United States International Trade Commission

Investigation No. 332-477

USITC Publication 4071

April 2009

Sub-Saharan Africa: 

Effects of 

Infrastructure 

Conditions on Export 

Competitiveness, 

Third Annual Report 
Address all communications to 

Secretary to the Commission 

United States International Trade Commission 

Washington, DC 20436

U.S. International Trade Commission

Director, Office of Industries

Karen Laney-Cummings

Director of Operations

Robert A. Rogowsky

COMMISSIONERS 

 

Shara L. Aranoff, Chairman 

Daniel R. Pearson, Vice Chairman 

Deanna Tanner Okun 

Charlotte R. Lane 

Irving A. Williamson 

Dean A. Pinkert
U.S. International Trade Commission

Washington, DC 20436 

www.usitc.gov

Publication 4071 April 2009

Sub-Saharan Africa: Effects of 

Infrastructure Conditions on Export 

Competitiveness, Third Annual Report 

Investigation No. 332-477
This report was prepared principally by 

Project Leaders 

Erland Herfindahl 

erland.herfindahl@usitc.gov 

Alan Treat 

alan.treat@usitc.gov 

Principal Authors 

 Chapter 1: Cathy Jabara cathy.jabara@usitc.gov 

 Chapter 2: Michael Ferrantino mferrantino@usitc.gov 

 Chapter 3: Isaac Wohl isaac.wohl@usitc.gov 

 Chapter 4: Joann Peterson joann.peterson@usitc.gov 

 Chapter 5: Dennis Luther dennis.luther@usitc.gov 

 Chapter 6: 

 Coffee: Mark Simone mark.simone@usitc.gov 

 Shea butter: Dan Cook justin.cook@usitc.gov 

 Tropical fruit: Brendan Lynch brendan.lynch@usitc.gov 

 Natural rubber: Philip Stone philip.stone@usitc.gov 

 Textiles and 

 apparel: Dawn Heuschel dawn.heuschel@usitc.gov 

 Leather: John Fry john.fry@usitc.gov 

 Tourism: Laura Bloodgood laura.bloodgood@usitc.gov 

Primary Reviewers 

Nannette Christ and Karl Tsuji

Special Assistance 

Diane Bennett, Brenda Carroll, Andrew Gately, Joe Kowalski, David Lundy, 

Cynthia Payne, Laura Polly, and Danielle Vu 

Under the direction of 

Richard W. Brown, Chief, Services Division 

richard.brown@usitc.gov 
Gambia 

Sub-Saharan Africa

i 

Abstract 

This report describes conditions in the land transport, maritime transport, and electricity 

infrastructure sectors, and examines their effects on export competitiveness in subSaharan Africa (SSA), particularly on the following industries: coffee, shea butter, and 

certain tropical fruit (pineapples and bananas) in the agricultural sector; natural rubber 

and related downstream products, textiles and apparel, and leather in the manufacturing 

sector; and tourism services in the services sector. 

Infrastructure conditions in SSA have a significant effect on the ability of firms to 

produce and export goods and services competitively. Relatively poor infrastructure 

conditions place many SSA producers and exporters of goods and services at a 

competitive disadvantage in regional and global export markets, increasing costs and 

compromising product quality, rendering both merchandise and services exports less 

competitive vis-à-vis exporters that may not be similarly disadvantaged. Roads in SSA 

are often unpaved and poorly maintained, rail networks are limited, and ports lack 

sufficient capacity. As a result, SSA producers often incur increased transportation costs 

and shipment delays. Electricity infrastructure is largely inadequate, unreliable, and 

poorly developed, particularly in rural areas, requiring producers to rely on more 

expensive on-site power generators, which further increase production costs. 

However, SSA governments and the private sector are implementing various strategies, 

including government regulatory reform, increased investment, and new applications of 

technology to improve infrastructure conditions within SSA, often in conjunction with 

neighboring countries, SSA regional organizations, multilateral institutions, and non-SSA 

countries. 

iii

CONTENTS

Page

Abstract ........................................................................................................................... i

Executive Summary ............................................................................................... ix

Chapter 1: Introduction and Overview ................................................. 1-1

Approach .......................................................................................................................... 1-2

Organization of report ...................................................................................................... 1-3

Infrastructure, economic growth, and welfare ................................................................ 1-3

Bibliography .................................................................................................................... 1-9

Chapter 2: Synthesis and Implications of Findings..................... 2-1

Infrastructure and production costs .................................................................................. 2-1

Direct production costs .............................................................................................. 2-1

Technology substitution ............................................................................................ 2-2

Infrastructure and export profiles .............................................................................. 2-4

Infrastructure and economic distance .............................................................................. 2-4

Transport costs .......................................................................................................... 2-5

Transport time ........................................................................................................... 2-6

Economies of scale .................................................................................................... 2-7

Infrastructure and uncertainty .......................................................................................... 2-8

Uncertainty in truck and ship arrival times ............................................................... 2-8

Uncertainty in electrical power supply ...................................................................... 2-9

Bibliography .................................................................................................................... 2-10

Chapter 3: Land Transport ............................................................................ 3-1

Conditions of the land transport sector ............................................................................ 3-1

Land transport infrastructure ..................................................................................... 3-1

Service providers ....................................................................................................... 3-7

Soft infrastructure: Borders ....................................................................................... 3-10

Effects of land transport infrastructure conditions on export competitiveness ................ 3-11

Effects on international trade .................................................................................... 3-11

Effects on intra-SSA trade ......................................................................................... 3-13

Efforts to improve the land transport sector .................................................................... 3-14

Reforms ..................................................................................................................... 3-14

Investment ................................................................................................................. 3-15
iv

CONTENTS—Continued

Page

Chapter 3: Land Transport—Continued

Regional cooperation ................................................................................................. 3-18

Bibliography .................................................................................................................... 3-20

Chapter 4: Maritime Transport .................................................................. 4-1

Conditions of the maritime transport sector ..................................................................... 4-2

Port infrastructure ...................................................................................................... 4-2

Service providers ....................................................................................................... 4-4

Soft infrastructure: Customs ...................................................................................... 4-6

Effects of port infrastructure conditions on export competitiveness ............................... 4-7

Efforts to improve the maritime transport sector ............................................................. 4-8

Port governance ......................................................................................................... 4-10

Investment in port infrastructure ............................................................................... 4-11

Bibliography .................................................................................................................... 4-14

Chapter 5: Electricity ........................................................................................... 5-1

Conditions of the electricity sector .................................................................................. 5-3

Electricity infrastructure ............................................................................................ 5-3

Service providers ....................................................................................................... 5-7

Effects of electricity infrastructure conditions on export competitiveness ...................... 5-8

Efforts to improve the electricity sector ........................................................................... 5-10

Nature and objectives of electricity sector reforms ................................................... 5-10

Investment in electric power infrastructure ............................................................... 5-12

Regional integration initiatives ................................................................................. 5-15

Bibliography .................................................................................................................... 5-18

Chapter 6: Effects of Infrastructure Conditions on the

Export Competitiveness of Select SSA Industries ........................ 6-1

Coffee ........................................................................................................................ 6-3

Summary of findings ................................................................................................. 6-3

Introduction ............................................................................................................... 6-3

Effects of infrastructure conditions on the competitiveness of SSA exports of

coffee ................................................................................................................... 6-5
v

CONTENTS—Continued

Page

Chapter 6: Effects of Infrastructure Conditions on

the Export Competitiveness of Select SSA

Industries—Continued

The Rwandan experience .......................................................................................... 6-7

Shea butter ....................................................................................................................... 6-9

Summary of findings ................................................................................................. 6-9

Introduction ............................................................................................................... 6-9

Effects of infrastructure conditions on the competitiveness of SSA exports of 

shea butter ............................................................................................................ 6-11

Tropical fruit .................................................................................................................... 6-15

Summary of findings ................................................................................................. 6-15

Introduction ............................................................................................................... 6-15

Effects of infrastructure conditions on the competitiveness of SSA exports of 

tropical fruit ......................................................................................................... 6-16

Natural rubber .................................................................................................................. 6-23

Summary of findings ................................................................................................. 6-23

Introduction ............................................................................................................... 6-23

Effects of infrastructure conditions on the competitiveness of SSA exports of

natural rubber ...................................................................................................... 6-26

Textiles and apparel ......................................................................................................... 6-29

Summary of findings ................................................................................................. 6-29

Introduction ............................................................................................................... 6-29

Effects of infrastructure conditions on the competitiveness of SSA exports of

textiles and apparel .............................................................................................. 6-31

Leather ......................................................................................................................... 6-36

Summary of findings ................................................................................................. 6-36

Introduction ............................................................................................................... 6-36

Effects of infrastructure conditions on the competitiveness of Ethiopia=s leather

exports ................................................................................................................. 6-38

Tourism ......................................................................................................................... 6-42

Summary of findings ................................................................................................. 6-42

Tourism in the global economy ................................................................................. 6-42

Tourism and infrastructure in South Africa .............................................................. 6-45

Tourism and infrastructure in Kenya ......................................................................... 6-47
vi

CONTENTS—Continued

Page

Chapter 6: Effects of Infrastructure Conditions on the Export

Competitiveness of Select SSA Industries—Continued

Bibliography .................................................................................................................... 6-50

Coffee ........................................................................................................................ 6-50

Shea butter ................................................................................................................. 6-51

Tropical fruit ............................................................................................................. 6-52

Natural rubber ........................................................................................................... 6-52

Textiles and apparel .................................................................................................. 6-53

Leather ....................................................................................................................... 6-54

Tourism ..................................................................................................................... 6-55

Appendices

A Request letter .................................................................................................................... A-1

B Federal Register notice .................................................................................................... B-1

C List of hearing participants .............................................................................................. C-1

D Summary of views of interested parties ........................................................................... D-1

E Trading Across Borders indicators: Sub-Saharan Africa ................................................. E-1

F Logistics Performance Index and select indicators: Sub-Saharan Africa ........................ F-1

G Harmonized system categories ......................................................................................... G-1

Boxes

1.1 Infrastructure sectors other than land and maritime transport, and electricity ................. 1-4

4.1 Containerization trends in sub-Saharan Africa ................................................................ 4-5

5.1 China=s investments in electricity infrastructure in sub-Saharan Africa .......................... 5-15

6.1 The cocoa butter equivalent (CBE) market for the exotic fats industries ........................ 6-10

6.2 Effects of access to capital on shea prices ........................................................................ 6-12

6.3 Government trade policies affecting the leather industry ................................................ 6-40

Figures

1.1 Logistics and trade cost comparison across regions, 2008 ............................................ 1-6

2.1 Technological substitution in the production of shea butter ......................................... 2-3

3.1 Major land transport routes and ports in sub-Saharan Africa ....................................... 3-4

5.1 Percent of population with access to electricity in sub-Saharan Africa ........................ 5-2

6.1 Leading global and SSA exporters of coffee, 2007 ...................................................... 6-4

6.2 Leading markets for global and SSA exports of coffee, 2007 ...................................... 6-4

6.3 Leading global and SSA exporters of pineapple, 2007 ................................................. 6-17

6.4 Leading markets for global and SSA exports of pineapple, 2007 ................................. 6-17
vii

CONTENTS—Continued

Page

Figures)Continued

6.5 Leading global and SSA exporters of bananas, 2007 ................................................... 6-18

6.6 Leading markets for global and SSA exports of bananas, 2007 ................................... 6-18

6.7 Leading global and SSA exporters of natural rubber, 2007 .......................................... 6-25

6.8 Leading markets for global and SSA exports of natural rubber, 2007 .......................... 6-25

6.9 Leading global and SSA exporters of textiles and apparel, 2007 ................................. 6-30

6.10 Leading markets for global and SSA exports of textiles and apparel, 2007 ................. 6-30

6.11 Leading global and SSA exporters of leather, 2007 ..................................................... 6-38

6.12 Leading markets for global and SSA exports of leather, 2007 ..................................... 6-39

6.13 Leading global and SSA exporters of tourism services, by total tourism

expenditures, 2006 .................................................................................................... 6-43

6.14 Leading global and SSA importers of tourism services, by total tourism

expenditures, 2006 .................................................................................................... 6-44

Tables

ES.1 Sub-Saharan Africa: Summary of effects of infrastructure conditions for select 

SSA industries and countries .................................................................................... xii

ES.2 Sub-Saharan Africa: Select strategies to improve infrastructure conditions ................ xiv

1.1 Comparison of gross national income (GNI) levels and infrastructure indicators,

by region .................................................................................................................... 1-5

2.1 Electricity intensity of production and export share of sub-Saharan Africa ................ 2-5

3.1 Select land transport corridors in sub-Saharan Africa ................................................. 3-3

3.2 Select land transport infrastructure projects with private participation in

sub-Saharan Africa .................................................................................................... 3-16

4.1 Select leading ports in the developing world by volume of containerized cargo,

2006 ........................................................................................................................... 4-2

4.2 Leading ports in sub-Saharan Africa by volume of containerized cargo, 2006 ........... 4-3

4.3 Comparison of container clearance and truck transit times from select SSA ports to

inland locations ......................................................................................................... 4-7

4.4 Comparison of port productivity in select SSA and non-SSA ports ............................ 4-9

4.5 Select infrastructure investments in SSA ports ............................................................ 4-12

5.1 Energy sources used to generate electricity in 10 leading SSA countries, 2005 ......... 5-6

5.2 Select infrastructure investments in SSA electricity generation projects ..................... 5-13

6.1 Exporting costs for coffee-producing countries in East Africa and their major

competitors ................................................................................................................ 6-7

6.2 Natural rubber industry statistics for select West African countries and their major

competitors, 2006 ...................................................................................................... 6-26

6.3 Exporting costs for natural rubberBproducing countries in West Africa and their

major competitors ...................................................................................................... 6-28

6.4 Survey of transport quality in select textiles and apparel producing countries ............ 6-35

6.5 Tourist arrivals in SSA countries, available data, 2000B2006 ...................................... 6-46

E.1 World Bank Doing Business indicators: Trading Across Borders (imports) in

sub-Saharan Africa, 2009 .......................................................................................... E-3
viii

CONTENTS—Continued

Page

Tables)Continued

E.2 World Bank Doing Business indicators: Trading Across Borders (exports) in

sub-Saharan Africa, 2009 .......................................................................................... E-5

F.1 Logistics Performance Index: SSA and regional comparisons, 2007 ........................... F-4

G.1 Harmonized System (HS) categories by select SSA industry sector ............................ G-3
ix 

Executive Summary 

The state of a country’s infrastructure is a major determinant of economic growth, social 

welfare, and trade. Land transport, maritime transport, and electricity infrastructure are 

critical to the ability of sub-Saharan African (SSA) countries to produce and export the 

vast majority of goods destined for regional and global export markets. Poor 

infrastructure conditions increase costs and compromise product quality and are a 

significant competitive disadvantage to the SSA industries examined in this report. 1

However, SSA governments and the private sector are implementing various strategies, 

including government regulatory reforms, increased investment, and new applications of 

technology, to improve infrastructure conditions. These efforts have often been 

undertaken in conjunction with neighboring countries, SSA regional organizations, 

multilateral institutions, and development agencies. The main findings of this report are 

highlighted in table ES.1 and the main conclusions regarding strategies to improve 

infrastructure are in table ES.2 at the end of this summary. 

Effects of SSA’s Infrastructure Conditions 

Poor infrastructure conditions increase production costs, economic distance (the time and 

cost of transporting goods), and business uncertainty, and undermine SSA’s export 

competitiveness. Most roads in SSA are poorly maintained and often unpaved, and truck 

fleets generally consist of aging, fuel-inefficient vehicles that are often overloaded and 

contribute to further road degradation. Poor roads and truck breakdowns result in the 

slow movement of goods, considerable damage to goods in transit (particularly to 

perishable goods), and high shipping costs relative to other areas of the world. Rail 

networks in SSA are limited and generally even less reliable than trucks, increasing the 

dependence on roads to transport goods. “Soft” infrastructure constraints, such as 

excessive check points, burdensome administrative procedures, and inefficient processing 

at border crossings, often cause longer delays than poor road conditions. These delays 

increase economic distance and often reduce product quality, particularly for perishable 

goods, leading to higher rejection rates, higher production costs, and lower income for 

producers. For instance, Rwandan coffee producers require an average of 42 days to 

export, excluding maritime transport, owing to long distances to port, poor road 

conditions, and customs delays. In contrast, Colombian producers require only 14 days to 

export, excluding maritime transport. These delays suggest that Rwandan coffee 

exporters face a 36 percent tariff equivalent compared to Colombian coffee exporters, 

significantly reducing income potential for Rwanda’s 500,000 coffee farmers. 

Ports in SSA are inefficient by global standards and lack sufficient capacity, resulting in 

increased port charges, elevated maritime freight costs, and delays, all of which adversely 

affect SSA’s export competitiveness. Many of the major ports in SSA are congested 

because of insufficient capacity, and procedural delays and inefficiencies often 

compound the problem. As a result, goods moving in or out of ports suffer lengthy 

delays. Furthermore, problems in one SSA port may affect port schedules in other SSA 

ports on the same shipping route, compounding delays and creating uncertainty. For 

 1

 These industries are coffee, shea butter, and certain tropical fruit (pineapples and bananas) in the 

agricultural sector; natural rubber and related downstream products, textiles and apparel, and leather in the 

manufacturing sector; and tourism services in the services sector. 
x 

example, anticipating ship arrival dates, Ghanaian pineapple farmers sometimes harvest 

their crop for export but only later discover that the ship is late; such delays can lead to 

decreased shelf life, compromised product quality, and higher rejection rates. 

Electricity infrastructure in SSA is the least developed, least accessible, least reliable, 

most costly to operate and, on average, highest priced of any region in the world. As a 

result, energy costs account for a higher proportion of production costs in many SSA 

industries relative to global competitors. Even in South Africa, which has the most 

competitively priced and extensive electricity network in SSA, the unreliability of 

electricity increases the uncertainty of maintaining production schedules. This uncertainty 

also compels many firms to rely on expensive on-site diesel generators, increasing overall 

production costs. In certain cases, such as a tire factory in Nigeria and a textile firm in 

South Africa, major producers have closed facilities due to expensive and unreliable 

electricity. 

Strategies to Improve Infrastructure

The critical role of infrastructure in export competitiveness, economic growth, and social 

welfare is widely recognized by governments, development agencies, multilateral 

organizations, and the private sector. These institutions have implemented a broad array 

of responses to ameliorate infrastructure conditions in SSA, including increased 

infrastructure investment, government reform and regional regulatory harmonization, and 

new applications of technology. A review of these efforts suggests strategies for 

overcoming infrastructure constraints. Table ES.2 provides examples of such strategies, 

which are interrelated and often overlap; e.g., regulatory reform can lead to private-sector 

participation, increased investment, and new uses of technology. 

Because challenges associated with improving land transport, maritime transport, and 

electricity infrastructure are tremendous, in many cases no single SSA government or 

donor organization is capable of addressing these issues alone. Many SSA governments 

have developed regional partnerships to address infrastructure constraints and improve 

infrastructure conditions. 

Infrastructure Investment 

Because capital requirements for upgrading infrastructure are significant, major 

infrastructure projects increasingly rely on a combination of public- and private-sector 

financing and regional cooperation initiatives to pool capital and spread investment costs. 

Many of the large-scale power projects under consideration in SSA call for the 

participation of public and private entities from multiple countries. In a few instances, 

one organization, be it public or private, incurs the majority of the financial burden and 

risk of building new infrastructure, as is the case of Dubai Ports World’s construction of a 

new container terminal at the port of Djibouti in East Africa. Nontraditional lenders, such 

as China and India, are also playing an increasingly important role in financing 

infrastructure in SSA, often linking such financing to natural resource concessions. 
xi 

Government Reform and Regional Regulatory Harmonization 

Governments across the region have separated regulatory and operational duties, while 

significantly expanding the role of the private sector in the operation of infrastructure 

sectors, such as ports and electricity. Many SSA countries have reformed regulations to 

promote viable and efficient infrastructure sectors. Examples include setting electricity 

rates at levels sufficient to ensure cost recovery for power generators and extending the 

hours for which customs facilities are open. Individual SSA countries are also engaged in 

important regional reform efforts, such as coordinating policies and technical standards to 

improve regional transportation and power networks. 

Application of Technology to Mitigate Negative Effects 

In recent years, governments and firms in SSA have introduced technologies to improve 

infrastructure conditions directly and to mitigate the negative effects of poor 

infrastructure conditions on export competitiveness. For example, by implementing 

computerized customs systems, governments have been able to significantly decrease 

delays at ports and land border crossings while reducing the opportunities for human 

error and corruption. SSA producers have adopted technologies that either compensate 

for poor infrastructure conditions or serve as a partial substitute for infrastructure. For 

instance, coffee producers in landlocked Rwanda have expanded the use of washing 

facilities to increase product quality, and thus price premiums, in an effort to compensate 

for high transportation costs compared with global competitors. Individuals and 

businesses are also taking advantage of the region’s increasingly expansive mobile 

telecommunications system to acquire timely market information and conduct business 

transactions, thereby bypassing difficult travel conditions on poor quality roads.
TABLE ES.1 Sub-Saharan Africa: Summary of effects of infrastructure conditions for select SSA industries and countries

 Effects of conditions in the following infrastructure sectors on export competitiv

Industry 

SSA exporters highlighted in this report 

Key export markets (by value) Land transport Maritime transport 

Agriculture 

Coffee Ethiopia 

Rwanda 

EU Algeria United States Japan 

Poor road quality or lack of adequate road networks increases transportation times, which can adversely affect coffee bean quality. Insufficient trucking capacity results in trucking shortages and increased fees to export coffee. 

Port congestion contributes to increased transportation costs and delays, ultimately increasing overall production costs and compromising coffee quality. 

Expensive aincreases pcoffee washthat relies oclean water

Shea butter Burkina Faso 

Côte d’Ivoire Ghana Togo 

EU United States 

Poorly maintained roads between local villages and central markets disrupt delivery schedules, increase transportation costs, and decrease financial returns to local shea producers. Road congestion, vehicle breakdowns, excessive checkpoints, and inefficient border crossings all increase shea export transport time. 

Port congestion contributes to increased transportation costs and delays. 

High electrifor investmethe efficienc

Tropical fruit (pineapples and bananas) 

Côte d’Ivoire Ghana 

EU Poor road conditions increase transport 

times and decrease shelf life. Poor feeder roads damage fruit during transport, contributing to rejection rates of 15–20 percent of fruit delivered by out-growers to nucleus farms. Congested and poorly maintained roads and numerous checkpoints increase the time and cost of transporting product from packing to port, even over short distances. 

Tropical fruit exports from West Africa are at a disadvantage in export markets compared to other global competitors because of inefficient or infrequent shipping routes. Poor handling at the port can damage the fruit and lead to higher rejection rates, as compared to those experienced by Latin American exporters. 

The develofacilities, whextend sheprohibitively large amouExports of pout-growers as a result ostorage facvarieties of Energy cosdecline by 6connected trelying on p

Manufacturing 

Natural rubber 

Côte d’Ivoire Liberia Cameroon Nigeria 

EU United States 

The lack of road infrastructure connecting collection points to processing plants constrains industry expansion. 

Insufficient competition among freight carriers contributes to high transportation costs and terminal charges. 

High electrioutages ha

downstream Poor infrastrender rubbpercent moglobal prod

xii
TABLE ES.1 Sub-Saharan Africa: Summary of effects of infrastructure conditions for select SSA industries and countries—Continued

 Effects of conditions in the following infrastructure sectors on export competitiv

Industry 

SSA exporters highlighted in this report 

Key export markets (by value) Land transport Maritime transport 

Manufacturing—Continued

Textiles andapparel

South Africa Lesotho Kenya Swaziland 

United States EU SSA 

Poor road conditions in Kenya increase transit times, thereby decreasing speed to market. Relatively better road conditions in southern Africa are a competitive advantage vis-à-vis other SSA apparel producers. 

Port congestion and shipment delays hinder the ability to acquire imported production inputs, resulting in production losses and higher production costs. Uncertain delivery times for imported inputs result in working capital tied to higher levels of inventory to hedge against delayed shipments or other unforeseen circumstances. 

Unexpected production of raw mateand increasHigh power competitive producers ifrom lower 

Leather Ethiopia Hong Kong 

EU China 

Poor road conditions and long distances adversely affect the quality of hides and skins, leading to higher rejection rates and lower prices paid by tanneries. A significant amount of working capital must be allocated to imported raw materials as a result of high transportation costs. 

Port congestion contributes to increased transportation costs and delays. Tanneries may maintain high levels of inventory of imported inputs to hedge against the uncertainty of delivery schedules. 

Frequent elchemical printo semiproBack-up gemore costly

Services 

Tourism South Africa 

Kenya 

SSA EU 

Superior infrastructure is a competitive advantage to South Africa’s tourism industry. Congested roads in Kenya dampen potential tourism expansion, as traffic deters tourists from venturing beyond resort areas. Nevertheless, the desire to visit specific tourist attractions often outweighs the inconvenience of poor road conditions. 

As there is a relatively small cruise industry in SSA, maritime infrastructure conditions have had a negligible effect on export competitiveness. 

Unreliable eoutages negenerators, Principal toAfrica tend generators, infrastructuless. 

Source: Compiled by Commission staff.

Note: The effects of infrastructure conditions on production and trade in select SSA industries noted above are specific examples from the case studies p

report. Because infrastructure conditions vary among countries within SSA, the relative effects of these conditions among all SSA producers in these indu

xiii 
Table ES.2 Sub-Saharan Africa: Select strategies to improve infrastructure conditions

Infrastructure sectors: 

Strategy Land transport Maritime transport EInfrastructure InvestmentPublic and donorfinanced investment Public-private partnerships

In 2006 members of the Infrastructure Consortium for Africa (which coordinates international infrastructure development assistance) invested $3.2 billion in transport projects in SSA, up from $2.6 billion in 2005. Various greenfield projects including a number of those identified in table 3.2. 

The Japanese Bank for International Cooperation is financing a second container terminal at the port of Mombasa, Kenya. A.P.-Moller/Maersk Group (Denmark) and Bolloré Group (France) are constructing a deep-sea port and new container terminal in Douala, Cameroon. 

The African DevelopmZambia–Tanzania–Kelinking the electricity gto the Southern AfricaThe government of Ug(U.S.), and multilaterajointly financing the 25hydroelectric power p

Government reform and regional regulatory harmonizationSeparation of operational and regulatory functions Regional regulatory harmonization 

Nigeria concessioned a private company to develop and operate a toll road corridor in Lagos, while maintaining regulatory oversight of the road network. The Common Market for Eastern and Southern Africa has implemented a common carriers license and a Yellow Card program which guarantees third-party insurance across borders for truckers. 

Mozambique granted a 15-year concession to a private-sector consortium to oversee the management of the port of Maputo, while maintaining regulatory authority and ownership of port assets. Bilateral proposals for cross-border corridor management committees are facilitated by the Economic Community of West African States. 

About one-half of SSA established a regulatotwo-thirds of all SSA cministerial electric utilwhich often remain goThe Southern African countries to coordinatof their electricity systtrade, and thereby redassociated with maint

New Applications of TechnologyPublic-sector use of technology Private-sector use of technology 

Swaziland has streamlined its customs procedures by using container scanners, risk management software, and satellite-based electronic tracking systems to provide preborder clearance at some inland ports and export-producing factories. A U.S. Agency for International Development–funded agribusiness project assisted Rwandan coffee farmers in obtaining custom cargo bikes to transport coffee to washing stations, thereby reducing transit times by two-thirds. 

Kenya implemented an Electronic Data Interchange system that allows shipping lines to submit cargo data electronically, which has reduced the customs clearance time at the port of Mombasa from six days to two days. Terminal operator Hutchison-Whampoa (Hong Kong) is investing in new cranes and computer systems to increase cargo throughput at the port of Dar es Salaam, Tanzania. 

In Ghana, the World BGhana, the Volta RiveCompany of Ghana adevelopers of renewaelectrify rural areas. Various SSA producegenerators to compenunreliable electricity srelatively high cost. 

Source: Compiled by Commission staff. Note: The strategies noted above are provided as illustrative examples, and are therefore not comprehensive. Strategies—and their effectiveness—to imp

in SSA can vary widely among SSA countries. 

xiv 
1-1

CHAPTER 1 

Introduction and Overview 

Well-maintained infrastructure supports economic activity and trade by facilitating the 

movement of people, goods, and services and serves as a key input in the production 

process. Land transport, maritime transport, and electricity infrastructure are critical to 

the ability of SSA countries to produce and export the vast majority of goods destined to 

regional and global export markets. This report examines the effects of infrastructure 

conditions on the export competitiveness of select industries within sub-Saharan Africa 

(SSA). 1

 Specifically, this report describes conditions in the land transport, maritime 

transport, and electricity sectors, describes efforts to improve conditions in these sectors, 

and examines the effects of these conditions on the export competitiveness of the 

following industries in SSA: coffee, shea butter, and certain tropical fruit (pineapples and 

bananas) in the agricultural sector; natural rubber and related downstream products, 

textiles and apparel, and leather in the manufacturing sector; and tourism services in the 

services sector.2

In her letter, the United States Trade Representative asked the U.S. International Trade 

Commission (Commission or USITC) to examine the effects of infrastructure conditions 

on the export competitiveness of select SSA industries, particularly but not limited to 

industries considered in the previous two annual reports in this series.3

 In response, the 

Commission selected six industries considered in the previous reports and one not 

previously considered. The Commission selected the seven industries largely on the basis 

of prior research that indicated that infrastructure conditions had a considerable effect on 

trade patterns for the products that these respective SSA industries produce. The 

Commission also considered other factors, such as geographic and sectoral diversity, the 

importance of each industry as a source of employment and foreign exchange, and 

government priority for industry development. 

 1

 Throughout this report, “SSA” is used to refer to both “sub-Saharan Africa” as a noun and “subSaharan African” as an adjective. Sub-Saharan Africa consists of the following 48 countries: Angola, Benin, 

Botswana, Burkina Faso, Burundi, Cameroon, Cape Verde, Central African Republic, Chad, Comoros, 

Democratic Republic of the Congo, Côte d’Ivoire, Djibouti, Equatorial Guinea, Eritrea, Ethiopia, Gabon, The 

Gambia, Ghana, Guinea, Guinea-Bissau, Kenya, Lesotho, Liberia, Madagascar, Malawi, Mali, Mauritania, 

Mauritius, Mozambique, Namibia, Niger, Nigeria, Republic of the Congo, Rwanda, São Tomé and Príncipe, 

Senegal, Seychelles, Sierra Leone, Somalia, South Africa, Sudan, Swaziland, Tanzania, Togo, Uganda, 

Zambia, and Zimbabwe. (See map on inside cover of report). 2

 On July 27, 2006, the Office of the United States Trade Representative (USTR) requested that the 

U.S. International Trade Commission (Commission) prepare three annual reports under section 332(g) of the 

Tariff Act of 1930 (19 U.S.C. 1332(g)) addressing factors affecting trade patterns of selected industries in 

sub-Saharan Africa. On June 30, 2008, the USTR requested that the Commission focus its third and final 

report in this series on the effect of infrastructure conditions in land transport, maritime transport, and 

electricity on the export competitiveness of select SSA industries, particularly but not limited to industries 

considered in the first two annual reports in this series. See app. A for request letter and app. B for Federal 

Register notice. 3

 See USITC, Sub-Saharan Africa, 2007; and USITC, Sub-Saharan Africa, 2008. 
1-2

Approach 

For the purposes of this report, export competitiveness is defined as the ability of 

producers to sell goods and services in foreign markets at price, quality, and timeliness 

comparable to competing foreign producers. The approach employed by the Commission 

to examine the effects of infrastructure conditions on export competitiveness in SSA is 

based on analyses of direct and indirect costs—for example, direct production costs, such 

as electricity and transportation costs; and indirect costs, such as those associated with 

electricity reliability and transit times. The Commission employed industry case studies 

to examine the effects of infrastructure conditions along the various stages of the supply 

and value chains for most of the SSA industries noted above. For example, the case 

studies describe how such conditions affect the direct and indirect costs of acquiring 

inputs, production and product quality, and exporting goods and services. The case 

studies highlight the experiences of producers in specific countries, and therefore should 

not be considered as representative of the experiences of producers in all SSA countries. 

The Commission’s analysis of the effects of infrastructure conditions on the export 

competitiveness of select SSA industries relies broadly on qualitative information 

obtained through fieldwork, as there is relatively little internationally comparable 

quantitative data. To the extent possible, the Commission sought and obtained 

quantitative data to augment its assessment of the effects of infrastructure conditions on 

the export competitiveness of producers within SSA, and also compared SSA as a region 

with other global competitors. Because factors other than infrastructure conditions, such 

as government regulation, trade policy, investment and technology, and natural 

endowments may affect export competitiveness, this report does not conclude that 

producers of one country are more export competitive than those of another based on the 

effects of infrastructure conditions alone. In addition, this report does not assess the 

relative importance of infrastructure conditions vis-à-vis these other factors. Comparisons 

of export competitiveness based on the effects of infrastructure conditions should thus 

take into account other factors that also affect competitiveness. 

Information for this report was collected from a variety of industry and government 

sources, including domestic and foreign industry representatives; international 

organizations, including the World Trade Organization (WTO), the World Bank, and the 

United Nations Industrial Development Organization (UNIDO); U.S. and foreign 

government sources, including U.S. embassies and foreign ministries in SSA countries; 

written submissions by interested parties; and hearing testimony. In addition, 

Commission staff traveled to SSA and conducted over 100 interviews with government 

officials from ministries of trade and industry, ministries of infrastructure and public 

works, and port authorities and with industry representatives, including growers, 

producers, consultants, industry associations, logistics firms, and utility companies in 

East Africa (Ethiopia, Kenya, and Rwanda), southern Africa (South Africa and 

Swaziland), West Africa (Burkina Faso, Côte d’Ivoire, and Ghana), and the United 

States. Merchandise trade data throughout this report, unless otherwise indicated, were 

obtained from Global Trade Information Services, Inc. (GTIS) Global Trade Atlas 

database.4

 Industry sectors highlighted in case studies in chapter 6 of this report were 

 4

 Global Trade Atlas was the primary source of trade data for this report. Most data were collected as of 

October 1, 2008; however, Global Trade Information Services, Inc. (GTIS) periodically updates its database 

and certain values were updated at later dates. All data are reported as nominal values. Internal EU trade data 

were excluded. Throughout this report, references to the EU refer to the EU-27. 
1-3

defined based on 2-, 4-, and 6-digit Harmonized System (HS) classifications (appendix 

table G.1).5

Organization of Report 

Compared with previous Commission reports in this series in which each industry 

discussion comprised essentially a stand-alone analysis,6

 this report is more integrated in 

nature. The report begins with an overview of infrastructure in SSA and its general 

effects on export competitiveness. The remainder of chapter 1 describes the contribution 

of infrastructure to economic growth and welfare and also notes the importance to 

production and trade of infrastructure sectors not considered in this report. Chapter 2 

discusses the ways in which infrastructure conditions affect export competitiveness in 

SSA in terms of production costs, economic distance, and business uncertainty and draws 

on examples from chapters 3–6 and from fieldwork interviews. Chapters 3–5 examine 

conditions in SSA land transport, maritime transport, and electricity infrastructure, their 

general effects on export competitiveness, and efforts to improve these infrastructure 

conditions. Finally, chapter 6 provides specific analyses of the effects of these 

infrastructure conditions on the export competitiveness of select SSA industries. 

Infrastructure, Economic Growth, and Welfare 

Infrastructure includes services such as water and sewage treatment, energy, transport, 

information and communication technology (ICT), logistics, 7 and financial services. 

Many of these sectors are particularly important to the facilitation of trade and investment 

and maintenance of public health (box 1.1).8

 Infrastructure services are generally less 

available in SSA than in other regions of the world (table 1.1). In particular, SSA lags 

behind many other regions in electricity consumption, paved roads, telecommunications 

services, air transport, and access to clean water. Financial services infrastructure is also 

less developed—the relatively high interest rate spread (the difference between bank 

lending and deposit rates) denotes a relatively high cost of borrowing. Logistics and trade 

costs are particularly high in SSA (figure 1.1), in part because of transport inefficiencies, 

inadequate storage facilities, and underdeveloped distribution systems.9

 5

 Consistent with previous Commission reports in this series and to minimize the effect of incomplete 

trade data from SSA countries, the data presented for exports in this report represent the value of apparent 

exports (i.e., partner-country reported imports) rather than actual reported exports. 6

 See USITC, Sub-Saharan Africa, 2007; and USITC, Sub-Saharan Africa, 2008. 7 Total logistics costs include transport, as well as packaging, storage, inventories, administration, and 

management. See WTO, World Trade Report 2004, 2004, 120. 8 Ibid., 114–42. 

9 CARANA Corporation, “The Role of Transportation and Logistics in International Trade,” September 

2003, 2. 
1-4

BOX 1.1 Infrastructure Sectors other than Land and Maritime Transport, and Electricity 

Conditions in a number of infrastructure sectors have a considerable effect on general economic development, on the 

ability of industries to produce and export goods and services competitively, and on public health and welfare in SSA. 

Important infrastructure sectors not examined further in this report are briefly discussed below. 

Air transport is an important shipping mode for high-value and time-sensitive products and for development of SSA’s 

tourism services sector. Improvements in air transport infrastructure have a role in opening up new markets for SSA’s 

exports of both goods and services. According to the WTO, African air transport costs are high relative to other 

regions.a Lack of adequate air transport in SSA has constrained the development of SSA’s tourism services sector, 

particularly since a large share of tourists in Africa originate from other countries within Africa and the road networks 

connecting these countries are generally poor.b

Information and communication technology (ICT) infrastructure allows suppliers in SSA to communicate with 

customers, enhance logistics, and market products. Efficient ICT infrastructure promotes just-in-time delivery of 

goods, as well as cross-border trade in services, some of which depend on telecommunications as the channel for 

transactions. Access to ICT can improve the competitiveness of industries that face short product life cycles, 

changing consumer tastes, and rapid technological change, such as consumer electronics and fashion apparel.c The 

availability of mobile phones has provided increased efficiency to SSA traders and producers in agricultural markets 

by linking buyers and sellers and providing improved access to market information. 

Financial services institutions such as banks, insurance companies, and investment firms mobilize funds for 

investment and the development of production capacity. Financial services facilitate international transactions, and 

the pricing and quality of these services are key components of the costs associated with exports and imports of 

goods and services.d The financial services infrastructure in many SSA countries is among the least developed in the 

world.e On average, SSA has the highest interest rate spread (the difference between bank lending and deposit 

rates) among regional groups due to high operating costs. Cash dominates the payment system in many SSA 

countries because of a lack of adequate financial institutions and payment systems. 

Water and sewer infrastructure is a critical input in the production of many goods and services and is crucial for 

maintaining a healthy workforce. Although SSA benefits from some of the world’s largest rivers such as the Congo, 

Zambezi, Nile, and Niger, as well as Lake Victoria, the world’s second-largest lake, shortages of fresh water 

resources for industrial and household use and irrigated agriculture exist due to uneven distribution and poor 

management.f Access to clean water and wastewater treatment facilities is important in the textile industry where 

dyeing, washing, and finishing operations require an abundance of clean water and generate wastewater that needs 

disposal. Clean water is also needed to wash coffee, a process that generally increases its value. Lack of access to 

clean water by SSA households is linked to serious health problems and reduced labor productivity. For example, 

Africa accounts for 97 percent of the world’s cases of onchocerciasis (a parasitic infection), 78 percent of 

schistosomiasis (a parasitic disease) cases, and 52 percent of trachoma (an eye disease) cases, all of which are 

water-borne diseases.g

______________ 

 a WTO, World Trade Report 2004, 2004, 119. 

 b Fatokun, “African Air Transport in the 21st Century,” 2005, 32. This report estimated that 40 percent of Africa’s 

tourists in 2001 originated from other African countries. For more information on factors contributing to increased 

exports of aviation services in SSA, see USITC, Sub-Saharan Africa, 2008, 4-1–4-18. 

 c WTO, World Trade Report 2004, 2004, 132.

 d Ibid., 135.

 e CGAP, “Financial Infrastructure,” undated (accessed December 13, 2008). 

 f World Wildlife Fund, “Facts on Water in Africa,” undated (accessed December 16, 2008). 

 g UNESCO, “Meeting Basic Needs,” undated (accessed December 18, 2008). 
1-5

TABLE 1.1 Comparison of gross national income (GNI) levels and infrastructure indicators, by region 

Indicator SSA 

South 

Asia 

East 

Asia & 

Pacific 

Middle East 

& North 

Africa 

Latin America 

and Caribbean 

Highincome 

countries 

GNI per capita (US$) 

(2007)a 952 880 2,180 2,794 5,540 37,566 

Infrastructure: 

Electricity 

consumption 

(kWh per capita) 

(2005) 

542 432 1,492 1,338 1,715 9,662 

Paved roads 

(percent of total) 

(2000–2005) 

12 57 11 70 24 91 

Registered air carrier 

departures 

worldwide (millions) 

(2006) 

378 549 2,454 392 1,621 18,477 

Fixed line and 

mobile subscribers 

(per 100 persons) 

(2007) 

25 27 65 69 85 146 

Internet users (per 

100 persons) (2007) 

4 14 14 16 24 66 

Interest spread 

(lending rate minus 

deposit rate, 

percent) (2006) 

9 7 6 5 7 5b

Improved water 

source (percent of 

population with 

access) (2006) 

58 87 87 89 91 100 

Improved sanitation 

facilities (percent of 

urban population 

with access) (2006) 

42 57 75 89 86 100 

Source: World Bank, World Development Indicators Database. 

