Market Trends of Africa Cross Border Road Freight Transport Industry
Growing Intra-regional Trade in the Region
The African Continental Free Trade Area (AfCFTA), which commenced in January 2021 under a liberalized trade regime, is one of the largest trading blocs in the world, with the majority of African countries operating under its privileged trade framework. The agreement will reduce tariffs among the member countries (41 countries and the RECs, including SACU, EAC, CEMAC, and ECOWAS) and cover policy areas such as trade facilitation and services and technical barriers to trade. Full enactment of AfCFTA would reshape markets and economies across the region and boost output in various sectors, including services, manufacturing, and natural resources.
The agreement covers both goods and services and provides a platform for individual countries to engage in intra-African trade through offers of tariff allowances and service commitments. The five prioritized sectors for liberalization within the agreement include business services, communication, financial services, transport, and tourism. The sectors that are anticipated to benefit from trade liberalization immediately include automotive, agro-processing, pharmaceuticals, textiles, chemicals, and mineral beneficiation.
Road Infrastructure Development in Africa
Africa has been steadily increasing investments in its road infrastructure development in order to enable and encourage road cargo transport. The African continent has significantly benefited from China's Belt and Road Initiative, where China has not only invested in the expansion of new urban and rural infrastructure but also has improved the existing infrastructure. Meanwhile, the UK-Africa partnership is also driving African socioeconomic development via infrastructure development.
Countries like Nigeria, Kenya, and South Africa are actively investing in the development of their road network and infrastructure, including the implementation of Information and Communications Technology (ICT) in order to monitor and communicate with trucks during their journey). Kenya has also started work on 800 km, about USD 2 billion toll-road contracts, and USD 3 billion rural road development contracts, which will help road freight companies get better reach and develop quality services. The superhighways like the Nairobi Southern Bypass, the Great North Trans-African Highway (Nairobi to Cape Town), and Nairobi-Thika are expected to make road cargo transport across Kenya and cross-border transport hassle-free.
The South African government allocated another USD 1.4 billion for the development of 940 road projects that, in the long run, is expected to improve connectivity and offer road freight operators greater access to remote markets.
