freight, and
dominance in passenger traffic for both standard and high-speed rail9, what can occur if
adequate investment is put into increasing system coverage and standards.
To sustain Africa’s trade growth, and to allow the fullest effect of the free trade policies
proliferating within Africa’s defined economic communities, investment to create an
efficient pan-African railway will be imperative.
Africa’s Travel Market
The two most ostensible issues with Africa’s aviation industry are its limited data
availability and poor safety record. According to the World Bank, data such as passenger
numbers are often never submitted or done so up to five years later by African airlines to
the International Civil Aviation Organisation, which at best engenders a considerable delay
when analysing the minutiae of the continent’s industry. In 2012 African airliners
experienced an increase in their hull or fuselage loss rate, from 1 in every 306,000 flights
to 1 in 270,000. This is by far the worst record globally, and has led to an EU ban on a few
African carriers with the worst records, as well as the Abuja declaration. The declaration
endorsed by the African Union in January 2013, aims to strategically increase the safety
and data transparency of African carriers.
North
Europe Latin
S. Asia & Africa Industry
America
Amerca Pacific
Average
2011
2012
0.00
0.00
1.28
0.25
3.27
0.37
0.00
0.15
0.42
0.48
3.71
0.20
Table 1 - Comparison of regional figures for aeroplane hull losses
per million flights
Source: IATA Annual Review 2013
as it is in the International Union of Railway’s definition
8
De Charles
Asia had 69% of total high-speed traffic with the rest being European;
China alone had 40% of traffic
9
12
On average only 15% of Africa’s airports received scheduled flights in 2007, a reduction
from 18% in 2001. The change in the continent’s number of city pairs10 has been negative
on average, concurring with the reduction in scheduled flights. Concerns should exist in the
ability of Africa’s air transport system to deal with its own growing travel demands, caused
by increasing commercial activity and a more affluent population. Ethiopia presents a good
example. Domestically, the aviation industry appears in decline with the number of the
country’s airports receiving a scheduled service dropping from 29 to 6 between 2001 and
2007. It also had a 6.5% and 22% recession in seat-kilometres and domestic seats during
the same period, and a -42 net decline in domestic city pairs. However, during the same
period its international market grew with a +6 net increase in international city pairs, and a
169% growth in intercontinental seats supplied.
African Airport Infrastructure Efficiency
An illustration showing what percentage of the total number of airports are used
in the ten largest economies in sub-Saharan Africa
South Africa
Used Airports1
Nigeria
Unused Airports2
Angola
Sudan*
Ethiopia
1
Defined as airports with
advertised travel schedules
2
Defined as the total number of
airports less those with travel
schedules
*
Prior to the secession of South Sudan
in 2011
Ghana
Tanzania
Cameroon
Côte d'Ivoire
Gabon
0
20
Source: AICD Database 2007 data; De Charles Analysis
40
60
80
100
%
In the context of the economic gains Ethiopia and other African economies have made
in the past decade, the large disparity between domestic and international air transport
markets is more likely to indicate poor domestic sector management Africa’s governments
that is stifling growth and breeding recession, rather than necessary reductions due to
an African populace unable or unwilling to use air travel. International travel markets in
African countries are generally more competitive than their domestic equivalent thanks
to previous liberalising actions. The Herfindahl index quantifies the disparity, with average
value of 0.3 and 0.8 for the continent’s international and domestic air transport markets
respectively. Ethiopia’s domestic market is completely state-controlled indicated by its
Herfindahl index of 1, while its international market is slightly more open with a score of
0.7. Across the continent foreign carriers provided over 14 million seats on international
flights within Africa’s different economic communities in 2007, and handled 140 country
pairs.
De Charles
Direct flight links between two cities
10
13
Comparing African Countries’ Domestic and International Travel Industries
Change in international & domestic city pairs, and intra-Africa and domestic total seat capacity are compared
Herfindahl index measure, a measure of a market’s competitiveness in the right section of graphs
Ethiopia
1.0
1.0
Percentage Change (%)
0.8
Percentage Change (%)
Herfindahl Index
unitless measure
Mauritania
0.6
0.4
0.2
0.0
-0.2
-0.4
0.6
0.6
International Market
0.4
Domestic Market
0.2
0.0
-0.2
-0.4
-0.6
-0.6
-0.8
-0.8
1.0
Percentage Change (%)
Percentage Change (%)
0.2
0.1
0.0
-0.1
-0.2
-0.3
ex
In
d
at
s
hl
Se
da
rfi
n
0.6
0.4
0.2
0.0
-0.2
-0.4
-0.6
-0.4
-0.5
-0.6
0.6
0.4
0.3
an
e
Ai
Ci
ty
Madagascar
0.4
rp
l
rp
l
rfi
n
Pa
irs
da
an
e
hl
Se
In
d
at
s
ex
-1.0
He
Kenya
Ai
Ci
ty
Pa
irs
-1.0
He
-1.0
-0.8
-0.6
-1.0
-1.0
Source: World Bank; AICD Database; De Charles Analysis
In 2007 there were on average 18.1 more international city pairs than domestic, but the
growth between 2001 and 2007 was minimal at 4.5%. To increase international traffic
going forward and better connect African countries, investment in more widespread
navigational infrastructure will be essential. Currently ground-based navigational aids,
required to assist air traffic control and pilots when airborne, are lacking in sufficient
quantity and distribution to provide pan-African coverage. Narrow corridors with
sufficient coverage exist between South Africa and Egypt and along the West African coast
from Tunisia and northern Algeria round to Gabon11. The rest of the continent however,
especially the Sahel belt, is not on par and has been described as unsuitable by aviation
organisations.