Note: The presentation of average values in the table masks the variation in the indicators not only 

across regions, but also within regions. For example, indicators for SSA include South Africa, which has 

better infrastructure access relative to other countries within SSA.

 aYears in parentheses indicate most current data availability. bDatum is for 2004.
1-6

Imports Exports

0

10

20

30

40

50

Time

Imports Exports

0

0.5

1

1.5

2

2.5

Cost

Imports Exports

0

2

4

6

8

10

SSA South Asia

East Asia & Pacific Middle East & North Africa

Latin America & Caribbean High Income

Documents

FIGURE 1.1 Logistics and trade cost comparison across regions, 2008

Source: World Bank, Doing Business Online Database.

 aTime in days required to import and export. Includes the time for obtaining all documents, inland transport, customs

clearance and inspections, and port and terminal handling. Does not include ocean transport time.

 bCost required to import and export. Includes the cost of obtaining all documents, inland transport, customs clearance and

inspection, and port and terminal handling. Includes official costs only; no bribes or tariffs.

 cDocuments required to import and export. Includes bank documents, customs clearance documents, port and terminal

handling documents, and transport documents.

a

c

b
1-7

Improvements in infrastructure provide development benefits to SSA countries by (1) 

reducing costs and increasing output and productivity of individual producers and 

businesses, rendering their goods and services more competitive in international markets; 

and (2) improving living conditions and opportunities, including for the poorer segments 

of SSA’s population. As discussed in more detail in chapter 2, relatively better 

infrastructure affects production and trade by reducing production costs. For example, 

power generators, electricity transmission and distribution systems, and road networks 

are infrastructure stocks that provide services (electricity and transportation) to 

producers, similar to factors of production such as labor and capital. Increased quantity 

and improved quality of the stock of infrastructure, such as an upgraded electricity 

transmission and distribution system or road network, expand the supply and quality of 

these services and lower production costs, thus creating new profit and trade 

opportunities.10 Likewise, with an increase in the supply of infrastructure services, labor 

and capital become more productive as higher output can be achieved for a given level of 

labor and capital. Further, increased productivity and lower costs provide firms with 

added investment incentives.11

Improved infrastructure can also lead to increased production and economic growth 

through economies of scale, better inventory management, and the use of higher quality 

and more sophisticated equipment and processes.12 There are benefits to infrastructure 

improvements that may also lead to economic growth over time. For example, as noted at 

the Commission’s hearing, apparel production in SSA may be more competitive when it 

is vertically integrated with on-site or nearby textile production.13 But textile production 

is capital intensive, which can act as a deterrent to investment if the infrastructure 

necessary for production is not already in place. Infrastructure investment and improved 

infrastructure conditions could contribute to the development of an expanded textile 

industry, increase vertical integration of textile and apparel production, and improve the 

competitiveness of apparel produced in some SSA countries.14

Improved infrastructure can also contribute to reducing poverty and inequality in SSA 

countries because access to basic infrastructure services—roads, electricity, clean water, 

and sewage treatment and disposal systems—is essential to improving quality of life. 

Infrastructure in most developing regions, including SSA, is characterized by low and 

unequal access for the poor.15 Improved infrastructure can reduce this inequality if it also 

enhances the living standards of the poorest segments of society. 16 Moreover, better 

infrastructure often improves access to healthcare and education, thereby enhancing 

individuals’ employment and economic opportunities. For example, during the rainy 

season in Chad, teachers cannot get to schools and people have difficulty reaching the 

limited medical facilities because of the poor quality of the roads.17 An improved road 

 10 Straub, “Infrastructure and Growth in Developing Countries,” January 2008, 6. 11 More specifically, Rodriguez noted that investment in infrastructure raises the marginal product of 

capital (and possibly of labor), thus raising the incentive to invest in operations. Rodriguez, “Have Collapses 

in Infrastructure Spending Led to Cross-Country Divergence in Per Capita GDP?” 2007, 2. 12 Straub, “Infrastructure and Growth in Developing Countries,” January 2008, 7. 13 For more information on the effect of infrastructure on the textiles and apparel industry, see chap. 6 

of this report. 14 USITC, Hearing transcript, October 28, 2008, 51 (testimony of Paul Ryberg, Africa Coalition for 

Trade). 15 World Bank, World Development Report 2006, September 2005, 169–70. 16 Ibid. 

17 USITC, Hearing transcript, October 28, 2008, 33 (testimony of the Honorable Christopher 

Goldthwait, former U.S. Ambassador to Chad). 
1-8

network could reduce these constraints and provide economic opportunities to Chad’s 

population that come from good health and education. 

As discussed throughout this report, infrastructure conditions in SSA have a significant 

effect on the ability of firms to produce and export goods and services competitively in 

regional and global export markets. Poor infrastructure conditions in SSA contribute 

significantly to the relatively higher cost of SSA exports. One study, for example, has 

shown that costs incurred by producers as a result of poor infrastructure conditions 

generally outweigh the costs of tariff and nontariff barriers imposed by developed 

countries. 18 However, the state of SSA’s infrastructure is only one of many factors 

constraining the region’s international trade. Although demand growth, increased 

investment, development of private enterprise, and deeper regional integration, among 

others factors, have positively affected SSA export performance, political instability, 

increased competition in key markets, and low crop yields are factors that have 

negatively affected SSA export performance. 19 In addition, internal and international 

conflicts, weak governance, poorly developed institutions, low levels of education, 

corruption, and a constraining business environment continue to hamper SSA export 

growth.20

 18 Bouet, Mishra, and Roy, “Does Africa Trade Less Than It Should, and If So, Why?” May 2008, 8. 

This paper cites the role of trade preferences in reducing trade barriers faced by SSA exporters. 19 USITC, Sub-Saharan Africa, table ES-1, 2008, xvi. 20 Portugal-Perez and Wilson, “Lowering Trade Costs,” May 31, 2008, 2. 
1-9

Bibliography 

Bouet, Antoine, Santosh Mishra, and Devesh Roy. “Does Africa Trade Less Than It Should, and If So, 

Why? The Role of Market Access and Domestic Factors.” International Food Policy Research 

Institute Discussion Paper 00770, May 2008. 

CARANA Corporation. “The Role of Transportation and Logistics in International Trade: The 

Developing Country Context.” Prepared for the U.S. Agency for International Development, 

September 2003. http://www.tessproject.com/products/special_studies/trans& 

log_phase_1_report.pdf. 

Consultative Group to Assist the Poor (CGAP). “Financial Infrastructure,” undated. 

http://www.cgap.org/p/site/c/template.rc/1.26.3229 (accessed December 13, 2008). 

Fatokun, Oladele Samson. “African Air Transport in the 21st Century: A Case Study of the Contrasting 

Experience of Nigeria and Kenya.” Ph.D. diss., Cranfield University, 2005. 

Portugal-Perez, Alberto, and John S. Wilson. “Lowering Trade Costs for Development in Africa: A 

Summary Overview.” Presented at the World Bank Workshop on Trade Costs and the Business 

Environment: A Focus on Africa, Entebbe Uganda, May 31, 2008. 

http://siteresources.worldbank.org/DEC/Resources/Trade-Costs-and-Africa-Draft.pdf. 

Rodriguez, Francisco. “Have Collapses in Infrastructure Spending Led to Cross-Country Divergence in 

Per Capita GDP?” United Nations. Department of Economic and Social Affairs. DESA Working 

Paper no. 52. ST/ESA/2007/DWP/52, July 2007. 

Straub, Stephane. “Infrastructure and Growth in Developing Countries: Recent Advances and Research 

Challenges.” World Bank Policy Research Working Paper no. 4460, January 2008. 

U.S. International Trade Commission (USITC). Hearing transcript in connection with inv. no. 332-447, 

Sub-Saharan Africa: Effect of Infrastructure Conditions on Export Competitiveness, Third 

Annual Report, October 28, 2008. 

———. Sub-Saharan Africa: Factors Affecting Trade Patterns of Selected Industries: First Annual 

Report, USITC Publication 3914. Washington, DC: USITC, 2007. 

———. Sub-Saharan Africa: Factors Affecting Trade Patterns of Selected Industries: Second Annual 

Report, USITC Publication 3989. Washington, DC: USITC, 2008. 

United Nations Educational, Scientific and Cultural Organization (UNESCO). “Meeting Basic Needs,” 

undated. http://www.unesco.org/water/wwap/facts_figures/basic_needs.shtml (accessed 

December 18, 2008). 

World Bank. Doing Business Online Database. 

http://www.doingbusiness.org/ExploreTopics/TradingAcrossBorders/ (accessed various dates). 

———. World Development Indicators Database. 

http://web.worldbank.org/WBSITE/EXTERNAL/DATASTATISTICS/0,,contentMDK:21725423

~pagePK:64133150~piPK:64133175~theSitePK:239419,00.html. 
1-10

———. World Development Report 2006: Equity and Development. Washington, DC: World Bank, 

September 2005. 

World Trade Organization (WTO). World Trade Report 2004. Geneva: WTO, 2004. 

http://www.wto.int/english/res_e/booksp_e/anrep_e/world_trade_report04_e.pdf. 

World Wildlife Fund. “Facts on Water in Africa,” undated. 

http://assets.panda.org/downloads/waterinafricaeng.pdf (accessed December 16, 2008). 
2-1 

CHAPTER 2 

Synthesis and Implications of Findings 

Poor conditions in the SSA land transport, maritime transport, and electricity 

infrastructure sectors increase both the direct and indirect costs of producing and 

exporting goods and services, thereby reducing the export competitiveness of a wide 

range of SSA industries. This chapter examines how poor infrastructure conditions 

manifest themselves in terms of increased (1) production costs, (2) economic distance 

(the time and cost associated with transporting goods), and (3) business uncertainty, and 

how each of these factors affects the general export competitiveness of SSA, as well as 

select SSA industries examined in chapter 6 of this report.1

 These three factors interact 

with each other in various ways and vary among industries and countries within SSA. 

Although the effects of infrastructure conditions on production costs, economic distance, 

and business uncertainty are widely recognized within SSA, there is relatively little 

internationally comparable quantitative data available to assess these effects. As a result, 

this chapter relies primarily on descriptive information presented in subsequent chapters 

of this report. Where appropriate, material presented in this chapter is supplemented with 

quantitative information derived from other studies or from primary statistical 

information.2

Infrastructure and Production Costs 

High transport and electricity costs are embedded in production costs and are 

incorporated into the delivered price of products. Increases in production costs resulting 

from high transport and electricity costs reduce export competitiveness directly. More 

specifically, poor quality transportation networks in SSA increase the costs of acquiring 

inputs, such as hides and skins for leather production in Ethiopia, or textiles for apparel 

production in Kenya. Likewise, electricity generation in much of SSA, whether gridbased or using on-site generators, operates on small scales by international standards. As 

a result, electricity costs per kilowatt hour (kWh) are particularly high. High electricity 

costs reduce the competitiveness, or inhibit the expansion, of SSA’s main electricityintensive exports, such as metals, chemicals, and textiles. The following sections describe 

the effects of infrastructure conditions on direct production costs, and how high 

production costs affect both technology substitution and the composition of SSA exports. 

Direct Production Costs 

Because transport costs are embedded in the cost of producing goods, the condition of 

land transport and maritime infrastructure has a direct effect on the costs of procuring 

needed production inputs, particularly for landlocked countries. SSA apparel exports rely 

largely on imported textile inputs that, in many cases, must be transported to domestic 

production facilities via both land and maritime transportation networks. Processed 

 1

 For more detailed information on the effects of infrastructure conditions on the export 

competitiveness of select SSA industries, see chap. 6 of this report. 2

 Information in this chapter is cited when not presented elsewhere in this report. 
2-2 

agricultural products also require inputs from a variety of sources, as well as packaging 

materials, which must be transported. 

As discussed in chapter 5, SSA’s electricity infrastructure is the least developed, most 

costly to operate, and highest priced of any region in the world (with a few exceptions—

notably, South Africa). Power generation facilities can offer cheaper power when they 

can operate at large scales. However, total national power output in most SSA countries 

is well below the level that could be served by even a single U.S. plant operating using 

current technology at reasonable scale economies. According to World Bank data, 

national electricity production in 2005 was less than 10 million megawatt hours in all but 

3 SSA countries.3

 By comparison, the output of the Mount Storm power station in West 

Virginia, the 97th largest electricity generation plant in the United States, was 

approximately 10 million megawatt hours in 2007. 4 Mount Storm generates 

approximately the same amount of electricity per year as Côte d’Ivoire, Namibia, and 

Senegal combined. Moreover, the widespread use of small-scale power generators—

necessary because many firms in SSA either lack access to grid-provided electricity or 

suffer from frequent electricity shortages even if connected to an electrical grid—require 

costly fuel to operate, raising the cost of electricity to producers. 

Costly electricity increases production costs across a wide range of industries in SSA. For 

example, tropical fruit producers in Ghana reported that they could reduce energy costs 

by up to 60 percent if connected to reliable grid power instead of using more expensive 

on-site generators. A large tropical fruit exporter in Ghana estimated that generator costs 

account for 15 percent of total costs, and total costs would decrease by 7.5 percent if 

operations were connected to the electricity grid. In Kenya, apparel exporters reported 

that electricity generated by diesel power is 20 percent more expensive than from the 

grid. Finally, an industry official in Nigeria stated that poor infrastructure conditions, 

particularly electricity conditions, make tire production there about 40 percent more 

expensive than in other countries. 

Technology Substitution 

When faced with high-cost and low-quality infrastructure services, firms in SSA may 

attempt to lower their production costs by substituting labor-intensive technologies for 

capital-intensive technologies that require more electricity. For example, all steps of shea 

butter production can be and are often done by traditional hand methods. However, 

several steps, including milling and kneading, can be performed in villages with smallscale electrically powered machines (figure 2.1), but the use of these methods is limited 

not only by the cost of the equipment, but also by the high cost and unreliability of 

electricity. Electricity prices for shea butter producers in Burkina Faso amount to $0.49 

per kWh, compared with $0.004 to $0.233 per kWh in most other countries around the 

world.5

 Improved electricity infrastructure could lead to more widespread use of mediumscale technologies, reducing the burden of hand labor and increasing the productivity and 

incomes of rural workers. 

 3

 World Bank, World Development Indicators Database (accessed March 27, 2009). 4

 USDOE, EIA, “100 Largest Electric Plant Net Generation, 2007,” February 2009. 5

 For comparison rates, see USDOE, EIA, “Electricity Prices for Industry,” undated (accessed 

February 5, 2009). Data are for 2006. 
2-3 

FIGURE 2.1 Technological substitution in the production of shea butter 

Shea butter producers in Ouagadougou, Burkina Faso, perform hand-kneading operations (foreground), and have 

one machine to perform electrically powered kneading (background). Burkina Faso’s electricity is among the costliest 

in the world. Relatively less expensive electricity would lead to substitution of mechanized kneading for hand 

kneading. 

Source: USITC. 

The ability to fully exploit the technologies available with relatively less costly and more 

reliable electricity may be limited by the availability of complementary factors, such as 

access to clean water or affordable capital. For example, the sorting and testing of 

tropical fruit in SSA is often performed by visual inspection methods, with workers 

consulting a chart to indicate quality.6

 In more developed countries, such sorting is often 

accomplished by laser-based optical technologies using costly equipment. 7 Coffee 

washing is a production technology that generally adds value to the coffee bean. 

However, coffee washing is limited in SSA, in part due to the lack of reliable electricity 

to pump clean water needed to wash coffee. As a result, the alternative technology of sun 

drying is used, which contributes to reduced coffee bean quality and lower returns to 

 6

 Industry official, interview by Commission staff, Awutu Efutu Senya, Ghana, October 28, 2008. 7

 For a discussion of laser-based optical sorting technology in fruit, see Edwards, Detecting Foreign 

Bodies in Food, 2004.
2-4 

producers. Access to reliable electricity is also important in cases where laboratory 

testing is necessary to ensure a certain product quality or composition for the customer.8

Infrastructure and Export Profiles 

High-cost and low-quality infrastructure services increase the production costs of certain 

products more than others. At the same time, poor infrastructure conditions affect both 

the type of goods SSA exports and the extent to which SSA countries undertake 

downstream processing of basic commodities that they produce. Table 2.1 compares the 

cost share of electricity (electricity intensity) of various products in SSA with the 

propensity of SSA to export those products. There are electricity-intensive products of 

which SSA exports a high portion of the world total, despite having poor electricity 

infrastructure conditions, because of its advantages in natural resource endowments and 

agro-climatic conditions. These products include nonferrous and ferrous metals, 

miscellaneous minerals, coal, plant-based fibers such as cotton,9

 and sugar cane and beet. 

For these products, SSA’s global market share could increase if electricity infrastructure 

conditions improved. In contrast, there are also electricity-intensive products of which 

SSA exports relatively little, including wheat; manufactured mineral products; chemicals, 

rubber, and plastics; paper and pulp; and textiles. In the case of these products, the high 

cost and unpredictability of electricity supplies may reduce export competitiveness. 

Improved electricity infrastructure conditions could improve the competitiveness of SSA 

producers and exporters and also support an increased global market share for SSA 

exports. 

The ability of SSA countries to engage in downstream processing of basic commodities 

may be constrained by poor conditions in land and maritime transport infrastructure as 

well. SSA exports a significant amount of crude petroleum, but relatively few refined 

petroleum products and even fewer chemicals—products that require complex production 

processes and adequate and reliable electricity supplies. SSA countries also have a low 

share of global exports in industries that have a low production cost share of electricity 

(e.g., electronics, machinery, and motor vehicles), as these industries are often 

characterized by global supply chains that rely on efficient and timely multi-modal 

transportation networks. However, SSA’s weak transport infrastructure increases the cost 

and time associated with importing needed production inputs and exporting final 

products, effectively increasing economic distance between SSA and the rest of the 

world. 

Infrastructure and Economic Distance 

The economic distance between two countries, or two regions within a country, can be 

measured by the costs incurred, or the time required, to ship goods from point to point. 

Increased economic distance can raise production costs indirectly by impeding producers’ 

efforts to exploit economies of scale to reduce unit production costs, which further erodes 

export competitiveness. Furthermore, the costs of moving goods from producers to 

consumers also depend on the quality of transport and associated services, such as 

customs and freight forwarding. Varying infrastructure conditions can even make 

transporting products more costly and untimely over some shorter distances than over

 8

 Industry official, interview by Commission staff, Ouagadougou, Burkina Faso, October 23, 2008. 9

 The cotton ginning process uses a significant amount of electricity. 
2-5 

TABLE 2.1 Electricity intensity of production and export share of sub-Saharan Africa 

SSA share of 

global exports 

High electricity intensity of 

production 

Medium electricity intensity 

of production 

Low electricity intensity of 

production 

High Nonferrous metals 

Ferrous metals 

Miscellaneous minerals 

Coal 

Plant-based fibers 

Sugar cane and beet 

Sugar, manufactured 

Fruits and vegetables 

Wool 

Misc. crops 

Misc. food products 

Crude petroleum 

Forestry products 

Medium Petroleum and coal products Meat products 

Vegetable oils and fats 

Natural gas 

Fisheries products 

Beverages and tobacco 

Apparel 

Low Wheat 

Manufactured mineral 

products 

Chemicals, rubber, plastics 

Paper and pulp 

Textiles 

Fabricated metals 

Processed rice 

Milk 

Motor vehicles 

Electronics 

Industrial machinery 

Other transport equipment 

Source: 2004 data from GTAP version 7 database. The medium range for SSA exports is 1–2 percent of global 

exports. The medium range for electricity intensity of production is 1–5 percent of total costs, calculated on a 

global basis. Industries shown are illustrative, rather than comprehensive. 

longer ones. For example, it can take one tropical fruit producer in Ghana approximately 

one hour to transport produce for export 100 kilometers (km)10 to the port of Tema, 

Ghana while it can take another producer in Ghana approximately three times longer to 

transport produce to the same port from a shorter distance of 70 km because of poor road 

conditions. 

Transport Costs 

The difference between the prices received by producers and the prices paid by 

consumers provides a direct indicator of economic distance.11 For example, Rwandan 

coffee is transported over 1,500 km on roads of variable quality via Uganda to the port in 

Mombasa, Kenya, or alternately by road and rail to Dar es Salaam, Tanzania. Transport 

costs may represent up to 40 percent of total costs of Rwandan coffee exports. One 

apparel producer near Nairobi, Kenya, estimated that improvements in all aspects of the 

transport process, including ports, roads, and customs procedures, could lower total costs 

by 10–40 percent and improve the firm’s competitiveness. 

Although all stages of land transport may be costly and time consuming, the initial stages 

can be particularly costly because of the poor quality of feeder roads, which connect 

inland, and often rural, locations to more centralized processing or market locations. For 

example, shea nuts sold in provincial capitals in Ghana and Burkina Faso may fetch 

double or triple the price paid to the farmer in remote local villages. The most difficult 

villages to reach (albeit not necessarily the farthest) receive the lowest prices. The 

discount reflects the fact that fewer truck drivers are willing to drive on poor roads in 

which they may lose an axle or arrive at a washed-out bridge that has not been repaired. 

These considerations reduce the number of trucks available for hire and consequently 

 10 One kilometer is approximately equal to 0.6 miles. 11 There are other reasons for high prices in urban areas, such as higher consumer income. It is 

therefore important for purposes of understanding infrastructure quality to focus on the difference between 

prices paid by the seller and those received by the buyer. 
2-6 

raise the price of trucking services. Economic distance can also be increased by the 

indirect costs of lost production from damage, spoilage, or mishandling in transit. 

Approximately 15–20 percent of fruit delivered by out-growers (small producers at 

dispersed locations) in Ghana on feeder roads to nucleus farms is rejected because of 

damage to the fruit while in transit. 

Improved road infrastructure can raise the income of village producers by increasing the 

supply of trucking services and thus lowering transportation costs. Improved roads can 

promote competition between trucking companies willing to drive on better roads and 

also encourage complementary investment in both commercial and personal vehicles, as 

expected maintenance and depreciation costs are reduced, which further increases 

trucking supply.12

Sometimes relatively modest investments or small changes in policies can significantly 

reduce transport times. For example, the distribution of bicycles to Rwandan coffee 

exporters through a U.S. Agency for International Development (USAID)-funded 

program reduced transit times from harvest to central processing stations by two-thirds, 

thereby reducing the potential of bean deterioration and enabling greater access to 

quality-enhancing coffee washing stations. Similarly, appropriately designed pricing 

schemes for the delivery of tapped rubber in Côte d’Ivoire provide incentives for farmers 

to choose the most efficient methods of transport. 

In some cases, increased demand to reach a particular remote location can stimulate 

investments in infrastructure, thereby improving infrastructure conditions and reducing 

economic distance. For example, investments in road paving and electrification have 

increased accessibility along “the Obama route” for tourists to visit the home of President 

Barack Obama’s father in the village of Nyang’oma Kogelo, Kenya. 

Transport Time 

Speed to market is increasingly valued in international trade, and slow delivery 

effectively increases costs. For some products, including simple manufactures and 

storable raw materials such as crude petroleum, speed to market is relatively less 

important. In contrast, speed to market is crucial for perishable products, such as 

agricultural goods, or products that become obsolete in the marketplace because of 

technological change (e.g., electronics) or shifting consumer preferences (e.g., fashion 

apparel). Consumers around the world increasingly demand products with precise 

characteristics and are willing to pay to have them delivered quickly. Moreover, with the 

segmentation of production processes for goods such as electronics—for which 

components are sourced from many countries—success in the marketplace requires the 

coordination of “just-in-time” delivery among widely dispersed production facilities.13

Effective participation in these dispersed supply chains requires the necessary transport 

infrastructure to satisfy the requirement for quick and reliable delivery times. One way 

that SSA apparel firms have compensated for a lack of efficient transport infrastructure 

has been to concentrate on production of low- to mid-range, commodity-type apparel 

products where speed to market is relatively less critical. 

The time required to export and import goods, including inland transport, customs 

clearance, and port clearance, is greater in SSA than in any other region of the world. In 

 12 Industry official, interview by Commission staff, Kasalgu, Ghana, October 21, 2008. 13 Hummels, et al., “Calculating Tariff Equivalents for Time in Trade,” March 2007, 3. 
2-7 

2007, the average time to export from SSA was 18.9 days, of which nearly one-half 

consisted of customs clearance, whereas the average import time was 28.5 days, divided 

about evenly among inland transport, customs, and ports.14 According to one study, the 

costs of a one-day delay in delivery of internationally traded goods, as a percent of the 

final product cost (“tariff-equivalent” costs), are estimated to be 0.7 percent for apparel; 

0.9 percent for vegetables, fruit, and telecommunications equipment; 1.1 percent for 

coffee, tea, cocoa, and spices; and 2.0 percent for road vehicles.15 

Although coffee exports from both Rwanda and Colombia enter the United States free of 

duty, Rwanda needs almost three times longer to export (42 days) than does Colombia 

(14 days), 16 implying that Rwandan coffee exports face a significantly higher tariff 

equivalent than Colombian coffee exports. Applying the above estimate that the cost of a 

one-day delay in coffee shipments is equivalent to 1.1 percent ad valorem, the additional 

delays in exporting coffee from Rwanda are equivalent to approximately a 36 percent 

tariff equivalent relative to exporting from Colombia.17 

Estimates based on simulation methods show that a 50 percent reduction in the time 

required to export from SSA would lead to a 2.2 percent increase in the region’s gross 

domestic product (GDP), whereas a similar reduction in the time required to import 

would lead to a 4.2 percent increase. 18 Such reductions in the time to trade would also 

likely be associated with significant diversification in exports away from most primary 

products and toward manufactures, as well as toward higher-value agricultural products 

such as vegetables, fruits, and nuts.19

Economies of Scale 

Reducing economic distance also makes it possible to exploit economies of scale in 

production because producers are able to source inputs from a wider range of suppliers 

and sell goods to a larger market. For example, natural rubber factories in SSA achieve 

reasonable scale economies by sourcing from out-growers. The scale economies can 

compensate for certain cost disadvantages associated with transporting cup rubber from 

out-growers to the factory.20

Economic distance between the same two points can differ for SSA exporters and 

multinational exporters, due in part to differences in resources and access to capital. 

Access to superior logistics and financing can create a significant competitive advantage 

for large (often foreign) firms by reducing economic distance and enabling the 

 14 Ibid., 5. These figures differ from those presented in figure 1.1 of this report because they are derived 

from the World Bank’s Doing Business 2007 report rather than Doing Business 2009, and because they 

exclude time to complete documentation, since importers and exporters may work on documentation while 

production is already underway. 15 Ibid., 8. 

16 Includes the time required to obtain all appropriate documents, inland transport, customs clearance 

and inspections, and port and terminal handling. Does not include ocean transport time. World Bank, Doing 

Business Online Database, 2009 data (accessed February 12, 2009). 17 The 36 percent estimate is a Commission staff calculation, and includes daily compounding. 18 Minor and Tsigas, “Impacts of Better Trade Facilitation in Developing Countries,” June 2008, 12–

13. 19 Ibid., 17. 

20 Cup rubber is natural rubber in its original state as tapped from the rubber tree and gathered in a cup. 

Cup rubber loses water from evaporation during transport. Natural rubber factories would prefer to pay for 

dry rubber equivalent, but must weigh the rubber at the out-growers’ location, where the water content is 

higher. This implies a higher cost per weight of usable rubber. 
2-8 

exploitation of scale economies. Well-financed foreign firms are often better able to take 

advantage of economies of consolidation by extending their operations throughout the 

supply chain and utilizing their own trucks and warehouses. Smaller SSA firms, in 

contrast, may find it difficult to obtain scale economies through consolidation. For 

example, shea nuts are often exported in mass quantities to Europe by foreign firms, 

where they can be processed in larger overseas factories that benefit from scale 

economies. Smaller local firms, on the other hand, are more likely to gather shea nuts 

over a relatively small area and produce and export shea butter in smaller quantities, 

without the benefit of scale economies.21 Likewise, it may require the consolidated output 

of several hundred coffee farms in East Africa to fill one shipping container of exportable 

green (unroasted) coffee. 

Infrastructure and Uncertainty 

Poor infrastructure in SSA makes transportation not only slow and costly, but also 

unreliable. Truck arrival times to transport products to port for export can be 

unpredictable; goods may be delivered to the customer late, not at all, or in an unusable 

state, thus damaging the reputation of the exporter. Similarly, electricity is subject to 

frequent and unpredictable outages. An electrical outage may shut down production lines 

midstream, damaging semi-finished products. Even if transport and electricity costs are 

relatively low, uncertainty often compels firms to invest in capacity that would otherwise 

be redundant, such as electric generators. 

Uncertainty created by poor infrastructure conditions substantially raises production risk 

and discourages investment and production. It can also lead to higher production costs 

and lower returns to producers. For example, poor road conditions between slaughtering 

facilities and tanneries in Ethiopia often lead to damaged rawhides and skins, and is one 

of a number of factors contributing to the large and unpredictable rejection rate at 

tanneries, ranging from 20 to 80 percent. Because quality is often not discernable in 

untanned hides, prices paid by tanneries are low to help offset the costs associated with 

rejecting an unknown portion of hides and skins; nevertheless, damaged hides and skins 

increase production costs to tanneries. In addition, uncertainty is introduced into the 

quantity of tanned leather available for export. Infrastructure investments, to the extent 

that they reduce uncertainty, can increase the profitability of exporting and promote 

complementary investments in production facilities. 

Uncertainty in Truck and Ship Arrival Times 

The unpaved and potholed condition of many roads in SSA leads to breakdowns of trucks 

used for export. Likewise, a lack of resources to repair washed-out bridges, delays due to 

roadblocks and checkpoints, and occasional hijackings also contribute to highly 

unpredictable truck arrival times at the port. If warehouse capacity at the port is 

insufficient, trucks may serve as ad hoc warehouses until the ship arrives, exposing goods 

to the risk of theft, and drivers may need to be compensated for food and lodging in the 

port city while awaiting the ship. Further, delays may lead to spoilage of perishable 

goods. Conversely, trucks may also arrive too late and miss the ship, as arrival times for 

container lines are uncertain, in part because of accumulated delays at previous port calls. 

 21 Industry officials, interview by Commission staff, Accra, Ghana, October 20, 2008; industry official, 

interview by Commission staff, Tamale, Ghana, October 22, 2008. 
2-9 

Moreover, fewer containers may be loaded onto the ship than were contracted for, 

requiring some of the goods to be left behind on the dock. Ships that are loaded but 

unable to leave the port on schedule because of logistical inefficiencies may incur port 

charges for demurrage,22 another unpredictable event. If perishable produce arrives at 

import markets in a spoiled state, exporters may receive no compensation, and claims 

may be filed against shipping lines for the losses incurred by the importer.23

Producers and exporters in SSA may adapt production and shipment schedules in 

response to uncertainty in ship arrival times. For example, in central Ghana, pineapples 

must be harvested and de-greened 9–10 days before they are loaded onto trucks for the 

three-hour journey to the port of Tema. In order to choose the right day to harvest, 

growers must consult not only the weather, but also reports about congestion at the port 

in Nigeria, where ships often stop en route to Tema. Nevertheless, the information can 

still be imperfect, and trucks may still arrive early or late. 

Uncertainty in Electrical Power Supply 

The uncertainty associated with electric brownouts and blackouts affects production to 

varying degrees. Entire phases of the production process, such as those depending on 

heating, may need to be restarted as the result of a 15-minute outage.24 Various stages of 

textile and apparel production, such as dyeing and cutting, are adversely affected by 

unreliable electricity; an entire textile dye lot can be ruined by load shedding.25 In many 

other industries, similar intermittent electricity failures lead to the wastage of semifinished products. Producers that require reliable electricity to serve an export market, 

such as rubber exporters in Côte d’Ivoire that sell to tire factories in North America, may 

incur the additional expense of installing large-scale diesel or natural-gas powered 

generating capacity to reduce the uncertainty of unreliable grid electricity. 26 Such 

technologies have not been widely used as a primary source of electricity in the United 

States for nearly a century. 27 Finally, many hotels at tourist locations require generators 

to limit the impact of load-shedding on visitors, adding to the cost of, and potentially 

reducing demand for, a vacation to destinations with unreliable electricity supplies. 

 22 Demurrage refers either to the detention of a ship beyond the time allowed for loading, unloading, or 

sailing, or to monetary charges associated with such detention. 23 Industry official, interview by Commission staff, Abidjan, Côte d’Ivoire, October 30, 2008. 24 Industry official, interview by Commission staff, Accra, Ghana, October 20, 2008. 25 Load-shedding involves scheduled or unscheduled power outages for certain areas due to lack of 

sufficient capacity to fully meet demand. 26 Industry official, interview by Commission staff, Abidjan, Côte d’Ivoire, October 31, 2008. 27 Freeman and Soete, The Economics of Industrial Innovation, 1997, 75–80. 
2-10 

Bibliography 

Edwards, Mike. Detecting Foreign Bodies in Food. Cambridge, UK: Woodhead Publishing, 2004. 

 

Freeman, Chris, and Luc Soete. The Economics of Industrial Innovation. 3rd ed. Cambridge, MA: MIT 

Press, 1997. 

Hummels, David, Pete Minor, Matthew Reisman, and Erin Endean. “Calculating Tariff Equivalents for 

Time In Trade.” Prepared by Nathan Associates, Inc. for the U.S. Agency for International 

Development, March 2007. 

Minor, Peter, and Marinos Tsigas. “Impacts of Better Trade Facilitation in Developing Countries: 

Analysis with a New GTAP Database for the Value of Time in Trade.” Prepared by Nathan 

Associates, Inc. for the 11th Annual GTAP Conference, Helsinki, Finland, June 2008. 

U.S. Department of Energy (USDOE). Energy Information Administration (EIA). “Electricity Prices for 

Industry,” undated. http://www.eia.doe.gov/emeu/international/elecprii.html (accessed 

 February 5, 2009). 

———. “100 Largest Electric Plant Net Generation, 2007,” February, 2009. 

http://www.eia.doe.gov/neic/rankings/rankbyplantgeneration.htm. 

World Bank. Doing Business Online Database. http://www.doingbusiness.org (accessed February 12, 

2009). 

———. World Development Indicators Online Database. http://www.worldbank.org (accessed March 27, 

2009). 
3-1

CHAPTER 3 

Land Transport 

The quality of land transport infrastructure is correlated with output, productivity, growth 

rates, land value, and market development.1

 High-quality land transport infrastructure 

facilitates economic activity, improves access to health care and education, raises social 

welfare by bringing consumer goods to rural areas, and facilitates social integration. In 

SSA, long distances, border delays, underinvestment in infrastructure, and inefficient 

trade and transport policies result in high land transport costs and low land transport 

quality. This impedes the movement of labor and goods, reduces transmission of 

knowledge and technology, and reduces export competitiveness by raising both the prices 

of imported inputs and the costs of transporting final goods to market. To reduce land 

transport infrastructure deficiencies, SSA countries are engaged in reforming 

management and finance, increasing investment, and promoting regional cooperation. 

Conditions of the Land Transport Sector 

Land Transport Infrastructure 

SSA roads and railways are in poor overall condition. Over the last several decades, SSA 

has lagged behind other regions of the world in quantity and quality of land transport 

infrastructure and has made slower progress in improving maintenance and management 

of infrastructure. In some respects, SSA’s infrastructure quality has worsened in absolute 

terms.2

Geographically, SSA countries vary widely in size, and many countries have low 

population densities and low levels of urbanization. Many SSA countries are small and/or 

landlocked, with landlocked countries accounting for 40 percent of SSA’s total 

population.3

 Seventy percent of SSA’s rural population lives more than 2 km from an allweather road,4

 so bicycles and walking constitute a greater percentage of transport needs 

in many rural areas than motorized vehicles.5

 Some SSA countries have topographical 

features (such as Rwanda’s hills, or erosion-susceptible coasts in Togo and Benin) that 

add to the expense of building and maintaining land transport infrastructure. Weather is 

also a problem, with heavy rains flooding main roads and long dry seasons rendering 

rivers unnavigable. For example, the Central African Republic (CAR) has two primary 

transit corridors: one, through Cameroon, is often impassable in the rainy season, and the 

other, involving transit down the Oubangui River, is unnavigable in the dry season.6

Land transport in SSA is not only time consuming and expensive but highly variable, 

both in trip length and in the condition of cargo upon arrival. Roads are sometimes 

flooded, and trains often do not leave on time. In addition, political instability increases 

 1

 Calderon and Serven, “Infrastructure and Economic Development,” September 2008, 2. 2

 Ibid., 15. 

3

 Ibid., 2. 

4

 Raballand and Teravaninthorn, Transport Prices and Costs in Africa, 2009, xi. 5

 Pedersen, “Freight Transport under Globalization,” 2001, 96. 6

 Faye, et al., “The Challenges Facing Landlocked Developing Countries,” March 2004, 44. 
3-2

the likelihood of corruption or robbery, and customs officials may delay or deny entrance 

or confiscate goods. Trucks in Ghana traveling from Paga (on the northern border with 

Burkina Faso) to Tema (on the Gulf of Guinea) take two to four days under normal 

conditions, but an estimated 10–20 percent of trucks are delayed by a week or more; 

moreover, if a truck breaks down on this route, it can take up to three weeks to procure a 

mechanic from Kumasi in south-central Ghana. 7 Unreliable supply chains force 

producers to invest in supply chain redundancy and hold large inventories as hedges (one 

beer wholesaler in rural Cameroon stockpiled up to five months’ inventory at the 

beginning of each rainy season).8

 These costs discourage investment in modern services, 

including those that would make supply chains more reliable (such as warehousing 

infrastructure and information technology).9

Most land transport in SSA takes place along various transnational corridors or routes 

that link economic centers with each other and with ports (table 3.1 and figure 3.1). 

Transport practices, prices, and costs tend to be corridor specific. Many SSA corridors 

are formally designated as such and are overseen by agencies established through 

multilateral treaty or memoranda of understanding; oversight agencies attempt to reduce 

transit times and costs by coordinating member country policies and investments. 10

Producers find it advantageous to have multiple corridor alternatives. For example, 

copper mining companies in Zambia have an explicit policy of maintaining alternative 

corridor routes in order to receive competitive shipping service. 11 Investments that 

improve average infrastructure quality on a transit corridor may not be effective if they 

do not improve conditions in the transit country with the worst infrastructure conditions, 

as business managers considering overland shipments base their decisions on the riskiest 

and most time-consuming portion of the trip.12

Roads 

There are about 2 million km of roads in SSA, with a replacement cost estimated in 2001 

to be $170 billion.13 SSA has the lowest road density, measured by kilometers of road per 

1,000 square kilometers of land, of any developing region in the world: 49 km/km2

 of 

paved roads (compared with 482 km/km2

 of paved roads in the Middle East and North 

Africa), and 152 km/km2

 of total paved and unpaved roads (compared with 740 km/km2

in Latin America and the Caribbean).14 Roads are the primary link between dense urban 

areas and agriculturally productive rural areas and account for more than 80 percent of 

total freight and passenger movement in SSA.15

Roads in SSA have lost nearly one-third of their value due to underinvestment and 

continuous deferral of maintenance,16 and there are fewer kilometers of roads in Africa

 7

 Industry officials, interview by Commission staff, Accra, Ghana, October 28, 2008. 8 Economist, “The Road to Hell is Unpaved,” December 19, 2002. 9

 Raballand, “The Cost of Being Landlocked in Africa,” February 21, 2008. 

10 Key performance indicators for corridor management include traffic volumes, transport prices, 

turnaround time for trucks, port dwell time, and border post transit times. 11 Raballand, Kunaka, and Giersing, “The Impact of Regional Liberalization,” January 2008, 5. 12 Buys, Deichmann, and Wheeler, “Road Network Upgrading,” December 2006, 12. 13 Simuyemba, “Linking Africa Through Regional Infrastructure,” 2000, 12; Nyangaga, “Reforming 

Road Management,” March 2001, 1. 14 Foster, et al., “Building Bridges,” 2008, 24. 

15 Dierks, “A Case for Namibian Roads Conservation,” December 28, 2000. 

16 Nyangaga, “Reforming Road Management,” March 2001, 1. 
3-3

TABLE 3.1 Select land transport corridors in sub-Saharan Africa 

Corridor Countries involved Culminating port Institutional arrangements for trade facilitation 

Northern 

 Corridor 

Democratic Republic of the 

Congo (DRC), Burundi, 

Rwanda, Uganda, Kenya 

Mombasa, Kenya Northern Corridor Transit Transport 

Coordination Authority (NCTTCA) (1985) 

Central Corridor DRC, Burundi, Rwanda, 

Tanzania 

Dar es Salaam, 

Tanzania 

Central Corridor Transit Transport Facilitation 

Agency (2006), modeled on NCTTCA 

Dar es Salaam 

 Corridor 

Zambia, Malawi, Tanzania Dar es Salaam, 

Tanzania 

Dar es Salaam Corridor Coordinating 

Committee (2003), based on transport 

coordinating committee founded in 1960s 

Walvis Bay 

 Corridors 

 (3 branches) 

South Africa, Botswana, 

Namibia (Trans-Kalahari); 

Zambia, Angola, Namibia 

(Trans-Caprivi); Angola, 

Namibia (Trans-Cunene) 

Walvis Bay, 

Namibia 

Walvis Bay Corridor Group (2000), a publicprivate partnership; and Trans-Kalahari Corridor 

Management Committee (2003) 

Maputo Corridor South Africa, Mozambique Maputo, 

Mozambique 

Maputo Corridor Logistics Initiative (2004), 

incorporated as a nonprofit in South Africa 

Abidjan-Lagos 

 Corridor 

Côte d’Ivoire, Ghana, Togo, 

Benin, Nigeria (branches 

linking Mali, Burkina Faso, 

Niger) 

Multiple West 

African ports 

Bilateral proposals for cross-border corridor 

management committees facilitated by the 

Economic Community of West African States 

North-South 

 Corridor 

DRC, Zambia, Zimbabwe, 

Botswana, South Africa 

(branches linking Tanzania 

and Malawi) 

Durban, South 

Africa 

Various domestic, bilateral, and regional 

arrangements (including involvement by 

COMESA, EAC, and SADC) 

Sources: Adzibgey, Kunaka, and Mitiku, “Institutional Arrangements for Transport Corridor Management in SubSaharan Africa,” October 2007; Pearson, “The North-South Corridor,” October 11, 2008. 

 
3-4

FIGURE 3.1 Major land transport routes and ports in sub-Saharan Africa 

Sources: Adapted from OECD, Africa Economic Outlook 2007/2008 2008, 12; and Degerlund, ed., Containerization 

International Yearbook 2008, 2008, 157–69. 

