If time is money, then Beitbridge must be the most expensive place. Late last year, trucks laden with goods such as cobalt from Congo, copper from Zambia and tea from Malawi meandered for miles as they waited to cross the Limpopo into South Africa. Many cars have been waiting there for days. Some drivers are bribed to jump to the front of the line -- 1,000 rand (about $68) buys speed, others don't. Four drivers are said to have died in their cars in 2020 while waiting.

African politicians have expressed a desire to break these bottlenecks. As of now, 41 of Africa's 55 countries have ratified the African Continental Free Trade Area (AfCFTA), which can facilitate intra-regional trade and thus boost economic development in the African region. As shown in the chart below, in 2020, only 18% of exports from African countries occurred between African countries, which is much lower than North America (30%), Asia (58%) and Europe (68%). More intraregional trade leads to more jobs, higher wages and less poverty.

AfCFTA is committed to promoting intra-African trade in two ways. The first is to reduce tariffs, especially between countries in different regional organizations, such as the Southern African Development Community and the East African Community. The International Monetary Fund estimates that this could boost intra-African trade by 15-25%. However, the other way - reducing "non-tariff barriers" can be doubly effective, because those barriers are what really hinder trade.

Weak infrastructure is one such obstacle. Africa is huge—the size of China, India, the United States, and most of Europe combined—but its rail network isn’t much larger than that of France and Germany combined. Many railroads were built by colonial companies, mainly to connect mines to ports, not to connect countries. The status quo of the existing track is also struggling to maintain. Under former president Jacob Zuma, the operator of South Africa's national rail network has been hollowed out by corruption. Newly built by China, Kenya's Mombasa-Nairobi and Jakarta railways are underutilized, either because it is difficult to compete with road freight, or because of a lack of supporting infrastructure such as warehousing.

The port throughput capacity is small and customs clearance is slow. The average wait time for cargo at African ports is more than two weeks, compared with less than a week in Asia, Europe and Latin America, according to the UK-based development finance agency cdc Group. The African Development Bank estimates that processing costs are about 50 percent higher than in the rest of the world.

About 80-90% of goods in Africa are transported by road, but the capacity is not enough. The density of the road network is among the lowest in the world. A 2018 report by the Export-Import Bank of India said only 800,000 of the 2.8 million kilometers of roads in sub-Saharan Africa are paved. The road planning is also unreasonable. Some are duplication of colonial railways, and many roads are laid in ethnic areas with great influence.

The International Monetary Fund estimates that the continent's trade would increase by 7 percent if the quality of Africa's infrastructure were to match the global average. And surprisingly, greater gains can be made by improving the way trade flows—unblocking existing channels rather than building bigger ones. The International Monetary Fund believes that if Africa's logistics quality is improved to the global average, African trade will increase by 12%. A recent paper by French economist Patrick Plane points out that logistics costs in Africa are three to four times the world average, so if the quality of logistics improves, the benefits will be huge. The African Development Bank estimates that existing logistics costs could increase commodity prices by 75 percent. As long as this situation does not change, Africans will not fully experience the benefits of globalization and free trade.

Why are logistics costs so high in Africa? Partly because of a paradox: those with a need to transport goods complained about not being able to find a container truck, and those with one complained that their vehicles had been sitting idle for long periods of time. One reason for this problem is that African countries buy more than they sell. Mark Pearson, from a consultancy in Lusaka, Zambia, said the cost of delivering goods from Durban, South Africa to Lusaka was twice as high as the opposite direction, because the truck driver could not be sure that the return trip would not be empty, so he asked for double the cost. TOLL. Another scenario is waiting – a van carrying goods from Lagos to the northern Nigerian city of Kano can wait for weeks until there are enough livestock or vegetable consignments to cover the cost of the return trip. So trucks are often overloaded when heading south, causing damage to both the truck and the road.

The small fleet size makes African shipping even worse. About 80 percent of freight forwarders in Africa have fewer than five trucks. These micro-enterprises are counting on making money from this shipment to make the next shipment, and a flat tire could bring their business to a screeching halt. Sigma Feeds, a company based on the outskirts of Nairobi, used to run its own fleet, but couldn't hold on because the pressure was too great. "Drivers may siphon off fuel to sell to pay for their children's school fees," said Vandan Shah, the company's chief executive.

Another problem is the lack of information. In most parts of the world, large companies can purchase train transport or truck logistics services on the logistics spot markets. This is not the case in Africa, where miners or brewers have to sign long-term contracts with large logistics companies – such as Bolloré or South Africa’s Imperial Logistics – that, whether used or not, they agree to Its logistics capacity is paid. "There is no visibility between supply and demand," explains Wale Ayeni of the World Bank's International Finance Corporation (IFC).

