By Eamonn Ryan
The Southern African Industrialisation Forum hosted a conference on 26–27 February 2024 with a range of panel discussions. This is part five of a five-part article.
The following discussion is titled “Leveraging Trade Agreements for Economic Growth in the SADC Region”, with the following panel members and key stakeholders:
- Peter Varndell: SADC Business Council Executive Secretary
- Desiderio Fernandes, FCFASA Federation President and Mozambican Logistics Professional
- Kafuta Mulemba, SADC Secretariat, SADC TA Lobito Corridor
- Gainmore Zanamwe, Afreximbank Senior Manager: Trade Facilitation
Railway and road infrastructure
One of the key areas of focus was the railway and road infrastructure, crucial arteries for transporting goods across vast distances. With an estimated increase in transportation demand, projected at about 36 billion units, significant investments are required to upgrade and expand railway networks. Additionally, the demand for trucking services is expected to surge, with approximately 2.2 million trucks needed to facilitate the movement of goods.
Despite these challenges, there are immense opportunities for investment amidst the infrastructure constraints. To address these challenges effectively, collaboration between the Southern African Development Community (SADC) and relevant financial institutions is paramount. By leveraging partnerships and innovative financing models, such as Public-Private Partnerships (PPPs), the region can overcome transportation hurdles and stimulate economic growth.
Port efficiency and digitisation
Efficient port operations are vital for facilitating trade and reducing bottlenecks in supply chains. The discussion highlighted the importance of enhancing port capacity and efficiency to ensure the swift movement of goods throughout the SADC region. Additionally, digitisation initiatives, such as the adoption of digital borders and efficient transit procedures, are essential for streamlining cross-border trade processes.
To support infrastructure development, organisations like the African Export-Import Bank (Afreximbank) have been actively involved in providing financial support and expertise. Through initiatives like the Border Markets Infrastructure project, Afreximbank is facilitating the development of efficient border infrastructure to facilitate trade flows. Furthermore, partnerships with regional economic communities and multilateral financial institutions are essential for co-ordinating efforts and maximising impact.
A key objective of infrastructure development is to promote industrialisation and value addition within the region. By establishing industrial parks and special economic zones along transportation corridors, countries like Zambia and the DRC are leveraging their natural resources to drive economic diversification. Initiatives focused on agri-processing and battery production underscore the importance of integrating infrastructure development with industrialisation strategies.
Despite the potential benefits of enhanced connectivity, challenges persist in data exchange and communication among government entities. Efforts to streamline data sharing and communication channels are crucial for improving co-ordination and decision-making. By harnessing digital technologies and fostering collaboration, the region can overcome these barriers and accelerate progress towards economic integration.
Lack of trust and information sharing
There is a pervasive lack of trust among stakeholders, which acts as a significant barrier to effective information sharing and synergy. While individual digitisation efforts have been observed at different levels, the absence of trust inhibits collaborative efforts, resulting in information silos and reluctance to embrace change within certain entities. This ‘shell effect’, as described by one participant, underscores the challenge of accessing and disseminating information vital for trade facilitation.
Despite concerted efforts by governments to promote digitisation, challenges persist at the national level, particularly regarding interconnectivity and data sharing. The absence of cohesive frameworks for information exchange reflects underlying trust issues that hinder cross-border co-operation and co-ordination. Participants emphasised the need for governments to prioritise interconnectivity initiatives and foster trust among stakeholders to ensure the seamless flow of information from the public to the private sector.
The discussion also touched upon logistical challenges, notably the imperative of just-in-time delivery for efficient trade operations. While existing infrastructure provides a foundation, addressing logistical challenges requires political will and collaboration among stakeholders. Initiatives such as multilateral business agreements and corridor development projects were highlighted as potential solutions to streamline logistics and optimise supply chain efficiency across the region.
Participants underscored the importance of private sector involvement in addressing day-to-day logistical challenges and ensuring the practical implementation of digital solutions. Emphasising the role of the private sector as key stakeholders in trade operations, participants advocated for their inclusion in decision-making processes and data transparency initiatives. By fostering greater collaboration between the public and private sectors, stakeholders can overcome trust barriers and drive meaningful progress in digitisation efforts.
Closing remarks
In closing, participants reflected on the need for sustained commitment and collaboration to overcome the challenges hindering digitisation for trade facilitation in Africa. Acknowledging the importance of addressing day-to-day logistical issues alongside long-term digitalisation goals, participants highlighted the role of trust, political will and private sector engagement in driving meaningful change. Looking ahead, the forum concluded with a call to action for stakeholders to work together towards building a more interconnected and digitally integrated trading environment in Africa.
As discussions continue and initiatives are implemented, the journey towards digitisation and seamless trade facilitation in Africa remains ongoing, with stakeholders committed to overcoming challenges and realising the full potential of digital integration across the continent.