Note: TEU refers to a twenty-foot equivalent unit, the cargo capacity of a standard shipping container 20 feet long and 

eight feet wide. 

Dakar, Senegal 

Abidjan, Côte d’Ivoire 
3-5

today than there were 30 years ago. 17 By one estimate, $12 billion of preventive 

maintenance in the 1970s and 1980s could have prevented $45 billion in SSA road value 

loss.18 The absence or poor enforcement of axle-load regulations contributes to overuse of 

roads: the relationship between axle weight and inflicted damage to pavement is not 

linear but exponential, and overloading trucks (which maximizes revenue given a limited 

number of trips) raises the maintenance costs and shortens the life expectancy of roads. In 

turn, poor roads damage vehicles, reduce tire lifespan and vehicle utilization, and reduce 

fuel efficiency to as little as 100 km per 50 liters (4.7 miles per gallon) for vehicles that 

often are already old and poorly maintained.19 Maximum driving speeds are low, as 

vehicles need to slow down to avoid potholes or navigate uneven terrain. The average 

daily speed of a freight-hauling truck in France is 69 km per hour, compared with 30 km 

per hour in Central Africa.20 A fully laden truck requires up to three days to travel 485 

km from Nairobi to Mombasa in Kenya,21 and up to four days to travel 500 km from 

Douala to Bertoua in Cameroon.22 

Even adequate SSA roads are not necessarily able to deal with large increases in traffic 

volumes. Economic development in South Africa has rapidly increased the use of the N3 

Johannesburg-Durban road, which carried the same amount of traffic over the past 3 

years as it had in the previous 20.23 Plans to construct and maintain roads are based upon 

traffic forecasts that may quickly become outdated during periods of rapid growth in 

freight movement. 

When road infrastructure is sufficiently poor, drivers take alternate routes that often 

require longer travel times. For example, Burundi’s most direct route to the coast is 

through neighboring Tanzania, but infrastructure along this route is so poor that the 

primary Burundian transit route to Mombasa is via Rwanda, Uganda, and Kenya, an 

additional 600 km.24 Due to bridges washing out in Togo, many freight shipments from 

northern Togo must travel to Tema, Ghana, via Ouagadougou, Burkina Faso, a detour of 

an estimated 1,750 km that contributes to overuse of and damages to Burkinabé roads.25

Railways 

Rail capacity in SSA has declined due to infrastructure deterioration and endemic 

unreliability in operations (breakdowns and delays are frequent). In the 1980s, there were 

20,000 km of rail lines in southern Africa, but only 10,000 km were in use in 2002.26 In 

Zambia, total freight carried by rail fell from 6 million tons per year in 1975 to less than 

1.5 million tons per year in 1998.27 Swaziland’s Swazi Rail currently moves less than 1 

million tons of import and export rail traffic per year, less than when the rail line was 

built in 1964 (it carried large volumes of iron ore at that time), and Swazi trains are not

 17 Raballand and Teravaninthorn, Transport Prices and Costs in Africa, 2009, xi. 18 Brushett, “Management and Financing of Road Transport Infrastructure in Africa,” March 2005, 4. 19 Raballand and Teravaninthorn, Transport Prices and Costs in Africa, 2009, 69. 20 Raballand and Macchi, “Transport Prices and Costs,” September 27, 2008, 5. 21 Faye, et al., “The Challenges Facing Landlocked Developing Countries,” March 2004, 58. 22 Economist, “The Road to Hell is Unpaved,” December 19, 2002. 23 Industry officials, interview by Commission staff, Johannesburg, South Africa, October 15, 2008. 24 Faye, et al., “The Challenges Facing Landlocked Developing Countries,” March 2004, 44. 25 Industry officials, interview by Commission staff, Ouagadougou, Burkina Faso, October 23, 2008. 26 De Jong, “South Africa: Railway Heritage At Risk,” 2002. 27 Raballand, Kunaka, and Giersing, “The Impact of Regional Liberalization and Harmonization,” 

January 2008, 4. All tons are metric tons. One metric ton is approximately equal to 1.1 net tons. 
3-6

always able to meet minimal load requirements at ports.28 Even in South Africa, the SSA 

country with the most developed rail sector, current capacity on the railway connecting 

manganese mines to Port Elizabeth is 3.5 million tons per year, whereas demand is 

approximately 4.2 million tons per year.29 The Johannesburg-Durban rail line is currently 

operating at about 25 percent capacity due to operational inefficiencies and congestion.30

As with road transport, rail transport in SSA can be protracted and unreliable: the 1,145 

km train trip from Kampala, Uganda, to Mombasa, Kenya can take from 14 to 21 days.31

While SSA roads are often inadequate, railways can present even more challenges to 

shippers, and in most SSA countries railways are losing market share to truck traffic. Due 

to low top speeds and unreliability on the narrow-gauge Kenyan railway, only 6 percent 

of the cargo entering and leaving Mombasa is now carried by train (down from 20 

percent in 2006).32 Rail traffic in South Africa, which had a 9 percent freight market 

share in 2005 worth $1.2 billion annually, has decreased over the last decade (except for 

coal and iron export lines), while road traffic has steadily increased. 33 Ghana has 

experienced a long and severe decline in rail traffic, and most of its goods (and all of its 

containers) now travel by truck, leaving manganese and bauxite (which can only feasibly 

be moved by rail due to their weight) to make up 83 percent of Ghana’s rail traffic.34 

The absence of high-quality rail lines also reduces competitive pressure and incentives 

for innovation and quality improvement in the trucking sector. This situation puts even 

more pressure on road use, increasing traffic and wear. Railways have suffered from 

continent-wide underinvestment in SSA, and even if countries reform their rail policies 

and make coordinated investments in regional rail networks, a critical mass of users has 

already shifted to roads. Some have invested in trucking fleets or otherwise made serious 

commitments to road use, and in such cases significant improvements in rail lines would 

be necessary to recapture this traffic.35

Intermodal Transitions 

Intermodal transitions (in which freight is transferred from trucks to trains, trains to ships, 

or other modal combinations) are particularly time consuming and inefficient throughout 

SSA; in many cases, intermodal links are the main bottleneck for freight movement. In 

2003, Ghana’s freight forwarding industry was entirely reliant on manual loading and 

unloading for intermodal transitions.36 Upgrading intermodal links is a priority in South 

Africa, where shippers are overusing the Johannesburg-Durban N3 road largely to avoid 

congested intermodal transfers required by rail shipments. Actual travel time from 

Durban to Johannesburg by train is estimated to be 18–21 hours (comparable to trucking 

 28 Industry officials, interview by Commission staff, Mbabane, Swaziland, October 23, 2008. Some 

port management agencies or other authorities require that incoming trains meet minimum load thresholds 

before entering ports and unloading their freight, in order to ensure profitability. Swazi Railways has argued 

that it could bypass shunting yards in Kings Rest and Bayhead, South Africa and gain direct access to the 

Durban port if it could consistently achieve minimum train lengths of 20 railcars. Mpata, Giersing, and 

Kaombwe, “Improving Transportation Logistics for Competitiveness of Swaziland,” April 2004, 18. 29 Ford, “Investment, Not Rebranding, Is the Key,” December 2008. 

30 Industry officials, interview by Commission staff, Johannesburg, South Africa, October 15, 2008. 31 Faye, et al., “The Challenges Facing Landlocked Developing Countries,” March 2004, 48. 32 Industry official, interview by Commission staff, Mombasa, Kenya, October 27, 2008. 33 Van der Muelen, “Transnet’s Turnaround Strategy,” September 2005. Converted from 11 billion 

rand, 2005 exchange rate. 34 Pedersen, “Development of Freight Transport and Logistics,” 2003, 288. 35 Industry officials, interview by Commission staff, Durban, South Africa, October 21, 2008. 36 Pedersen, “Development of Freight Transport and Logistics,” 2003, 291. 
3-7

time) but containers are not available for pickup at the City Deep container terminal in 

Johannesburg for an estimated seven days, as it reportedly takes three days to load a 

container onto a train and another three days to unload it.37

Intermodal connections facilitate the vertical integration of commodity chains. Logistics 

sectors typically evolve from a three-stage system of transporting commodities (from 

rural hinterlands to marketplaces, from marketplaces to ports, and then from ports to 

overseas markets) to integrated door-to-door supply chains.38 By comparison, improving 

intermodal links was a major factor in the export-driven development of Southeast Asian 

countries. Starting in the 1980s, these countries restructured their transport sectors into 

multimodal supply chain management sectors that took advantage of containerization and 

the internationalization of production.39 Improvements in intermodal links in Southeast 

Asia were correlated with increased trade flows (especially of intermediate goods), 

increased integration into global production networks, and growth in domestic 

manufacturing sectors. 

Service Providers 

Ownership Structure 

Some large manufacturing, mining, beverage, and agricultural firms in SSA maintain 

their own in-house shipping capacity to achieve self-sufficiency (such as the Magadi soda 

mine in Kenya, which operates its own railway lines).40 Most producers, though, hire 

outside parties to transport their products, ranging from single owner-operator trucks to 

large third-party logistics providers (3PLs). The division of trucking ownership varies. In 

Ghana, the majority of the 10–11 percent annual growth in trucks since 1986 was driven 

by operator-owned trucks; only a few operators have large fleets. 41 Owner-operator 

enterprises tend to be less efficient than large-scale 3PLs, but some countries maintain 

many owner-operators due to policies that promote entrepreneurship (such as poverty 

reduction plans that provide funding for small- to medium-sized enterprises).42 Larger 

operators have broader customer portfolios, more flexible operating conditions, and 

greater ability to back-haul cargo.43 For example, Zambian operators with at least 50 

trucks have a back-haul rate of almost 100 percent in spite of freight imbalances (partly 

due to high demand for transport services in the region).44 Larger operators are also more 

able to enter into long-term contracts with producers, whereas many owner-operator 

transport services are purchased in truck (lorry) parks on spot markets.45

The majority of SSA railways are operated by public or parastatal entities. Some 

parastatals operate effectively and independently; for example, South Africa’s parastatal 

rail and port operator Transnet funds itself without receiving any general tax revenues 

and is using its earnings to fund a $6.4 billion expansion plan.46 However, many public 

 37 Industry officials, interview by Commission staff, Durban, South Africa, October 21, 2008. 38 Pedersen, “Freight Transport under Globalization,” 2001, 96. 39 Ibid., 87. 

40 Ibid., 96. 

41 Pedersen, “Development of Freight Transport and Logistics,” 2003, 290–91. 42 Pedersen, “Freight Transport under Globalization,” 2001, 94. 43 Back-haul refers to a vehicle carrying cargo on a return journey. 

44 Raballand, Kunaka, and Giersing, “The Impact of Regional Liberalization and Harmonization,” 

January 2008, 5. 45 Pedersen, “Development of Freight Transport and Logistics,” 2003, 290–91. 46 Industry officials, interview by Commission staff, Johannesburg, South Africa, October 15, 2008. 
3-8

railway agencies in SSA constitute a combination of asset managers, operators, and 

regulators, which leads to problems stemming from self-regulation and makes it difficult 

for private operators to enter the market.47 Nevertheless, some SSA railways are operated 

by private companies. The railway between Côte d’Ivoire and Burkina Faso was 

privatized in 1994 with major shipping companies and forwarders—SAGA, SDV, and 

Maersk—as the controlling shareholders.48

Market Conditions 

Although vehicle damage inflicted by poor-quality roads, high fuel costs, and the use of 

old fuel-inefficient truck fleets can make some operating costs in SSA’s land transport 

sector higher than in other world regions according to the World Bank, lower wages and 

the lower capital costs of purchasing secondhand trucks can result in lower fixed costs.49

(The median monthly wage for truckers in 2008 was $160 in Zambia, $189 in Chad, and 

$269 in Kenya, compared to $3,129 in France and $3,937 in Germany.50) By comparison, 

variable costs and fixed costs for operators in Central Africa are $1.31 per km and $0.57 

per km respectively, whereas in France they are $0.72 per km and $0.87 per km.51 Costs 

also vary among SSA countries because of specific policies; for example, operators in 

Tanzania can afford better, more expensive vehicles or spend less acquiring similar 

vehicles than operators in Kenya, as Kenya imposes high import duties on vehicles while 

Tanzania exempts vehicles from import taxes.52 Similarly, South Africa prohibits the 

import of secondhand vehicles in order to benefit its domestic motor vehicle 

manufacturing industry, which imposes higher finance, depreciation, and insurance costs 

on truck owners.53

From the standpoint of producers who hire shippers, transport costs take the form of 

prices charged by transport service providers. Although poor infrastructure raises variable 

costs in SSA, there should be a countervailing effect on transport prices from lower fixed 

costs. But in parts of SSA, particularly Central Africa, transport prices are higher than 

would be expected after accounting for this effect because land transport service 

providers are often able to mark up the prices of their services and maintain high pricecost margins. 54 This is partly because strong market regulations, such as fleet quotas and 

queuing systems for allocating freight, impose barriers for new entrants and provide 

opportunities for rent-seeking behavior on the part of truckers.55 

 47 Van der Muelen, “Transnet’s Turnaround Strategy,” September 2005. 48 Pedersen, “Development of Freight Transport and Logistics,” 2003, 287. 49 Arvis, et al., “The Cost of Being Landlocked: Logistics Costs and Supply Chain Reliability,” June 

2007, 21. In this analysis, wages and the capital costs of trucks are considered fixed costs, and fuel and 

maintenance costs are considered variable costs. 50 World Bank, cited in Portugal-Perez and Wilson, “Trade Costs in Africa,” September 2008, 27. 51 Raballand and Macchi, “Transport Prices and Costs,” September 27, 2008, 5. 52 Industry official, interview by Commission staff, Mombasa, Kenya, October 28, 2008. 53 Raballand, Kunaka, and Giersing, “The Impact of Regional Liberalization and Harmonization,” 

January 2008, 17. 54 Raballand and Teravaninthorn, Transport Prices and Costs in Africa, 2009, 4. 55 Queuing systems centralize and coordinate supply and demand for freight transport. In one 

illustrative system (the “tour de rôle”), all carriers register with a regional freight bureau, and anyone who 

needs freight transport submits their demands through brokers to the bureau. The bureau then allocates 

shipments to carriers, partly based on which carrier claims the freight first and partly pursuant to the goal of 

ensuring that even small shippers have opportunities to haul freight and are not shut out of the market. Such 

systems reduce incentives for shippers to become more competitive or provide better service because all 

carriers are entitled to transport at least some freight on a regular basis; they also facilitate corruption, as 

bribing the freight bureau is often the only way to increase business. Raballand and Macchi, “Transport 

Prices and Costs,” September 27, 2008, 22. 
3-9

Improvements in land transport infrastructure will not necessarily lower transport prices 

in regions where regulations render logistics markets uncompetitive; shipping firms 

capable of exercising monopolistic power may maintain high transport prices and avoid 

passing along savings to end-users. Market regulation is strong in West and Central 

Africa. In Central Africa especially, there are high barriers to market entry, and freight 

bureaus and transport associations have great influence, resulting in disproportionately 

high transport prices.56 The result is that freight transport services in Central Africa can 

be more expensive than in developed countries. In the United States, freight transport 

prices average $0.04 per ton-km, compared to $0.11 per ton-km on the Douala, 

Cameroon–N’djamena, Chad corridor.57 

Although the barriers to entry in West Africa are not as high as in Central Africa, many 

West African countries impose freight quotas, allocation schemes, and queuing systems, 

resulting in high cost, low-quality transport.58 For example, in Burkina Faso, a regulation 

designed to protect domestic truck companies reserves two-thirds of all transit freight for 

carriage by Burkinabé trucks.59 In Niger, where trucks are on average 29 years old, 

operating costs per vehicle-km are 30 percent higher than in Beninese and Togolese 

fleets, but shippers in Niger are required to use local fleets, resulting in higher prices, 

lower quality shipping services, and increased requests for informal payments (the 

trucking association in charge of enforcing quotas has reportedly sold market shares or 

freight to companies ready to offer the largest bribes).60 Corruption in countries like Mali 

and Ghana reportedly also generates market inefficiencies.61 Compared to other SSA 

regions, East Africa has a less regulated and more competitive trucking environment, 

resulting in relatively low transport prices. Southern Africa, which has the least regulated 

trucking sector in SSA, has the lowest transport prices and highest transport efficiency 

among SSA regions.62

The inefficiency of transport sectors can be seen in the annual distances driven by trucks. 

Operators in some developed countries drive around 121,000 km per year, whereas 

operators in East Africa drive 100,000 km per year, and operators in Central Africa drive 

only 65,000 km per year. 63 This difference is attributed partly to strong market 

regulations and partly to heavy reliance on poorly maintained trucks that are often 

sidelined for repair.64 The profit margins on different SSA corridors are correlated with 

the level of truck utilization (which reflects cartel systems that keep inefficient trucking 

firms operating).65 For example, southern Africa uses vehicles at a rate of 10,000 to 

12,000 km per month (similar to Europe), and operators on the Lusaka, Zambia–

Johannesburg, South Africa corridor have a profit margin of about 18 percent; 

conversely, Central and West African countries, which have trucking cartels, use vehicles 

at 2,000 km per month, and the profit margin on the Ngaundere, Cameroon–Moundou, 

Chad corridor (which is shorter than the Lusaka-Johannesburg corridor) is about 163 

 56 Arvis, et al., “The Cost of Being Landlocked: Logistics Costs and Supply Chain Reliability,” June 

2007, 68. 57 Raballand and Macchi, “Transport Prices and Costs,” September 27, 2008, 4. 58 Arvis, et al., “The Cost of Being Landlocked: Logistics Costs and Supply Chain Reliability,” June 

2007, 22. 59 Faye, et al., “The Challenges Facing Landlocked Developing Countries,” March 2004, 48. 60 Raballand and Teravaninthorn, Transport Prices and Costs in Africa, 2009, 53. 61 Pedersen, “Development of Freight Transport and Logistics,” 2003, 291. 62 Portugal-Perez and Wilson, “Trade Costs in Africa,” September 2008, 11. 63 Raballand and Macchi, “Transport Prices and Costs,” September 27, 2008, 5. 64 Ibid., 9. 

65 Raballand and Teravaninthorn, Transport Prices and Costs in Africa, 2009, 55. 
3-10

percent.66 Average trucking rates in SSA declined during the 1990s, but rates are still 

high for the quality of service provided. 

Soft Infrastructure: Borders 

In many SSA corridors, the harshest constraints on improving transport time are 

administrative procedures at borders. On the Northern Corridor, trucks reportedly lose up 

to four hours of travel time on some corridor segments due to road conditions, but often 

lose more than one day at Malaba, the Uganda–Kenya border post.67 One study found 

that trucks carrying imports into Rwanda waited an average of two days at Malaba and 

one day at Gotuma (the Uganda–Rwanda border post). 68 Casa Gulu, the Zambia–

Botswana bridge link, regularly has queues up to 3 or 4 km long.69 In 2004, a truck 

required an average of between three weeks to a month to travel 985 km from Bangui, 

CAR, to Douala, Cameroon, with CAR–Cameroon border procedures taking up to two 

weeks.70 The Maputo port in Mozambique would be a logical source of imports and 

destination for exports for industries in South Africa’s Gauteng province (which includes 

the city of Johannesburg) because it is much closer than ports in Durban or Cape Town, 

but industry officials indicate that crossing the South Africa–Mozambique border 

introduces so much cost and uncertainty that the majority of Gauteng businesses rely on 

the port in Durban.71 Administrative procedures and delays at borders account for an 

estimated 20 percent of freight costs in East Africa, and delays at southern African border 

posts cost an estimated $48 million in 2001 (about 0.1 percent of the value of southern 

African exports that year).72 

Government agencies that operate at borders include customs, immigration, agriculture, 

and health ministries. Among global regions, SSA has the highest number of export 

procedures and the second-highest number of import procedures. 73 There are 15 

government agencies enforcing duplicative laws on either side of the Chirundu Border 

Post (the main gateway for commercial traffic between Zambia and Zimbabwe), resulting 

in average border crossing times ranging from 26 to 46 hours northbound into Zambia, 

and from 6 to 17 hours southbound into Zimbabwe.74 The administrative costs of crossing 

borders include documentation time and fees, customs clearance fees, and terminal 

handling charges. A Mozambican company entering Zimbabwe must pay a road-user 

charge of $25 per 100 km, an entry visa charge of $30, an insurance charge of $300 for 

three months, a carbon tax of $30 for one month, and a guarantee of $120 per year.75 The 

World Bank’s Doing Business Online Database indicates that, measured as absolute fees 

levied on a 20-foot container, SSA has the highest average costs for both export and 

import procedures of any world region, roughly twice as high as in high-income countries 

(figure 1.1 in chapter 1). 76 One factor that increases complexity in border crossing 

procedures is the desire of transit countries to secure revenues from tariff duties. 77

 66 Ibid., 40. 

67 Raballand and Macchi, “Transport Prices and Costs,” September 27, 2008, 12. 68 Subramanian, “Building Competitive Trade Logistics for Global Markets,” May 5, 2008. 69 Industry officials, interview by Commission staff, Durban, South Africa, October 21, 2008. 70 Faye, et al., “The Challenges Facing Landlocked Developing Countries,” March 2004, 48. 71 Industry officials, interview by Commission staff, Johannesburg, South Africa, October 24, 2008. 72 Faye, et al., “The Challenges Facing Landlocked Developing Countries,” March 2004, 48–57. 73 Portugal-Perez and Wilson, “Trade Costs in Africa,” September 2008, 6. 74 Department for International Development, “Modern and Efficient Border Controls,” February 19–

29, 2008. 75 Raballand and Teravaninthorn, Transport Prices and Costs in Africa, 2009, 71. 76 Portugal-Perez and Wilson, “Trade Costs in Africa,” September 2008, 7. 77 Raballand, “The Cost of Being Landlocked in Africa,” February 21, 2008. 
3-11

Multiple-clearance transit systems are vulnerable to various types of rent-seeking 

behaviors, such as demands for bribes from customs or military officials.78

Border-crossing costs are multiplied by information barriers. Customs organizations may 

fail to communicate changes regarding border-crossing procedures to shipping firms 

(whose vehicles may arrive at borders without the newly required documents and face 

unrecoverable penalties) or to neighboring countries. 79 Private-sector operators also 

contribute to border delays when they fail to acquire and provide the necessary 

documentation even after receiving notice of changes. Additionally, language barriers 

sometimes cause friction for drivers crossing borders. 

Limited days of operation and business hours at border crossings also affect freight flows. 

In 2004, the two main corridors for Burkina Faso had customs escorts only three times 

per week.80 Kenyan President Mwai Kibaki recently mandated that several border posts, 

as well as the Mombasa port, provide service 24 hours per day (some borders had only 

been open for 8 hours per day) in order to reduce freight congestion and encourage 

trade.81 The Ressano Garcia border post between Mozambique and South Africa has 

proposed expanding daily cargo clearance hours from 16 to 24 as part of a coordinated 

effort to attract South African freight traffic to Maputo.82

Some border posts also have problems with their physical design. At Golela (a 

Swaziland–South Africa border post), drivers sometimes enter the building to make a 

declaration and emerge to find their path blocked by another truck.83 At Malaba (on the 

Kenya–Uganda border) there is limited parking space for trucks and limited space in the 

customs yard, and customs officials start to process documents (which can take several 

hours) only after trucks have entered the customs yard.84 

Effects of Land Transport Infrastructure Conditions on 

Export Competitiveness 

Effects on International Trade 

Inadequate land transport infrastructure has a number of effects on SSA trade, including 

increased costs and uncertainty, reduced investment in exporting industries, and lower 

levels of export volume and diversity. Export competitiveness in SSA countries is partly 

constrained by geographic distance. The main markets for most SSA exports are the 

United States and the EU, several thousand km away from major SSA economic centers, 

and many products must travel long distances just to reach ports (for example, Kigali, 

Rwanda, is 1,670 km from the port in Mombasa, Kenya). Generally, areas in SSA closer 

to ports have more skill-intensive sectors and are more integrated into global markets, 

with export diversity declining as distance from ports increases.85 For example, South 

 78 Ibid. 

79 Industry officials, interview by Commission staff, Durban, South Africa, October 21, 2008. 80 Faye, et al., “The Challenges Facing Landlocked Developing Countries,” March 2004, 48. 81 Agina and Beja, “Kibaki Orders 24-hour Service at Mombasa Port,” August 12, 2008. 82 Industry officials, interview by Commission staff, Johannesburg, South Africa, October 24, 2008. 83 Industry official, interview by Commission staff, Mbabane, Swaziland, October 22, 2008. 84 Raballand and Teravaninthorn, Transport Prices and Costs in Africa, 2009, 79. 85 Naudé and Matthee, “The Significance of Transport Costs in Africa,” 2007. 
3-12

African regions farthest away from ports produce more furniture, textiles, and metal 

products, which are primarily for domestic markets.86 The importance of distance to port 

for exporters is also made apparent by tracing 2003 export-to-GDP ratios for countries 

along the Northern Corridor that ends at Kenya’s Mombasa port: 6 percent for Burundi, 9 

percent for Rwanda, 12 percent for Uganda, and 26 percent for Kenya.87

In SSA, transport costs as a percentage of export and import values are very high. 

Transport costs in Zambia account for up to 17 percent of total import costs, more than 

three times as much as in developed countries.88 These costs are generally higher than for 

non-SSA developing countries, and (as context for trade-inhibiting effects) they are much 

higher than average importing-country tariffs on SSA exports.89 Globally, liberalization 

has reduced many tariffs and other artificial trade barriers encountered by SSA exports, 

which increases the relative constraining power of transport costs.90

These high transport costs greatly reduce trade potential. One study from 2000 estimated 

that a doubling of transport costs can reduce trade flows by as much as 80 percent and 

can reduce import values by roughly the same amount.91 The study also found that land 

distance generally has a much stronger effect on total transport costs than sea distance, 

and estimated that an extra 1,000 km distance traveled by sea adds an average of $190 to 

the final transport cost of a standard container, whereas an extra 1,000 km traveled by 

land adds an average of $1,380.92 In addition, products exported by SSA countries tend to 

be primary commodities such as minerals or agricultural products which are typically 

bulky, heavy, often noncontainerized, hard to transport, and unprocessed, thus having 

high transport costs relative to value. (Diamonds and some beadwork are exceptions.) 

Competitive international markets make it difficult for SSA exporters to pass these high 

transport costs on to buyers. 

Trade with countries outside SSA is particularly difficult for landlocked SSA countries, 

which depend on other countries’ ports, land transport networks, political stability, and 

administrative practices. Neighboring countries in SSA sometimes have disputes and 

conflicts, produce the same exports and compete for international markets, or have 

internal problems that affect passage of transit goods. The infrastructure of SSA countries 

with coastal access is a regional public good (that is, it has positive externalities and 

should create opportunities for welfare-enhancing collective action) and tends to be 

undersupplied. Studies have found that being landlocked raises total transport costs by 

 86 Ibid. 

87 Faye, et al., “The Challenges Facing Landlocked Developing Countries,” March 2004, 57. GDP per 

capita in these countries is also progressively higher the closer they are to the port of Mombasa which, like 

the export-to-GDP ratio, may be due to a number of factors, but reflects the endogeneity between 

development levels and infrastructure conditions. 88 Raballand, Kunaka, and Giersing, “The Impact of Regional Liberalization and Harmonization,” 

January 2008, 2. 89 World Bank, Can Africa Claim the 21st Century? 2000, 138. 90 See Amjadi and Yeats, “Have Transport Costs Contributed to the Relative Decline of African 

Exports?” December 1995. This study found that the average ad valorem transport cost for SSA exports was 

8.7 percent, whereas the average tariff on these goods was 0.5 percent. It also found the ratio of net freight 

and insurance payments to the value of SSA exports to be 15.1 percent, much higher than in other regions 

(the average for all developing countries was 5.8 percent). This percentage had actually increased over time 

for SSA, while decreasing in other regions (in developing countries in Asia, it dropped from 8 percent to 0 

percent between 1970 and 1990, meaning Asian countries were receiving as many freight and insurance 

payments as they were making). The purchasing of freight and insurance services from other countries uses 

foreign exchange that might otherwise go into capacity-building investments. 91 Limão and Venables, “Infrastructure, Geographical Disadvantage and Transport Costs,” 2001, 2. 92 Ibid., 5. 
3-13

about 50 percent, with the median landlocked economy having only 30 percent of the 

trade volume of the median coastal economy.93 One study found that net freight payments 

averaged 42 percent of the annual value of exports for landlocked SSA countries, 

compared with an average of 18 percent for SSA countries with coastal access. 94

Swaziland and Botswana, however, have been able to overcome problems associated 

with being landlocked; the former is close to ports in Mozambique and South Africa, the 

latter relies on diamonds (84 percent of its exports by value), which can be profitably 

transported by air, and both benefit from being integrated into southern Africa’s good 

road network and having access to multiple corridors.95

Effects on Intra-SSA Trade 

There are intra-regional trade opportunities within SSA, especially for countries that 

share a border. Neighboring countries often have integrated transport networks and in 

many instances have bilateral transit or customs agreements. However, the poor quality 

and overall port-oriented design of land transport infrastructure in SSA inhibits intraregional trade. One study found the median transport costs for intra-SSA trade to be 

about the same as for SSA imports from the rest of the world and much higher than (i.e., 

equal to the 75th percentile of) the average cost of intra-regional trade in other 

geographic regions.96 The study also found that intra-regional trade as a percentage of 

total trade in SSA averaged only 4 percent, compared to 44 percent in East Asia.97 There 

is no overland trade between South Africa and Nigeria, the two largest economies in 

SSA. 

Improved road and rail links may increase trade between SSA countries by integrating 

markets and facilitating specialization, analogous to the effects of the U.S. rail and 

interstate highway systems. However, the intra-SSA trade effects are limited by the fact 

that many SSA countries produce similar commodities (agriculture and minerals), while 

demand for imports tends to be for manufactured goods. 98 There is limited 

complementarity between regional economies in SSA, and in the absence of changes in 

the trade profiles of SSA countries, there may be little natural momentum behind changes 

in infrastructure.99 However, countries with manufacturing sectors (like South Africa and 

Kenya) could expect to benefit from improved land transport links. Moreover, there may 

be a tipping point in intra-regional trade flows such that coordinated interventions in 

infrastructure, political institutions, education, and other complementary sectors in 

multiple countries could create momentum toward the unification of markets and 

generate significant growth in regional trade. 

 93 Limão and Venables, “Infrastructure, Geographical Disadvantage and Transport Costs,” 2001, 17. 94 Amjadi and Yeats, “Have Transport Costs Contributed to the Relative Decline of African Exports?” 

December 1995, 7. 95 Faye, et al., “The Challenges Facing Landlocked Developing Countries,” March 2004, 39. 96 Limão and Venables, “Infrastructure, Geographical Disadvantage and Transport Costs,” 2001, 20. 97 Ibid., 20. 

98 In fact, many primary commodities are exported from SSA, processed, and then returned to SSA for 

consumption. Khandelwal, “COMESA and SADC,” December 2004, 15. 99 Khandelwal, “COMESA and SADC,” December 2004, 17. 
3-14

Efforts to Improve the Land Transport Sector 

Reforms 

Management reforms are vital for improving infrastructure in SSA. Agencies that manage 

land transport infrastructure are responsible for prioritizing and sequencing investments, 

establishing standards and legal frameworks, and agreeing on cost-recovery principles. 

But the operation and maintenance of land transport infrastructure in SSA (most of which 

is owned, financed, and managed by governments) can be impaired by poorly designed 

management organizations in which lines of responsibility are unclear and budgetary 

authority is not aligned with performance objectives. 100 Many SSA countries face 

fragmented planning efforts, as responsibility for infrastructure is seldom concentrated in 

a single government department. In South Africa, Transnet (the parastatal rail and port 

operator) is accountable to the Department of Public Entities, but the Department of 

Transport drafts transportation policy. Moreover, trade policy (which is closely linked to 

transport policy) falls under the purview of the Department of Trade and Industry, and 

the South African Revenue Service, which includes South Africa’s customs agency, is 

part of the National Treasury, which has budgetary authority over public infrastructure 

investments.101 It is difficult to create and implement national transport strategies when 

decisions about infrastructure investments are spread among multiple agencies. 

Many SSA countries are implementing organizational reforms (such as increased 

delegation, accountability, and use of nongovernmental agencies) to ensure that their land 

transport infrastructure investments are coordinated and reflect national priorities. In 

1996, the Ugandan government developed a 10-year Road Sector Development Plan that 

provided a strategic and administrative roadmap for the transformation of the role of 

government from direct provider of transport services to provider of policy guidance and 

legal frameworks.102 As a result of the plan, the percentage of “fair or good” national 

roads increased from 50 percent in 1990 to 70 percent in 1999.103 Generally, management 

reforms in SSA have had some success encouraging investment in land transport 

infrastructure and improving coordination on national and cross-border projects.104

Oversight of infrastructure financing is often limited, and user fees, to the extent 

collected, are often commingled with other government revenues. Construction and 

maintenance funds in SSA countries are not always managed by independent boards that 

provide adequate oversight; many funds are audited only infrequently, 105 and 

governments tend to borrow from these funds for other purposes.106 SSA countries often 

finance infrastructure partly through user fees such as fuel levies or vehicle license fees, 

however, some SSA countries have low collection rates on user charges. Fees often are 

only raised in response to donor pressure. This financing model is considered to be 

 100 Nyangaga, “Reforming Road Management,” March 2001, 2. 101 Industry officials, interview by Commission staff, Durban, South Africa, October 21, 2008. 102 Kumar, “A Contrasting Approach to Road Reforms,” March 2002, ix. The plan separated planning 

and financing responsibilities from procurement and implementation offices; commercialized technical and 

engineering services; and established the clear definition, separation, and assignment of road responsibilities, 

with matching authority and performance targets (including financial audits). 103 Ibid., 10. 104 Africa Partnership Forum, “Interim Document Set: 9th Meeting of the Africa Partnership Forum,” 

November 12–13, 2007, 69. 105 Brushett, “Management and Financing of Road Transport Infrastructure in Africa,” March 2005, 7. 106 Kumar, “A Contrasting Approach to Road Reforms,” March 2002, 18. 
3-15

effective inasmuch as it ensures actual road users are paying for road maintenance.107

Many countries, however, put user fees into a general pool of tax revenues overseen by 

their treasuries, in which case there is no dedicated revenue stream for land transport that 

can be used for maintenance and new investment expenses.108 This commingling of funds 

makes it more difficult to align revenues with expenditures. 

Private firms are generally willing to enter infrastructure markets (table 3.2) when the 

regulatory environment is supportive and forecasted revenues are sufficiently high. South 

Africa granted a concession for its N4 national road in 1997 to Trans Africa 

Concessioning, which now charges tolls. In 2003, Nigeria decided to develop a toll road 

corridor along the Lekki peninsula with a 30-year concession to Lekki Concession Co. 

Ltd. (the first private toll road concession in West Africa).109 Private concessionaires face 

challenges: operators often test new concession laws (and the government’s commitment 

to the project) and operate in difficult urban construction and tolling environments. They 

also have to borrow either in domestic capital markets that normally do not provide longterm, limited-recourse funding (that is, funding in which borrowers generally have no 

liability to repay debt except from the earnings of the project) or in international markets, 

which creates exchange-rate risk (as debts are usually in U.S. dollars and revenue streams 

are in local currencies).110 

In addition to management and finance reforms, technology can facilitate trade and 

transport. Some customs authorities have streamlined their contraband-focused 

procedures by using efficient container scanners, electronic data interchanges, and risk 

management software; container seals and satellite-based electronic tracking systems 

provide pre-border customs clearance at some inland ports and export-producing 

factories.111 Some countries let companies provide online declarations or allow clearing 

agents to e-mail truck manifests, which customs agents can examine when the truck 

reaches the border. For example, Uganda recently linked its online declaration system 

with Kenya’s.112 

Investment 

In most SSA countries investment has not been sufficient to maintain existing land 

transport infrastructure or expand it to meet increased needs. The current infrastructure 

funding gap in SSA is estimated to be $35 billion.113 In 2000, the World Bank estimated 

that infrastructure maintenance in SSA would require about 5–6 percent of GDP 

annually, but many SSA countries consistently fell short of this target.114 Even those that 

achieve this target may struggle to meet infrastructure demands; Tanzania spent about 6 

percent of its GDP annually on infrastructure between 2000 and 2004, but this was 

equivalent to $27 per person, less than one-tenth the average per capita spending levels in 

middle-income countries over the same period. 115 Historically, SSA countries have 

allocated as little as 20 percent of what was necessary for road maintenance, and even 

 107 Nyangaga, “Reforming Road Management,” March 2001, 3. 108 Industry officials, interview by Commission staff, Johannesburg, South Africa, October 15, 2008. 109 Wood, “Road to New Market,” September 2008. 110 Ibid. 111 Industry officials, interview by Commission staff, Mbabane, Swaziland, October 23, 2008. 112 World Bank, Doing Business 2008, 2007, 45. 113 Foster, “Overhauling the Engine of Growth,” September 2008, 13. 114 World Bank, Can Africa Claim the 21st Century? 2000, 142. 115 Ter-Minassian, Hughes, and Hajdenberg, “Creating Sustainable Fiscal Space for Infrastructure,” 

November 2008, 9. 
3-16

TABLE 3.2 Select land transport infrastructure projects with private participation in sub-Saharan Africa 

Project name Countries affected Participating company Type of participation 

Private 

investment 

commitment 

(million $) 

Abidjan Lagoon Toll 

 Bridge 

Côte d'Ivoire Société Concessionnaire 

du Pont Riviera (Socoprim) 

Greenfield project 

(30 yrs) 

150.0 

Abidjan-Ouagadougou 

 Railway 

Burkina Faso, 

Côte d'Ivoire 

Sitarail Concession (20 yrs) 63.3 

Bakwena Platinum Toll 

 Highway 

South Africa Bakwena Platinum Corridor Greenfield project 

(30 yrs) 

450.0 

Beira Railway Mozambique Companhia Dos Caminhos 

 De Ferro Da Beira 

Concession (25 yrs) 152.5 

Beitbridge-Bulawayo 

 Railway 

Zimbabwe Beitbridge-Bulawayo Railway 

Private Limited 

Greenfield project 

(30 yrs) 

85.0 

Cameroon Railways Cameroon Camrail Concession (30 yrs) 90.0 

Central Railway Nigeria Global Infrastructure Nigeria 

Limited 

Concession (20 yrs) (

a

) 

Chapman’s Peak Drive South Africa Entabeni Limited Concession (30 yrs) 17.0 

Dakar-Bamako Railway Mali, Senegal Canac-Getma Consortium Concession (25 yrs) 55.4 

Gautrain Light Rail South Africa Bombela Consortium Greenfield project 

(20 yrs) 

3,483.0 

Kenya-Uganda Railways Kenya, Uganda Rift Valley Railways Concession (25 yrs) 400.0 

Limpopo Toll Bridge Zimbabwe Beitbridge-Bulawayo Railway 

Private Limited 

Greenfield project 

(20 yrs) 

18.0 

Malagasy Railway Madagascar Malagasy Railway Concession (20 yrs) 36.0 

Malawi-Nacala Railway Malawi Central East African Railway 

Company 

Management and 

lease (20 yrs) 

6.0 

Maputo Corridor Railway Mozambique Spoornet (Transnet) Concession (15 yrs) 10.0 

N3 Toll Road South Africa N3 Toll Road Consortium Concession (30 yrs) 570.0 

N4 Toll Road Mozambique, 

South Africa 

Trans Africa Concessions Concession (30 yrs) 426.0 

Nacala Corridor Railway Mozambique Corredor de Desenvolvimento 

do Norte 

Concession (15 yrs) 17.7 

Trans-Gabonese 

Railroad Concession (II) 

Gabon Setrag Concession (30 yrs) 91.8 

Zambia Railways Zambia Railway Systems of Zambia 

Limited 

Concession (20 yrs) 14.8 

Source: World Bank, PPIAF, Private Participation in Infrastructure Database, updated October 2008. 

a

Not available. 
3-17

that allocation has been subject to postponements or cuts without warning. 116 The 

economic gains of land transport infrastructure investments are region specific and 

depend upon traffic volumes—for example, the biggest returns on road rehabilitation may 

be along East African corridors, which tend to have higher minimal traffic levels (at least 

200 trucks per day) than West or Central African corridors117—but virtually all SSA 

countries stand to benefit from closing infrastructure financing gaps. 

Attempts to increase investment continue to face substantial hurdles. For example, 

countries need to access credit on international capital markets to pay for infrastructure 

investments, which will likely be difficult for SSA countries in the upcoming years, 

particularly in light of recent developments in world financial markets. Kenya recently 

had to suspend some major infrastructure projects because the government could not 

generate funding through a $300-million sovereign bond issue; foreign investors were 

demanding high-interest premiums given risk perceptions linked to the current global 

financial downturn.118

International donors have historically been a major source of infrastructure investment in 

SSA. For example, in 2006 members of the Infrastructure Consortium for Africa (which 

coordinates international development assistance) invested $3.2 billion in transport 

projects in SSA, up from $2.6 billion in 2005.119 Some donors are reluctant, however, to 

fund certain aspects or types of infrastructure. For example, many want developingcountry governments to meet recurring costs such as administration and maintenance. 

