• Monday, December 02, 2024
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Rethinking Africa’s intra-connectivity challenge

Low credit ratings cause high borrowing costs, liquidity challenges in Africa

Earlier this year, the 2024 edition of the African Nations Cup (AFCON) was held in Abidjan, the Ivorian capital city, to the delight and excitement of football fans across the continent; a time of the year that was always special for many locals.

While the beautiful game took centre stage, something else glared to many of the continent’s keen observers – empty or half-filled stadiums. It could have been a more pleasant sight for the continent’s biggest soccer tournament. While many reports alluded to issues around ticketing, there was a more potent, more obvious cause.

A few months ago, at the annual Africa CEO’s Forum in Kigali, Rwanda, Africa’s richest man, Aliko Dangote, stated how difficult it is for him to travel around the continent. He said he’d need at least 35 visas to travel across the continent’s 54 countries, even as one of the most influential entrepreneurs in this hemisphere.

Dangote’s predicament and the empty seats at the AFCON reflect a more profound truth – Africa’s struggle to connect with itself – a perennial problem that seems to have defied a lasting solution.

These two scenarios paint a grim picture of Africa’s intra-connectivity challenge. It is a fact that travelling across Africa as an African is hectic. Africa is not connected. Simple. While passionate fans across Africa yearn to support their teams or enthusiastic entrepreneurs seeking to create opportunities, a web of barriers ensnares them: restrictive visa policies, expensive travel costs, currency differentiations, language barriers, fragmented infrastructure, and general economic downturns.

I live in Lagos. I should be able to hop on a train to see a weekend match on the Ivory Coast and return in time to resume my corporate job on a Monday morning, but I need more than that. Conversely, an English football fan can hop on a train from London to Lisbon, Amsterdam, or Paris to watch their national team and clubs play without costing an arm and a leg. The distance between London and Paris is approximately 343 km (212 miles), and the fastest train ride will get you to Paris in just over two hours. In comparison, there are no direct train services from Lagos to Accra, and the 460 km (250 miles) road trip will take about ten hours.

Africans spend four times more on intra-continental airfare compared to Europeans. Flight tickets are priced out of the average economic realities on the continent–further adding an extra layer to the travel barrier. Finding a needle in a haystack is easier than finding direct flights between African cities; often, airlines route their connections through European cities, which means higher costs and longer travel time for African business or tourist travellers. A European, Asian or American can navigate the continent easier than an African.

The downsides of these realities concern trade, commerce, tourism, and cultural integrations, not just football matches. Initiatives like ‘Open Skies Africa’, ‘Ease of Doing Business’, ‘One Continent’, ‘Africa Rising’, etc., are fancy rhetoric if the ground realities differ. These are the issues that the AU, ECOWAS, and all other regional blocks must stand up to solve.

It is a fact that Africa trades more with ‘outsiders’ than it does with itself. The gap in trade volumes with other economic blocs far surpasses intra-African trade. Intra-Africa trade today accounts for just about 15 percent of total African exports, compared to Europe at 68 percent and Asia at 59 percent.

This data, again, is a vast reflection of how challenging our trade and commerce integration is. Suppose a continent of 54 countries, 1.3 billion people, and a GDP of $3.1 trillion can put its house in order; we’d become a global economic powerhouse that will advance the economic opportunities and realities of the black continent.

The Trans-African Highway–a 60,000km road network expected to reduce road transport costs and increase commercial and tourism activity on the continent—has been in the works for over 50 years. However, the dream of interconnectedness remains unreleased, mainly due to the inertia that plagues our progress.

The African Continental Free Trade Area (AfCFTA) has immense potential to boost regional trade and the overall value of economic output, but its impact hinges on dismantling the barriers that stifle intra-continental trade. In the same breath is the Yamoussoukro Decision to Open Skies for Africa, which has yet to be fully implemented for better air connectivity.

Africa needs more investments in transportation and aviation infrastructure and a total overhaul of existing visa policies, which look like relics of the colonial era, to reduce the intra-connectivity barriers. We must urgently review our stringent visa policies to be more business-friendly. Speed is a currency in business and investment decisions; many investors want quick access and easy mobility.

Why can’t we have low-cost airlines that cater to the needs of Africa’s middle class? How many African cities have direct rail lines between them?

Economic leaders and advisors should fully implement the AfCTA. Regional institutions like AfreximBank, AFDB, and the like should join the party more robustly by ‘walking the talk’ and acting beyond shiny conferences and summit rhetoric.

For Africa to be genuinely open for business, we must rethink our borders and how to connect better. Our political, business, and cultural leaders must be honest about designing a real solution. Africa should behave and act like a single economic bloc to stand any chance of actual development in a fast evolving, constantly changing world with shrinking borders.

According to Bloomberg CityLab, “If people can get a direct flight from their city to yours, they’re likely to increase business relationships. If they can’t, they won’t.” I can only do business with you if I have access to you!

This argument is not just about football fans filling stadiums; it’s about unlocking the immense potential of a continent teeming with talent, resources, and shared dreams. We need concrete action plans, not just lofty goals. Our leaders must ditch the tired rhetoric and embrace action.

Connectivity is not a luxury; the lifeblood of progress will facilitate trade and drive commerce, tourism, and cultural integration among Africans. Let’s build an open Africa for business, collaboration, and the boundless potential of its people.

Anani, a freelance writer, is a digital strategist and communication consultant based in Lagos, Nigeria

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