De Charles
Ground-based navigational aids data from AICD, De Charles Analysis
11
14
Africa’s Ports
African ports are working at virtually full capacity. At the end of 2005 port utilisation was
estimated to be at 80% of capacity even though – just as today – Africa was dealing with
only 3% of global merchandise trade.
Port
Traffic (TEU)
Capacity
(TEU/yr)
Capacity Used
(%)
Abidjan, Côte d’ivoire
Cape Town, South Africa
Durban, South Africa
Dakar, Senegal
Luanda, Angola
Mombasa, Kenya
Onne, Nigeria
Rades, Tunisia
Sudan, Sudan
Tema, Ghana
500,119
690,895
1,899,065
331, 191
377,208
436,671
86,290
380,000
328,690
420,000
600,000
950,000
1,450,000
400,000
400,000
600,000
100,000
400,000
400,000
375,000
83%
73%
131%
83%
94%
73%
86%
95%
82%
112%
Table 2 - Comparison of traffic and capacity of African ports
in the twenty-foot equivalent unit (TEU)
Source: AICD Database 2005
In the same year ports such as Durban in South Africa and Tema in Ghana were working
above their rated container handling capacities, even though the former and Said in Egypt
were the only ports on the continent that processed over a million TEUs. The port of
Mombasa, one of the two most important in East Africa, recently highlighted the issue
when its capacity was upgraded by a third to 800,000 TEUs per year at cost of
US$62 million. Even with this, the port is expected to continue operating above its new
capacity by at least 12.5%12, until work on its new USD320 million extension that began in
2012 is completed.
Africa’s 3% share of global trade value was the same in 2012 as it was in 1990, only dipping
to a 2% import and export average between 1995 and 2005. Asia starting from a higher
position increased its share by 10 points to 33% during the same period. The value of
Africa’s imports and exports grew slower than all other regions between 1990 and 2000 at
30% and 40% respectively, while, being within its important decade of growth, Asia grew
the fastest in this period by 120% and 132% for imports and exports respectively. In the
first decade of the 21st century however, Africa’s imports and exports took over growing
by 267% and 244% respectively, faster than any other continent, with a 349% increase
occurring between 2002 and 2012. Also of note was the shift in trading partners, as
between 1990 and 2009 Africa’s trade with non-OECD countries grew by over 260%. In
1990 84% of trade value was with the then 32 member states of the OECD, but by 2009
this share had reduced to 56%.
De Charles
Economist Intelligence Unit
12
15
African trade value in the last decade has been helped by the dramatic rise in oil revenues
and other commodity prices. However, volumetric trade growth has also been significant
with imports and exports in sub-Saharan Africa growing at 23% and 85% respectively
during 2005 and 2012, faster than those in North Africa.
Growth in African Trade
35
700
30
600
25
500
20
400
15
300
10
200
5
100
0
0
-5
-100
-10
-15
-300
Export Growth
-20
-400
Export Value
-25
-500
Import Value
-30
-35
-200
Import Growth
1991
1996
Trade Value (Billion USD)
Percentage Growth (%)
The value of import and export trades and their growth using
2013 exchange rates as benchmark
-600
2001
2006
2011
-700
Year
Source: UNCTAD Database; De Charles Analysis
All of the above points to Africa requiring an increase in the capacity of its ports for its
rapid trade growth that began at the turn of this century to not be curtailed. There are
presently international trade barriers that are limiting the continent’s exports in
particularly, which multilateral organisations and activists are trying to remove. However,
it should be noted that on the current evidence if and when these tariffs are removed,
substantial investments in port infrastructure would still be needed for considerable
export gains to be enabled.
De Charles
16
Water Management
Africa is blessed with vast water resources. It has significant surface amounts, second only
to South America, thanks to the rivers Congo, Nile, Zambezi, and Niger, and Victoria the
second largest lake in the world. Groundwater makes up over 95% of the source of
freshwater that humans use13 and Africa has the second largest groundwater reserves
after Asia, which amounts to 23% of the world’s total for a region that currently houses
16% of the globe’s population. Recent research was able to map and quantify the amount
of groundwater reserves Africa has stored and readily available in aquifers for the first
time. It found this accessible amount to be twenty times the water stored above ground
in Africa’s lakes, rivers, reservoirs and wetlands, and more than 100 times the continent’s
annual renewable freshwater resource14.