Additionally, reliance on international donors leads to fluctuating infrastructure 

investment depending on when donors provide funds.120

In addition to traditional providers of infrastructure financing, China has recently played 

a growing role in infrastructure upgrading projects in SSA. The China Export-Import 

Bank is financing land transport projects in more than 35 SSA countries, with Nigeria, 

Angola, Sudan, and Ethiopia as the largest recipients.121 Chinese financial commitments 

to SSA infrastructure projects rose from $1 billion per year in 2001–03 to $7 billion in 

2006 (the Chinese “Year of Africa”), and then fell back to $4.5 billion in 2007.122 The 

majority was invested in railroads. Much of this financing is through an “Angola mode” 

arrangement, in which the beneficiary SSA country awards a license to extract natural 

resources to a Chinese company, and selects a Chinese infrastructure contractor to 

construct infrastructure; the China Export-Import Bank then accepts the license as 

payment in kind for a loan that it provides directly to the contractor. 123 Chinese 

 116 Nyangaga, “Reforming Road Management in Sub-Saharan Africa,” March 2001, 3. 117 Raballand and Macchi, “Transport Prices and Costs,” September 27, 2008, 13. 118 Anyanzwa, “State Suspends Major Infrastructure Projects,” December 5, 2008. 119 In April 2008, a number of U.S. government agencies including the Department of Transportation, 

USTR, and the Millennium Challenge Corporation hosted a conference in South Africa bringing together 

U.S. and African government officials, as well as representatives of the private sector and multilateral 

organizations. The conference announced the establishment of a number of important initiatives including the 

African Trade Lanes Partnership, in which the U.S. government will provide financing for a number of tradefacilitating transportation projects within SSA. USTDA, “Remarks of Larry Walther,” April 14, 2008; Biau, 

Dahou, and Homma, “How to Increase Sound Private Investment,” December 11, 2008, 4. 120 Simuyemba, “Linking Africa Through Regional Infrastructure,” 2000, 12; Nyangaga, “Reforming 

Road Management,” March 2001, 11. 121 Foster, et al., “Building Bridges,” 2008, vi. 122 Ibid., vii. 123 Ibid., 43. 
3-18

infrastructure financing is generally not linked to governance and accountability 

requirements.124

Regional Cooperation 

SSA countries have sought to improve the predictability and speed of cross-border land 

transport by promoting bilateral relationships between transport ministries, adopting 

multilateral standards and accreditations (such as international licenses), and forming 

regional organizations that share information. For example, the South African Revenue 

Service handles many import procedures for the Southern African Customs Union 

(SACU) member countries.125 The Southern African Development Community (SADC) 

issues regional drivers’ licenses and aims to harmonize tariffs by 2010.126 The Common 

Market for Eastern and Southern Africa (COMESA) has harmonized road transit charges, 

established a common carriers license, and implemented a Yellow Card program that 

guarantees third-party insurance across borders. 127 Regional organizations like the 

Economic Community of West African States (ECOWAS) are discussing multilateral rail 

protocols, including commitments that all new rail lines be of a common gauge.128

International organizations are facilitating regional partnerships as well. The East African 

Trade and Transport Facilitation Project (TTFP), funded by the World Bank and African 

Development Fund, aims to strengthen the Northern Corridor Transit Transport 

Coordinating Authority (a catalyst for regional trade), develop protocols for the East 

African Community customs union, establish a regional electronic cargo tracking system, 

and support the joint concessioning of the Kenya–Uganda railways. 129 Similarly, the 

Economic and Monetary Community of Central Africa (CEMAC) promotes enforcement 

of load controls and investment in roads and railways along Central African corridors—

for example, paving roads in Cameroon, promoting output-based performance contracts 

in Chad, and designing a public-private partnership for Cameroon Railways.130 These 

 124 Ibid., vii. 125 Industry official, interview by Commission staff, Mbabane, Swaziland, October 22, 2008. Customs 

duties collected by the five member countries are pooled, then distributed according to a formula kept secret 

by South Africa’s treasury. 126 Faye, et al., “The Challenges Facing Landlocked Developing Countries,” March 2004, 55. 127 Ibid., 55. 128 Most SSA rail systems rely on interchanges at borders where containers are transferred from one 

wagon to another. Goods traveling by train from the DRC to South Africa can only be moved by DRC 

operators to the Zambian border, where Zambian operators take over; then Zimbabwean operators take over 

at Victoria Falls, etc. The need for interchanges results from national policies, physical differences in rail 

gauge, and other conditions (such as the limited ability in some countries to repair other countries’ rolling 

stock) that inhibit cross-border trade in rail services. Interchanges are often poorly facilitated and require 

waiting times of up to 8 hours. Industry officials, interview by Commission staff, Mbabane, Swaziland, 

October 23, 2008; UNECA, “Assessment of Progress on Regional Integration in Africa,” October 8–10, 

2007, 2. 129 In addition, in March 2009, the East African Community (EAC) announced plans to launch a major 

infrastructure initiative that will bring together members of the Common Market for Eastern and Southern 

Africa (COMESA), the EAC and the Southern African Development Community (SADC). The initiative 

seeks, through an integrated series of projects, to upgrade infrastructure, simplify customs and regulatory 

procedures, and improve power supply and transmission in the 12 Southern African Power Pool members. 

The initiative hopes to secure infrastructure investment funding from multilateral organizations, development 

agencies, and the private sector. EAC, “Major New Infrastructure Initiative,” March 25, 2009. African 

Development Fund, “East Africa Trade and Transport Facilitation Project,” October 2006, xi. 130 Marteau and Raballand, “Support to Effectiveness of Regional Transit,” February 21, 2008. The 

largest impact of CEMAC’s plan—more than 70 percent of the total projected benefits—is projected to fall 

on Cameroon, where there are higher traffic volumes. 
3-19

partnerships are part of a broader effort to establish and strengthen regional partnerships 

that integrate economies and promote stability and growth in SSA. 
3-20

Bibliography 

Adzibgey, Yao, Charles Kunaka, and Tesfamichael Nahusenay Mitiku. “Institutional Arrangements for 

Transport Corridor Management in Sub-Saharan Africa.” World Bank SSATP Working Paper no. 

86, October 2007. 

African Development Fund. “East Africa Trade and Transport Facilitation Project: Appraisal Report.” 

African Development Bank Group, October 2006. 

Africa Partnership Forum. “Interim Document Set: 9th Meeting of the Africa Partnership Forum.” Algiers, 

Algeria, November 12–13, 2007. 

Agina, Ben, and Patrick Beja. “Kibaki Orders 24-hour Service at Mombasa Port.” East Africa Standard, 

August 12, 2008. 

Amjadi, Azita, and Alexander Yeats. “Have Transport Costs Contributed to the Relative Decline of 

African Exports? Some Preliminary Empirical Evidence.” World Bank International Trade 

Division. Policy Research Working Paper no. 1559, December 1995. 

Anyanzwa, James. “State Suspends Major Infrastructure Projects.” East African Standard, December 5 

2008. 

Arvis, Jean-François, Raballand, Gaël, and Marteau, Jean-François. “The Cost of Being Landlocked: 

Logistics Costs and Supply Chain Reliability.” World Bank Policy Research Working Paper no. 

4258, June 2007. 

Biau, Carole, Karim Dahou, and Toru Homma. “How to Increase Sound Private Investment in Africa’s 

Road Infrastructure: Building on Country Successes and OECD Policy Tools.” NEPAD-OECD 

Africa Investment Initiative Expert Roundtable on Investment in Transport Infrastructure, 

Kampala, Uganda, December 11, 2008. 

Brushett, Stephen. “Management and Financing of Road Transport Infrastructure in Africa.” World Bank 

SSATP Discussion Paper no. 4, March 2005. 

Buys, Piet, Uwe Deichmann, and David Wheeler. “Road Network Upgrading and Overland Trade 

Expansion in Sub-Saharan Africa.” World Bank Development Research Group. Policy Research 

Working Paper no. 4097, December 2006. 

Calderon, Cesar, and Luis Serven. “Infrastructure and Economic Development in Sub-Saharan Africa.” 

World Bank Development Research Group. Policy Research Working Paper no. 4712, September 

2008. 

Degerlund, Jane, ed. Containerization International Yearbook, 2008. London: Lloyd’s MIU, 2008. 

De Jong, Robert C. “South Africa: Railway Heritage At Risk.” International Council of Monuments and 

Sites, 2002. http://www.international.icomos.org/risk/2002/southafrica2002.htm. 

Department for International Development. “Modern and Efficient Border Controls: Theory of One Stop 

Border Posts (OSBP); Lessons Learnt on the Chirundu OBSP Project.” Presented at the World 

Bank Sustainable Development Network Week, Washington, DC, February 19–29, 2008. 
3-21

Dierks, Klaus. “A Case for Namibian Roads Conservation: Agenda for Reform.” Namibia Ministry of 

Works, Transport and Communication Position Paper, December 28, 2000. 

East African Community (EAC). “Major New Infrastructure Initiative to Transform Southern and Eastern 

African Trading Opportunities.” Press release, March 26, 2009. 

Economist. “The Road to Hell is Unpaved,” December 19, 2002. 

Faye, Michael, John W. McArthur, Jeffrey D. Sachs, and Thomas Snow. “The Challenges Facing 

Landlocked Developing Countries.” Journal of Human Development 5, no. 1 (March 2004): 31–

68. 

Ford, Neil. “Investment, Not Rebranding, Is the Key.” African Business, December 2008. 

Foster, Vivien. “Overhauling the Engine of Growth: Infrastructure in Africa.” Africa Infrastructure 

Country Diagnostic, September 2008. 

Foster, Vivien, William Butterfield, Chuan Chen, and Nataliya Pushak. “Building Bridges: China’s 

Growing Role as Infrastructure Financier for Africa.” World Bank Public-Private Infrastructure 

Advisory Facility, 2008. 

Hertel, Thomas, Terrie Walmsley, and Ken Itakura. “Dynamic Effect of the ‘New Age’ Free Trade 

Agreement between Japan and Singapore.” Journal of Economic Integration 16, no. 4 (December 

2001): 446–84. 

Khandelwal, Padamja. “COMESA and SADC: Prospects and Challenges for Regional Trade Integration.” 

IMF Working Paper WP/04/227, December 2004. 

Kumar, Ajay. “A Contrasting Approach to Road Reforms: The Case Study of Uganda Experience.” 

World Bank SSATP Discussion Paper no. 1, March 2002. 

Limão, Nuno, and Anthony J. Venables. “Infrastructure, Geographical Disadvantage and Transport 

Costs.” World Bank Economic Review 15, no. 3 (2001): 451–79. 

Marteau, Jean-François, and Gaël Raballand. “Support to Effectiveness of Regional Transit.” Presented at 

the World Bank Sustainable Development Network Week, Washington, DC, February 21, 2008. 

Mpata, Stallard, Bo Giersing, and Smak Kaombwe. “Improving Transportation Logistics for 

Competitiveness of Swaziland.” Prepared by Chemonics International, Inc., for U.S. Agency for 

International Development, Regional Center for Southern Africa. Gaborone, Botswana, April 

2004. 

Naudé, Wim, and Marianne Matthee. “The Significance of Transport Costs in Africa.” United Nations 

University World Institute for Development Economics Research. Policy Brief no. 5, 2007. 

Nyangaga, Francis. “Reforming Road Management in Sub-Saharan Africa.” World Bank SSATP 

Technical Note 32, March 2001. 

Organisation for Economic Co-Operation and Development (OECD). Africa Economic Outlook 

2007/2008. Paris, France: OECD, 2008. 
3-22

Pearson, Mark. “The North-South Corridor: An Aid for Trade Initiative.” Presented at Regional Trade 

Facilitation Programme Meeting of Stakeholders, Washington, DC, October 11, 2008. 

Pedersen, Poul O. “Development of Freight Transport and Logistics in SSA: Taaffe, Morrill and Gould 

Revisited.” Transport Reviews 23, no. 3 (2003): 275–97. 

———. “Freight Transport under Globalization and its Impact on Africa.” Journal of Transport 

Geography 9, (2001): 85–99. 

Portugal-Perez, Alberto, and John S. Wilson. “Trade Costs in Africa: Barriers and Opportunities for 

Reform.” World Bank Development Research Group. Policy Research Working Paper no. 4619, 

September 2008. 

Raballand, Gaël. “The Cost of Being Landlocked in Africa.” Presented at World Bank Sustainable 

Development Network Week, Washington, DC, February 21, 2008. 

Raballand, Gaël, Charles Kunaka, and Bo Giersing. “The Impact of Regional Liberalization and 

Harmonization in Road Transport Services: A Focus on Zambia and Lessons for Landlocked 

Countries.” World Bank Africa Sustainable Development Division. Policy Research Working 

Paper no. 4482, January 2008. 

Raballand, Gaël, and Patricia Macchi. “Transport Prices and Costs: The Need to Revisit Donors’ Policies 

in Transport in Africa.” Presented at BREAD Conference on Development Economics, Chicago, 

IL, September 27, 2008. 

Raballand, Gaël, and Supee Teravaninthorn. Transport Prices and Costs in Africa: A Review of the Main 

International Corridors. Washington, DC: World Bank, 2009. 

Simuyemba, Shemmy. “Linking Africa Through Regional Infrastructure.” Africa Development Bank 

Economic Research Paper no. 64, 2000. 

Subramanian, Uma. “Building Competitive Trade Logistics for Global Markets.” Presented at Trade 

Logistics Advisory Program, Washington, DC, May 5, 2008. 

Ter-Minassian, Teresa, Richard Hughes, and Alejandro Hajdenberg. “Creating Sustainable Fiscal Space 

for Infrastructure: The Case of Tanzania.” IMF Working Paper WP/08/256, November 2008. 

United Nations Economic Commission for Africa (UNECA). “Assessment of Progress on Regional 

Integration in Africa.” Fifth Session of the Committee on Trade, Regional Cooperation and 

Integration, Addis Ababa, Ethiopia, October 8–10, 2007. 

United States Trade and Development Agency (USTDA). “Remarks of Larry W. Walther.” U.S.-African 

Growth and Opportunity Transportation and Trade Forum Opening Plenary, Cape Town, South 

Africa April 14, 2008. 

Van der Muelen, Dave. “Transnet’s Turnaround Strategy: Remarks by Pradeep Maharaj, Group Executive 

for Strategy and Transformation at Transnet.” CILT World, September 2005. 

Wood, Jonathan. “Road to New Market.” Project Finance, September 2008. 

World Bank. Can Africa Claim the 21st Century? Washington, DC: World Bank, 2000. 
3-23

———. Doing Business 2008. Washington, DC: World Bank, 2007. 

———. Public-Private Infrastructure Advisory Facility (PPIAF). Private Participation in Infrastructure 

Database, updated October 2008. http://ppi.worldbank.org. 

4-1

CHAPTER 4 

Maritime Transport 

Over 90 percent of international trade between SSA and foreign countries is conducted 

via maritime transport.1

 The region accounts for 2–3 percent of global merchandise trade 

by value, and slightly more than 2 percent of worldwide maritime cargo originates in or is 

destined for an SSA port.2

 Despite SSA’s heavy reliance on maritime transport, many 

ports face inadequate physical capacity to handle maritime trade volumes. The 

approximately 90 maritime ports in Africa3

 include coastal ports and those located on 

inland lakes and rivers.4

 The transport of goods between coastal and inland ports relies 

primarily on access to road and rail networks. By international standards, most SSA ports 

are small, even when compared with other ports in the developing world (table 4.1).5

Among the region’s coastal ports, the South African port of Durban is by far the largest 

in terms of annual throughput, processing nearly three times the volume of containerized 

cargo as the next largest port, Cape Town, also in South Africa.6

 Although most SSA 

ports are state owned, the majority of shipping firms serving the region’s ports are 

private-sector entities.7

Despite the relatively small size of the SSA maritime market, several ports have 

undergone recent reforms and are attracting new investment. Reforms are aimed 

primarily at improving the operational efficiency of ports, which historically has been 

hampered by inadequate infrastructure, poor management, and a lack of financial 

resources. Reform has largely been achieved through public-private partnerships (PPPs), 

in which a private-sector entity is granted a concession to operate a port while the port 

remains under state ownership. In many cases, the private-sector entity also invests in 

port infrastructure and equipment. Mozambique was the first to adopt this model, 

transferring the management of all three of its coastal ports to private terminal operators 

 1

 UNCTAD, Review of Maritime Transport 2006, 2007, 102; USAID, “Port Congestion in Africa,” 

September 2005, 1. Maritime trade volumes between SSA and foreign countries are in line with the world 

average. According to one source, 90 percent of globally traded merchandise is transported by ship. 2

 UNCTAD, Review of Maritime Transport 2006, 2007, 104. Approximately 87 percent of the total 

volume of cargo exported from SSA ports is crude petroleum, with the remaining 13 percent divided evenly 

between minerals and metals (primarily bauxite and iron ore) and general cargo (including agricultural goods 

and textiles and apparel). By contrast, 90 percent of maritime cargo destined for SSA ports consists of 

general cargo. Crude petroleum is transported by tankers, minerals and metals are transported by break bulk 

carriers, and general cargo is transported by both break bulk carriers and container ships. This chapter focuses 

on container ship traffic, which is a growing proportion of maritime traffic in SSA. 3

 Radebe, “The State of Transport in Africa,” May 16, 2005. This estimate includes ports in North 

Africa, but the majority of these ports are located in SSA. 4

 Harding, Pálsson, and Raballand, “Port and Maritime Transport Challenges in West and Central 

Africa,” May 2007, 33; Ford, “East African Waterways Offer Cheap and Easy Transport,” August–

September 2007. The term “inland waterways” refers to lakes and rivers. At present, barge traffic largely 

comprises inland waterway transport in SSA. Efforts to promote inland waterway transport have been 

pursued by regional trading blocs within SSA such as COMESA and SADC. 5

 UNCTAD, “African Ports,” March 31, 2003, 10. Overall, African ports reportedly handle one-half of 

the volume of cargo traffic by container ship processed through Latin American ports and one-seventh of the 

volume processed through Asian ports. 6

 UNCTAD, Review of Maritime Transport 2006, 2007, 102. 7

 UNCTAD, “African Ports,” March 31, 2003, 19. 
4-2

TABLE 4.1 Select leading ports in the developing world by volume of containerized 

cargo, 2006 

Global 

ranka Port Country Region Volume in TEUsb

1 Singapore Singapore Asia 24,792,000 

2 Hong Kong China Asia 23,539,000 

3 Shanghai China Asia 21,710,000 

5 Busan South Korea Asia 12,039,000 

15 Guangzhou China Asia 6,600,000 

24 Jawaharal Nehru India Asia 3,298,000 

34 Manila Philippines Asia 2,772,000 

37 Santos Brazil South America 2,446,000 

41 Durbanc

 South Africa Africa 2,335,000 

47 Kingston Jamaica Caribbean Basin 2,150,000 

Sources: AAPA, “World Port Ranking: 2006,” undated (accessed January 5, 2009); 

Aldrick, “The Global Container Port Industry,” February 28, 2008. 

 aBased on AAPA’s ranking of the 50 largest ports worldwide. bTEUs = Twenty-foot equivalent units. cDurban is the only port in SSA that ranks among the top 50 global ports. Total 

containerized cargo volume for all of Africa is estimated at just over 15 million TEUs. 

beginning in 1998. By 2000, 70 percent of SSA ports had some form of private-sector 

participation.8

 

While private-sector management of SSA ports, as well as investment in physical 

infrastructure, has led to modest improvements in port productivity, problems remain. In 

particular, the region’s maritime operations continue to be adversely affected by 

burdensome customs procedures, inadequate access to land transport networks, and 

corruption, and the primary constraints facing SSA ports—inefficient operations and lack 

of sufficient capacity—have yet to be fully resolved.9

 As a result, freight rates to and 

from SSA remain substantially higher than in other parts of the world, reducing the 

region’s export competitiveness. 

Conditions of the Maritime Transport Sector 

Port Infrastructure 

The top 10 ports in SSA account for nearly three-quarters of the cargo transported to and 

from the region. Among the region’s largest and/or most active ports are Abidjan, Côte 

d’Ivoire, and Tema, Ghana, in West Africa; Dar es Salaam, Tanzania, and Mombasa, 

Kenya, in East Africa; and Durban, South Africa, and Maputo, Mozambique, in southern 

Africa (figure 3.1 in chapter 3 and table 4.2). Together, in 2000, these six ports accounted 

for almost one-half of containerized cargo transiting SSA.10 These ports also serve, and at 

 8

 Ibid., 11. 

9

 Ibid., 29; U.S. Department of State, U.S. Embassy, Nairobi, “GOK Advances Pro-Business Agenda,” 

August 28, 2008. 10 UNCTAD, “African Ports,” March 31, 2003, 36–37. Ratios are estimated using data from year 2000. 
4-3

TABLE 4.2 Leading ports in sub-Saharan Africa by volume of 

containerized cargo, 2006 

Port Region/country Volume in TEUsa

West and Central Africa 

Abidjan Côte d’Ivoire 507,119 

Tema Ghana 425,409b

Dakar Senegal 309,000c

Lagos Nigeria 226,571 

Lome Togo 203,372 

Cotonou Benin 158,201c 

Douala Cameroon 148,433 

 

 East Africa 

Mombasa Kenya 479,355d

Dar es Salaam Tanzania 352,548 

Port Sudan Sudan 326,721 

Djibouti Djibouti 221,330 

 

 Southern Africa 

Durban South Africa 2,334,999e

Cape Town South Africa 764,753 

Port Elizabeth South Africa 407,278 

Luanda Angola 316,396c

Walvis Bay Namibia 83,263 

Maputo Mozambique 62,516 

Sources: Degerlund, ed., Containerization International 

Yearbook, 2008, 157–69; CargoSystems, “South Africa: Coping 

With Growth,” May 2003, 49. 

 aTEUs = Twenty-foot equivalent units. bInitial planned capacity = 500,000 TEUs. cFigures are for 2005. dInitial planned capacity = 250,000 TEUs. eInitial planned capacity = 950,000 TEUs. 

 

times compete with one another, as transshipment points for inland destinations. For 

example, maritime cargo ultimately destined for the landlocked countries of Burkina Faso 

and Mali may be conveyed through either the ports of Abidjan or Tema, whereas cargo 

destined for Swaziland or Zimbabwe may transit the ports of Durban or Maputo.11 

In general, those SSA ports that function as the region’s major transshipment ports are 

characterized by relatively modern infrastructure, including deepwater berths to 

accommodate container ships, an adequate number of quays, or docks, to facilitate cargo 

movement, and dockside cranes to load and unload cargo from large vessels.12 Other 

 11 Ibid., 17. 

12 Ibid., 13. In a 2001 UNCTAD survey of 50 African ports, 59 percent of responding ports stated that 

they have terminals to accommodate container ships. 
4-4

physical characteristics common among the region’s highest functioning ports include the 

establishment of dedicated terminal facilities for containerized cargo, the use of 

information technology systems for the tracking and tracing of cargo as well as customs 

processing, and access to inland road and rail networks.13 

The physical infrastructure of most SSA ports is inadequate, partly due to historical 

factors. Although many SSA ports were developed to accommodate the transport of 

specific types of raw materials, growth in the region’s merchandise trade has expanded 

their use. For example, the port of Richards Bay, South Africa, was originally built in the 

1970s to facilitate the shipment of South African coal, but by the 1990s, the port was 

processing nearly one-half of all cargo transiting South Africa. Similarly, the port of 

Durban grew, by necessity, from a general cargo port to a major regional transshipment 

hub.14 In response to increases in merchandise traffic, certain SSA ports, such as Walvis 

Bay, Namibia, have updated their master plans to account for changing trade patterns.15

However, despite such planning, SSA ports continue to face physical capacity 

constraints, especially with regard to container ship trade (box 4.1).16 These capacity 

constraints are exacerbated by inefficient, and at times corrupt, customs administrations.17

Service Providers 

Large international shipping firms such as Danish-based Maersk and French-based CMACGM account for the bulk of maritime transport service between SSA and non-SSA 

markets.18 In particular, these two firms transport the majority of containerized cargo 

between SSA and Europe, the largest market for SSA exports.19 Other foreign-based 

shipping firms that have a substantial presence in the region include the German firm 

Hapag-Lloyd, the Italian firm Grimaldi Lines, and the Swiss firm Mediterranean 

Shipping Co. In recent years, the maritime transport market in SSA has become more 

concentrated, as many large shipping firms have been absorbed through corporate 

consolidations. For example, in 2005, Maersk purchased the liner shipping business of 

British-based P&O Nedlloyd, and Hapag-Lloyd merged its operations with the Canadian 

firm CP Ships.20 Earlier, in 1999, Maersk also purchased the South African shipping firm 

Safmarine, one of the largest regional shipping lines providing service between SSA and 

foreign countries.21

 13 Ghana Ports and Harbour Authority Web site. http://www.ghanaports.gov.gh (accessed September 

18, 2008); Kenya Port Authority Web site. http://www.kpa.co.ke (accessed September 18, 2008); and the 

Maputo Port Development Company Web site. http://www.portmaputo.com (accessed September 18, 2008). 14 Byrne, ed., “Ports and Shipping,” May 1996. 15 U.S. Department of State, U.S. Embassy, Port Louis, “USITC Study on Sub-Saharan Africa,” 

October 2, 2008. 16 USAID, “Port Congestion in Africa,” September 2005, 1. 17 Industry official, interview by Commission staff, Accra, Ghana, October 24, 2008. 18 UNCTAD, Review of Maritime Transport 2006, 2007, 103; CMA-CGM Web site. 

http://www.cmacgm.com (accessed September 24, 2008). In 2005, CMA-CGM purchased the liner shipping 

business of French firm Bolloré, which included two of Bolloré’s subsidiaries, Delmas and OT Africa Line, 

which provide service between Europe and countries in SSA. 19 UNCTAD, Review of Maritime Transport 2006, 2007, 103. In 2004, 40 percent by value of African 

exports were destined for Europe, compared to less than 20 percent for North America. 20 FMC, 45th Annual Report, 2006, 25. 21 Safmarine Web site. http://safmarine.mbendi.com (accessed September 18, 2008); 

A.P.-Moller/Maersk Group, “The A.P. Moller/Maersk Group Confirms Announcement,” November 2, 1999. 
4-5

BOX 4.1 Containerization Trends in Sub-Saharan Africa 

During the period 1995–2005, the transport of SSA imports and exports by container ship doubled, with the largest 

increase in containerized traffic occurring in West Africa.a

 Containerized traffic between SSA and foreign countries 

is expected to double again by 2015, creating new demand in the region for port infrastructure to accommodate 

container ship trade.b

 In broad terms, the increase in containerized traffic is due to a shift in the transport of certain 

SSA exports, including coffee and cotton, from bulk to containerized cargo, and to the region’s growing trade with 

countries such as China that transport a large proportion of their goods by container ship.c

 At present, however, 

the capacity of even the largest SSA ports to handle a rising volume of containerized cargo is insufficient. For 

example, at the port of Durban, through which two-thirds of South Africa’s containerized imports and exports are 

transported, container ships reportedly experience delays of several days to dock at the port.d

 Similar delays are 

encountered by container ships at the ports of Dar es Salaam, Tanzania, and Mombasa, Kenya.e

 Delays caused 

by insufficient docking capacity, or by long wait times for loading and unloading of cargo from ships, lead to higher 

freight rates. For example, a small container ship may potentially incur an operating cost of $43,000 for each day 

that it is delayed from docking at a port.f

 To mitigate such costs, some shipping firms have imposed ‘vessel delay 

surcharges’ of as high as $100 for each container that transits certain SSA ports; these charges are in turn passed 

on to importers.g Nonetheless, certain ports in the region have been successful in addressing capacity issues for 

containerized traffic by attracting outside investment in infrastructure and improving port management. For 

example, at the port of Mombasa, the Kenya Ports Authority has established dedicated berths for one of the area’s 

largest shipping firms and now permits cargo to be processed on a 24-hour basis.h

 In addition, the port has 

attracted new investment from the Japanese Bank for International Cooperation (JBIC) to underwrite construction 

of a second container terminal to be completed in 2013.i

 In Durban, port upgrades have led to a sevenfold increase 

in the number of containers processed through the port.j

 Ultimately, like Mombasa and Durban, other SSA ports 

that increasingly serve as regional hubs, or transshipment ports, are investing in the infrastructure and managerial 

expertise to handle growing containerized trade.k 

_____________________ 

 a Mike Mundy Associates and Ocean Shipping Consultants, “Africa Infrastructure Diagnostic Study,” February 

28, 2008. 

 b Osler, “African Ambition,” April 25, 2008; UNCTAD, “African Ports,” March 31, 2003, 13. c UNCTAD, Review of Maritime Transport 2006, 2007,107; Pedersen, “Freight Transport under Globalization,” 

2001, 88; and USITC, Hearing transcript, October 28, 2008, 71 (testimony of Paul Kent, Nathan Associates). 

Growth in the region’s container ship traffic has also been influenced by a trend toward the deployment of 

increasingly larger vessels in the world’s busiest ports, allowing shippers to transport higher volumes of cargo with 

less frequent voyages. One result of this trend is that smaller container ships are being redeployed in markets with 

relatively low volumes of containerized traffic, such as those in SSA. d Lloyd’s List, “Durban Bursting at the Seams,” October 19, 2007; industry official, interview by Commission staff, 

Durban, South Africa, October 17, 2008. 

 e Sambu, “Tanzania: Dar Port Delays Strain Cargo Clearance,” December 5, 2007; Osler, “African Ambition,” 

April 25, 2008. 

 f SITC, Hearing transcript, October 28, 2008, 70 (testimony of Dr. Paul Kent, Nathan Associates). This figure 

pertains to a vessel with a capacity of 1,500 TEUs, assumed to have a daily operating cost of $1,800 per hour. 

 g Esnor, “Lurching from One Crisis to Another,” November 6, 2006. h KPA, 2008–09 Handbook, 2008, 7. According to the Kenya Ports Authority, the introduction of a 24-hour 

operating schedule has decreased ship turnaround times at the port from seven to two days, reduced the average 

time for a ship to wait for a berth from nearly three days to one day, and increased the number of containers 

moved by crane per hour from 10 to 15. 

 I Industry official, interview by Commission staff, Mombasa, Kenya, October 27, 2008. j Sambu, “Tanzania: Dar Port Delays Strain Cargo Clearance,” December 5, 2007; Osler “African Ambition,” 

April 25, 2008. 

 k Government official, interview by Commission staff, Durban, South Africa, October 17, 2008. 
4-6

Apart from Safmarine, there are currently few regionally based shipping firms in SSA.22

Most regionally based carriers, which were historically state owned, were dismantled in 

the 1990s following the entry of European and other foreign shipping lines into 

previously protected maritime markets.23 These firms included Sitram in Côte d’Ivoire, 

Black Star Line in Ghana, and NNSL in Nigeria. 24 At present, the remaining SSA 

shipping lines primarily provide intraregional service, either along inland waterways or 

between two or more coastal ports. 25 For example, the Togo-based maritime firm 

Ecomarine provides container shipping services between the West African ports of 

Dakar, Abidjan, Lagos-Apapa, and Tema. 26 Similarly, Safmarine transports goods 

between the South African ports of Durban and East London, as well as between these 

cities and Maputo, Mozambique.27 In Angola, state-owned shipping company Cabotang 

provides maritime transport between domestic coastal locations, while in Tanzania the 

partially privatized TRC Marine transports cargo on lakes linking Tanzania with 

neighboring countries.28 

Soft Infrastructure: Customs 

Port operations remain adversely affected by customs delays and corruption. Customsrelated issues that most commonly hamper portside operations include multiple clearance 

procedures, delays in the release of imported and exported cargo from the port, and in 

some cases, corrupt customs officials. For example, goods processed at the port of 

Mombasa must be cleared by three separate government agencies: the Kenya Ports 

Authority, the Kenya Revenue Authority, and the Kenya Bureau of Standards.29 At the 

port of Tema, delays in the release of imported cargo may increase port storage fees for 

importers, and in extreme cases, an importer may choose to abandon cargo at the port 

rather than to accrue such charges. In addition, although the port of Tema has been 

successful in reducing corruption, largely by the introduction of automated customs 

technology, importers and exporters may still bribe customs officials in return for an 

expedited clearance of goods.30

Not surprisingly, goods that are destined for landlocked countries generally experience 

more clearance procedures and longer delays at the port of entry than do goods destined 

for the local market. For instance, it reportedly takes five additional days for the port of 

Dar es Salaam, Tanzania, to clear cargo that is en route to the neighboring countries of 

Burundi, Rwanda, or Uganda.31 Similarly, in 2005, goods that arrived at the port of 

Mombasa, Kenya, bound for Uganda spent an average of 13 days longer at the port than 

 22 Government official, interview by Commission staff, Mombasa, Kenya, October 27, 2008. 23 Pedersen, “Freight Transport under Globalization,” 2001, 90. Prior to the 1990s, shipping firms 

serving Africa participated in a “liner conference” system that divided major shipping routes to and from the 

region into three protected markets: those served by African shippers (40 percent), those served by European 

shippers (40 percent), and those served by other foreign shippers (20 percent). In 1992, the European Court of 

Justice determined that this arrangement was anticompetitive, hence opening the market to direct competition 

between African and non-African shipping firms. 24 Harding, Pálsson, and Raballand, “Port and Maritime Transport Challenges,” May 2007, 9. 25 Osler, “African Ambition,” April 25, 2008. 26 Africa News, “Ghana; ECOWAS Has Done Well,” September 18, 2008. 27 Safmarine Web site. http://www.safmarine.mbendi.com (accessed September 18, 2008). 28 The Banker, “Angola: The Slow and Steady Road to Prosperity,” August 1, 2008; Tanzania National 

Web site. http://www.tanzania.go.tz/transportf.html (accessed October 8, 2008). 29 U.S. Department of State, U.S. Embassy, Nairobi, “GOK Advances Pro-Business Agenda,” 

August 28, 2008. These organizations are reportedly working towards harmonizing their clearance 

procedures through the establishment of common accreditation and computerized clearance systems. 30 Industry official, interview by Commission staff, Accra, Ghana, October 24, 2008. 31 Lloyd’s List, “The Maritime Route to Prosperity,” June 18, 2008. 
4-7

goods remaining in the local market (table 4.3). Ultimately, burdensome customs and 

inspection procedures at SSA ports lead to higher costs for goods transiting the region.32

As such, without commensurate improvements in customs administration, efforts to 

physically improve SSA ports will likely have less impact on the region’s ability to 

compete in international trade. 

TABLE 4.3 Comparison of container clearance and truck transit times from select SSA ports to inland 

locations

Route 

Location of final 

destination for 

cargo 

Distance in 

kilometers 

Number of days for 

clearance at the 

port of origin 

Total transit time 

(including port 

clearance) 

Mombasa 

(Kenya) to 

Nairobi (Kenya) 

Within country 485 5–6 days a > 10 days 

Mombasa 

(Kenya) to 

Kampala 

(Uganda)

Neighboring 

country 

1,150 13 days a > 2 weeks 

Durban (South 

Africa) to 

Johannesburg 

(South Africa) 

Within country 500 2–4 days 3–7 days b

Durban (South 

Africa) to 

Mbabane 

(Swaziland) 

Neighboring 

country 

400 2–4 days 5–7 days 

Sources: Industry officials, interviews by Commission staff, Durban, South Africa, October, 21, 2008, 

Mombasa, Kenya, October 27, 2008, and Matsapha, Swaziland, October 23, 2008; Arvis, Raballand, and 

Marteau, “The Cost of Being Landlocked,” June 2007, 28. 

 aData from 2005. bIt takes approximately 18–21 hours for cargo to be transported between Durban and Johannesburg, and 

three additional days for such cargo to be offloaded and deposited in an inland container depot in 

Johannesburg.

Effects of Port Infrastructure Conditions on Export 

Competitiveness 

Because port infrastructure in SSA was not built to support the region’s diverse and 

growing volume of merchandise trade, infrastructure deficiencies currently result in 

substantial time delays and high costs for goods moving both into and out of the region.33

For example, in 2004, lack of sufficient berthing capacity in the port of Durban led to 

 32 Arvis, Raballand, and Marteau, “The Cost of Being Landlocked,” June 2007, 28–29. 33 USAID, “Port Congestion in Africa,” September 2005, 1; Aldrick, Drewry Shipping Consultants, 

Ltd., “The Global Container Port Industry,” February 28, 2008. Although, on average, the capacity utilization 

ratio for all African ports is estimated at slightly below 80 percent, certain ports in the region have already 

exceeded their planned capacity design, including the ports of Durban, South Africa, and Mombasa, Kenya 

(table 4.2). Further, by 2012, the capacity utilization ratio of African ports is forecast to increase to nearly 

100 percent. 
4-8

vessel wait times of up to 66 hours.34 Similarly, at the port of Mombasa, inadequate rail 

capacity has resulted in a backlog of more than 10,000 containers awaiting transport to 

inland destinations. 35 Finally, at the port of Tema, insufficient crane capacity has 

hampered port productivity. Illustratively, although the port of Tema uses two cranes per 

ship to load and unload containerized cargo, the port of Singapore uses as many as eight 

cranes to unload cargo from a single ship (table 4.4).36 

As a result of the infrastructure issues faced by SSA ports, maritime freight costs in the 

region surpass those in other countries. For example, it is estimated that manufacturers 

shipping from SSA pay nearly three times more in container handling charges at African 

ports than manufacturers shipping from Europe.37 In some SSA countries, the cost of 

importing a standard-sized container is reportedly more than twice the world average.38

Added to these charges are the indirect costs associated with time delays at the port of 

entry and in the transport of goods to inland destinations. Overall, in 2004, it was 

estimated that freight costs as a ratio of import value were approximately 10 percent for 

SSA, compared with an average of nearly 6 percent for all developing countries, 

including those in SSA. For certain landlocked countries such as Mali and Rwanda, this 

ratio was as high as 24 percent.39

SSA’s high transport costs have a negative impact on the region’s ability to compete in 

global export markets. One study concludes that transport costs in Africa are a higher 

trade barrier than trade-partner tariffs on African goods.40 For instance, although apparel 

from SSA benefit from lower tariffs in the United States vis-à-vis similar products from 

Cambodia and Bangladesh, the relatively higher transport costs associated with shipping 

apparel from SSA can render the product uncompetitive in the U.S. market.41 Therefore, 

further reform of, and investment in, SSA’s ports is necessary to reduce maritime freight 

costs in the region and, in turn, improve export competitiveness.42 

Efforts to Improve the Maritime Transport Sector 

In the past two decades, SSA countries have pursued varied efforts to upgrade port 

infrastructure and achieve regulatory reform of their maritime sectors. Although the 

physical improvement of certain SSA ports has enabled these ports to handle increasing 

 34 Good, “South Africa Still Stalled Over Ports,” April 27, 2004. 35 U.S. Department of State, U.S. Embassy, Nairobi, “GOK Advances Pro-Business Agenda,” 

August 28, 2008. 36 Industry official, interview by Commission staff, Tema, Ghana, October 25, 2008. Average vessel 

size in Singapore is larger, however. 37 Osler, “African Ambition,” April 25, 2008. 38 Lloyd’s List, “Singapore’s Connections Put It on Top of the World,” November 12, 2007; UNCTAD, 

Review of Maritime Transport 2006, 2007, 118, 123. This trend, however, may be reversing. Between 2001 

and 2004, the ratio of freight costs to import value decreased by 3.5 percentage points in SSA, compared to 

2.0 percentage points among all developing countries and 2.5 percentage points among all countries in the 

world. 39 UNCTAD, Review of Maritime Transport 2006, 2007, 123–24. Import values as reported by 

UNCTAD are based on freight and insurance data from the IMF Balance of Payments Statistics (January 

2006). 40 World Bank, Can Africa Claim the 21st Century?, 2000, 138. 41 USITC, Hearing transcript, October 28, 2008, 121 (testimony of Paul Ryberg, African Coalition for 

Trade, Inc.). 42 USAID, “Port Congestion in Africa,” September 2005, 3–4. 
4-9

TABLE 4.4 Comparison of port productivity in select SSA and non-SSA ports 

Region Port Country 

Productivity 

measure (crane 

moves per houra

) 

Africa Abidjan Côte d’Ivoire 20 

 Cape Town South Africa 12 

 Dar es Salaam Tanzania 20 

 Durban South Africa 15 

 Maputo Mozambique 10 

 Mombasa Kenya 15 

 Tema Ghana 15b 

 

Asia Pacific Hong Kong China 40 

Manila Philippines 30 

Shanghai China 30 

Singapore Singapore 35 

Sydney Australia 27 

 

Europe/North 

America Baltimore, MD United States 37 

 Felixstowe United Kingdom 20 

 Los Angeles, CA United States 25 

 Rotterdam Netherlands 30 

 Vancouver Canada 25 

 Wilmington, NC United States 39 

Sources: Kunaka, “Ports and Corridor Performance,” September 26, 2008; 

“Intermodal Transportation and Terminal Operations,” spring 2008; North 

Carolina State Ports, Port of Wilmington, “Container Productivity Increases,” 

June 23, 2005; and industry official, e-mail message to Commission staff, 

September 30, 2008. 

 aIndicates the number of containers moved each hour by quay cranes. bAt a new container terminal completed at the port of Tema, productivity has 

reportedly increased from 15 to 30 crane moves per hour. 

volumes of merchandise trade, most ports in the region remain uncompetitive by 

international standards. In broad terms, the poor performance of SSA ports is due to the 

sporadic nature of investment in port infrastructure and the lack of effective institutional 

reform of ports by national governments. 43 The latter in particular has undermined 

regional competition in the provision of maritime services.44 

 43 Osler, “African Ambition,” April 25, 2008; Pedersen, “Freight Transport under Globalization,” 2001, 

93. 44 USAID, “Port Congestion in Africa,” September 2005, 3–4. 
4-10

Port Governance 

In the 1990s, many SSA countries commenced initiatives to improve the efficiency of 

their maritime transport sectors.45 These efforts centered on the institutional reform of 

ports, which was broadly achieved through the separation of the ports’ regulatory and 

commercial functions. Under reform, national port authorities retained regulatory 

oversight over of the activities of the port, while private-sector entities were granted 

concessions by port authorities to perform warehousing, container handling, and other 

commercial operations.46 By enlisting the private sector to invest in port infrastructure 

and provide expertise in port operations and management, national authorities aimed to 

increase the productivity of their ports. Improved port productivity, in turn, would enable 

SSA ports to compete more effectively with one another to handle the region’s growing 

merchandise trade volumes.47

Regulatory reform of ports in SSA has not been accompanied by ownership reform—that 

is, most ports in the region remain under state ownership.48 Nonetheless, reform has 

shifted the number of ports previously classified as “operating” ports to “landlord” status.