Startups, such as Kenya-based Lori Systems and its Nigerian rival Kobo360, hope to solve this problem through digital marketplaces that match traders and shippers. Not only does this reduce wasted capacity, it also reduces the ability of freighter alliances to drive up prices. The startups also help check customs clearance documents, check driver backgrounds, advance cash to truck drivers, and provide repairs in the event of a breakdown. Ife Oyedele, co-founder of Kobo360, pointed out, "If the tire falls off, the driver can log in to our app to order a new tire."

"Infrastructure remains a headache," said Uche Ogboi, owner of Lori Systems. "But what we thought was -- it's a government thing, and we're going to have to deal with it until the government finally fixes it." She believes that Lori Systems could help solve more than half of the obstacles that lead to high transportation costs, such as getting drivers Can easily send customs clearance documents to border checkpoints.

"Reliability is very important when doing business in Africa," said Mohammed Akoojee, owner of Imperial, which bought a stake in Lori Systems last year. His customers would rather pay more to ensure on-time delivery than lower shipping rates and longer shipping times. Imperial hopes to use Lori Systems' software to build a freight market.

The deal reflects a broader trend of consolidation in the African logistics industry. In March, Dubai-based port operator dp World bought Imperial with plans to set up a ship-to-shop company covering much of Africa. Last year, Dubai World and cdc Group joined forces to develop African ports, including those in Egypt, Senegal and Somaliland. Another company, Arise Ports & Logistics, launched in 2020, is partly owned by an investment fund jointly set up by Danish shipping giant Maersk and Singaporean trader Olam. According to the US think tank CSIS, Chinese companies are involved in operating or building at least 46 ports in sub-Saharan Africa.

Logistics companies, as well as businesses with freight needs, want the long-awaited idea of ​​"trade corridors" to come to fruition. These "trade corridors" are complexes of hard and soft infrastructure connecting countries. At that time, the containers from Shanghai will be shipped to Lagos or Mombasa, and then, because all the customs clearance documents have been approved, the containers can be directly shipped to countries such as Niger or Uganda.

AfCFTA aims to encourage such trade facilitation measures. This year, it pushed forward a plan to reduce foreign exchange costs by allowing traders in one country to pay in their own currency instead of dollars in another. But overall, the plan has been slow. Although AfCFTA has launched more programs than NASA has sent rockets, no trade has actually been conducted under the terms of such a program. "(African countries) lack a sense of urgency," said David Luke of the London School of Economics.

The current stumbling block is the rules of origin - the foundation of any trade regional organization. The big powers in the European Union (such as Germany and the pre-Brexit Britain) advocate liberalization, while Africa's largest economies—Egypt, Nigeria, South Africa, and Kenya—have protectionist leanings. External factors add to the difficulty of coordination: the EU has many different types of trade agreements with African countries, making it more difficult for these African countries to harmonize their own rules.

Disputes between countries could hamper trade for months. Rwanda and Uganda closed their borders for three years and only recently opened them. Kenya banned the import of Ugandan chicken and eggs for most of last year, amid dissatisfaction among Kenyan farmers because of Ugandan's staggering poultry production. In 2020, a dispute between transport unions in Gambia and Senegal made it difficult to transport goods from Banjul to Dakar. Examples like this go on and on.

Negotiations on rules of origin have stalled, hampering progress elsewhere. Many countries still rely on paper customs forms. Few border crossings have "one-stop windows". Truck drivers need to stand in separate lines at immigration, customs, auto tax and coronavirus testing windows. These all add to the cost of cross-border transportation; it costs US$2,000 to transport a container from China to Beira, Mozambique, and US$5,000 to transport a further 500 kilometers inland to Malawi.

Political barriers within countries can be as serious as barriers between countries. In part, hampered by vested interests, major overhauls and upgrades of ports and border crossings are often difficult. African countries often rely heavily on tariffs to fill their coffers, a practice that mirrors the extractive patterns of historical colonial regimes. For example, an inspector at the port of Toamasina in Madagascar is responsible for collecting 1.3% of the total national tax.

This power opens the door to rent-seeking and corruption. A study by Sandra Sequeira and Simeon Djankov of the London School of Economics and Political Science found that around 15 years ago, more than half of all shipments passing through the port of Maputo and more than a third of those passing through the port of Durban involved bribery. Digitization and higher wages do not seem to reduce corruption. Ghana raises salaries for border control police, but bribery increases.

Businesses are far from blameless, adds the World Bank's Gaël Raballand. Powerful oligopolies may be complicit in corruption, either to transport their own goods, or (paradoxically) to hold their goods in port—a way of raising the cost of entry for potential competitors.

“The problem is still stuck at the border,” complained one Kenyan freight forwarder. Even if customs clearance documents are submitted in advance, drivers may still queue behind those who do not submit documents. "We had to pay drivers to skip the line and had to do it because this is Africa."