Irrespective of this, Africa is noted as the second driest region after Australia15, which as a
continent has groundwater reserves and surface water less than 22% and 0.7% that of
Africa’s, and an average rainfall figure approximately 60% of the Africa’s amount. This
opinion though is due principally to the wildly uneven distribution of water reserves and
rainfall on the continent, which has not yet been remedied by sufficient water management
infrastructure.
Average Rainfall by Country
Average rainfall on the continent in mm per year
Avg. Rainfall > 2000mm/yr
Avg. Rainfall < 1500mm/yr
Avg. Rainfall < 1000mm/yr
Avg. Rainfall < 700mm/yr
Avg. Rainfall < 250mm/yr
No Data
Source: World Bank Database
De Charles
UNEP
Quantitative maps of groundwater resources in Africa | A M MacDonald et al 2012
15
National Geographic, World Wildlife Fund (WWF)
13
14
17
Central Africa has the highest average annual rainfall of the continent’s regions at
1,628mm. The region also houses the Congo River, the deepest and – based on volume of
water carried – second largest river in the world, as well as its basin that alone drains 30%
of the continent’s freshwater16 for 10% of Africa’s population that within it reside.
Conversely, North Africa has just over a tenth of Central Africa’s annual rainfall, lower than
the global average rainfall over deserts.
Average Rainfall Comparison (mm per year)
Average annual rainfall of African countries and regions
compared with dry and wet benchmarks and global averages
0
500
1000
1500
2000
2500
3000
3500
Libya
Niger
North Africa
Tunisia
Mali
Chad
Morocco
Sudan
Australia
Southern Africa
Kenya
Zimbabwe
Ethiopia
East Africa
Tanzania
West Africa
Nigeria
Malawi
Rwanda
Cameroon
Central Africa
Myanmar
Equatoial Guinea
Liberia
Colombia
Papua New Guinea
.R
g
Av
.R
g
Av
Source: World Bank; CIA World Factbook; US Geological Survey; De Charles Analysis
n
n
lo
ai
lo
al
tR
al
nf
er
nf
ai
es
ai
.D
g
Av
Note - North, West, Central, East, and Southern Africa represent the average rainfall
of the countries in the respective regions
h’s
rt
Ea
nd
La
l
al
nf
e
ac
rf
Su
De Charles
16
WWF, UN Economic Commission for Africa (UNECA)
18
Water & Sanitation Access
Approximately 75% of African’s have access to a source of water that is likely to be
protected from external contamination. However, with limited infrastructure to manage
the distribution and utilisation of water, the World Bank states that only 58% of
sub-Saharan Africans have access to clean drinking water, and the growth in access appears to be lagging behind the growth of the region’s population. Additionally over half a
billion Africans lack adequate sanitation, a number that is decreasing – albeit slowly – as
those lacking has decreased from 74% in the 90s to 69% in 2006.
Changes in Africa’s Access to Water and Sanitation Between 1990 to 2000
CAGR of changes in the percentages of national populations with access to water and sanitation, between the above period.
The continent is brokendown in to economic groups, and access by different water and sanitation technologies.
Piped Water
5
4
3
2
1
0
-1
-2
-3
Water Access
Surface Water
Standpost
Low-income
Well/Borehole
Fragile States
Middle-income
Septic Tank
Sanitation Access
Resource-rich
15
12
9
6
3
0
-3
Open Defacation
Improved Latrine
Traditional Latrine
Source: World Bank; De Charles Analysis
De Charles
19
Consequently, Africa is the only region not on track to meet the 2015 UN Millennium
Development Goal (MDG) for access to drinking water, and alongside south Asia it is
predicted to not meet the MDG target for sanitation17.
Limited sanitation and access to clean water severely affects the continents wellbeing,
predominantly through disease and low agriculture yields. Diarrhoea, cholera and other
waterborne diseases are able to cause death and malnutrition, especially among infants,
and result in US$3.1 billion in lost value from Africa’s GDP each year due to the reduced
productivity from workers sick days18. Ample clean water is required for the
water-intensive task of agriculture. Currently only 7% of agricultural land in Africa and 4%
in sub-Saharan Africa employs water management for irrigation, compared to 38% in Asia.
The unmanaged others run by subsistence farmers are at the mercy of local rainfall, the
failure of which can literally be the difference between life and death.
De Charles
Targeted sanitation is defined as private or shared, but not public, facilities that are
able to hygienically separate waste from human contact.
17
Africa’s Water and Sanitation Infrastructure | World Bank, 2011
18
20
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De Charles
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De Charles
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De Charles
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