Under an operating port, the ownership and management of port assets, including 

terminal facilities and equipment, remain with the port authority, but the port authority 

may lease these facilities to private-sector entities.49 By contrast, under a landlord port, 

the port authority also retains ownership of port infrastructure, but permits private-sector 

firms to carry out cargo handling and other port functions using their own equipment, and 

to invest in the building of new facilities.50 

At present, some of the most active ports in SSA function under the landlord model, 

including Dar es Salaam, Maputo, and Tema.51 In general, these and other ports in the 

region followed a similar path toward private-sector participation: port restructuring 

followed by long-term concessions to private entities. For example, after disaggregating 

its commercial operations from the port authority in 2000, Dar es Salaam established a 

two-member consortium led by Filipino-based International Container Terminal Services 

to operate the port.52 The consortium was granted a 10-year concession, during which 

time it was charged with improving port productivity and upgrading port equipment and 

terminal infrastructure. Similarly, also in 2000, the port of Maputo granted a 15-year 

 45 UNCTAD, “Comparative Analysis of Deregulation,” May 24, 1995, 16. Efficiency measures in the 

maritime transport sector include such parameters as vessel turnaround times, container dwell times in a port, 

cargo handling charges, and port call charges. 46 UNCTAD, “African Ports,” March 31, 2003, 19. The arrangement is commonly termed a publicprivate partnership (PPP). 47 UNCTAD, “Comparative Analysis of Deregulation,” May 24, 1995, 5. 48 Osler, “African Ambition,” April 25, 2008. 49 UNCTAD, “African Ports,” March 31, 2003, 9; World Bank, “Module 3,” 2007, 83–84; and USITC, 

Hearing transcript, October 28, 2008, 136 (testimony of Paul Kent, Nathan Associates). Under an operating 

port, private-sector participation is limited, particularly with regard to cargo handling services, which are 

often carried out by the port authority. However, in many countries, such as Argentina, Chile, the 

Netherlands, and Singapore, the landlord port has become the standard institutional framework for port 

governance. In particular, the landlord port is seen as the most effective model for involving the private 

sector in port management and investment while still maintaining public-sector oversight of port activities. 50 UNCTAD, “African Ports,” March 31, 2003, 12, 15. Private-sector entities may build new port 

infrastructure under a build-operate-transfer arrangement, under which newly constructed assets revert to the 

ownership of the national port authority once the term of a concession has expired. 51 Ibid., 12–16. 

52 Hutchinson Whampoa Limited, “Hutchinson Port Holdings Acquires Overseas Assets,” May 28, 

2001. In May 2001, the overseas port development operations of International Container Terminal Services 

were acquired by Hong Kong-based Hutchinson Holdings. 
4-11

concession to a private-sector consortium that later formed the Maputo Port Development 

Company (MPDC).53 MPDC is currently responsible for managing the operations of the 

port, including those of newly privatized terminals developed for niche markets, such as 

coal and fresh produce. 54 Finally, in 2002, the Ghana Ports and Harbours Authority 

converted the port of Tema to landlord status, while maintaining regulatory authority 

over the port, and permitted private firms to engage in cargo-handling services through 

concessions.55 

Elsewhere, SSA countries have pursued slightly different forms of private-sector 

participation in port activities. For instance, in June 2000, global terminal operator Dubai 

Ports Worldwide (DPW) signed a 20-year management contract with the Djibouti Port 

Authority to oversee the entire operation of the port.56 In South Africa, institutional 

reform has resulted in the establishment of two new entities to regulate and manage the 

country’s seven ports: the Transnet National Ports Authority and Transnet Port 

Terminals. The Transnet National Ports Authority serves as the port regulator, whereas 

private firms engage in portside operations through either leasing contracts or 

concessions.57 By contrast, Kenya’s port of Mombasa has not yet undergone regulatory 

reform, but nonetheless permits private-sector participation in 60 percent of port 

operations.58

Investment in Port Infrastructure 

Regulatory reform of SSA ports and private-sector participation in port operations has 

brought new investment in port infrastructure (table 4.5). Many of the infrastructure 

projects are designed to position SSA ports to accommodate growing container ship trade 

in the region. For example, in 2007, private terminal operator APM, a subsidiary of the 

Danish shipping firm Maersk, invested $75 million to upgrade the Nigerian port of 

Lagos-Apapa. APM’s investment included the refurbishment of gantry cranes used to 

load and unload cargo from container ships. The project reportedly resulted in an average 

monthly increase in container throughput of nearly 50 percent, and helped alleviate 

congestion at the port. 59 In Djibouti, terminal operator DPW has invested in the 

construction of a container terminal. The new terminal will enable the port to serve as a 

primary entry point for goods destined for East Africa.60 At the same time, several other 

SSA ports plan to increase their container terminal capacity with funding from the private 

sector, including Dakar, Douala, Durban, and Mombasa.61

 53 Furlonger, “Harbors—1. Grinding Out Growth,” December 21, 2007; UNCTAD, “African Ports,” 

March 31, 2003, 12–16; and PMAESA, “Maputo: Meeting Expectations,” 2008, 46. Shareholders in the 

Maputo Port Development Company currently include Portuguese firm Portus Indico, Mozambican railway 

operator CFM, and the government of Mozambique. 54 Lloyd’s List, “Peel Strips its Activity with Sale of Maputo Stake,” January 3, 2008. 55 UNCTAD, “African Ports,” March 31, 2003, 19; industry official, e-mail message to Commission 

staff, September 30, 2008. 56 Port of Djibouti—DP World Web site. http://www.dpworld-djiboutiport.com/sublevel.asp?pageid=8

(accessed October 2, 2008). 57 UNCTAD, “African Ports,” March 31, 2003, 31. 

58 Lloyd’s List, “Privatisation on Cards for Mombasa,” July 23, 2008; Lloyd’s List, “Mombasa Gets 

Box Jam Lifeline from Andersen,” August 12, 2008; and government official, interview by Commission 

staff, Mombasa, Kenya, October 27, 2008. The Kenya Ports Authority reportedly has plans to convert the 

port to landlord status. 59 Lloyd’s List, “Success Story of Apapa,” July 17, 2008. 60 Lloyd’s List, “World Bank Guarantee for Djibouti Box Terminal,” July 17, 2008. 61 Mike Mundy Associates and Ocean Shipping Consultants, “Africa Infrastructure Diagnostic Study,” 

February 28, 2008. 
4-12

TABLE 4.5 Select infrastructure investments in SSA ports 

Port Investment Major stakeholder(s) 

Dakar, Senegal Expansion of existing container 

terminal, building of new terminal 

Dubai Ports Worldwide (United Arab 

Emirates) 

Dar es Salaam, Tanzania Gantry cranes, computer systems Hutchinson Whampoa (Hong Kong) 

Douala, Cameroon Deep-sea port construction, new 

container terminal 

A.P.-Moller/Maersk Group 

(Denmark); Bolloré Group (France) 

Djibouti, Djibouti New container terminal Dubai Ports Worldwide (United Arab 

Emirates) 

Durban, South Africa New container terminal Transnet National Port Authority 

(South Africa) 

Lagos-Apapa, Nigeria Gantry cranes A.P.-Moller/Maersk Group (Denmark) 

Maputo, Mozambique New terminals for granite and 

metals, expansion of container 

terminal capacity, dredging of water 

channel to port 

Dubai Ports Worldwide (United Arab 

Emirates); Government of 

Mozambique 

Mombasa, Kenya Construction of a second container 

terminal, the first phase scheduled 

for completion in 2013 

Japanese Bank for International 

Cooperation (Japan) 

Tema, Ghana New container terminal Ghana Ports and Harbours Authority 

(Ghana); A.P.-Moller/Maersk Group 

(Denmark) 

Sources: Industry officials, interviews by Commission staff, Johannesburg, South Africa, October 23, 2008, and 

Mombasa, Kenya, October 27, 2008; Dickenson, “Tanzanian Port Has Big Aspirations,” April 1, 2003; Lloyd’s 

List, “Success Story of Apapa,” July 17, 2008; Mike Mundy Associates and Ocean Shipping Consultants, “Africa 

Infrastructure Diagnostic Study,” February 28, 2008; Port of Djibouti Web site. http://www.dpworlddjiboutiport.com (accessed January 13, 2009); Port of Maputo Web site. http://www.portmaputo.com (accessed 

January 13, 2009); Port of Douala Web site. http://www.otal.com/cameroon/index.htm#psi (accessed January 

13, 2009); and Ghana Ports and Harbours Authority Web site. http://www.ghanaports.gov.gh (accessed 

January 13, 2009). 

Competition among SSA ports for transshipped cargo has also led them to improve their 

own infrastructure. 62 For instance, the port of Dar es Salaam plans to compete with 

Mombasa as the primary transshipment hub for goods in East Africa. Consequently, with 

the aid of Hong Kong-based terminal operator Hutchison-Whampoa, the port has 

invested in new cranes and computer systems to increase cargo throughput. 63 In southern 

Africa, the port of Maputo is upgrading terminal equipment and warehousing facilities, as 

well as expanding the harbor to accommodate Panamax vessels—all with the goal of 

 62 Pringle, “African Ports Lack Capacity,” June 4, 2008; USITC, Hearing Transcript, October 28, 2008, 

135 (testimony of Paul Kent, Nathan Associates). In transshipment, containerized cargo is offloaded from a 

“mother” vessel at a port and placed on a “feeder” vessel that transports the cargo to its final destination. 63 Dickenson, “Tanzanian Port Has Big Aspirations,” April 1, 2003; government official, interview by 

Commission staff, Mombasa, Kenya, October 27, 2008. 
4-13

attracting traffic from the area’s largest port, Durban.64 Finally, the port of Tema now 

competes, to some extent, with Abidjan as a major transshipment hub in West Africa.65

The port recently completed improvements to its docks to facilitate the loading of cargo 

onto ships, thus decreasing vessel turnaround time and port productivity. In addition, the 

Ghanaian port authority has established an offsite cargo processing center in the town of 

Kumasi to expedite the movement of goods from the coastal ports of Tema and Takoradi 

to inland locations.66

As an additional means of handling increasing volumes of containerized cargo, some 

ports in SSA have developed inland container freight stations (CFS). The CFS, which 

may be located within export processing zones (EPZs) and some distance from the port, 

are built and managed by private-sector firms. These facilities are not only responsible 

for the unloading and storage of containerized cargo, but also for the retrieval and 

transport of such cargo inland from the port and for the submission of customs 

documentation to port authorities. Although the purpose of CFS is to relieve congestion 

at coastal ports, some CFS facilities, such as those located outside Mombasa, have 

ultimately added to such congestion. In particular, these facilities reportedly lack 

adequate equipment to unload containers from ships, as well as a sufficient number of 

trucks to transport containers to CFS inland warehouses. Moreover, because CFS 

operators receive revenue for storing containers, they have little incentive to move 

containers out of storage in a timely manner.67 

Another important segment of port infrastructure investment among SSA countries is 

customs processing technology. For example, the Kenya Ports Authority (KPA) 

implemented an Electronic Data Interchange system that enables shipping lines to submit 

cargo data electronically to the port authority.68 As a result, customs clearance time at the 

port of Mombasa was reduced from six to two days. KPA ultimately hopes to reduce 

clearance time to less than one day.69 Similarly, the port of Durban has adopted the use of 

electronic manifests, which allows South African customs agents to clear incoming cargo 

before arrival at the port.70 

 64 World Bank, “Module 2,” 2007, 38, 41; Furlonger, “Harbors—1. Grinding Out Growth,” 

December 21, 2007. Panamax vessels are one of the largest classes of container ship and were introduced in 

the 1970s to transit the Panama Canal. In the 1990s, construction began on “post-Panamax” container ships, 

so named because the dimensions of these vessels were too large to permit them to pass through the Panama 

Canal. At present, a Panamax vessel can carry containerized cargo of up to 4,800 TEUs in volume, whereas a 

post-Panamax vessel may transport as much as 10,000 TEUs of cargo. Designs are underway for the 

construction of “mega-container ships,” that will have cargo-carrying capacity of up to 18,000 TEUs. 65 UNCTAD, Review of Maritime Transport 2006, 2007, 116; industry official, e-mail message to 

Commission staff, September 30, 2008. 66 EIU, “Resources and Infrastructure,” September 7, 2007; Pedersen, “Freight Transport under 

Globalization,” 2001, 93; and government official, interview by Commission staff, Mombasa, Kenya, 

October 27, 2008. Aside from Ghana, other SSA countries such as Kenya and Tanzania have developed 

inland cargo handling and storage facilities, also known as container freight stations, as a means of alleviating 

congestion at coastal ports. 67 Government official, interview by Commission staff, Mombasa, Kenya, October 27, 2008. 68 PMAESA, “KPA Reaps from ICT Advantages,” 2008, 46. 69 Government official, interview by Commission staff, Mombasa, Kenya, October 27, 2008. 70 Government official, interview by Commission staff, Durban, South Africa, October 17, 2008. 
4-14

Bibliography 

Africa News. “Ghana: ECOWAS Has Done Well, Says Minister,” September 18, 2008. 

Aldrick, Katy. Drewry Shipping Consultants, Ltd. “The Global Container Port Industry: Implications for 

Africa?” Presented at the 6th Intermodal Africa 2008 Conference, Accra, Ghana, February 28, 

2008. 

American Association of Port Authorities (AAPA). “World Port Ranking: 2006,” undated. 

http://www.aapa.org (accessed January 5, 2009). 

A.P.-Moller/Maersk Group. “The A.P. Moller/Maersk Group Confirms Announcement by Safmarine.” 

News release, November 2, 1999. 

http://media.maersk.com/en/PressReleases/1999/Pages/TheAPMollerMaerskGroupconfirmsanno

uncementbySafmarine.asp. 

Arvis, Jean-François, Gaël Raballand, and Jean-François Marteau. “The Cost of Being Landlocked: 

Logistics Costs and Supply Chain Reliability.” World Bank Policy Research Working Paper no. 

4258, June 2007. 

Banker. “Angola: The Slow and Steady Road to Prosperity,” August 1, 2008. 

Byrnes, Rita M., ed. “Ports and Shipping.” South Africa: A Country Study. Federal Research Division. 

Library of Congress, May 1996. http://www.country-data.com/frd/cs/zatoc.html#za0094. 

CargoSystems. “South Africa: Coping With Growth,” May 2003. 

Degerlund, Jane, ed. Containerization International Yearbook, 2008. London: Lloyd’s MIU, 2008. 

Dickenson, Daniel. “Tanzanian Port Has Big Aspirations.” BBC News, April 1, 2003. 

Esnor, Linda. “Lurching from One Crisis to Another.” Business Day (South Africa), November 6, 2006. 

Federal Maritime Commission (FMC). 45th Annual Report, Fiscal Year 2006. Washington, DC: FMC, 

2006. 

Ford, Neil. “East African Waterways Offer Cheap and Easy Transport.” African Business via BNET.com 

August–September 2007. http://findarticles.com/p/articles/mi_qa5327/is_/ai_n29371028. 

Furlonger, David. “Harbors—1. Grinding Out Growth.” Financial Mail (South Africa), December 21, 

2007. 

Good, Nicola. “South Africa Still Stalled Over Ports.” Lloyd’s List, April 27, 2004. 

Harding, Alan, Gylfi Pálsson, and Gaël Raballand. “Port and Maritime Transport Challenges in West and 

Central Africa.” Appendix 1: Geographical Classification of African Countries. World Bank SubSaharan Africa Transport Policy Program (SSATP) Working Paper no. 84, May 2007. 

Hutchinson Whampoa Limited. “Hutchinson Port Holdings Acquires Overseas Assets of International 

Container Terminal Services, Inc.” News release, May 28, 2001. http://www.irasia.com. 
4-15

“Intermodal Transportation and Terminal Operations.” Transportation Logistics course presentation, 

University of Washington, spring 2008. 

Kenya Ports Authority (KPA). 2008–09 Handbook. Mombasa, Kenya: KPA, 2008. 

Kunaka, Charles. World Bank Sub-Saharan Africa Transport Policy Program (SSATP). “Ports and 

Corridor Performance.” Presented at the Port Congestion Workshop sponsored by the Port 

Management Association of East and Southern Africa (PMAESA), Mombasa, Kenya, 

September 26, 2008. 

Lloyd’s List. “Durban Bursting at the Seams; Congestion Is a Major Issue As Peak Season Looms at 

Africa’s Busiest Port,” October 19, 2007. 

———. “The Maritime Route to Prosperity: Study Links Port Access to Economic Welfare,” June 18, 

2008. 

———. “Mombasa Gets Box Jam Lifeline from Andersen,” August 12, 2008. 

———. “Peel Strips its Activity with Sale of Maputo Stake,” January 3, 2008. 

———. “Privatisation on Cards for Mombasa: Maersk Chief’s Talks with Kenyan Vice-President Fuel 

Local Speculation,” July 23, 2008. 

 

———. “Singapore’s Connections Put It on Top of the World: Asian Maritime and Logistics Hub Wins 

World Bank’s Vote after Survey of 150 Countries,” November 12, 2007. 

———. “Success Story of Apapa,” July 17, 2008. 

———. “World Bank Guarantee for Djibouti Box Terminal,” July 17, 2008. 

Mike Mundy Associates and Ocean Shipping Consultants. “Africa Infrastructure Diagnostic Study: Port 

Sector.” Presented at the 6th Intermodal Africa 2008 Conference, Accra, Ghana, February 28, 

2008. 

North Carolina State Ports. Port of Wilmington. “Container Productivity Increases.” News release, 

June 23, 2005. http://ncports.com. 

Osler, David. “African Ambition: With Many African Economies Now Growing at a Steady Rate, What 

Role Can the Maritime Industries Have in Ensuring the Often Volatile Continent Reaches Its Full 

Potential?” Lloyd’s List, April 25, 2008. 

Pedersen, Poul Ove. “Freight Transport under Globalization and Its Impact on Africa.” Journal of 

Transport Geography 9 (2001): 85–99. 

Port Management Association of Eastern & Southern Africa (PMAESA). “Maputo: Meeting 

Expectations.” Our Ports 4, no. 1, 2008. 

———. “KPA Reaps from ICT Advantages.” Our Ports 4, no. 1, 2008. 

Pringle, Chanel. “African Ports Lack Capacity to Meet Growing Demand.” Engineering News Online, 

June 4, 2008. http://www.engineeringnews.co.za. 
4-16

Radebe, Jeff. “The State of Transport in Africa.” Presented at the International Transport Convention 

2005, Limpopo Province, South Africa, May 16, 2005. 

Economist Intelligence Unit (EIU). “Resources and Infrastructure: Transport, Communications and the 

Internet.” Country Profile Select, September 7, 2007. 

Sambu, Zeddy. “Tanzania: Dar Port Delays Strain Cargo Clearance.” Business Daily (Kenya), 

December 5, 2007. http://www.afrika.no/noop/page.php?p=Detailed/15571&print=1. 

UNCTAD. “African Ports: Reform and the Role of the Private Sector.” UNCTAD/SDTE/TLB/5, 

March 31, 2003. 

———. “Comparative Analysis of Deregulation, Commercialization and Privatization of Ports.” 

UNCTAD/SDD/PORT/3, May 24, 1995. 

———. Review of Maritime Transport 2006. New York and Geneva: UNCTAD, 2007. 

U.S. Agency for International Development (USAID). “Port Congestion in Africa: Implications for 

Competitiveness and Economic Growth.” Trade Developments, September 2005. 

U.S. Department of State. U.S. Embassy, Nairobi. “GOK Advances Pro-Business Agenda (Nairobi 

002039),” August 28, 2008. 

U.S. Department of State. U.S. Embassy, Port Louis. “USITC Study on Sub-Saharan Africa: Effects of 

Infrastructure Conditions on Export Competitiveness (Port Louis 00346),” October 2, 2008. 

U.S. International Trade Commission (USITC). Hearing transcript in connection with inv. no. 332-477, 

Sub-Saharan Africa: Effects of Infrastructure Conditions on Export Competitiveness, Third 

Annual Report, October 28, 2008. 

World Bank. Can Africa Claim the 21st Century? Washington, DC: World Bank, 2000. 

———. “Module 2: The Evolution of Ports in a Competitive World.” Port Reform Toolkit, Second 

Edition, 2007. Washington, DC: World Bank, 2007. 

———. “Module 3: Alternative Port Management Structures and Ownership Models.” Port Reform 

Toolkit, Second Edition, 2007. Washington, DC: World Bank, 2007. 
5-1 

CHAPTER 5 

Electricity 

SSA’s electricity infrastructure is the least developed, least accessible, least reliable, most 

costly to operate, and highest priced of any region in the world.1

 In 2006, the total 

generation capacity of electricity systems installed in SSA was equivalent only to that in 

Spain alone. Electricity installed, produced, and consumed in SSA is concentrated in its 

most developed country, South Africa. Even there, however, the government has declared 

the current state of the electricity generation system a national emergency, likely to 

continue for years. Moreover, electricity costs to firms have substantially increased in 

recent years, especially in numerous countries subject to prolonged and/or frequent power 

outages. These conditions inhibit the development of the manufacturing, agricultural 

product processing, and service industries. 

In 2006, 26 percent of the population in SSA had access to electricity (figure 5.1), about 

one-half the electrification rate of the next-lowest region, South Asia. In rural areas, only 

8 percent of the population, on average, had electricity. 2 Consequently, annual 

consumption of electricity per person is low throughout SSA. In certain countries, the 

cost of power to consumers is prohibitively expensive, irrespective of access to electric 

power. 

Decades of insufficient investment and poor management by national governments in 

state-owned electric utilities have exposed populations and businesses to irregular 

electricity availability. Outdated equipment and poor maintenance have resulted in high 

operating costs for electric utilities and a formidable treasury expense for SSA 

governments that have opted not to allow electricity rates to reflect such high costs. As a 

result of electricity sector inefficiencies, SSA consumes more electric power per dollar of 

income earned than any other region, despite also having the world’s lowest access to, 

and use of, electricity. 

Prompted by multilateral lending institutions led by the World Bank, national 

governments in SSA have instituted regulatory reforms in the electricity sector. The 

reforms have facilitated improvements in the financial position of numerous state-owned 

electric utilities. Further, reforms have begun to encourage efforts to arrive at viable 

electricity rates and to improve the climate for investment, especially in generation. Some 

countries have created new structures to oversee the provision of electricity to 

underserved populations. Most countries have established a regulator for the electricity 

sector, although the regulatory agencies are still mostly new and gradually building 

capacity and expertise. 

 1

 IMF, Regional Economic Outlook, April 2008, 74–93. 2

 OECD, IEA, World Energy Outlook 2006, 2006, 567. 
5-2 

FIGURE 5.1 Percent of population with access to electricity in sub-Saharan Africa 

Source: Adapted from OECD, IEA, World Energy Outlook 2006, 568–69. 

*Note: The International Energy Agency (IEA) does not directly report data for the following countries: Burundi, Chad, 

Equatorial Guinea, The Gambia, Guinea, Liberia, Mali, Mauritania, Niger, Rwanda, Sierra Leone, Somalia, and 

Swaziland. For these countries, the IEA estimates an average electrification rate of 7.5 percent, although actual 

electrification rates may be higher or lower. 
5-3 

In 2007, investments in the electricity sector in SSA increased by 62 percent, to $3.9 

billion, as compared with the previous year.3

 However, the investments in 2007 appear to 

have fallen more than 50 percent short of the World Bank’s estimate of the amount 

needed annually through 2015 to keep pace with projected increased electricity demand.4

Consensus is building that the way forward on investment, as well as capacity building, is 

through regional initiatives and planning that include generation, transmission, and 

distribution as a complete system rather than disparate elements.5

 

Conditions of the Electricity Sector 

Electricity Infrastructure 

Generation infrastructure installed in SSA had a total capacity of about 67 gigawatts 

(GW) of electricity in 2006.6 The extent of installed electric power generation varies 

widely by country. South Africa dominates with about 43 GW, followed by Nigeria with 

approximately 6 GW. Seven countries spread throughout the continent have 1 to 3 GW.7

The twelve countries with the smallest generation capacity all have less than one-tenth of 

1 GW (i.e., less than 100 megawatts (MW)).8

 South Africa has added 2.6 GW since 2005, 

which is more generation capacity than most other SSA countries have had installed at 

any time. 

In addition to country differences, wide gaps in the extent of installed generation exist 

between urban and rural areas in SSA. In 2005, electricity from a grid was available to 58 

percent of the population in urban areas but only 8 percent in rural areas. A combination 

of poverty and very low population density in many rural areas accounts, in part, for the 

disparity. Installed generation in the region has been stagnant over several decades.9

 In 

South Africa, despite increasing demand, long-anticipated private investment to expand 

generation capacity did not materialize for more than a decade. Finally, in 2004, the 

government authorized its state-owned electric utility company Eskom to significantly 

expand generation capacity. However, by that time, long-predicted declines in excess 

electricity reserves had materialized, foreshadowing recent disruptions in electric power 

 3

 ICA, “Significant Increase in Commitments to Infrastructure Projects in Africa,” July 2008, 1. In 

addition to the World Bank, the total includes financing from member governments of the G8 countries, the 

European Commission and European Investment Bank, the African Development Bank (AfDB), and other 

African institutions. 4

 Foster, et al., “Building Bridges,” 2008, 26. 

5

 Electricity is generated (produced) by the combustion of fossil fuels, a nuclear reaction, or the 

controlled release of renewable energy to drive turbines. Except for electricity captured for the generator’s 

own use, electricity produced is transported from generators along high voltage transmission networks (grids) 

in bulk to large industrial users or to a distribution network of lower voltage electricity lines and substations 

through which distributors provide electricity to consumers. (Definition adapted from WTO, Council for 

Trade in Services (CTS), “Energy Services,” September 9, 1998, 5.) 6

 ICA, “Power Supply Situation in Africa,” March 13–14, 2008. 7

 These countries include the Democratic Republic of the Congo (DRC), Mozambique, and Zimbabwe 

(2 to 3 GW each), and Côte d’Ivoire, Ghana, Kenya, and Zambia (between 1 and 2 GW each). 8

 One MW equals one million watts and one kW equals 1,000 watts, where watts measure power (the 

flow of electric current). In comparison, the measurement of power consumed over a period of time is 

expressed in watt-hours, i.e., the number of hours in which one watt is consumed continuously. (Definition 

adapted from Energy Industry Issues Newsletter, “What Is a Megawatt?” June 24, 2003.) 9

 IMF, Regional Economic Outlook, April 2008, 74. 
5-4 

consumption there and in certain neighboring countries to which South Africa exports 

electricity.10

Electricity generation infrastructure in many SSA countries is inefficient and costly for 

several reasons. First, about one-third of installed capacity in East and West Africa relies 

on diesel fuel to drive power-plant generators, costing at least $0.20 per kWh more to 

operate than hydroelectric systems. Second, small electricity systems with a capacity 

below 200 MW, which are installed in most countries throughout the region, lack 

economies of scale and thus cost more to operate per kWh than larger systems. Electric 

power system operating costs per kWh are also higher in landlocked countries than in 

coastal countries, due in part to the cost of importing equipment and fossil fuel.11 Third, 

about one-fourth of SSA’s entire installed generation capacity is not in operating 

condition. For example, in Nigeria only 19 of 79 installed generating units operated in 

200112 and only one-third of the turbines were able to operate recently at the Democratic 

Republic of the Congo’s (DRC) chief generation facility.13 

Major reasons for operational deficiencies include natural causes, especially drought for 

hydropower facilities (drought directly affects the ability of hydropower plants to 

maintain sufficient water levels at adjacent dams in order to operate); increasingly 

overextended use of decades-old generation infrastructure; political conflicts; and the 

inability of management to contain costs and technically balance electricity supply and 

demand. Water and power rationing and power outages have frequently affected Kenya 

and Ghana, 14 among many other countries highly dependent on hydropower for 

generation. Projected growth in demand for electricity in SSA for the next 20 years could 

average 5 percent per year, while investment growth rates in electricity infrastructure in 

recent years have lagged behind demand.15 Political conflicts have damaged electricity 

infrastructure in all regions of SSA over time and in at least nine countries as recently as 

2007. 16 Rehabilitation and maintenance have received low budget priorities by SSA 

governments for at least a decade. As a result, engines wear out prematurely, fuel and 

lubricant usage increases, and capital costs per unit of electricity produced also 

increase.17 In South Africa, capital costs per unit have increased in recent years because 

of the necessity to schedule more frequent plant maintenance on its system to keep pace 

with high demand. 

In recent years, at least nine countries’ governments leased a total of approximately 700 

MW of emergency power generation equipment for one to three years as a rapidly 

deployable, although costly, temporary solution to electricity shortages. In countries such 

as Madagascar, Rwanda, Sierra Leone, and Uganda, electricity produced by leased 

 10 Industry official, interview by Commission staff, Johannesburg, South Africa, October 14, 2008. 11 IMF, Regional Economic Outlook, April 2008, 78–79. 12 Ex-Im Bank, “Power Projects in Africa,” April 17–18, 2008, 38. 13 ICA, “Power Supply Situation in Africa,” March 13–14, 2008. 14 UNECA, Economic Report on Africa 2004, 2004, 130. For example, though far apart geographically, 

these countries experienced annual declines of at least 3 percentage points in GDP as a result of electricity 

disruptions due to droughts in the late 1990s. Droughts in recent years continued to interfere with the 

generation of electricity in countries such as Kenya, which could produce power for only a few hours per day 

in 2007. 15 Richards, Written testimony to the USITC, October 28, 2008, 3. 16 IMF, Regional Economic Outlook, April 2008, 76. 17 UNECA, Economic Report on Africa 2004, 2004, 131. 
5-5 

equipment constituted more than 30 percent of the total installed capacity and cost the 

countries at least 2 percent of their GDP.18

Electricity transmission infrastructure (the national electricity grid) is deficient in much 

of SSA. Increased instances of transmission system failure due to inadequate funding of 

equipment and facility maintenance, repair, and replacement adversely affect many SSA 

countries. For example, in 2008, the South African utility Eskom reported its worst 

transmission system performance since 2002, attributable largely to equipment 

malfunctions. 19 In SSA, transmission grids often span substantial distances between 

generation and distribution centers, which contribute to system failure. Moreover, 

electricity grids in certain countries are incompatible with each other, as they operate on 

different frequencies and voltages or use different equipment standards. 20 Further, 

numerous national grids are not sufficiently developed to connect to transmission systems 

in neighboring countries.21 

Like the high-voltage transmission infrastructure that carries generated electricity to 

distributors, the distribution infrastructure in SSA experiences high technical and 

nontechnical system losses.22 While the international standard for losses ranges from 10 

to 12 percent, some countries in SSA have experienced losses exceeding 30 percent,23

with most of the difference attributed to nontechnical losses. Examples of nontechnical 

losses include illegally taking electricity from distribution lines, theft of distribution 

equipment, tampering with electricity meters, or distributors’ failure to replace old or 

faulty electricity meters. Another key problem for many of the region’s distribution 

companies is the failure of customers to pay electricity bills in full or on time. 

Governments themselves are often culpable. For example, a previous Kenyan 

administration owed its distribution utility company the equivalent of 9 percent of the 

company’s annual revenues early in 2002.24 Distribution companies in certain countries 

introduced prepayment meters or enhanced billing mechanisms to minimize nonpayment 

or delayed payment problems. 

Lost revenues from nontechnical losses especially affect distribution companies already 

disadvantaged by low rate levels, limited government funding, and minimal private 

investment available to upgrade and repair distribution networks. In Ghana, for example, 

each of these factors inhibited improvements in the distribution system, much of which is 

 18 IMF, Regional Economic Outlook, April 2008, 77. Under a lease, small-capacity electricity 

generation equipment can be installed and begin providing power within a few weeks. Generators usually use 

diesel fuel priced at about $0.35 per kWh, which is at least two to three times more expensive than power 

supplied over the national grid. 19 Eskom, Together, Rising to the Challenge, 2008, 56–57. 20 Services Group, Review of the Regulatory Framework, September 2007, 16–17. Incompatibility in 

transmission systems even exists within the same country, as is the case in the DRC. The situation is 

attributable to the development of separate regional electric companies, each under different technical 

criteria, prior to the government’s formation of a single vertically integrated electricity company. 21 SAICE, “The SAICE Infrastructure Report Card for South Africa: 2006,” undated (accessed 

September 24, 2008), 14; Mbogo, “Africa: Electricity Managers Agree on Uniform Standards,” June 25, 

2008. 22 UNECA, Economic Report on Africa 2004, 2004, 129. Technical losses occur in the form of heat lost 

over long distances between electricity production and consumption centers. When voltage lines are too thin, 

the result is greater pressure and higher electricity loss. Technical losses occur in every electricity 

transmission and distribution system, and may be minimized by incorporating advanced technology and 

equipment, technically proficient management, and scheduled maintenance. 23 Redwood-Sawyerr, “Widening Access in the Context of Power Sector Reform,” May 21–22, 2002, 

11. Countries in SSA with high distribution losses include Nigeria, Sierra Leone, Sudan, and Uganda. 24 UNECA, Economic Report on Africa 2004, 2004, 131. 
5-6 

more than 30 years old.25 Inadequate distribution systems, especially at the municipal 

level or in smaller urban areas, are common to many SSA countries. When generation 

and distribution networks are out of balance with respect to electricity supply and 

demand, brownouts and forced power outages typically follow. 

A shortage of skilled engineering personnel is common in each of the electricity 

infrastructure segments. In South Africa, for example, engineering professionals state that 

the inadequacy of operation and maintenance capacity is at least partially the result of the 

undersupply of skilled personnel, especially in municipal distribution networks outside 

major urban areas.26

Energy sources currently used in electricity generation in SSA (table 5.1) are only a small 

fraction of the proven potential. As a region, SSA holds enormous potential for future 

electricity generation, including major reserves of traditional fossil fuels such as coal and 

natural gas; renewable resources for hydroelectric power and geothermal energy; and 

uranium for nuclear power. 27 Furthermore, these resources are distributed widely 

throughout SSA countries, although many of the energy sources with the highest 

potential for electricity generation are in countries located far from areas with high 

demand for electricity. Other countries with high potential for electricity generation are in 

the midst of or recovering from political upheaval. In most cases, countries’ economies 

are too small to raise sufficient capital for major power generation projects, meaning that 

external financing must be secured.28

TABLE 5.1 Energy sources used to generate electricity in 10 leading SSA countries, 2005 

 

Energy source (%) 

Country 

Generation 

(gWh)a Coal 

Natural 

gas 

Hydroelectric Crude 

oil 

Geothermal Nuclear Other 

South Africa 244,920 93 (

b

) 2 

 

5 (

b

) 

Nigeria 23,539 53 34 13 

Mozambique 13,285 (b

) 100 (b) 

Zimbabwe 10,269 43 57 (b

) 

Zambia 8,938 (b

) 99 (b) 

DRC 7,419 100 (b

) 

Ghana 6,788 79 21 

Kenya 6,003 50 30 15 5 

Côte d’Ivoire 5,570 74 26 (b

) 

Cameroon 4,145 94 6 

Source: OECD, IEA Web site. http://www.iea.org/Textbase/stats/ (accessed August 7, 2008). 

 aGigawatt hours. bLess than 0.5 percent. 

 25 University of Ghana, Resource Center for Energy Economics and Regulation, Guide to Electric 

Power in Ghana, July 2005, 39. 26 SAICE, “The SAICE Infrastructure Report Card for South Africa: 2006,” undated (accessed 

September 24, 2008), 15; News24.com, “Engineer Shortage Causes Havoc,” August 26, 2008. A 

representative of an institute of South African electrical engineers stated that the country produced 45 

engineers per million people, far below levels in the United States, China, and India. 27 Although off-grid solar power is sometimes used in rural areas of Africa for public buildings such as 

hospitals and for residential uses such as lighting, it has generally not been used in the industries covered in 

chap. 6 of this report because industrial processes typically require more and steadier electricity than off-grid 

solar power has been able to provide. 28 IMF, Regional Economic Outlook, April 2008, 78. 
5-7 

Service Providers 

The principal service providers in the electric power sector include national, and in 

certain countries, municipal utility companies. Other participants—with important 

responsibilities in several countries—include independent power producers (IPPs), to a 

lesser extent independent power distributors (IPDs), and also firms that manage and/or 

operate parts of or the entire electric power sector in certain countries.29 Most electric 

utility companies in SSA remain state owned and vertically integrated. Through 

government reforms, numerous SSA electric utility firms have improved their financial 

performance in recent years. Nonetheless, such firms generate, at best, revenues 

sufficient to offset operating costs but insufficient to finance system maintenance or 

expansion.30 

Eskom is by far SSA’s largest electric power utility. In 2008, the South African 

government-owned utility holding company generated about 95 percent of the electricity 

consumed in South Africa and 45 percent of the electricity in all of Africa.31 Eskom 

ranked ninth in electricity sales and thirteenth in generation capacity among the world’s 

leading electric utilities in 2008. Despite its large size and predominance in electric 

power generation, Eskom is not a legal monopoly provider of electricity services in South 

Africa, except with respect to the national transmission grid.32 A subsidiary of the Eskom 

holding company operates electricity generation concessions in Mali, Uganda, and 

Zambia. Although its sales growth and return on assets (3 percent each) slowed markedly 

in 2008 compared to the previous year, Eskom’s investment rating enabled its vast, longdelayed electricity network expansion and upgrade program to proceed. Nevertheless, 

increased coal prices and unforeseen reliance on costly diesel-fueled power plants 

propelled a 40 percent increase in Eskom’s energy costs in 2008.33

IPPs have generated electric power in SSA countries where electricity sector reforms and 

market conditions provide for their inclusion and encourage private investment. 

Nevertheless, IPPs are less prevalent in SSA than in other developing regions of the 

world. One reason is that locally denominated finance is not widely available, which may 

leave IPP projects vulnerable to currency fluctuation, as occurred in numerous SSA 

countries in the 1990s. Another is that terms of numerous IPP contracts negotiated during 

periods of crisis for electricity generation were later subject to renegotiation (some to 

arbitration or termination) as stakeholders and host governments faced changed 

electricity market conditions in several SSA countries.34 Although the cost of electricity 

generated by IPPs usually surpasses that generated by state-owned companies, the 

reliability of IPP-produced electricity is generally superior. For example, IPPs in Kenya 

had an average electricity availability of 95 percent compared to 60 percent for the oil- 

 29 In addition, technical, construction, and commercial specialists, system developers, and others 

participate in various preliminary processes over many years prior to an electric power system becoming 

technically operational and subsequently able to provide electricity commercially. These participants are not 

included in this analysis. 30 IMF, Regional Economic Outlook, April 2008, 80. 31 Eskom, Together, Rising to the Challenge, 2008. Data for Eskom in 2008 are for the period April 1, 

2007, through March 31, 2008. 32 In addition to generation and transmission activities, Eskom is responsible for the distribution of 

electricity to consumers directly and to 187 municipal councils in South Africa which in turn distribute and 

sell electric power in their jurisdiction. Further, Eskom imports and exports electricity, and conducts research 

and development in energy technologies. The company also provides technical, operational, and other 

expertise and collaboration with international and regional bodies. 33 Eskom, Together, Rising to the Challenge, 2008. 34 Gratwick and Eberhard, “An Analysis of Independent Power Projects,” October 2007, 43–45. 
5-8 

fired thermal generation plants of the Kenya Generation Company (KenGen) from 2004 

through 2006.35 With regard to distributors, to date, IPDs have participated in only a few 

SSA countries: Ghana, Namibia, South Africa, Uganda, and Zimbabwe. 36 Few SSA 

governments have opened this segment of the electricity sector to independent firms or 

provided incentives to encourage investment in distribution by prospective IPDs. 

The large U.S.-owned electricity services provider AES is the only known multinational 

corporation to own, operate, and manage a vertically integrated national utility in an SSA 

country (Cameroon). In 2001, AES acquired a 56 percent stake, 37 which included 

operation and management contracts, in the vertically integrated national electric utility 

renamed AES-SONEL, under a 20-year concession. An amendment to the concession 

agreement in 2006 provided for significantly higher rates and the ability to pass through 

to consumers a portion of fuel cost increases in years that deficient rainfall affects 

hydropower plants. In exchange, AES agreed to upgrade generation, transmission, and 

distribution facilities; reduce the costs of connecting new customers; and more than 

double the number of consumers served in the remaining 15 years of the concession.38

Prior to the amended concession, AES-SONEL constructed an 85 MW oil-fired thermal 

power plant in 2004 to partially alleviate brownouts and load-shedding in periods of 

insufficient rainfall. 

Effects of Electricity Infrastructure Conditions on Export 

Competitiveness 

With few exceptions, electricity provided over national grids in SSA countries is not 

sufficiently affordable, reliable, or accessible. These adverse conditions impede regional 

and national economic growth, unfavorably affect the export competitiveness of existing 

SSA firms, and inhibit the development of manufacturing, agricultural product 

processing, and service industries. 

Industrial firms in numerous countries in the region are negatively affected by extremely 

high electricity prices—some among the highest in the world—for publicly available 

power. 39 Moreover, the cost of connecting to electricity grids varies widely among 

countries. For example, average costs per connection in 2001 ranged from $240 in South 

Africa to over $1,000 in rural Kenya and Uganda.40 Industry representatives and other 

experts cited high cost as the dominant concern regarding electricity infrastructure. For 

example, sources stated that more than 60 percent of coffee processing plants in Uganda 

ceased operations in recent years due in part to high electricity rates that prevented firms 

from using electric-powered equipment that would have allowed them to upgrade 

 35 Gratwick and Eberhard, “An Analysis of Independent Power Projects,” 2008, 329, 333. 36 UNECA and UN-Energy/Africa, “Energy for Sustainable Development,” May 2007, 57. 37 The government of Cameroon owns the remaining shares and the integrated generation plants and 

distribution facilities. 38 AES, Form 10-K, Year Ended December 31, 2007, March 17, 2008, 32. 39 IMF, Regional Economic Outlook, April 2008, 75. The $0.13 per kWh average electricity rate among 

SSA countries is approximately twice as high as the average for developing countries elsewhere. 

Alternatively, certain SSA governments set rates artificially low (often below the cost of production) on 

electricity supplied through the grid, while business sectors may be required to pay higher rates than other 

sectors to support the low social rate. 40 OECD, IEA, World Energy Outlook 2002, 2002, 381. 
5-9 

efficiency and remain competitive.41 By contrast, at least one-half of the coffee producers 

in Latin America use electric power in the pulping processes of coffee production.42

Similarly, shea butter producers in Burkina Faso stated that electricity rates, which are 

among the highest in SSA, significantly reduced operating capital available for 

investment in electrical equipment needed to improve product quality and efficiency.43 A 

multinational firm reported that its manufacturing facility in Kenya paid twice as much 

for electricity compared to its similar plants in Asian countries.44 A textile exporter in 

Chad—a country without a national grid— reported the closure of its operations largely 

due to the high costs of diesel-fueled electric power, which prevented it from competing 

with firms in neighboring countries or in Asia.45

Manufacturing firms in SSA reported that power outages occurred, on average, 

approximately 56 days per year, reducing sales by 5–6 percent. 46 Interruptions in 

electricity—by outages (prolonged or frequent) or voltage fluctuations—especially 

disrupt industrial consumers that depend on continuous electric power supply. For 

example, in South Africa, sudden, unscheduled power outages in January 2008 severely 

affected textile firms that were located outside of priority industrial areas not subject to 

blackouts.47 

Theft and unreliable electricity provision in SSA, often from outdated and poorly 

maintained transmission and distribution networks, reduce the revenue earned by 

industrial producers by an estimated 6 percent per year.48 Largely due to unreliable 

electricity supply, approximately one-half of all manufacturers in SSA are obliged to use 

backup diesel- or gas-fired generators at a cost approximately four times higher per kWh 

than that from electricity grids. For example, in a recent survey, 70 percent of firms in 

Kenya reported that they had acquired generators to compensate for frequent loadshedding and for the generally unreliable electricity from the grid.49 Auxiliary electricity 

is often a necessity for African firms in order to adhere to contractual delivery schedules 

but it generally raises costs and reduces competitiveness. 

For many firms—especially small- and medium-sized firms—the cost of purchasing and 

operating generators is prohibitive.50 Firms in Kenya and Rwanda stated that the use of 

fossil fuel-fired backup generators increased electricity costs by 20–50 percent and total 

production costs by up to 25 percent.51 Several firms in different countries noted that they 

purchased multiple generators to maintain continuous power supply when a generator 

required maintenance. Other firms stated that grid-provided electricity was so unreliable, 

 41 Industry official, interview by Commission staff, Kampala, Uganda, October 22, 2007. For more 

information on the coffee industry in SSA, see chap. 6 of this report. 42 USITC, Hearing transcript, October 28, 2008, 55 (testimony of Scott Clark, TechnoServe). 43 Industry officials, interviews by Commission staff, Ouagadougou, Burkina Faso, October 23, 2008. 

For more information on the shea butter industry in SSA, see chap. 6 of this report. 44 Industry official, interview by Commission staff, Nairobi, Kenya, October 31, 2008. 45 USITC, Hearing transcript, October 28, 2008, 37–38, 80 (testimony of Christopher Goldthwait). For 

more information on SSA’s textiles and apparel industries, see chap. 6 of this report. 46 IMF, Regional Economic Outlook, April 2008, 75. 47 Industry official, interview by Commission staff, Johannesburg, South Africa, October 14, 2008. 48 Foster, et al., “Building Bridges,” 2008, ix. 

49 Ramachandran, “Power and Roads for Africa,” March 2008, 6; Ramachandran, Written testimony to 

the USITC, October 27, 2008. 50 Ramachandran, “Addressing Africa’s Infrastructure Crisis,” October 7, 2008; UNECA, Economic 

Report on Africa 2004, 2004, 126. 51 Industry officials, interviews by Commission staff, Mombasa, Kenya, October 28, 2008, Nairobi, 

Kenya, October 29, 2008, and Kigali, Rwanda, November 3, 2008. 
5-10 

they used their own generators exclusively for all production processes, reserving gridsupplied electricity for operations unrelated to production.52

Overall, electricity is inaccessible to more than 80 percent of the population in many SSA 

countries. 53 Most businesses outside major cities lack access to electricity through a 

national grid. Insufficient access to electricity increases the cost of establishing 

businesses that could sell products and services to existing export firms or become 

exporters themselves. 

Efforts to Improve the Electricity Sector 

Nature and Objectives of Electricity Sector Reforms 

Historically, electric utilities in SSA operated as branches of the government singularly 

responsible for the provision of electricity generation, transmission, and distribution. 

Today, most SSA electric utilities operate as government-owned companies directed by 

government-appointed boards. Few governments in the region have reformed or 

privatized their electricity sector to the extent that governments have in other world 

regions. 

Beginning in 1993, major multinational lending institutions led by the World Bank 

adopted a policy of lending in the electricity sector only where national governments 

instituted legislative, regulatory, and/or structural reforms in the sector based on longterm, coherent planning, priorities, and policies. International lenders determined that, 

overall, government ownership and management of the electricity sector had been poorly 

conceived and exercised and that it operated without regard for commercial principles. 

Lenders sought reforms whereby governments would engage in a process to improve 

electric utilities significantly and to transform the ownership and management of a stateowned electric utility in order to attract more investment and expertise into the sector. 

Reforms would encourage competition in electricity generation and distribution where 

economically feasible, while recognizing that competition is not technically or 

economically justifiable in electricity transmission.54 Moreover, lender-initiated reforms 

generally support regulatory transparency, independence, and impartiality with regard to 

providers and consumers of electricity.55 

More than four-fifths of SSA governments have instituted sector reforms to some degree. 

The principal goals of reforms undertaken thus far in the region were to increase the 

financial viability of state-owned electric utilities, to attract investment needed to 

substantially increase electricity generation, and, in some cases, to provide electricity to 

underserved populations. 56 About two-thirds of the countries converted their electric 

utilities into companies, which for the most part are directed by boards appointed by the 

government, but remain government owned. SSA governments mostly retained vertically 

 52 Industry official, interview by Commission staff, Abidjan, Côte d’Ivoire, October 31, 2008. 53 OECD, IEA, World Energy Outlook 2006, 2006, 565–69. In a few countries, however, such as Côte 

d’Ivoire, Mauritius, and South Africa, as much as 50 percent of the population has access to electricity. 54 UNECA, “Utility Regulation in Africa,” November 2007, 4. In general, governments require that 

electricity transmission remains a monopoly, due to the prohibitive cost and the impracticality of duplicating 

transmission infrastructure spanning vast territory. 55 UNECA, Economic Report on Africa 2004, 2004, 133–34. 56 UNECA and UN-Energy/Africa, “Energy for Sustainable Development,” May 2007, 58. 
5-11 

integrated companies, in contrast to the tendency of governments in other regions to 

create separate companies for each function in the sector as a means to instill competition 

in generation and/or distribution. Exceptions include the governments of Uganda and 

Zimbabwe, which unbundled all three functions in separate companies, and the 

governments of Ghana, Kenya, Lesotho, and Mozambique, which split the three 

functions among two companies. Generally, the rationale for unbundling was to 

encourage competition and investment in generation, although most of the separated 

companies remain government owned.57

Few governments in SSA have taken major steps to privatize state-owned electricity 

assets in generation and distribution. As initial steps, governments in about six countries 

in East and West Africa have entered into management contracts with consultants in an 

effort to improve their utilities’ performance. Côte d’Ivoire awarded a second consecutive 

15-year concession to operate and manage its state-owned power company upon 

conclusion of the first concession in 2005. Actual private ownership of parts of the stateowned electricity sector in SSA is rare but exists, for example, in Cameroon. However, 

two attempts by Senegal to privatize its state-owned electricity utility ended without 

success.58

An important aspect of reform is the effect on electricity rates. In many SSA countries 

electricity rates are high, but in certain countries they are kept artificially low through a 

subsidy. In several SSA countries, electricity legislation and regulations provided for, and 

encouraged participation by, IPPs in generation, in part by facilitating higher rates on 

electricity for consumers, including businesses. Rate increases reflected IPPs’ use of 

increasingly expensive fossil fuel to generate electricity, especially to cover periods of 

extraordinary peak demand or disruptions in the supply of electricity from other fuel 

sources. In certain instances, rates were increased to compensate IPPs for the limited time 

in which to recover investment costs and earn a return on investment. In certain other 

countries, however, regulators or government ministries set rates too low to attract 

investment from IPPs, because governments set a higher priority on keeping rates 

affordable than on recovering actual costs of providing electricity.59

About one-half of SSA governments have established a regulator for electricity. 

Multilateral lenders regard the extent to which the regulator is independent as an 

important benchmark in evaluating the efficacy of electricity sector reform.60 In general, 

the ability of regulatory agencies in SSA to make final decisions on electricity rates 

independent of government or other party influences varies in SSA.61 Another indicator 

of independence is the degree to which the process used by heads of state or ministers to 

appoint members of the regulatory body is transparent and consultative. By this measure, 

there are relatively few fully autonomous electricity sector regulatory agencies in SSA.62

Regulatory agencies in many countries are new, sparsely funded, and have limited 

expertise and training. Industry representatives note that problems with regulatory 

 57 UNECA and UNEP, Making Africa’s Power Sector Sustainable, September 2007, 63–65. 58 Prasad, “Energy Sector Reform,” March 2006, 30. In the first case, a public-private partnership 

ended after investment objectives for generation could not be met and further deterioration of electricity 

sector infrastructure occurred, resulting in load-shedding. In the second attempt, negotiations over a tender 

offer failed. 59 UNECA and UNEP, Making Africa’s Power Sector Sustainable, September 2007, 67. 60 UNECA, Economic Report on Africa 2004, 2004, 142; UNECA “Utility Regulation in Africa,” 

November 2007, 6, 7, 14. 61 UNECA, “Utility Regulation in Africa,” November 2007, 2. 62 UNECA and UNEP, Making Africa’s Power Sector Sustainable, September 2007, 69–71. 
5-12 

agencies may stem from the government and regulator not establishing clear and 

consistent electricity sector policies.63

Investment in Electric Power Infrastructure 

In 2007, investment surged in electricity infrastructure projects in SSA. Significant 

increases in financial commitments came from traditional sources and the private sector, 

and funding commitments from nontraditional sources continued the strong growth 

pattern of recent years.64 Partial-year data for Aug.–Nov. 2008 show that the worldwide 

financial crisis and other factors slowed the growth of overall infrastructure investment in 

SSA compared to the same period in 2007, although to a lesser extent than in other 

developing regions. Higher costs of financing affected a number of these projects, while 

others were canceled or potentially delayed.65

Financial commitments to electric power projects in SSA increased in 2007 over the 

previous year by 62 percent to $3.9 billion, including funding from the World Bank and 

other traditional multinational and bilateral project financiers.66 Nevertheless, the World 

Bank estimated that the electricity sector in SSA requires financing of about $8.3 billion 

annually between 2005 and 2015 to upgrade plant and equipment ($5.2 billion) and to 

provide for adequate operation and maintenance ($3.1 billion).67 The World Bank is the 

principal lender and guarantor in the SSA electric power sector. The bank’s involvement 

widened in recent years beyond traditional, individual-country support to include 

numerous large-scale regional projects to expand generation capacity and to upgrade, 

extend, and interconnect transmission facilities (table 5.2). Its projects have sought to 

increase access to electricity and to develop reliable, sustainable, and affordable energy, 

especially in the poorest and most remote areas. The bank supports efforts to provide 

technical, financial, and management expertise to governments, electric utilities, and 

regulatory agencies. 68 Such efforts enable projects to reach financial or contractual 

closure sooner and improve financial, operational, and regulatory performance. 69 In 

recent years, the African Development Bank (AfDB), the continent’s major multinational 

development bank, has expanded its support of electric power projects. A key example of 

current projects at least partially funded by the AfDB is the rehabilitation of existing 

hydropower facilities and the related distribution system overhaul in the DRC.70

 63 Industry official, interview with Commission staff, Johannesburg, South Africa, October 15, 2008. 64 Data on electricity sector investment in SSA in 2008 are not yet available. 65 World Bank, PPI Advisory Facility, “Financial Crisis Affecting New Private Infrastructure Projects,” 

undated (accessed January 9, 2009). 66 ICA, “Significant Increase in Commitments,” July 2008, 1. 67 Foster, et al., “Building Bridges,” 2008, 26. 

68 Current examples of the World Bank’s capacity-building activities in the sector include developing 

approaches to increase synergies among government agencies in Burkina Faso, electricity regulatory reforms 

in Eritrea, improvements in system efficiency and the electric utility’s financial standing in Guinea, 

assessments of options for policy and regulatory frameworks for renewable energy in South Africa, and 

technical assistance for transmission and distribution efficiency improvements in Zambia. 69 Closure occurs when private sponsors make a legally binding commitment to provide funding or 

services. The definition of financial or contractual closure varies according to the type of private 

participation. For example, financial closure occurs when equity holders or debt financiers commit to provide 

or make available full funding on a greenfield project. Contractual closure occurs when a private entity signs 

a contract that authorizes commencement of management or leased services, or a concession. World Bank, 

“Methodology,” Private Participation in Infrastructure Database, undated (accessed March 27, 2009). 70 Other important AfDB involvement includes the Bujagali transmission interconnection project in 

Uganda, the Zambia–Tanzania–Kenya interconnection project to link Tanzania and Kenya to the Southern 

African Power Pool (SAPP), and generation projects in Mozambique and Tanzania. 
5-13 

Table 5.2 Select infrastructure investments in SSA electricity generation projects 

Country/region Investment Major stakeholder(s) 

Country: 

 Botswana Develop coal mining and coal-fired 

electricity plant at Mmamabula to 

generate up to 4,200 MW, mostly for 

export to South Africa 

Expand Morupule coal-fired power 

station from current 132 MW to 

1,200 MW 

First IPP in Botswana: CIC Energy 

Corp. (Canada) 

Botswana Power Corporation or 

government of Botswana, 

international financial institutions 

 Democratic Rep. of the 

 Congo (DRC) 

Refurbish hydroelectric plants (Inga 

1 and 2, others) 

African Development Bank 

 Ghana Make grants to developers of 

renewable energy technologies to 

electrify rural areas 

World Bank, government of Ghana, 

Volta River Authority, Electric 

Company of Ghana 

 Kenya Expand capacity of existing 

hydroelectric plants 

Expand capacity at existing 

geothermal generation plants and 

develop new plants at sites under 

evaluation 

Kenya Electricity Generating 

Company (KENGEN) 

KENGEN, World Bank, European 

Investment Bank, government of 

Kenya 

 Mozambique Expand capacity of existing Cahora 

Bassa hydroelectric plant and 

develop new hydroelectric plants 

Develop coal mining and coal-fired 

electricity plant at Moatize coal field 

Various, including Ex-Im Bank 

(China) 

 Nigeria Construct country’s largest 

hydroelectric plant (2,600 MW) 

Refurbish dams and design and 

build various sized hydroelectric 

dams 

Government of Nigeria, Ex-Im Bank 

(China) 

Government of Germany and 

German firms, Aqua Energy (Norway) 

 Uganda Develop 250 MW of hydroelectric 

power capacity at new plant 

(Bujagali) 

Sithe Global Power (U.S.), 

government of Uganda, World Bank 

Region: 

 

 Angola, Botswana, DRC, 

 Namibia, and South Africa 

Develop 3,500 MW of new 

hydroelectric plant capacity (Inga 3 

in the DRC) 

Western Power Corridor 

(WESTCOR), a joint-venture 

company owned by the electric utility 

companies of the five countries 

 Burundi, Rwanda, and 

 Tanzania 

Develop hydroelectric generation 

capacity at Rusumo Falls on the 

Rwanda–Tanzania border, and 

related transmission infrastructure 

for interconnection among the three 

countries (key project to eventually 

link the East African Community to 

the Southern African Power Pool) 

World Bank 
5-14 

 

TABLE 5.2 Select infrastructure investments in SSA electricity generation projects─Continued 

Country/region Investment Major stakeholder(s) 

 Ethiopia, Kenya, and 

 Uganda 

Jointly develop hydroelectric plants 

to be established in Ethiopia and 

Uganda, with portions of electricity to 

supply Kenya 

Governments and electricity 

companies of the three countries 

Sources: Ekanem, “Nigeria: Manufacturing Under Stress,” October 2008, 75; Corporate Council on Africa 

(CCA), “Projects in the Pipeline,” October 6–8, 2008, 1–13; Cuambe, “Workshop: Large Project Finance,” 

February 7, 2008; Ex-Im Bank, “Power Projects in Africa,” April 17–18, 2008; and Foster, et al., “Building 

Bridges,” 2008, 65–66. 

Financing for electricity infrastructure projects in SSA changed substantially in recent 

years with increased participation from nontraditional sources, especially China but also 

India 71 and Middle Eastern countries. 72 Africa supplies approximately 30 percent of 

China’s oil imports and certain electric power projects financed by the government of 

China are secured by promises to supply additional petroleum to China. Chinese 

investment is often linked to natural resource development in SSA (box 5.1). For 

example, a China-financed hydroelectric power facility construction project will provide 

electricity to Chinese-owned mining operations in Guinea. 

Until recently, reported private participation in electricity infrastructure projects in SSA 

was minimal. From 1990 through 2007, less than one-half of the countries reported more 

than one such project with private participation.73 From 1990 through 2005, only a few 

countries reported investment commitments totaling more than several hundred million 

dollars. Before 2007, only Cameroon reached contractual closure on an electric power 

project valued at more than $500 million that involved a private-sector participant—its 

2001, $532 million, 20-year concession to power corporation AES (U.S.). 

In 2007, however, the largest private-equity holding in an electric power sector project in 

SSA reached financial closure. Uganda finalized financing on new generation facilities, 

including the 250 MW Bujagali hydropower plant, awarded under a 30-year buildoperate-transfer contract to a consortium led by Sithe Global Power (U.S.), which holds a 

58 percent stake74 in the $799 million investment commitment. 

 71 Investments by India’s Ex-Im Bank chiefly involve a multibillion-dollar deal to build an oil refinery 

and power plant in Nigeria, and construction of an oil pipeline and four combined cycle power plants and an 

associated transmission system in Sudan. India purchased oil exploration rights in the region as well, which 

illustrates an approach similar to that of China concerning participation in natural resource development in 

Africa. 72 From 2001 through 2007, Middle Eastern country donors participated mostly in relatively small 

electricity projects that together totaled about $3.6 billion. The projects are located in many SSA countries, 

especially ones with sizable Islamic populations. Usually, multiple Middle Eastern donor agencies combine 

resources to finance electricity projects, such as a hydropower project in Sudan, in which China’s Ex-Im 

Bank also participated. 73 Fifteen countries in the region reported no electricity infrastructure projects involving private 

participation and 12 additional countries reported only one. 74 The Aga Khan Fund of Switzerland holds a 31 percent stake. 
5-15 

BOX 5.1 China’s Investments in Electricity Infrastructure in Sub-Saharan Africa 

From 2001 through 2007, China channeled one-third of its investments in SSA’s infrastructure to electricity 

projects (the most of any infrastructure sector) chiefly through China’s Export-Import (Ex-Im) Bank. These 

Chinese investments mainly provide for Chinese firms to construct dams and related hydroelectric plants 

that increase generation capacity. During this period, China invested $5.3 billion in electricity projects in 16 

SSA countries, with $3.3 billion invested in 10 hydropower projects in nine countries, which could increase 

installed generation capacity in the region by 30 percent when completed. Four of the ten projects would 

more than double the hydroelectricity generation currently installed in the host countries. To date, the 

principal recipients of Chinese investment in hydropower projects have been Angola, Ethiopia, Nigeria, and 

Sudan. In addition to hydropower, China invested in the construction of thermal power generation facilities, 

primarily in Nigeria and Sudan. Apart from generation, China also invested in transmission facility 

construction projects in Angola and Tanzania. Because OECD member countries have agreed to adhere to 

a more stringent risk criteria (compared to China) for infrastructure project finance in developing countries,a

China has been able to increase its financial support of electric power and other infrastructure projects in 

SSA. Nevertheless, collaboration between traditional multilateral donors and China is likely to increase with 

the signing of memoranda of understanding between China’s Ex-Im Bank and the World Bank in 2007 and 

the AfDB in May 2008, providing for information exchange and the possibility of shared participation in future 

infrastructure projects. China’s participation in electric power projects is widely perceived by African funding 

sources as complementary to that of traditional multilateral and bilateral sources.b

 

_____________ 

 a Government representative, interview by Commission staff, Washington, DC, September 18, 2008. b Foster, et al., “Building Bridges,” 2008. 

Regional Integration Initiatives 

Uneven development of available energy resources within countries and regions of SSA 

exist alongside inefficient and unreliable electricity infrastructure, presenting few viable 

solutions to many SSA governments individually. Potential solutions increasingly center 

on regional development of large-scale generation projects and cross-border electricity 

transmission and distribution infrastructure.75 Moreover, regional electric power pools 

such as the Southern African Power Pool (SAPP), established in 1995, 76 will likely 

evolve from current cooperative arrangements to eventually allow for competitive power 

trading, but not without first solving complex technical, financial, and political issues.77

For example, extensive transmission system upgrades, regulatory harmonization, and 

operational synchronization among utilities in different countries are prerequisites for 

initiating significant expansion of electricity trading. 78 Nevertheless, countries have 

already realized benefits from collaborations within the SAPP, including reduced capital 

and operations expenditures and lower requirements for reserve margins of electricity at 

 75 Industry and government officials, interviews by Commission staff, Washington, DC, October 7–8, 

2008. 76 WEC, The Potential for Regionally Integrated Energy Development, 2003, 34. The SAPP was the 

first power pool established anywhere in Africa. The electric utilities of twelve countries are members of the 

SAPP, which includes companies from the member countries of SADC. The SAPP was established to allow 

members to coordinate planning and operation of their respective electricity systems, while benefiting from 

making surplus electric power available to other members on one-day’s notice. The SAPP was established 

during a period when its largest member, South Africa’s Eskom, had abundant surplus electric power 

available, which is no longer the case. Even at its inception, however, the power pool provided a means by 

which member utilities could provide electricity to other members in the event of emergency power 

shortages. 77 UNECA and UNEP, Making Africa’s Power Sector Sustainable, September 2007, 73. 78 IMF, Regional Economic Outlook, April 2008, 90. 
5-16 

hydroelectric and thermal-powered plants.79 Power pools also have been formed in West, 

Central, and East Africa.80

Regional economic communities,81 multilateral financiers,82 the Millennium Challenge 

Corporation, and SSA governments collectively 83 have placed a high priority on 

facilitating large-scale, medium- and long-term projects in the energy sector, including 

electricity (table 5.2). Further, the long-term plan is to eventually link power pools in 

several regions. Examples of high-profile projects with regional electricity trade potential 

include development of the Bujagali Dam and hydroelectric power facilities in Uganda, 

and the long-proposed, expensive, and complex hydroelectric projects in the DRC 

currently under consideration. Examples of important transmission interconnection 

projects in development include facilities between Malawi and Mozambique, Zambia and 

Namibia, and Ethiopia and Sudan. Other major projects involve new generation and 

transmission facilities and subsequent interconnections of national grids in Burundi, 

Rwanda, and Tanzania to enable eventual linkages to power grids in East and southern 

African countries.84

The recently commissioned West African Gas Pipeline is the first commercially 

operational, high-priority project of ECOWAS in the energy sector. Natural gas provided 

to member states through the pipeline could be used for electricity generation.85 The 

World Bank estimated that Benin, Ghana, and Togo together could realize a $500 million 

savings in fuel costs over 20 years with gas supplied from the pipeline. The project may 

serve as a model for future large multinational energy initiatives in SSA.86 

Harmonizing regulatory practices across countries is an important component of 

establishing viable regional electricity sectors. Formation of the African Forum for Utility 

Regulators (AFUR) in 2002 began a process to share information, experiences, and 

expertise. 87 The AFUR adopted a framework for utility regulation that recommends 

adherence to seven regulatory principles, including nondiscrimination, promotion of 

competition, and investor protection. 88 Further, the recent formation of regional 

associations of electricity regulators provides an opportunity to focus on regional issues 

 79 UNECA, Economic Report on Africa 2004, 2004, 146. 80 ICSU, Regional Office for Africa, Sustainable Energy in Sub-Saharan Africa, July 2007, 8. The 

Economic Community of Central African States and the East African Community each established power 

pools in recent years. In addition, a number of small power pools exist that each involves only a few 

countries, such as the pool among Burundi, the DRC, and Rwanda. 81 These include SADC, the East African Community, and ECOWAS. 

82 These principally include the World Bank Group and the AfDB. 

83 CCA, “Projects in the Pipeline,” October 6–8, 2008. For example, the governments of Kenya, 

Tanzania, and Zambia are financing a project to provide electricity in rural areas by interconnecting power 

grids through newly constructed transmission lines in the three countries. 84 Services Group, Review of the Regulatory Framework, September 2007; CCA, “Projects in the 

Pipeline,” October 6–8, 2008. 85 Long-range plans are underway, in a project funded largely by the World Bank, for two power plants 

in Ghana to change from crude oil-fired to natural gas-fired electricity generation, using gas supplied from 

Nigeria through the West African Gas Pipeline. 86 UNECA and UN-Energy/Africa, “Energy for Sustainable Development,” May 2007, 76. 87 Thirty-five African regulatory authorities (including seven as observers) from 26 countries (all but 

one from SSA) participate in the AFUR. Participating authorities that regulate electricity exclusively or in 

conjunction with other energy or public utility sectors are from Cameroon, Côte d’Ivoire, Ethiopia, The 

Gambia, Ghana, Kenya, Lesotho, Madagascar, Malawi, Mali, Mauritania, Namibia, Niger, Nigeria, Senegal, 

South Africa, Sudan, Tanzania, Togo, Uganda, Zambia, and Zimbabwe. 88 Information sharing, capacity building, and work toward harmonization on minimum guidelines and 

regulatory standards are ongoing. In 2003, the AFUR resolved to establish peer reviews among regulators, 

but no such reviews have occurred. 
5-17 

in the sector and develop common regional regulatory guidelines and standards. AFUR 

member energy regulators from Kenya, Tanzania, and Uganda agreed in 2008 to form an 

association for East African Community energy regulators to address regional energy 

supply challenges. The new association would also endeavor to influence energy policy 

regionally, especially to enhance opportunities for increasing the use of renewable and 

alternative energy.89 Similarly, the Regional Electricity Regulators Association comprises 

electricity regulators from member governments of SADC that have established a 

regulatory body.90

 89 AFUR, “Partnership Initiatives,” July–December 2008, 17–18. 

90 Services Group, Review of the Regulatory Framework, September 2007, 71–72. 
5-18 

Bibliography 

AES Corporation. Form 10K. Annual Report to the Securities and Exchange Commission for Year Ended 

December 31, 2007, March 17, 2008. http://investor.aes.com. 

African Forum for Utility Regulators (AFUR). “Partnership Initiatives: A New Regional Regulatory 

Association in East Africa.” AFUR Bulletin 2, no. 1 (July–December 2008): 17–18. 

http://www.afurnet.org/. 

Corporate Council on Africa (CCA). “Projects in the Pipeline.” Prepared for CCA conference on African 

infrastructure, Washington, DC, October 6–8, 2008. 

Cuambe, Manuel. “Workshop: Large Project Finance.” PowerPoint presentation at conference on large 

infrastructure finance, Maputo, Mozambique, February 7, 2008. http://www.mcli.co.za/mcliweb/events/2008/07feb2008/PO1_EdM%20presentation_Moz%20Energy%20section%20dev%2

0plan.pdf. 

Ekanem, Williams. “Nigeria: Manufacturing Under Stress.” African Business, October 2008. 

Energy Industry Issues Newsletter. “What Is a Megawatt?” June 24, 2003. In Alexander’s Gas & Oil 

Connections 8, no. 14, July 10, 2003. http://www.gasandoil.com/goc/features/fex32816.htm. 

Eskom Holdings Limited. Together, Rising to the Challenge: Annual Report 2008. Johannesburg, South 

Africa: Eskom, 2008. 

http://financialresults.co.za/eskom_ar2008/ar_2008/downloads/eskom_ar2008.pdf. 

Export-Import Bank of the United States (Ex-Im Bank). “Power Projects in Africa.” Prepared for the 

annual conference, Washington, DC, April 17–18, 2008. 

http://www.exim.gov/products/special/africa/pubs/power_projects_in_africa042008.pdf. 

Foster, Vivien, William Butterfield, Chuan Chen, and Nataliya Pushak. “Building Bridges: China’s 

Growing Role as Infrastructure Financier for Africa.” World Bank Public-Private Infrastructure 

Advisory Facility, 2008. 

Gratwick, Katharine Nawaal, and Anton Eberhard. “An Analysis of Independent Power Projects in Africa: 

Understanding Development and Investment Outcomes.” Working paper prepared for the 

Management Program in Infrastructure Reform and Regulation, Cape Town, South Africa, 

October 2007. 

http://gsbnet.uct.ac.za/MIR/admin/documents/African%20IPP_9_10_2007_16703.pdf. 

———. “An Analysis of Independent Power Projects in Africa: Understanding Development and 

Investment Outcomes.” Development Policy Review 26, no. 3 (2008): 309–38. 

http://www.gsb.uct.ac.za/gsbwebb/mir/documents/AfricanIPPs2008DPR.pdf. 

Infrastructure Consortium for Africa (ICA). “Power Supply Situation in Africa.” Paper prepared for ICA 

annual meeting, Tokyo, Japan, March 13–14, 2008. 

http://www.icafrica.org/fileadmin/documents/Tokyo/Background_paper_Power_Supply_situation

in_Africa_FINAL.pdf. 
5-19 

———. “Significant Increase in Commitments to Infrastructure Projects in Africa.” ICA Newsletter, no. 7, 

July 2008. http://www.icafrica.org/fileadmin/documents/july08_Newsletter.pdf. 

International Council for Science (ICSU). Regional Office for Africa. Sustainable Energy in Sub-Saharan 

Africa. Pretoria, South Africa: ICSU, July 2007. 

http://www.icsuafrica.org/sustainable_energy_rep_2007.pdf. 

International Monetary Fund (IMF). Regional Economic Outlook: Sub-Saharan Africa. Washington, DC: 

IMF, April 2008. http://www.imf.org/external/pubs/ft/reo/2008/AFR/ENG/sreo0408.htm. 

Mbogo, Steve. “Africa: Electricity Managers Agree on Uniform Standards.” Business Daily (Nairobi), 

June 25, 2008. http://allafrica.com/stories/printable/200806251086.html. 

News24.com. “Engineer Shortage Causes Havoc,” August 26, 2008. 

http://www.news24.com/News24/South_Africa/Power_Crisis/0,,2-7-2335_2382896,00.html. 

OECD. International Energy Agency (IEA). World Energy Outlook 2006. Paris: OECD/IEA, 2006. 

http://www.iea.org/textbase/nppdf/free/2006/weo2006.pdf. 

———. World Energy Outlook 2002. Paris: OECD/IEA, 2002. 

http://www.iea.org/textbase/nppdf/free/2000/weo2002.pdf. 

Prasad, Gisela. “Energy Sector Reform and the Pattern of the Poor: Energy Use and Supply, a Four 

Country Study: Botswana, Ghana, Honduras and Senegal.” World Bank. Energy Sector 

Management Assistance Program (ESMAP). ESMAP technical paper 095, March 2006. 

http://www.esmap.org/filez/pubs/09506EnergyUsePrasadforWeb.pdf. 

Ramachandran, Vijaya. “Addressing Africa’s Infrastructure Crisis.” Presented at CCA conference on 

African infrastructure, Washington, DC, October 7, 2008. 

———. “Power and Roads for Africa.” Center for Global Development, March 2008. 

http://www.cgdev.org/files/15659_file_AfricaPowerRoads.pdf. 

———. Written testimony submitted to the U.S. International Trade Commission in connection with inv. 

no. 332-477, Sub-Saharan Africa: Effects of Infrastructure Conditions on Export Competitiveness, 

Third Annual Report, October 27, 2008. 

Redwood-Sawyerr, Jonas A.S. “Widening Access in the Context of Power Sector Reform: An Overview 

of the Institutional Challenges in Africa.” Paper prepared for UNEP-IEA meeting, Paris, France, 

May 21–22, 2002. http://www.uneprisoe.org/SectorReform/InstitutChallengesAfrica.pdf. 

Richards, Timothy J. General Electric Company. Written testimony submitted to the U.S. International 

Trade Commission in connection with inv. no. 332-477, Sub-Saharan Africa: Effects of 

Infrastructure Conditions on Export Competitiveness, Third Annual Report, October 28, 2008. 

Services Group. Review of the Regulatory Framework for Power Generation and Distribution in 

Southern Africa. Prepared for the U.S. Agency for International Development/Southern Africa. 

Gaborone, Botswana, September 2007. 

http://www.satradehub.org/assets/files/Reg%20Framework%20for%20Power%20and%20Genera

tion.pdf. 
5-20 

South African Institution of Civil Engineering (SAICE). “The SAICE Infrastructure Report Card for 

South Africa: 2006.” http://www.civils.org.za/Portals/0/pdf/publications/saice-reportcard.pdf. 

UNECA. Economic Report on Africa 2004: Unlocking Africa’s Trade Potential. “Chapter 4: Poor Energy 

Infrastructure Hobbles Export Diversification.” Addis Ababa, Ethiopia: UN, ECA, 2004. 

http://www.uneca.org/era2004/. 

———. Report on Strategies for Promoting Accessibility and Accountability in Public Service Delivery: 

Utility Regulation in Africa. Prepared for fourth meeting of the Committee on Human 

Development and Civil Society. Addis Ababa, Ethiopia, November 22–23, 2007. 

E/ECA/CHDCS.4/4, November 2007. 

http://www.uneca.org/chdcs/chdcs4/Report-Utility-regulation.pdf. 

UNECA and UN-Energy/Africa. Energy for Sustainable Development: Policy Options for Africa. 

Prepared for Commission on Sustainable Development session no. 15, New York, NY, May 2007. 

http://www.uneca.org/eca_resources/Publications/UNEA-Publication-toCSD15.pdf. 

UNECA and UN Environment Program (UNEP). Making Africa’s Power Sector Sustainable: An Analysis 

of Power Sector Reforms in Africa. Addis Ababa, Ethiopia, September 2007. 

http://www.uneca.org/eca_programmes/nrid/pubs/PowerSectorReport.pdf. 

University of Ghana. Resource Center for Energy Economics and Regulation. Guide to Electric Power in 

Ghana. First edition, July 2005. 

http://www.beg.utexas.edu/energyecon/IDA/USAID/RC/Guide_to_Electric%20Power_in_Ghana.

pdf. 

U.S. Department of State. U.S. Embassy, Nairobi. “Kenya Confronts Its Energy Crisis (NAIROBI 

002381),” October 17, 2008. 

World Bank. Public-Private Infrastructure (PPI) Advisory Facility. “Financial Crisis Affecting New 

Private Infrastructure Projects,” undated. 

http://www.ppiaf.org/content/view/506/462/ (accessed January 9, 2009). 

———. “Investment Commitments to Energy Doubled in 2007.” PPI data update note 11, October 2008. 

http://ppi.worldbank.org/features/Oct2008/2007EnergyDataLaunch.pdf. 

———. “Methodology.” Private Participation in Infrastructure Database, updated October 2008. 

http://ppi.worldbank.org/resources/ppi_methodology.aspx. 

———. “Private Activity in Energy Remained Stable in 2006.” PPI data update note 6, November 2007. 

http://ppi.worldbank.org/features/Nov2007/2006EnergyDataLaunch.pdf. 

World Energy Council (WEC). The Potential for Regionally Integrated Energy Development in Africa: A 

Discussion Document. London: World Energy Council, 2003. 

http://www.gm.undp.org/Reports/The%20Potential%20for%20energy%20devt%20in%20Africa.

pdf. 

WTO. Council for Trade in Services. “Energy Services: Background Note by the Secretariat.” S/C/W/52, 

September 9, 1998. 
6-1

CHAPTER 6 

Effects of Infrastructure Conditions on the 

Export Competitiveness of Select SSA 

Industries 

Conditions in land transport, maritime transport, and electricity infrastructure sectors, as 

discussed in chapters 3 through 5, can have a considerable effect on the ability of firms to 

produce and export products and services competitively in regional and global export 

markets. This chapter examines the effects of these infrastructure conditions on the 

export competitiveness of the following industries in SSA: coffee, shea butter, and certain 

tropical fruit (pineapples and bananas) in the agricultural sector; natural rubber and 

related downstream products, textiles and apparel, and leather in the manufacturing 

sector; and tourism services in the services sector. 

The case studies that follow in this chapter examine the effects of infrastructure 

conditions along the various stages of the supply and value chains of most of the select 

SSA industries noted above;1

 for example, the effects of infrastructure conditions on the 

direct and indirect costs of acquiring production inputs, on production and product 

quality, and on exporting goods and services. The case studies do not present a 

comprehensive comparison of the effects of infrastructure conditions on the export 

competitiveness of these select industries across all SSA countries; rather the case studies 

serve to highlight the experiences of specific producers, such as coffee producers in 

Rwanda or leather producers in Ethiopia, and make comparisons among SSA producers 

or between SSA producers and other global competitors to the extent possible. 

Relatively poor infrastructure conditions are a competitive disadvantage to SSA 

producers and exporters of goods and services. Poor infrastructure conditions increase 

costs and can compromise product quality, rendering both merchandise and services 

exports less competitive vis-à-vis global competitors that may benefit from relatively 

better infrastructure conditions. Relatively poor conditions in land transport and maritime 

transport infrastructure in SSA countries not only increase transportation costs and transit 

times for goods destined for export, but also increase the costs and length of time for 

importing needed production inputs such as textiles for apparel production in Kenya or 

chemicals for leather production in Ethiopia. In addition to increasing transportation 

costs, poorly maintained road networks can also disrupt delivery schedules and 

compromise product quality—particularly for perishable items, such as tropical fruit—

leading to missed deliveries, higher rejection rates, and lower financial returns to 

producers. Road congestion can inhibit the expansion of tourism, as traffic can deter 

tourists from venturing (and spending money) beyond resort areas. Because of inadequate 

or unreliable grid electricity throughout much of SSA, expensive on-site power 

generators are often used to maintain production schedules. As a result, overall 

production costs are often higher, reducing the cost competitiveness of SSA producers. 

Other factors, such as lack of access to affordable capital, geographic distance to major 

 1

 Because the textiles and apparel industries are two distinct industries, the discussion of infrastructure 

conditions on the export competitiveness of these industries is organized by infrastructure sector. The 

discussion of infrastructure conditions on the export competitiveness of tourism exports does not follow the 

same organizational structure as that for merchandise exports because of the nature of service exports. 
6-2

markets, political instability, and certain government policies can amplify the negative 

effects of poor infrastructure conditions on the export competitiveness of SSA producers.
6-3 

Coffee 

Summary of Findings 

Poor infrastructure conditions in SSA compound the challenges faced by longtime East 

African2

 coffee producers attempting to compete in higher-value specialty coffee 

markets. Inadequate and poor quality roads in some East African countries increase 

transport costs and compromise bean quality, resulting in lower returns to producers. 

Inadequate, unreliable, and costly electricity limits the ability to wash coffee, a valueadded process that requires electricity to pump clean water. As a result, most coffee 

produced in and exported from SSA continues to be used in mass-produced, lower-priced 

blended coffees. Some East African countries, however, have been able to achieve higher 

returns in recent years despite these infrastructure constraints. In particular, by focusing 

on quality improvements that increase the appeal of its coffee to international buyers, 

Rwanda has achieved greater returns and improved its export competitiveness by 

increasing production and exports of higher-value specialty coffees. 

Introduction 

Unlike the large coffee plantations in Latin America, smaller farms in East Africa, 

averaging only 1 to 2 hectares3

 of land, produce the majority of East African coffee.4 

Because virtually all East African agriculture is rain fed5 and uses few purchased inputs, 

coffee production can be subject to a high degree of variability both in terms of volume 

and quality from year to year.6

Ethiopia, Uganda, Côte d’Ivoire, and Kenya are among the largest coffee producing and 

exporting countries in SSA. For these and a few other East African countries (e.g., 

Rwanda and Tanzania), coffee exports have been a major source of foreign exchange and 

represent a significant share of total exports.7

 East African coffee producers benefited 

from an extended rebound in world coffee prices during the 2002−08 period, which 

contributed to increased export earnings.8

 Because these countries are relatively small 

producers (figure 6.1), East African coffee production has little influence on world coffee 

prices and is periodically affected by price volatility. The EU is the largest export market 

for SSA coffee (figure 6.2). 

 2

 This case study focuses on the East African region because it is the largest coffee producing and 

exporting region in SSA. In 2007–08, East Africa (Ethiopia, Kenya, Rwanda, Tanzania, and Uganda) 

accounted for 70 percent of SSA’s total coffee production and 67 percent of its exports. USDA, FAS, 

Production, Supply, and Distribution Online Database (accessed January 15, 2009). 3

 One hectare equals approximately 2.5 acres. 

4

 Lewin, Giovannucci, and Varangis, Coffee Markets, 2004, 1. 5

 Rain fed is defined as growing crops under conditions of natural rainfall rather than using manmade 

irrigation systems. 6

 USITC, Sub-Saharan Africa, 2008, 2-4. 7

 Côte d’Ivoire is the third largest producer and exporter of coffee in SSA. However, because of the 

relatively greater importance of cocoa to its economy, coffee export revenue is less significant to Côte 

d’Ivoire than to other SSA countries, such as Ethiopia and Uganda. 8

 As noted in USITC, Sub-Saharan Africa, 2008, factors contributing to growth in SSA coffee exports 

in recent years include price increases and demand growth, ongoing liberalization of SSA coffee sectors, and 

success in differentiating coffee from a homogenous commodity through quality attributes, geographic origin, 

and method of production. 
6-4 

Brazil

23.2%

Vietnam

13.1%

Colombia

13.0%

SSA

10.2%

Indonesia

4.9%

Guatemala

4.5%

Peru

3.6%

Honduras

3.2%

Switzerland

3.1%

U.S.

2.9%

Mexico

2.4%

India

2.2%

Other

13.6%

Ethiopia

28.9%

Uganda

15.3%

Côte d’Ivoire

13.7%

Kenya

12.4%

Tanzania

8.1%

Rwanda

2.8%

Other

18.9%

FIGURE 6.1 Leading global and SSA exporters of coffee, 2007

Source: GTIS, Global Trade Atlas Database. Annual data compiled from reporting countries’ official

statistics, including EU external trade.

Note: Data may not equal 100 percent due to rounding. Includes exports of both unroasted and roasted or

further processed coffee.

Global exporters SSA exporters

$14.3 billion $1.5 billion

EU27

46.3%

U.S.

24.6%

Japan

7.1%

Canada

4.8%

Switzerland

2.3%

Algeria

1.6%

South Korea

1.4%

Other

12.0%

EU27

59.1%

Algeria

10.5%

U.S.

7.9%

Japan

6.7%

Saudi Arabia

4.6%

Other

11.2%

FIGURE 6.2 Leading markets for global and SSA exports of coffee, 2007

Global export markets SSA export markets

$14.3 billion $1.5 billion

Source: GTIS, Global Trade Atlas Database. Annual data compiled from reporting countries’ official

statistics, including EU external trade.

Note: Data may not equal 100 percent due to rounding.
6-5 

Effects of Infrastructure Conditions on the Competitiveness of SSA 

Exports of Coffee 

Poor infrastructure conditions in East Africa often negatively affect coffee quality and 

lower producer returns. Poor road quality, or lack of adequate road networks, increases 

transportation times, which can negatively affect coffee bean quality. Expensive and 

unreliable electricity increases production costs and disrupts coffee washing, a valueadded process that relies on water pumps to deliver clean water. Other challenges faced 

by East African coffee producers include the lack of available credit, inexperienced 

management, and insufficient Internet access and communication technologies 

From Harvest to Collection 

Coffee growing in East Africa uses few purchased inputs, making infrastructure 

conditions less critical at the initial (production through harvesting) stages than at 

subsequent stages along the coffee value chain.9

 Infrastructure conditions can 

significantly affect the ability to transport coffee from harvest locations to collection and 

processing points. Because most East African coffee farms are small, production of 

enough exportable green (unroasted) coffee to fill one shipping container may require the 

collective output of several hundred farms. The collection of coffee therefore presents a 

massive logistical undertaking.10

Lengthy transit times negatively affect the quality of the coffee bean because coffee 

quality rapidly deteriorates between harvesting and processing due to sugar fermentation 

in the raw coffee cherry. Within 20 hours after harvest, this fermentation can ultimately 

result in an unpleasant taste to the coffee.11 Therefore, farmers who can reduce transit 

times are able to sell a higher-quality product and improve their financial returns. Poorquality feeder roads can increase transportation delays to central collection points or to 

cooperatives,12 although the degree to which road conditions affect transportation varies 

by country.13 Furthermore, vehicles are often not used for these deliveries. In Ethiopia, 

farmers haul coffee loads on horses and mules,14 whereas in Rwanda, hundreds of 

farmers walk 2 to 4 km from the fields to reach the collection points.15

Processing 

The outer skin of coffee beans, known as the cherry, must be removed before the beans 

can be dried and roasted. Removal is accomplished either through dry or wet processing 

with both methods used in East Africa, although the share processed by each method 

varies by country.16 When coffee is dry processed, or unwashed, the entire cherry is 

cleaned and placed on tables or racks to be sun dried before being milled to strip off the 

 9

 Some farmers do use chemical inputs for pest and disease control, but fertilizer use is minimal for 

SSA coffee production. Loveridge, Mpyisi, and Weber, “Farm Level Perspectives,” March 2002, 2. 10 Project Rwanda, “The Coffee Bike,” undated (accessed September 9, 2008). 11 Ibid. 

12 USITC, Hearing transcript, October 28, 2008, 55 (testimony of Scott Clark, TechoServe). 13 Industry official, interview by USITC staff, Addis Ababa, Ethiopia, November 7, 2008. 14 U.S. Department of State, U.S. Embassy, Addis Ababa, “USITC Report: Ethiopia’s Infrastructure 

Effects,” October 8, 2008, 9. 15 Project Rwanda, “The Coffee Bike,” undated (accessed September 9, 2008). 16 Kenya and Tanzania wet process the majority of their coffee, while Ethiopia and Rwanda dry process 

most of their coffee. UNIDO, Regional Office for Ethiopia, Uganda, and Rwanda, “Agro-Industries 

Development in Ethiopia,” 2007, 8. 
6-6 

residue from the beans.17 Wet processing, or washing through pulping machines, 

separates the fruit from the bean; the bean is then washed with substantial quantities of 

clean water to remove the sticky residue, which if left on the bean, can cause it to 

ferment, reducing its quality and affecting its flavor.18

Water for wet processing is usually pumped from wells to processing facilities. The 

electrical supply for these pumps is virtually nonexistent or, at best, inadequate or 

unreliable in most rural areas of East Africa. Hence, wet processing is far less common in 

East Africa than in other coffee-producing regions in the world. Where wet processing 

does occur in East Africa, diesel generators are often used, which increases overall 

production costs.19

Coffee prices are based, in part, on the quality of the bean, which varies due to factors 

such as type, climate, and soil. With proper coffee washing, these intrinsic qualities are 

better preserved, producing green coffee beans that are homogenous, with fewer 

defects,20 and that can be sold at higher market prices relative to unwashed coffee.21

Transportation for Export 

Coffee is a bulk commodity that is usually exported in containers. In East Africa, coffee 

is typically shipped to ports via poorly maintained roads. In addition, the lack of trucking 

capacity and port congestion22 also contribute to increased transportation costs and 

delays, ultimately increasing overall production costs and compromising coffee quality. 

Because of these factors, the time and cost associated with shipping a container from East 

Africa, particularly from landlocked countries, are higher compared to other major coffee 

exporters (table 6.1). In landlocked Ethiopia, for example, the peak season for exporting 

coffee to the neighboring port of Djibouti coincides with the peak season for importing 

fertilizers from the same port, resulting in port congestion and delays. In addition, 

officials confirm that there is insufficient trucking capacity which results in increased 

fees.23 Uganda, Africa's second-largest Robusta24 coffee producer, exports more than 75 

percent of its coffee through the port of Mombasa, Kenya;25 it can take up to six weeks 

for coffee shipments to reach the port.26 Although Kenya benefits from its coastal 

location and its role as a trade hub for the central and eastern Africa region, Kenyan 

exporters also suffer from port congestion and delays. Poor port management reportedly 

compounds the problem.27 

 17 Ibid. 

18 Schilling and McConnell, “Model for Siting Coffee Washing Stations in Rwanda,” July 2004, 10. 19 USITC, Hearing transcript, October 28, 2008, 55 (testimony of Scott Clark, TechoServe). 20 International Coffee Organization, “Field Processing,” undated (accessed January 9, 2009). 21 Dougherty, “Rwanda Savors the Rewards of Coffee Production,” July 27, 2004. 

22 For more information on maritime infrastructure in SSA, see chap. 4 of this report. 

23 Industry official, interview by Commission staff, Addis Ababa, Ethiopia, November 7, 2008. 24 Robusta is the other major species of coffee besides Arabica. Grown in Africa and Brazil, and to a 

much smaller extent, Central America, Robusta plants are more resistant to pests and disease, and produce 

more fruits. The caffeine content of Robusta beans is about twice that of Arabica. Robusta is considered 

inferior tasting to Arabica. 25 Dow Jones Newswires, “Uganda Coffee Exports Still Halted by Kenya Violence,” January 9, 2008. 26 Baffes, “Restructuring Uganda’s Coffee Industry,” October 2006, 9. 

27 Industry official, interview by Commission staff, Mombasa, Kenya, October 28, 2008. 
6-7 

TABLE 6.1 Exporting costs for coffee-producing countries in East Africa and their major competitors

 SSA 

Indicator Ethiopia Kenya Rwanda Tanzania Uganda Brazil Colombia Vietnam 

Average time 

to export 

 (days)a

46 29 42 24 39 14 14 24 

Cost to export 

 ($/container)b 2,087 2,055 3,275 1,262 3,090 1,240 1,690 734 

SSA rankc 29 26 40 9 24 (d) (d) (d) 

Overall ranke 152 148 168 103 145 92 96 67 

Source: World Bank, Doing Business Online Database (accessed January 12, 2009).

Note: Container refers to a 20-foot-long container for bulk commodities. 

a

Includes the time for obtaining all documents, inland transport, customs clearance and inspections, and 

port and terminal handling. Does not include ocean transport time. b

Includes the cost of obtaining all documents, inland transport, customs clearance and inspection, and 

port and terminal handling. Includes official costs only; no bribes or tariffs. 

 cRankings are based on a simple average of trading across borders indicators, out of 46 SSA economies 

(Djibouti and Somalia are not included). 

 dNot applicable. eRankings are based on a simple average of trading across borders indicators, out of 181 economies. 

The Rwandan Experience 

Rwanda is the ninth-largest producer of Arabica coffee in Africa, with 500,000 small 

farms averaging less than 1 hectare.28 Although Rwanda is a relatively small, landlocked 

producer of coffee in East Africa, the coffee industry has attempted to overcome 

infrastructure constraints and offset associated high costs by focusing on quality 

improvements to compete in higher-value specialty coffee markets. 

Nearly all of Rwanda’s exports travel 1,500 km over poor roads through Uganda and 

Kenya to the port of Mombasa, or to a lesser extent, by road and rail to the port of Dar es 

Salaam, Tanzania.29 Transportation from production regions to ports can account for up 

to 40 percent of the total cost of coffee produced in Rwanda.30 

Efforts to Overcome Infrastructure Constraints 

Cooperatives and coffee washing stations 

With assistance from USAID, many coffee farmers in Rwanda have formed cooperatives, 

which pool farmers’ assets and provide them with easier access to technical assistance, 

marketing advice, and machinery.31 Several cooperatives also constructed coffee washing 

stations with assistance from USAID, other government organizations, and 

nongovernmental organizations (NGOs).32 These communal stations enable growers to 

pool their water and electricity costs and gain the value-added from selling washed coffee 

 28 Sweet Maria’s Coffee Cupping Reviews, “Africa: Rwanda,” undated (accessed September 30, 2008). 29 EIU, Country Profile 2008: Rwanda, 2008, 14. 30 Government official, interview by Commission staff, Kigali, Rwanda, November 3, 2008. 31 USAID, “Producers Wake Up and Smell the Coffee,” July–August 2005. 32 By 2005, 46 washing stations had been constructed. This number increased to 120 by 2007. 

Boudreaux and Ahluwalia, “Cautiously Optimistic,” 2008, 41. 
6-8 

beans. Between 10 and 15 percent of Rwanda’s coffee crop is now fully washed and 

exported as premium-priced gourmet coffee.33

Washing has improved the stature of Rwanda’s coffee in international tasting 

competitions, which have increased brand awareness of, and price premiums paid for, 

Rwandan coffee.34 In 2002, Rwanda made its first sale of high-value specialty coffee, 

which was priced significantly higher than the world commodity-grade benchmark 

price35 for Arabica coffee.36 In 2003, the Karuba Coffee Cooperative received a USAID 

grant to construct a washing station, and by 2007, its quality had improved to such an 

extent that Karuba’s coffee placed third out of 138 Rwandan coffees in Rwanda’s Golden 

Cup Competition.37 Improvements in coffee quality have enabled some Rwandan 

cooperatives to earn higher returns by bypassing traditional market outlets, such as local 

auctions, and selling directly to coffee buyers in the United States and Europe at premium 

prices through Internet auctions.38 USAID works with the Specialty Coffee Association 

of America39 and other groups in operating “cupping competitions” that involve coffee 

experts who taste selected types of coffee. According to USAID, these cupping 

competitions have increased demand for Rwandan coffee, resulting in higher prices from 

online sales.40 According to one international coffee buyer, “Rwanda has become 

Africa’s most actively improving coffee country” and its “cooperatives are producing 

some of the cleanest coffee on the continent.”41

Despite these successes, Rwanda’s coffee washing stations remain constrained by a lack 

of clean water, expensive electricity,42 and a lack of trained workers.43 As a result, the 

majority of Rwandan coffee continues to be sold as commodity grades used in massproduced, lower-quality blended coffees. 

Coffee bike program 

Beginning in 2007, Project SPREAD,44 a USAID-funded agribusiness project; Project 

Rwanda, an NGO; and several other NGOs assisted coffee farmers in obtaining custom 

cargo bikes to transport coffee to washing stations. Since the introduction of the program, 

transit times have been reduced by two-thirds, to 2–4 hours. Farmers purchase the bikes 

through a credit program offered within the coffee cooperatives and are able to repay the 

loans with the additional income they receive as a result of improved coffee quality.45

More than 1,800 bikes have been sold thus far to cooperatives in Rwanda.46

 33 Government official, interview by Commission staff, Kigali, Rwanda, November 3, 2008. 34 USAID, “Producers Wake Up and Smell the Coffee,” July–August 2005. 35 The “C” market on the Intercontinental Exchange (ICE), formerly the New York Board of Trade, 

serves as the world benchmark price for Arabica coffee. The majority of mass-produced coffee is “C” grade 

coffee. 36 Project Rwanda, “The Coffee Bike,” undated (accessed September 9, 2008). Prices for Rwanda’s 

higher-grade specialty coffee can be 50 to 250 percent above the “C” market prices. Fraser, “Coffee, and 

Hope, Grow in Rwanda,” August 6, 2006. 37 ACDI/VOCA, “Rwandan Coffee Gets High Marks,” December 2007. 38 USAID, “Producers Wake Up and Smell the Coffee,” July–August 2005. 39 The Specialty Coffee Association of America is an international trade association that develops and 

promotes specialty coffee by setting and maintaining quality standards for the industry. 40 USAID, “Producers Wake Up and Smell the Coffee,” July–August 2005. 41 ACDI/VOCA, “Specialty Coffee,” undated (accessed September 9, 2008). 42 Industry official, interview by Commission staff, Kigali, Rwanda, November 17, 2008. 43 Industry official, interview by Commission staff, Kigali, Rwanda, November 17, 2008. 44 SPREAD is an acronym for “Sustaining Partnerships to Enhance Rural Enterprise.” 

45 Project Rwanda, “The Coffee Bike,” undated (accessed September 9, 2008). 46 Gottlieb, “Rwanda Project Members Discuss Coffee-Bike,” February 22, 2008. 
6-9 

Shea Butter47 

Summary of Findings 

Poor road conditions and inadequate access to electricity affect the harvest, collection, 

and processing of shea in SSA, resulting in inefficient production, quality issues, and 

increased costs for shea butter producers. These producers face poor infrastructure 

conditions, exemplified by increased transportation costs, unreliable delivery schedules, 

and no access to the electrical grid, and receive lower financial returns on their products 

than shea butter producers with access to adequate road networks and electric power. 

Improved infrastructure conditions could greatly enhance the overall ability of SSA firms 

to efficiently produce and export shea butter. Although SSA shea butter producers face 

limited competition from competing substitutable products,48 improved road transport 

and cost-effective electricity could allow for increased returns to rural shea butter 

producers and facilitate capital investment to increase productivity or to expand 

operations in downstream products. 

Introduction 

Industry Overview49 

Shea butter is an exotic vegetable fat derived from the nut of the shea fruit and competes 

on a limited basis with other exotic vegetable fats as an input into the production of cocoa 

butter equivalents (CBEs) (box 6.1). A small portion of shea butter production competes 

with a variety of other inputs (e.g., moisturizers and emulsifiers) and end products (e.g., 

lotions) in the cosmetics and natural products industry. 

SSA shea production is dispersed across large rural areas and is characterized by 

numerous small and micro-enterprises.50 Shea butter is produced by extracting the oil 

from dried shea nuts. Shea nuts are harvested and dried almost exclusively by rural 

women in SSA as an income-generating activity secondary to traditional farming, such as 

cotton and grain harvesting. The process of harvesting shea fruit, extracting the nut from 

the shea fruit, and drying the nut is done manually. Dried nuts can then be sold to largescale foreign processors, intermediate buyers, or small- to mid-sized SSA processors, 

which typically use manual or mechanical (hand-, gas-, or electrical-powered) butter 

extraction techniques. Shea butter can also be extracted manually by the women who 

harvest the nuts. Shea butter produced in SSA is generally exported in an unrefined state. 

 47 HTS subheadings 1207.99.02 and 1515.90.21 include shea and other nuts, and oils/fat not elsewhere 

specified or identified, respectively. Other products containing shea butter, including cosmetics, lotions, hair 

products, and soaps (HTS 3304, HTS 3305.10, HTS 3305.20, and HTS 3401.11.00), do not specify the 

percentage of shea in the final product. Industry officials have stated in Commission interviews that there is 

no good source of trade and production data for shea nuts, butter, or downstream products. The best data 

available for trade and production are based on industry knowledge in SSA. 48 Competing products include other exotic vegetable fats derived from the kernels/nuts of sal, mango, 

illipe, and kokum, but are produced in limited quantities and also face many of the same infrastructure 

constraints as shea butter. 49 For a more detailed overview of the shea butter industry, see USITC, Sub-Saharan Africa, 2008, 2-

19–2-34. 50 An estimated 90 percent of all shea nuts in SSA are harvested in Benin, Burkina Faso, Côte d’Ivoire, 

Ghana, Guinea, Mali, Nigeria, and Togo. However, production extends across 20 SSA countries from 

Senegal to Ethiopia. 
6-10 

BOX 6.1 The Cocoa Butter Equivalent (CBE) Market for the Exotic Fats Industries

Chocolate producers use CBEs to reduce input costs and create a more durable and versatile 

chocolate product. CBEs are produced using a combination of palm oil and exotic vegetable fats, such 

as those derived from the kernels/nuts of shea, sal, mango, illipe, and kokum.a

 The type of exotic fats 

used can change the desired characteristics of a CBE. Consequently, the end use of a particular CBE 

determines that CBE’s fat blend. 

Shea butter is one of the most commonly used exotic fats in CBE production because of its 

characteristics and the large quantities of shea butter available. When exotic fats are used in CBE 

production, the choice of fat is determined by the structure of the triglycerides unique to each exotic 

fat. Typically, exotic fats with the largest percentage of triglycerides that are identical to those found in 

cocoa butter are preferred. Shea butter (more specifically, shea stearin—the portion of the butter used 

directly in CBE production) and kokum contain triglyceride levels most similar to those in cocoa butter. 

Shea butter production also far exceeds the combined total of all other exotic fats suitable for use in 

CBE production.b 

_____________________ 

 a Exotic fats are obtained primarily from the nuts/kernels of trees growing wild in the tropics. Chalfin, 

Shea Butter Republic, 2004, 162. b LMC International, Ltd., “The Impact of Directive 2000/26/EC,” June 2006. 

Large-scale shea butter production outside SSA, primarily in Europe, typically employs a 

complex chemical process that creates a white, uniform, odorless, refined shea butter 

suitable for use as an edible fat, emulsifier, or moisturizer. Refined shea butter production 

in Europe can begin either with the direct processing of the shea nut or unrefined shea 

butter. 

Because shea butter is primarily used as an input for CBE production, a majority of 

international trade in the shea industry is conducted by a limited number of multinational 

agrifood oil processors. Because of this concentration, internal business decisions, such 

as the location of new processing facilities, significantly affect the levels and form in 

which shea is exported from SSA. Currently, two multinational oil processors export nuts 

from SSA for processing in overseas facilities, and two other firms have increased SSA 

shea butter processing capacity.51

International Trade 

Shea nuts and unrefined butter have become important export commodities for several 

SSA countries.52 Shea butter exports have continued to grow as the quality and quantities 

of shea production have increased in recent years.53 In 2008, the eight major West 

African producing countries harvested an estimated 560,000 metric tons (mt) of shea 

nuts, of which approximately 54 percent were destined for export.54 Of the products 

 51 Loders Croklaan moved to source only shea butter from SSA. Ghana Specialty Fats began producing 

a refined shea butter (stearin) for export in 2007. Reportedly, four other major oils and fats companies are 

investigating shea butter production closer to the production of shea nuts. Industry official, e-mail message to 

Commission staff, August 16, 2008. 52 For example, shea is a primary source of foreign exchange for Burkina Faso, after cotton and 

livestock. 53 Factors contributing to increased export values of shea include rising demand for CBE, increased 

prices, growing consumer awareness, training and funding for improved production, and increased private 

sector investment. USITC, Sub-Saharan Africa, 2008, 2-19–2-34. 54 Estimate for 2008. The remainder is consumed domestically as cooking oil, cosmetics, and building 

insulation. Industry official, e-mail message to Commission staff, August 16, 2008. 
6-11 

destined for export, approximately 40 percent were exported in the form of shea butter, or 

the equivalent of 30,000 mt of shea butter, the remainder as shea nuts.55 

Approximately 80 percent of SSA shea (nuts and unrefined butter) exports are shipped to 

Europe for processing into refined shea butter.56 The well-established European oils and 

fats industry has experience receiving, de-gumming, refining, and fractionating shea 

butter, whereas there is limited processing capacity in SSA.57 European companies then 

export refined shea butter and related downstream products, ranging from chocolate bars 

to cosmetic products. Limited quantities of shea butter are also produced in India and 

Japan.58

Effects of Infrastructure Conditions on the Competitiveness of SSA 

Exports of Shea Butter 

The shea industry in SSA has limited competition outside the region because shea nuts 

are only grown and harvested in SSA and shea butter has few competitive substitutes. As 

noted in box 6.1, CBE manufacturers choose which exotic fats to use largely based on 

quality characteristics and availability, which are superior commercial aspects of shea 

butter.59 Therefore, most SSA shea producers and exporters compete among themselves. 

At the firm level within SSA, poor road infrastructure, the limited availability and high 

costs of vehicles for harvesting and shipping, and unreliable and high-cost energy for 

mechanized shea processing contribute to increased production inefficiencies, poor 

quality, and increased costs. 

Shea Transport to Local Markets 

Poorly maintained roads between local villages and central markets disrupt delivery 

schedules and increase transportation costs, resulting in lower returns to local shea 

producers. If producers are able to guarantee the delivery date of their shea nuts and 

butter, they would likely be able to procure a premium price.60 Weather conditions, such 

as the rainy season that coincides with the shea harvest (generally June through 

September),61 contribute to poor road conditions and increased travel times. Poor road 

conditions, combined with higher vehicle repair costs, limit the number of rental vehicles, 

such as taxis, available to provide transport services to local markets. High vehicle repair 

 55 Calculations based on 3 kilograms of shea nuts per kilogram of shea butter. Industry official, 

interview by Commission staff, Accra, Ghana, November 1, 2007. 56 Unrefined shea butter is thought to have certain natural “healing” properties for skin and hair largely 

not found in other oils, which makes it highly marketable, especially as consumer awareness of shea butter 

has grown, creating a niche market for SSA producers. Although most industrial refining removes the healing 

portion of the shea butter, some techniques have been developed to retain the healing benefits of shea butter, 

some of which are certified organic. Fintrac Inc., “Buying and Selling Shea Butter,” October 2002. 57 Industry official, e-mail message to Commission staff, November 14, 2008. 58 India likely produces unrefined shea butter, as most Indian exotic vegetable fats, including 

domestically produced kokum, are exported to Europe or Japan, the primary locations of most refined 

processing operations. LMC International, Ltd., “The Impact of Directive 2000/26/EC,” June 2006, 38, 54. 59 The volumes of shea nuts harvested in West Africa far exceed total production levels of other exotic 

fats used in CBE production (sal, mango, illipe, and kokum). Other exotic fats are primarily produced in 

India and Indonesia (farther from the European fats industry) and face many of the same infrastructure issues 

as faced by shea butter producers. LMC International, Ltd., “The Impact of Directive 2000/26/EC,” June 

2006. 60 Industry official, interview by Commission staff, Kasalgu, Ghana, October 21, 2008. 61 USAID, “Mali Food Security Update,” February 2008; industry official, e-mail message to 

Commission staff, August 16, 2008. 
6-12 

costs also raise rental rates for those vehicles that are available, increasing the transport 

costs incurred by shea producers.62

In addition to using taxis, producers without significant access to capital who desire to 

sell their product at the central market often walk, bike, or rent a donkey cart to transport 

their shea.63 Buyers in central markets with access to capital often travel to surrounding 

villages and purchase nuts and butter at a discounted rate reflective of transportation costs 

that would be otherwise incurred (box 6.2). These buyers generally are more efficient in 

shea transport due to their ownership of vehicles.64 According to one buyer in Burkina 

Faso, the central market price was approximately twice the local village price, a 

significant enough differential that it is more cost effective to use his own vehicles for 

transport rather than pay the high price for nuts brought to the central market.65 Buyers 

are also able to be more selective in their shea nut and butter purchases outside the central 

market, improving the overall quality of their purchases66 and likely resulting in a higher 

resale price.67

BOX 6.2 Effects of Access to Capital on Shea Prices 

 

Buyers with access to capital are able to pre-finance their purchases and buy shea nuts 

and butter at a discounted rate by paying in cash at the time of purchase. This price 

concession is possible because shea producers are often willing to sell shea at a 

discount in order to receive immediate funds and provide for their familiesa as other 

marketing possibilities (e.g., taking shea nuts and butter to nearby markets) are limited or 

difficult to reach. For example, shea sales generally coincide with the rainy season and 

the worst feeder road conditions.b International buyers, accessing capital from their 

global operations, can often purchase shea nuts at a discount of 20–40 percent of the 

asking price.c In contrast, local buyers without such access to capital are required to 

borrow from other companies or banks or buy on credit, inflating the cost by roughly 30 

percent over the asking price. 

_____________________ 

 a Grain and food supplies are often at their lowest levels for the year during the shea 

sales period. Grain harvesting begins in October and extends through December. 

USAID, “Mali Food Security Update,” February 2008; Elias and Carney, “African Shea 

Butter,” January 1, 2007. 

 b The rainy season extends from May through September. c Industry official, interview by Commission staff, Accra, Ghana, October 20, 2008. 

 62 Industry official, interview by Commission staff, Kasalgu, Ghana, October 21, 2008. 63 In Ghana, taxis are generally hired, while donkey carts are typically hired in Burkina Faso. 64 Industry officials, interviews by Commission staff, Kasalgu, Ghana, October 21, 2008; and 

Ouagadougou, Burkina Faso, October 23, 2008. 65 Industry official, interview by Commission staff, Ouagadougou, Burkina Faso, October 23, 2008. 66 Industry official, interview by Commission staff, Ouagadougou, Burkina Faso, October 23, 2008. 67 Higher-quality nuts typically yield larger quantities of butter, which is also generally of a higher 

quality and can be sold at a premium. Reportedly, chocolate companies will stipulate the quality 

specifications, including free fatty acid content, unsaponfiables, moisture, and impurities, in their contract 

and will pay less for any product that falls short of stated specifications or even refuse payment. Similarly, 

cosmetic and pharmaceutical companies will refuse to purchase any product that does not meet their required 

specifications. Industry official, e-mail message to Commission staff, December 3, 2008. 
6-13 

Shea Butter Production 

High electricity costs minimize incentives for investment in machinery to improve the 

efficiency of shea butter production.68 Electricity costs factor into decisions on where 

processors locate their facilities and what type to build.69 For example, three mechanical 

shea butter factories operate in Ghana, where electricity costs are $0.09 per kWh.70 By 

contrast, only two semi-mechanical processing facilities operate in Burkina Faso, where 

electricity costs are $0.49 per kWh, the highest in the region and among the highest in the 

world.71 When electricity costs permit, mechanization of shea butter production can 

significantly increase processing efficiencies. For example, the largest of the three 

processing factories in Ghana has seven press screws and a production capacity of 140 mt 

of unrefined shea butter per day. In comparison, an average-sized women’s group72

produces 20 mt in a month.73

The power source for mechanical extraction can directly affect the quality of shea butter 

produced. Although mechanized facilities can be powered by diesel generators, less 

expensive sources of electrical power are preferred.74 Compared with diesel-powered 

generators, facilities powered by more efficient sources of electricity typically produce a 

finer and smoother shea butter, resulting in higher yields; a much lower free fatty acid 

content level, indicating higher quality; and increased financial returns.75

Shea Transport for Export 

Insufficient road maintenance, poor road conditions, and insufficient supply of transport 

vehicles increase the cost and time required to transport shea nuts and butter for export 

from SSA. In addition, overuse of major transportation corridors and excessive delays 

further contribute to increased costs and time requirements. The limited number of 

transportation corridors in West Africa and poor road conditions along these corridors 

increase the real distance and economic costs associated with inland transportation. 

For example, the major corridor for shea exports connects the port of Tema, Ghana, with 

Ouagadougou, Burkina Faso, via Tamale, Ghana (a major shea trading center). Although 

large quantities of shea butter are produced in western Burkina Faso and more direct 

routes to the ports of Abidjan, Côte d’Ivoire, and Tema are available, western Burkinabé 

shea exporters often ship products through Ouagadougou to the northeast to reach Tema 

because of poor road conditions along the more direct routes. According to one shipper, 

this detour, which adds approximately 1,500 km to a trip originally only 1,300 km, avoids 

the nearly impassable roads in northwestern Ghana.76 Similarly, Togolese shea exporters 

generally ship from the port in Lome, Togo, the closest port. However, because of a 

 68 This includes mill machinery, crushers, and kneading machines. Industry official, interview by 

Commission staff, Ouagadougou, Burkina Faso, October 23, 2008. 69 Other factors include political stability and access to raw materials. 

70 World Bank, Snapshot Africa, January 2007. 71 Industry official, interview by Commission staff, Ouagadougou, Burkina Faso, October 23, 2008. 72 Women’s groups are cooperative organizations of various sizes that work together to harvest, 

produce, and sell shea. 73 Industry official, interview by Commission staff, Northern Region, Ghana, October 22, 2008. 74 Industry official, interview by Commission staff, Tamale, Ghana, October 22, 2008. 75 Electrically powered machinery operates more consistently. Despite some notable benefits for 

mechanized production of shea butter, the quality is typically lower when compared to smaller manual 

operations, which are able to sort through nuts and select only those with the right moisture content, quality, 

and yield potential. Industry official, interview by Commission staff, Northern Region, Ghana, October 22, 

2008. 76 Industry official, interview by Commission staff, Paga, Ghana, October 22, 2008. 
6-14 

recently collapsed bridge along the primary corridor to the port, and poor road conditions 

rendering an alternative route impassable, many Togolese exporters must transport shea 

via Ouagadougou in the north and export through Tema rather than through Lome.77 This 

diversion adds an estimated 1,750 km to a trip that would otherwise be 650 km.78

Road congestion, vehicle breakdowns, excessive checkpoints, and border crossings all 

increase shea transport time. It can take an estimated 2–4 days to travel approximately 

1,360 km between Paga at the Ghanaian–Burkinabé border and Tema. Along the way, a 

driver may be stopped as many as 25 times, when only four checkpoints are officially in 

place.79

 77 Industry official, interview by Commission staff, Accra, Ghana, October 20, 2008. 78 Industry official, interview by Commission staff, Accra, Ghana, October 20, 2008. 79 Industry official, interview by Commission staff, Paga, Ghana, October 22, 2008. 
6-15 

Tropical Fruit 

Summary of Findings 

Infrastructure conditions in SSA have a significant effect on the competitiveness of SSA 

tropical fruit producers and exporters, particularly smaller producers. Neglected feeder 

roads, poorly maintained major transport networks, limited cold storage facilities affected 

by high electricity costs, port inefficiencies, and limited shipping options increase 

transportation time to market and compromise product quality—the critical competitive 

factors for perishable fruit with a limited shelf life. As a result, rejection rates by buyers 

are often higher and returns to SSA producers and exporters are often lower, compared 

with other global tropical fruit exporters. 

Introduction 

Industry Overview 

Tropical fruit is grown and harvested throughout much of East and West Africa, although 

West Africa accounts for most SSA exports of tropical fruit. Tropical fruit producers in 

West Africa are either large, export-oriented plantations, medium-sized local companies, 

or small-scale out-growers.80 Bananas and pineapples account for the overwhelming 

majority of tropical fruit production in SSA. 

Large plantations, such as the banana plantations of Cameroon, Côte d’Ivoire, and Ghana, 

operate through one ownership group, generally joint ventures between multinationals 

and local firms or wholly owned subsidiaries of multinational firms. These plantations, 

usually larger than 500 hectares, often possess their own trucks, packing houses, shipping 

lines, and distribution networks, and have established relationships with customers in the 

EU. Large plantations also invest capital in local infrastructure, including road networks 

surrounding their plantations, in order to maximize efficiency and limit damage to the 

fruit in transit. Greater access to capital allows larger plantations to operate with 

improved infrastructure conditions and benefit financially from these investments. 

Medium-sized local companies, or farmer-based organizations (FBOs), tend to be 

managed by comparatively large, centrally located, nucleus farms. In addition to what is 

produced on-site, FBO operations source, pack, and market fruit from small-scale outgrowers. Small out-growers operate farms generally 0.5–10 hectares in size and sell their 

product to nucleus farms and at local markets via revolving supply contracts, making 

small out-growers vital to the success of the SSA tropical fruit industry. In turn, outgrowers generally receive technical and financial assistance from nucleus farms, thereby 

increasing their access to training and inputs such as mechanical equipment and seeds.81

Small out-growers tend to grow pineapples because the initial investment cost of 

establishing a pineapple farm is relatively low compared to the investment costs needed 

to grow other fruit, such as bananas.82 Recent developments, such as the political 

uncertainty in Côte d’Ivoire and the shift in consumer preference from the traditional 

 80 Out-growers are small producers at dispersed locations, distinct from centrally located producers, 

such as larger tropical fruit plantations, with cold storage facilities. 81 Industry official, interview by Commission staff, Tamale, Ghana, October 21, 2008. 82 Minot and Ngigi, “Are Horticultural Exports a Replicable Success Story?” December 1–2, 2003, 36. 
6-16 

Smooth Cayenne pineapple variety to the sweeter, less acidic MD2 variety of pineapple, 

have spurred a trend toward more plantation-style pineapple production.83

International Trade 

In 2007, global exports of pineapples totaled almost $1.6 billion and were dominated by 

Central American producers. Pineapple exports from Costa Rica alone were almost seven 

times larger than those from SSA. Exports of pineapples by SSA countries in 2007 

totaled $152 million, or approximately 10 percent of global exports.84 The largest SSA 

exporters were Côte d’Ivoire, Ghana, and Cameroon (figure 6.3).85 Globally, more than 

three-quarters of pineapple exports are destined for either the EU or the United States; the 

EU is the largest market for SSA pineapple exports (figure 6.4). 

In 2007, global exports of bananas totaled nearly $7.7 billion, with Central and South 

America (collectively referred to as Latin America) accounting for the vast majority of 

that amount. The largest banana producers in SSA export small percentages of their total 

production, in part because of the distances to ports, poor road infrastructure, and long 

transport times. SSA exports of bananas in 2007 totaled $439 million, or approximately 6 

percent of global exports (figure 6.5). The largest SSA exporters were Cameroon, Côte 

d’Ivoire, and Ghana. Almost all SSA exports of bananas are destined for the EU (figure 

6.6). 

Effects of Infrastructure Conditions on the Competitiveness of SSA 

Exports of Tropical Fruit 

Infrastructure conditions have a significant effect on postharvest treatment of fruit, which 

affects final product quality and, in turn, the export competitiveness and financial returns 

of tropical fruit producers. In SSA, poor infrastructure conditions, such as inferior road 

networks, few cold storage facilities, and less than ideal port operations, facilities, and 

shipping availability, render production and distribution inefficient, compromising 

product quality along the entire supply chain. As a result, SSA product is often of lower 

quality and rejection rates by buyers are often higher than for Latin American 

competitors. 

 83 For more information on the transition to the MD2 variety and its impact on the industries in the 

region, see USITC, Sub-Saharan Africa, 2008, 2-48–2-71. 84 Factors contributing to shifts in exports of tropical fruits from SSA include demand growth for 

bananas and pineapples, the development of new pineapple varieties, increased foreign investment, price 

increases for bananas, assistance from international aid programs, and the development of industry 

organizations and government support institutions. See USITC, Sub-Saharan Africa, 2008, 2-48–2-71. 85 The largest SSA producers of pineapples are Nigeria and Kenya, although most pineapples produced 

in those countries are consumed domestically. FAO, FAO Stat Global Production Database (accessed 

December 10, 2008). 
6-17 

Costa Rica

64.4%

Philippines

10.4%

SSA

9.6%

Ecuador

4.2%

Panama

2.7%

Other

8.9%

Côte d’Ivoire

42.9%

Ghana

38.3% Cameroon

6.5%

South Africa

6.4%

Other

5.9%

FIGURE 6.3 Leading global and SSA exporters of pineapple, 2007

Global exporters SSA exporters

$1,584.4 million $151.5 million

Source: GTIS, Global Trade Atlas Database. Annual data compiled from reporting countries’ official

statistics, including EU external trade.

Note: Data may not equal 100 percent due to rounding.

EU27

50.6%

U.S.

27.2%

Japan

5.9%

Canada

5.9%

South Korea

3.4%

Russia

1.7%

Other

5.5%

EU27

86.7%

Russia

6.6%

Switzerland

4.6%

Other

2.1%

FIGURE 6.4 Leading markets for global and SSA exports of pineapple, 2007

Global export markets SSA export markets

$1,584.4 million $151.5 million

Source: GTIS, Global Trade Atlas Database. Annual data compiled from reporting countries’ official

statistics, including EU external trade.

Note: Data may not equal 100 percent due to rounding.
6-18 

Ecuador

Costa Rica 31.5%

16.1%

Colombia

15.4%

Philippines

12.4%

SSA

5.7%

Guatemala

4.8%

Panama

4.3%

Other

9.8%

Cameroon

47.5%

Côte d’Ivoire

43.4%

Ghana

6.6%

Other

2.5%

FIGURE 6.5 Leading global and SSA exporters of bananas, 2007

Global exporters SSA exporters

$7,653.3 million $439.1 million

Source: GTIS, Global Trade Atlas Database. Annual data compiled from reporting countries’ official

statistics, including EU external trade.

EU27

49.2%

U.S.

16.0%

Russia

7.7%

Japan

7.6%

Canada

3.1% South Korea

2.2%

Saudi Arabia

1.6%

China

1.4%

Other

11.2%

EU27

94.6%

SSA

3.4%

Morocco

1.4%

Other

0.6%

FIGURE 6.6 Leading markets for global and SSA exports of bananas, 2007

Global export markets SSA export markets

$7,653.3 million $439.1 million

Source: GTIS, Global Trade Atlas Database. Annual data compiled from reporting countries’ official

statistics, including EU external trade.
6-19 

From Harvest to Packing 

Out-growers load their tropical fruit harvest into the bed of a truck and transport it over 

feeder roads in loose, unpackaged form to packing facilities or nucleus farms, where the 

fruit is placed into cardboard packaging boxes and then precooled. The condition of these 

feeder roads is critical to maintaining the quality and value of the fruit. The roads are 

rarely paved and travel speeds are slow, which delays the refrigeration of the fruit and 

decreases shelf life. This additional time is crucial; industry officials estimate that every 

hour a pineapple spends in the sun before being cooled is equivalent to one extra day of 

time onboard a ship in cold storage.86 Rutted and potholed feeder roads also damage the 

fruit during transport. Consequently, when sourcing from out-growers, nucleus farms 

reject large volumes of fruit during their screening process because the fruit does not 

meet quality standards; industry officials report that approximately 15 to 20 percent of 

fruit delivered by out-growers is rejected.87

The poor condition of these feeder roads is a competitive disadvantage for most West 

African producers compared to Latin American competitors. In Latin America, most 

production occurs on larger plantations that have access to capital and possess other 

financial advantages. Local governments and the multinational firms that operate these 

farms have developed and improved road networks in and around these plantations over 

time through both private and public investment.88

Packing, Cold Storage, and Electricity Costs and Connectivity 

In addition to the poor quality of feeder roads, the lack of cold storage throughout the 

supply chain is a significant infrastructure constraint for West African tropical fruit 

producers. A complete cold-storage supply chain for tropical fruit preserves the quality 

and increases the value of the fruit by reducing spoilage and extending shelf life. 

Maximizing shelf life increases export competitiveness and, correspondingly, the prices 

received in global markets89

The lack of cold storage and electric connectivity are critical competitive disadvantages 

for West African producers. In Costa Rica and other export-oriented countries throughout 

Latin America, cold storage is maintained throughout the entire supply chain, and as a 

result, the fruit is more likely to be delivered to customers in optimal condition. Because 

production usually takes place on larger plantations that have access to capital, producers 

in Latin America can generally afford to invest in cold storage facilities. Also, these 

larger farms reportedly are almost always connected to electrical grids, have reliable 

access to affordable electricity, and therefore have much lower energy costs.90

Unlike in Costa Rica, many tropical fruit producers in West Africa are located in more 

rural areas, far from major road networks and ports, and do not have access to the 

national electrical grid unless they pay for the installation themselves. The initial 

investment for connection, which includes the poles, wiring, and transformers, is often 

prohibitive for producers of all sizes. Transformers alone cost nearly $300,000.91 As a 

result, many producers remain disconnected from the grid. 

 86 Industry official, interview by Commission staff, Accra, Ghana, October 27, 2008. 87 Industry official, interview by Commission staff, Tamale, Ghana, October 21, 2008. 88 Industry official, telephone interview by Commission staff, December 22, 2008. 89 Industry official, interview by Commission staff, Accra, Ghana, October 27, 2008. 90 Industry official, telephone interview by Commission staff, December 22, 2008. 91 Industry official, interview by Commission staff, Accra, Ghana, October 24, 2008. 
6-20 

The large capital investment required to construct cold storage facilities ($120,000–

$135,000 in most cases), and high electricity costs when operating the facilities, hamper 

cold-storage facility expansion in the West African region and result in a lack of 

sufficient cold storage availability throughout the supply chain.92 Access to credit is 

extremely limited, and because most farms operate with low profit margins, they cannot 

afford to finance these investments on their own. As a result, expansion often depends on 

external financing or donations from international aid and development groups. 

The electrical costs of operating cold storage facilities in West Africa are prohibitive for 

many smaller-sized tropical fruit producers. Because the electricity distribution systems 

in Ghana and Côte d’Ivoire experience frequent outages, all packing facilities, even if 

connected to the electrical grid, rely on backup generators. Although the percentages vary 

depending on the region, tropical fruit producers connected to the electrical grid in Ghana 

estimate that they source electricity from their diesel generators more than 30 percent of 

the time, at a cost that is approximately twice the cost of electricity supplied from the 

national electric grid.93

Nucleus farms without electric connectivity operate solely on diesel generators, which 

increase costs substantially. For example, the staff of a nucleus farm that exports 

relatively small quantities of tropical fruit from northern Ghana estimated that if the farm 

were connected to the grid and the supply were fairly reliable, its energy costs would 

decrease by 60 percent or more.94 These cost differences apply to large-scale exporters as 

well. One of the largest tropical fruit exporters in the region estimated that generator 

power accounts for approximately 15 percent of total costs. If connected to the grid, the 

exporter estimated that his power costs would decrease by 50 percent, to 7.5 percent of 

total costs.95

Exports of pineapples from independent out-growers have declined substantially as a 

result of difficulties accessing cold storage facilities. The importance of cold storage 

increased with the transition to the MD2 pineapple variety because, without cold storage, 

the new variety’s quality diminishes faster than traditional varieties. As a result, many 

out-growers have not been able to transition to the MD2 variety because cold storage 

facilities are not available within a reasonable distance of their farms,96 leaving a large 

number of out-growers without a foreign market for their product. 

From Packing to the Port and Beyond 

Once harvested tropical fruit arrives at the packing facility, it is sorted and packed in 

containers and, ideally, precooled. The containers are then placed on trucks that are 

generally refrigerated and shipped to the port. Congested and poorly maintained roads 

and numerous checkpoints increase the time and cost of transporting tropical fruit from 

packing to port, even over short distances. For example, it takes approximately one hour 

to transport produce from one farm 100 km away from the port of Tema, Ghana, whereas, 

because of poor transport conditions, it takes approximately three hours to transport 

 92 The industry official estimated a cost of €90,000–100,000, converted to U.S. dollars at a rate of $1.33 

per euro. Out of 26 nucleus farms that comprise the Sea-Freight Pineapple Exporters of Ghana, only 7 had 

cold storage facilities as of January 2009. Industry official, interview by Commission staff, Accra, Ghana, 

October 28, 2008. 93 Industry officials, interviews by Commission staff, Accra, Ghana, October 27, 2008; and Awutu 

Efutu Senya, Ghana, October 28, 2008. 94 Industry official, interview by Commission staff, Tamale, Ghana, October 21, 2008. 95 Industry official, interview by Commission staff, Accra, Ghana, October 27, 2008. 96 Industry official, interview by Commission staff, Awutu Efutu Senya, Ghana, October 28, 2008. 
6-21 

produce from another farm only 70 km from the same port.97 If the fruit is being 

transported in cold storage, then the additional transport time may not affect the fruit 

quality as dramatically, but entire truckloads of produce can be lost because of poor road 

conditions. One producer reportedly lost two truckloads of pineapples during a threemonth period when his trucks overturned as a result of unstable road conditions.98 In 

contrast, road access in Costa Rica is reportedly more reliable and direct to the port, 

resulting in lower transport times and fewer vehicular accidents.99

Port operations throughout West Africa affect fruit shipment quality and the 

competitiveness of tropical fruit exports. Tropical fruit exports from West Africa are at a 

disadvantage in export markets compared to other global competitors because of 

inefficient or infrequent shipping routes. Poor handling at the port can damage the fruit 

and lead to higher rejection rates than those experienced by Latin American exporters. 

Despite being a comparable distance by sea from the EU, tropical fruit shipped from the 

largest exporters in Latin America spends less time in transit between ports than tropical 

fruit shipped from West Africa.100 Most of the produce exported from Latin America is 

shipped on dedicated fruit vessels operated by the major global produce companies, such 

as Dole and Del Monte. Dedicated fruit vessels are available less frequently in West 

Africa than in Latin America because of limited regular quantities of SSA tropical fruit 

exports. Therefore, most fruit exports from West Africa are shipped on container vessels, 

which are less costly than dedicated fruit vessels.101 Latin American producers reportedly 

benefit from efficient shipping route options to all of the major ports in the EU, with 

produce often reaching its final EU destination, such as Antwerp, Belgium, in 12 or 13 

days.102 In contrast, some produce exported from West Africa is shipped on container 

vessels that make other port calls en route and can take around 20 days to arrive at its 

final EU destination. The additional days in transit lower the fruit’s value to a retailer.103

In addition, the mishandling of containers can cause damage to the fruit prior to 

departure. Between 2 and 3 percent of fruit exports from West Africa are reportedly 

damaged as a result of poor handling at West African ports, compared to an approximate 

1 percent damage rate in Latin America.104

In an attempt to improve fruit quality and compete with other global exporters, West 

African industry and port operators are constructing portside tropical fruit cold storage 

facilities. For example, a new fruit handling terminal with expanded cold storage 

facilities at the port of Tema was completed in October 2008, although it is not yet 

operational because of delays in concluding an agreement on its operations among the 

Ghanaian Ministry of Agriculture, the Sea-Freight Pineapple Exporters of Ghana, and the 

Ports Authority. The expanded facility is expected to increase cold storage capacity and 

 97 Industry official, interview by Commission staff, Accra, Ghana, October 27, 2008. 98 Industry official, interview by Commission staff, Awutu Efutu Senya, Ghana, October 28, 2008. 99 Industry official, interview by Commission staff, Awutu Efutu Senya, Ghana, October 28, 2008. 100 For more information on maritime infrastructure in SSA, see chap. 4 of this report. 101 Whereas shipping a reefer container from West Africa to northern Europe can cost approximately 

$3,300, shipping the same quantity of tropical fruits in palettes on a dedicated fruit vessel can cost almost 

twice as much. Industry official, e-mail message to Commission staff, November 20, 2008. 102 Hapag-Lloyd, “Schedules,” undated (accessed December 3, 2008); Dole Ocean Cargo Express, 

“Sailing Schedules,” undated (accessed November 14, 2008). 103 Currently, sailing times from Tema, Ghana, to Antwerp, Belgium, can take more than 20 days due 

to additional port calls in Senegal, Morocco, and Spain. Maersk Line, “Route Schedules by Map-Africa,”

October 3, 2008. 104 Industry official, telephone interview by Commission staff, December 22, 2008. 
6-22 

decrease cold storage costs compared to the high rates charged to tropical fruit exporters 

for storing refrigerated containers at the port.105 

 105 Industry official, e-mail message to Commission staff, September 25, 2008. 
6-23 

Natural Rubber 

Summary of Findings 

Poor infrastructure conditions and high electricity costs increase production costs and 

have a negative effect on the competitiveness of SSA exports of natural rubber. They also 

hinder the ability of SSA countries to expand production and exports of natural rubber 

and rubber products. With the exception of South Africa, SSA countries have not been 

successful in manufacturing goods from natural rubber for their domestic or regional 

export markets. The high price of electricity is the major obstacle to manufacturing 

downstream rubber products that are cost competitive with imports. However, SSA 

countries do have some advantages over their primary competitors in Southeast Asia, 

including abundant, inexpensive land suitable for rubber planting and high productivity 

of newly planted areas. 

Introduction 

Industry Overview 

Natural rubber is a commodity product collected from the Hevea brasiliensis tree, which 

grows well in warm, wet climates.106 It is most often collected by small land holders who 

harvest unprocessed rubber from an area of about 2 to 20 hectares and sell it to nearby 

processors. Natural rubber is also produced on estates or plantations, usually covering 

thousands of hectares, where the company owning the land manages the entire rubber 

production process. An estimated 75 percent of solid rubber is used for the production of 

tires.107 Other products made from solid rubber include hoses, seals, conveyor belts, and 

foam rubber. 

Natural rubber production in SSA is concentrated in the equatorial regions of West 

Africa.108 Côte d’Ivoire, Liberia, Cameroon, and Nigeria are the largest natural rubber 

producers and exporters in SSA, together accounting for about 91 percent of SSA natural 

rubber production and exports.109 In Côte d’Ivoire, small land holders account for about 

61 percent of the area dedicated to rubber production.110 In Liberia, production is 

dominated by a large estate that has been owned by Firestone Natural Rubber Co., LLC, 

since 1924.111 In Nigeria, small holders account for about 60 percent of the area dedicated 

to natural rubber production. 112 

 106 Baker and Fulton, “Rubber, Natural,” 1997, 2. For more information on natural rubber production 

and factors affecting SSA trade in natural rubber in recent years, see USITC, Sub-Saharan Africa, 2008, 3-

17–3-30. 107 USITC, Sub-Saharan Africa, 2008, 3-19. 108 Historically, the DRC was a major exporter of natural rubber. Recently, the DRC’s natural rubber 

production has been greatly reduced because of internal conflict. The DRC’s dilapidated transportation 

infrastructure also hinders the development of natural rubber production. See OECD and AfDB, African 

Economic Outlook 2007/2008, 2008, 244. 109 IRSG, Rubber Statistics Bulletin, table 7, January–February 2008. 110 USITC, Sub-Saharan Africa, 2008, 3-20; IRSG, Rubber Statistics Bulletin, table 46, January–

February 2008. 111 Africa News, “Liberia: President Issues Executive Order,” November 22, 2008. Firestone recently 

renegotiated the concession for the estate with the Liberian government and has rights to the concession until 

2041. Rubber & Plastic News, “Houses of Liberian Legislature Ratify Pact,” April 14, 2008. 112 IRSG, Rubber Statistics Bulletin, table 46, January–February 2008. 
6-24 

Estate production is typically more efficient than small-holder production because estate 

employees often have better technical knowledge that enables them to produce more 

natural rubber per hectare.113 However, government policies in both SSA and Southeast 

Asia, SSA’s closest competitor, tend to favor small holders over large estates.114 Small 

holders also have more flexibility to switch to different crops or different sources of 

income when the price of rubber falls because they do not have as much capital invested 

as the estates.115

International Trade 

SSA exports of natural rubber topped $912 million in 2007, or about 6 percent of global 

exports that year (figure 6.7). Côte d’Ivoire, Liberia, Cameroon, and Nigeria together 

accounted for almost 90 percent of SSA exports. In comparison, the world’s three largest 

exporters of natural rubber, all based in Southeast Asia, accounted for 84 percent of 

global exports that year—more than 13 times the amount of SSA natural rubber exports. 

The EU and the United States are the largest markets for SSA natural rubber, together 

accounting for 88 percent of SSA exports (figure 6.8). About 66 percent of SSA natural 

rubber exports are for the production of tires in the EU and United States.116 SSA 

countries shipped little natural rubber to China, the world’s largest importer of natural 

rubber.117

Although SSA lags behind Asian countries in terms of total production and exports of 

natural rubber, production per hectare in some SSA countries is on par with or exceeds 

that of Southeast Asian countries. Production per hectare in Côte d’Ivoire and Liberia is 

higher than or similar to the production levels in the three top Southeast Asian countries 

(table 6.2). Côte d’Ivoire’s productivity advantage over producers in Southeast Asia is 

attributable to a higher proportion of estate production and the use of superior rubber tree 

clones.118 Nigeria’s production per hectare is substantially lower. Government policies 

that have focused more on crude petroleum production than on natural rubber production 

have resulted in a lack of investment to replace old, less productive trees with new 

seedlings.119 Some of the advantages that West African countries have over Southeast 

Asian producers are abundant land suitable for plantation development, lower plantation 

land acquisition cost, higher natural rubber yields, lower corporate taxes, and proximity 

to European and U.S. markets.120

 113 IRSG, “The African Rubber Industry,” 2002, 8. 114 Industry official, interview by Commission staff, Anguedou, Côte d’Ivoire, October 31, 2008; 

IRSG, “The African Rubber Industry,” 2002, 14. 115 IRSG, “The African Rubber Industry,” 2002, 14. 116 Ibid. 117 However, a Singaporean company, GMG, which owns 90 percent of the Hevecam plantation in 

Cameroon, wants to expand production at this plantation to supply the Chinese state-owned company 

Sinochem. Tumanjong, “Sinochem Intl To Be Major Consumer,” November 10, 2008. 118 Industry official, interview by Commission staff, Abidjan, Côte d’Ivoire, October 31, 2008. 119 IRSG, “The African Rubber Industry,” 2002, 11–12. 120 Business Times (Singapore), “Olam, Wilmar in 50:50 African Joint Venture,” November 16, 2007; 

Jones, “Vietnam Mulls Africa Rubber Plantations,” July 15, 2008. 
6-25 

Thailand

34.0%

Indonesia

32.9%

Malaysia

17.4%

SSA

6.2%

Vietnam

4.7%

Other

4.9%

Côte d’Ivoire

43.7%

Liberia

24.7%

Cameroon

12.2%

Nigeria

8.7%

Ghana

3.4%

Gabon

2.9%

Guinea

2.8%

Other

1.6%

FIGURE 6.7 Leading global and SSA exporters of natural rubber, 2007

Global exporters SSA exporters

$14,693.5 million $912.1 million

Source: GTIS, Global Trade Atlas Database. Annual data compiled from reporting countries’ official

statistics, including EU external trade.

Note: Data may not equal 100 percent due to rounding.

China

22.2%

EU27

21.1%

U.S.

14.4%

Japan

12.3%

Malaysia

5.5%

South Korea

5.4%

Brazil

3.3%

Singapore

2.2%

Other

13.7%

EU27

72.5%

U.S.

15.6%

SSA

3.6%

Canada

3.3%

Ukraine

2.0%

Other

3.0%

FIGURE 6.8 Leading markets for global and SSA exports of natural rubber, 2007

Global export markets SSA export markets

$14,693.5 million $912.1 million

Source: GTIS, Global Trade Atlas Database. Annual data compiled from reporting countries’ official

statistics, including EU external trade.

Note: Data may not equal 100 percent due to rounding.
6-26 

TABLE 6.2 Natural rubber industry statistics for select West African countries and their major competitors, 2006 

 

SSA 

 

Southeast Asia 

Statistic 

Côte 

d’Ivoire Liberia Nigeria Thailand Indonesia Malaysia 

Production of natural rubbera 

(mt) 

178,300 100,500 44,000 3,137,000 2,637,000 1,283,000 

Rubber producing land area 

 (hectares) 

121,700 108,900 150,000 2,294,700 3,309,000 1,225,000 

Small landholders (%) 60.7 44.5 60.0 (b) 84.5 95.5 

Productivity (kg per 

 hectare) 

1,465 923 293 1,367 797 1,047 

Domestic consumption of 

 natural rubber (mt) 

(

c

) (c) 17,000 320,900 355,000 383,300 

Source: IRSG, Rubber Statistical Bulletin, January–February 2008. 

 aLast full year for which data are available. bNot available. cNot available. Total domestic consumption by natural rubber producers in Africa other than Nigeria was estimated 

to be 5,000 mt in 2006. Côte d’Ivoire is known to have some domestic consumption of natural rubber to make rubber 

gloves. Liberia has no known domestic consumption. 

Effects of Infrastructure Conditions on the Competitiveness of SSA 

Exports of Natural Rubber 

Natural rubber producing countries in SSA are primarily hindered by a poor road network 

for transporting raw rubber to the processing plant and by high electricity costs. These 

factors raise the cost of both processing natural rubber and making consumer goods from 

locally produced rubber. Moreover, the unreliability of the electricity supply causes many 

SSA factories to use on-site electric generators, which increase factory costs compared 

with competitors outside the region. As a result, natural rubber producing countries in 

SSA cannot make goods from locally produced natural rubber that are competitive 

outside the domestic market. 

Collection of Unprocessed Rubber 

The lack of road infrastructure in SSA affects the ability of the industry to expand 

production. In Côte d’Ivoire, there is available, arable land considered suitable for 

planting more rubber trees, but the rubber industry is unable to expand because of the 

lack of an adequate road network connecting the rubber tappers121 to the processing 

facilities, and the high costs of laying paved roads in these areas.122 For areas harvested 

by small land holders, processing plants collect natural rubber from many individual 

farmers at distances of 50–100 km from the plant.123 In the past, the plant owners covered 

the cost of transportation from the small farms to the plant. Many processors are now 

implementing a system whereby they pay the farmer a set transportation price for 

delivering the unprocessed rubber. Processors anticipate that this program will give small 

land holders an incentive to find the most efficient means of transporting their rubber.124

The transportation price provided by the processing plant generally varies by the distance 

that the farmer ships the rubber. Some farmers may be able to earn an extra $0.04 per 

 121 Workers that collect natural rubber from the tree. 122 Industry official, interview by Commission staff, Abidjan, Côte d’Ivoire, October 31, 2008. 123 Industry official, interview by Commission staff, Abidjan, Côte d’Ivoire, October 31, 2008. 124 Industry official, interview by Commission staff, Anguedou, Côte d’Ivoire, October 31, 2008. 
6-27 

kilogram (kg) of unprocessed rubber if they secure efficient transportation.125 This money 

could be invested in expanding or improving their farms.126

Processing Natural Rubber and Products Made of Natural Rubber 

Power outages and high electricity costs are a major hindrance to competitive production 

of natural rubber and rubber products.127 Electricity powers equipment that washes, 

masticates, and presses the water out of the collected, unprocessed rubber. Many natural 

rubber factories invest in their own generating facilities even if they have access to the 

local electricity grid, as on-site generation provides more reliable power than the grid.128

Factories in Côte d’Ivoire that use the grid typically only use less reliable grid electricity 

for lighting and in offices, while production equipment runs using on-site generators.129

Producers in Côte d’Ivoire typically use diesel generators, in part because government 

subsidies are highest for heavy fuels.130 However, increases in the price of crude 

petroleum have prompted some producers to switch from diesel to cheaper natural gas to 

reduce power generation costs.131

With a few exceptions, SSA countries do not produce manufactured items from locally 

produced natural rubber. The ability to produce downstream products in many of the 

natural rubber producing countries is hampered by inadequate infrastructure and/or 

political instability. For example, Michelin shut down its tire plant in Nigeria in 2007 

because it was no longer cost competitive.132 The chief executive officer of Dunlop 

Nigeria stated that decaying infrastructure, especially electrical power, makes production 

of tires in Nigeria about 40 percent more expensive than elsewhere.133 A survey of 

manufacturers in Nigeria reported that over 90 percent of the rubber and chemical 

producers in the country cited electricity as the biggest infrastructure problem.134 More 

than 93 percent of those surveyed experienced more than five power outages per week.135

In 2005, the mean cost per outage to rubber and chemical producers was $312,000.136

Exporting Processed Natural Rubber 

Most natural rubber processing plants and rubber growing areas in SSA are located along 

the Atlantic coast near ports. Even though the distances are relatively short, the cost of 

transporting containers to the ports is high.137 Natural rubber producers in Côte d’Ivoire 

ship their products out of the ports of Abidjan and San Pedro; Abidjan is the larger port 

and handles most of the cargo. One producer in Côte d’Ivoire stated that costs of 

transporting containers to the port and terminal charges are high, due in part to 

 125 The price that a farmer receives for raw rubber reached as high as $0.90 per kg when petroleum 

prices were high, but the price in October 2008 in Côte d’Ivoire was closer to $0.65 per kg. The price of 

natural rubber changes with the price of crude petroleum because a competing product, synthetic rubber, is 

made from petroleum. Industry official, interview by Commission staff, Abidjan, Côte d’Ivoire, October 31, 

2008. 126 Industry official, interview by Commission staff, Abidjan, Côte d’Ivoire, October 31, 2008. 127 Africa News, “Nigeria: Common Tariff Will Kill Manufacturing Effort,” July 29, 2007. 128 Industry officials, interviews by Commission staff, Anguedou and Abidjan, Côte d’Ivoire, 

October 31, 2008. 129 Industry official, interview by Commission staff, Abidjan, Côte d’Ivoire, October 31, 2008. 130 Industry official, interview by Commission staff, Anguedou, Côte d’Ivoire, October 31, 2008. 131 Industry official, interview by Commission staff, Anguedou, Côte d’Ivoire, October 31, 2008. 132 BBC News, “Michelin to Close Nigerian Plant,” January 18, 2007. 133 Business Times (Singapore), “Olam, Wilmar in 50:50 African Joint Venture,” November 16, 2007. 134 Adenikinju, “Analysis of the Cost of Infrastructure Failures,” table 8, February 2005, 21. 135 Ibid., table 12, 23. 136 Ibid., table 18, 26. 137 Industry official, interview by Commission staff, Anguedou, Côte d’Ivoire, October 31, 2008. 
6-28 

insufficient competition among freight carriers. However, the port of Abidjan is still 

considered by exporters to be one of the best ports in the region in terms of infrastructure 

and computerization, which reduces the delay and cost of customs clearance.138

According to the World Bank, the customs clearance and technical control portion of the 

export procedure take three days and cost $81 in Côte d’Ivoire, compared to six days and 

$355 in Liberia and 3 days and $300 in Nigeria.139 However, the high costs of port and 

terminal handling and inland transportation lead to a higher overall cost of export from 

Côte d’Ivoire than from Liberia or Nigeria (table 6.3). SSA countries rank much lower in 

the World Bank’s Trading Across Borders ranking than their major competitors in 

Southeast Asia. 

TABLE 6.3 Exporting costs for natural rubber–producing countries in West Africa and their major competitors 

 SSA Southeast Asia 

Indicator Côte d’Ivoire Liberia Nigeria Thailand Indonesia Malaysia 

Documents required 

 to export 

 (number)a

10 10 9 4 5 7 

Time to export 

 (days)b 23 20 25 14 21 18 

Cost to export 

 ($/container)c 

SSA rankd

1,904 

32 

1,232 

13 

1,179 

23 

625 

(

e

) 

704 

(

e

) 

450 

(

e

) 

Overall rankf 155 115 144 10 37 29 

Source: World Bank, Doing Business Online Database (accessed January 15, 2009). 

Note: Container refers to a 20-foot-long container for bulk commodities. 

 aIncludes bank documents, customs clearance documents, port and terminal handling documents, and 

transport documents. 

 bIncludes the time for obtaining all documents, inland transport, customs clearance and inspections, and 

port and terminal handling. Does not include ocean transport time.

 cIncludes the cost of obtaining all documents, inland transport, customs clearance and inspection, and 

port and terminal handling. Includes official costs only; no bribes or tariffs. 

 dRankings are based on a simple average of trading across borders indicators, out of 46 SSA economies 

(Djibouti and Somalia are not included). 

 eNot applicable. fRankings are based on a simple average of trading across borders indicators, out of 181 economies. 

 138 U.S. Department of State, U.S. Embassy, Abidjan, “Response to Request for Information,” 

October 2, 2008. 139 World Bank, Doing Business Online Database (accessed February 24, 2009). 
6-29 

Textiles and Apparel 

Summary of Findings 

Infrastructure conditions are one of the many constraints affecting the competitiveness of 

textile and apparel exports among SSA producers, as well as between SSA producers and 

global competitors. Inadequate infrastructure, such as unreliable electricity, poor road 

quality, and limited access to international shipping, increases production costs and limits 

speed to market. As a result, most SSA manufacturers produce lower-value, basic apparel 

products. Additional constraints include, but are not limited to, geographic distances to 

major markets, lack of access to affordable capital, and political instability. 

Introduction 

Industry Overview 

The textile and apparel industries140 are important sources of employment and foreign 

exchange earnings in several SSA countries. Textile production in SSA is limited and 

most apparel produced for export is manufactured using fabric and trim from thirdcountry sources such as China, Taiwan, India, and Indonesia. For example, in 2007, 

approximately 86 percent of U.S. apparel sourced from SSA was imported free of duty 

from lesser-developed AGOA beneficiary countries141 using fabric imported from a third 

country.142 SSA apparel producers generally supply foreign retailers in the United States 

and the EU on a contract basis with products such as basic T-shirts, jeans, and other 

commodity-type apparel that generally do not change in response to fashion trends. 

International Trade 

SSA accounted for less than 1 percent of global exports of textiles and apparel in 2007 

(figure 6.9). In that year, SSA exports of textiles and apparel amounted to $3.2 billion, 

the majority of which (82 percent, or $2.6 billion) were apparel.143 SSA exports of 

textiles and apparel combined are primarily destined for the U.S. and EU markets (figure 

6.10). Ninety percent ($2.35 billion) of all SSA apparel exports were shipped to these 

markets in 2007. In contrast, most SSA textile exports (40 percent, or $225 million) were 

destined for other SSA markets.144 SSA textile and apparel exports originate from a few 

large suppliers, namely Mauritius, Madagascar, South Africa, Lesotho, Kenya, and 

Swaziland. These countries accounted for 93 percent of SSA apparel exports and 

77 percent of SSA textile exports in 2007.145

 140 The textile industry covers a wide range of products, including intermediate inputs (yarns and 

fabrics), as well as finished products of cotton, wool, other natural fibers, and manmade fibers (i.e., made-up 

textile articles, including carpeting, bedding sheets, and towels). The apparel industry also covers a wide 

range of products, including woven, knit, or nonwoven garments such as shirts, trousers, gloves, headwear, 

and neckwear. 141 Lesser-developed AGOA beneficiary countries are those AGOA countries having a per-capita GDP 

of less than $1,500 in 1998, as measured by the World Bank. In addition, AGOA also grants lesser-developed 

beneficiary country status to Botswana, Namibia, and most recently to Mauritius. 142 USDOC, OTEXA, “Trade Preference Programs,” November 2008. Lesser-developed AGOA 

beneficiary countries eligible to export apparel to the United States are permitted to use fabric and yarn inputs 

sourced from third countries and maintain duty-free status. Industry sources indicate that U.S. customers 

often designate fabric from specific textile mills (often in Asia) for use in apparel production. 143 GTIS, Global Trade Atlas Database (accessed October 1, 2008 and January 12, 2009). 144 Ibid. 145 Ibid. 
6-30 

China

39.6%

Turkey

5.6%

India

4.9%

Italy

3.2%

U.S.

3.1%

Bangladesh

2.9%

Hong Kong

2.8%

Pakistan

2.5% SSA

0.8%

Other

34.5%

Mauritius

Madagascar 28.4%

21.3%

South Africa

14.7%

Lesotho

13.0% Kenya

8.7%

Swaziland

4.3%

Other

9.5%

FIGURE 6.9 Leading global and SSA exporters of textiles and apparel, 2007

Global exporters SSA exporters

$376.3 billion $3.2 billion

Source: GTIS, Global Trade Atlas Database. Annual data compiled from reporting countries’ official

statistics, including EU external trade.

Note: Data may not equal 100 percent due to rounding.

EU27

U.S. 27.8%

25.7%

Hong Kong

8.2%

Japan

7.5%

China

4.4%

Canada

2.9%

South Korea

2.0%

Mexico

2.0% Switzerland

1.8%

Other

17.7%

U.S.

41.7%

EU27

39.7%

SSA

12.5%

Other

6.1%

FIGURE 6.10 Leading markets for global and SSA exports of textiles and apparel, 2007

Global export markets SSA export markets

$376.3 billion $3.2 billion

Source: GTIS, Global Trade Atlas Database. Annual data compiled from reporting countries’ official

statistics, including EU external trade.

Note: Data may not equal 100 percent due to rounding.
6-31 

Effects of Infrastructure Conditions on the Competitiveness of SSA 

Exports of Textiles and Apparel 

Poor infrastructure conditions, such as inadequate and costly electricity, poorly 

maintained road networks, and limited access to international shipping, undermine the 

competitiveness of SSA textile and apparel exports by increasing production costs and 

limiting speed to market. However, some SSA countries, particularly in southern Africa, 

do benefit from relatively better infrastructure conditions. 

Electricity 

Textile production requires consistent and reliable electricity for dyeing operations, 

spinning fibers into yarn, and knitting or weaving yarn into fabric. Apparel production 

requires reliable electricity for powering cutting, sewing, and finishing operations. 

Unexpected electricity outages often disrupt production schedules. In the case of textile 

production, outages can result in damaged fabric and unusable dye lots, both of which 

can decrease productivity and increase production costs. 

Compared with other SSA markets, South African textile and apparel producers benefit 

from more reliable electricity, with rates of around $0.02 per kWh,146 making South 

Africa one of the lowest-cost electricity providers in the world.147 However, in January 

2008, rolling blackouts and load-shedding disrupted production schedules, resulting in 

decreased productivity and revenue losses for South African textile and apparel 

manufacturers. Industry sources indicate that firms were not provided with accurate and 

timely notice in anticipation of the blackouts, and thus incurred significant losses in raw 

materials and decreased production volumes.148 One textile firm indicated that it lost 

5,000 kg of dyed fabric as a result of the outages.149 In November 2008, this firm 

subsequently announced that it would close its operations citing, among other factors, 

increased utility costs and the lack of a reliable electricity supply during January of that 

year.150 In addition, South African textile manufacturers reportedly cannot rely on dieselfueled generators to supply electricity because the cost of diesel fuel is prohibitively high. 

Apparel producers in Swaziland indicate that electricity provision in the country is 

reliable and relatively low cost, with rates around $0.023 per kWh—roughly 15 percent 

higher than in South Africa.151 Swaziland generates 20–25 percent of its electricity needs 

domestically through hydropower, and imports the remaining 75–80 percent from 

neighboring South Africa. The country was not subject to the load-shedding and 

blackouts that occurred in South Africa during early 2008 as a result of contractual 

electricity supply obligations.152 However, one apparel manufacturer noted that Swazi 

 146 Eskom, Together, Rising to the Challenge, 2008, 4. Rate reflected is average price of electricity sold 

based on total sales. Original price reported as 0.1954 rand per kWh and converted to USD using the 2008 

average annual exchange rate of 8.3 rand to 1 USD as reported by the IMF. 

http://www.imf.org/external/np/fin/data/rms_mth.aspx?SelectDate=2008-12-31&reportType=REP. 147 Industry official, interview by Commission staff, Johannesburg, South Africa, October 15, 2008. 148 Industry official, interview by Commission staff, Johannesburg, South Africa, October 14, 2008. 149 Industry official, interview by Commission staff, Johannesburg, South Africa, October 14, 2008. 150 The firm also cited technology improvements in other markets and cost increases in raw materials in 

South Africa as causal factors that contributed to the plant closing. Just-style.com editorial team, “South 

Africa: 640 Jobs to Go,” November 6, 2008. 151 Swaziland Electricity Board, “Tariff Rates for 2006 and 2007,” undated (accessed November 13, 

2008). Converted to USD using representative exchange rate of 10.1 rand to 1 USD as of December 9, 2008. 

http://www.imf.org/external/np/fin/data/rms_mth.aspx?SelectDate=2008-12-31&reportType=REP. 152 Industry official, interview by Commission staff, Mbabane, Swaziland, October 22, 2008. 
6-32 

producers are subjected to about 65 hours per year of blackouts on average, generally 

during off-peak hours.153 This firm further noted that, although it did have a backup 

diesel generator, it was rarely used. 

By contrast, apparel producers in Kenya indicated that electricity provision in the country 

is unreliable and, at $0.22 per kWh, among the most expensive in the region—over 850 

percent higher than in Swaziland.154 One producer indicated that electricity rates 

increased by 60 percent in 2008, subjecting the firm to increased costs that it cannot pass 

on to its customers.155 The source also noted that electricity supply is unreliable in Kenya, 

necessitating the use of diesel generators. On average, the firm uses a backup dieselpowered generator twice per week, which reportedly costs 20 percent more than 

electricity sourced from the national power grid.156

Maritime Transport 

Apparel firms in South Africa, Swaziland, and Lesotho should have a competitive 

advantage vis-à-vis other SSA producers in terms of speed to market due to their 

proximity to the port of Durban, which is the most advanced port in SSA and the port 

through which most trade in textiles and apparel flows.157 Despite their relative proximity 

to port, industry sources in Swaziland and South Africa report that delays caused by 

congestion at the port of Durban hinder their ability to acquire fiber, fabric, and other 

critical inputs needed to maintain production schedules and ensure that shipments are 

delivered on time.158 Sources indicate that port congestion is an obstacle to receiving 

shipments of inputs, while apparel exports are relatively less affected. These firms require 

roughly 130 days to produce and ship apparel to the United States.159 In contrast, firms in 

India or China may require only 30–45 days to manufacture and export apparel to the 

United States.160 Shipping times from Shanghai to the port of Los Angeles are often only 

13 days,161 compared to as much as 45 days to ship from Durban to New York.162

Kenyan apparel firms cite congestion at the port of Mombasa as a major constraint on 

their ability to receive raw materials and other inputs needed to maintain production 

schedules and deliver shipments on time. Because of shipment delays on the import side, 

production schedules are often disrupted, which costs firms money in the form of lost 

production. For example, one Mombasa-based apparel manufacturer stated that if 

clearance times for an imported container from the port to the export processing zone 

exceed the firm’s estimates, then the factory could lose $25,000 per day.163 Because of 

the increased uncertainty of delivery, the same manufacturer noted that the firm holds 

higher levels of raw material inventory to hedge against delayed shipments or other 

unforeseen circumstances.164

 153 Industry official, interview by Commission staff, Nhlangano, Swaziland, October 22, 2008. 154 Industry official, interview by Commission staff, Nairobi, Kenya, October 29, 2008. 155 Industry official, interview by Commission staff, Mombasa, Kenya, October 28, 2008. 156 Industry official, interview by Commission staff, Mombasa, Kenya, October 28, 2008. 157 For further information on the port of Durban, see chap. 4 of this report. 158 Industry official, interview by Commission staff, Durban, South Africa, October 17, 2008. 159 Industry official, interview by Commission staff, Nhlangano, Swaziland, October 22, 2008. 160 Industry official, interview by Commission staff, Mombasa, Kenya, October 28, 2008. 161 Searates.com, “Statistical Data of Transit Time,” undated (accessed January 14, 2008). 162 USITC, Hearing transcript, October 28, 2008, 8 (testimony of David Rantekoa, Ambassador of the 

Kingdom of Lesotho to the United States). 163 Industry official, interview by Commission staff, Mombasa, Kenya, October 28, 2008. 164 Industry official, interview by Commission staff, Mombasa, Kenya, October 28, 2008. 
6-33 

In addition to delays because of port congestion at Mombasa, Kenyan apparel producers 

based near Nairobi face increased transit times because of poorly maintained roads 

between Mombasa and Nairobi, a distance of approximately 450 km. One apparel 

producer based near Nairobi indicated that it can take up to one week for trucks to deliver 

inputs from the port of Mombasa. 165 Delayed shipments because of port congestion and 

poor road conditions can result in cancelled orders from apparel buyers, discounts to 

apparel buyers, or penalties incurred by the producer. One apparel producer based near 

Nairobi stated that if customs regulations were streamlined and port and road conditions 

improved, his total production costs would decrease by 10 percent, and in some cases up 

to 40 percent. He further noted that the cost savings would significantly enhance the 

firm’s competitiveness.166 

Land Transport 

Speed to market is an increasingly important factor in the global apparel industry; thus, 

the extent to which a firm can transport its shipments efficiently and reliably from the 

factory to the port is an important component of a firm’s ability to compete. One way that 

SSA apparel firms have responded to an inefficient transportation infrastructure has been 

to produce low- to mid-range, commodity-type apparel products, for which speed to 

market is relatively less important.167 SSA apparel manufacturers mainly produce basic 

apparel products such as T-shirts, polo shirts, and sweatshirts, which generally do not 

change styles in response to fashion trends. 

Lesotho- and Swaziland-based textile and apparel exporters benefit from the use of 

neighboring South Africa’s roads to transport their shipments to and from the port of 

Durban. The textile and apparel industries in both Swaziland and Lesotho are generally 

located in industrial areas near the South African border; the Swazi industries are 

concentrated in Matsapha (about 80 km from the South African border) and Nhlangano 

(about 15 km from the South African border), and the Lesotho industries are concentrated 

in Maseru, along the country’s western border with South Africa. These areas are roughly 

seven- to eight-hours’168 drive (Swazi industries) and five- to six-hours’169 drive (Lesotho 

industries) to the port of Durban. One Swaziland-based industry source indicated that the 

predominant constraint related to land transport is a lack of security on South African 

roads.170 This source noted that trucks carrying the company’s shipments from 

Nhlangano to Durban had been hijacked on South African highways on three different 

occasions during the past eight years. 

By contrast, the land transport system puts apparel producers in Kenya at a disadvantage 

relative to other key SSA textile and apparel exporting countries. According to a survey 

conducted by the World Economic Forum that measures the perceived quality of land 

transport infrastructure, Kenya was rated fourth out of the five major SSA textile and 

apparel producers included in the survey in terms of quality of existing roads, second in 

terms of quality of railroad infrastructure, and third in terms of quality of ports 

 165 Industry official, interview by Commission staff, Nairobi, Kenya, October 29, 2008. 166 Industry official, interview by Commission staff, Nairobi, Kenya, October 29, 2008. 167 For further information on land transport infrastructure, see chap. 3 of this report. 168 Industry official, interview by Commission staff, Nhlangano, Swaziland, October 22, 2008. 169 USITC, Hearing transcript, October 28, 2008, 10 (testimony of David Rantekoa, Ambassador of the 

Kingdom of Lesotho to the United States). 170 Industry official, interview by Commission staff, Nhlangano, Swaziland, October 22, 2008. 
6-34 

(table 6.4).171 Mauritius and South Africa fared better than some other global textiles and 

apparel producers in the survey. They were rated higher than China, Turkey, Bangladesh, 

and India in terms of both perceived quality of roads and port infrastructure. 

 171 While Lesotho ranked last or next to last out of the five countries surveyed, textile and apparel 

production in Lesotho is concentrated along the South African border and is thus relatively less affected by 

the adverse road conditions in the interior of the country, as compared with Kenya. 
TABLE 6.4 Survey of transport quality in select textile and apparel producing countriesa

 SSA 

Indicator Kenya Lesotho Madagascar Mauritius 

South 

Africa China Turkey Bangladesh India 

 

(1=underdeveloped, 7=extensive and efficient by international standards ) 

Quality of roads 2.8 2.0 2.9 4.5 4.8 4.1 3.9 2.8 2.9 Quality of railroad  infrastructure 

2.3 1.9 1.7 (b) 3.5 4.1 2.2 2.3 4.4 

Quality of port  infrastructure 

3.5 2.6c 2.6 4.4 4.4 4.3 3.4 2.6 3.3 

Road densityd 11 20 9 99 30 20 55 184 114 

Source: Porter and Schwab, The Global Competitiveness Report 2008–2009, 2008, 385–87; Blanke and Chiesa, The Travel & Tourism 

Competitiveness Report 2008, 2008, 416–20. Survey data is based on World Economic Forum, Executive Opinion Survey 2007, 2008. 

 aData for Swaziland are not available.  bNot available.  cFor landlocked countries, quality of port infrastructure measures the ease of access to port facilities and inland waterways.  dRefers to the kilometers of road per 100 square kilometers of land, 2004. 

6-35 
6-36 

Leather172 

Summary of Findings 

Poor infrastructure conditions compound existing challenges faced by Ethiopian 

producers and exporters of leather—particularly their ability to procure quality hides and 

skins used as inputs to leather production. Lack of refrigeration at slaughtering facilities, 

long transport distances, and poor road conditions to tanneries located in the capital, 

Addis Ababa, where electricity is more reliable, all have a negative effect on the ability to 

produce and export leather competitively. Given the prevalence of livestock in rural 

Ethiopia, improvements in infrastructure conditions could significantly improve the 

export competitiveness of Ethiopia’s leather industry, generating potentially large gains 

to Ethiopia’s agrarian population. 

Introduction 

Industry Overview 

The global leather industry’s production is valued at approximately $40 billion, with over 

65 percent of leather production used for footwear.173 Hides and skins,174 the primary 

input for leather production, are byproducts of the meat slaughter industry. According to 

the International Council of Tanners, hides and skins represent approximately 5–15 

percent of the value of the animal.175

Africa accounts for approximately 20 percent of the world’s stock of cattle, sheep, and 

goats but only produces about 15 percent of the world’s output of hides and skins, and 

less than 4 percent of global leather exports.176 Ethiopia, with the 10th largest livestock 

herd in the world, accounts for the largest share (12 percent) of all livestock in SSA.177

The livestock sector is estimated to contribute to the livelihoods of 60–70 percent of 

Ethiopia’s population.178 The abundance of hides and skins therefore represents an 

economic development opportunity for a large portion of the population, and the 

government of Ethiopia has recognized the sector’s potential to alleviate poverty, 

encourage economic growth, and increase employment.179

 172 Leather is defined as semiprocessed and finished leather found under the HTS subheadings 4104, 

4105, 4106 (semiprocessed bovine, sheep, and goat leather, respectively); 4107, 4112, 4113 (finished bovine, 

sheep, and goat leather, respectively); 4114 (chamois and patent leather); and 4115 (composition leather). 

Raw hides and skins are discussed, but only in the context of production inputs. 173 ICT, “Perspective on Leather,” undated (accessed January 9, 2009). 174 Hides denote the skin of larger animals such as cattle and buffalo, while skins denote the skin from 

smaller animals such as sheep and goats. 175 ICT, “Introduction to Leather,” undated (accessed January 8, 2009). 176 UNIDO, A Blueprint for the African Leather Industry, 2004, 8. 177 EPA, The Leather Industry Overview, July 15, 2002. 178 PPLPI, “The Political Economy of Pro-Poor Livestock Policy-Making in Ethiopia,” March 24, 

2004, 9. 179 In 2005, UNIDO, in cooperation with the government of Ethiopia, recommended policies to further 

develop the leather and leather goods industry and promote a domestic footwear industry. According to the 

plan, a thriving footwear sector would encourage tanneries to produce higher volumes of better quality 

leather, in turn creating demand for better quality hides and skins. UNIDO, A Strategic Action Plan, March 

2005, 7. 
6-37 

The leather industry in Ethiopia is dependent upon the cattle, sheep, and goat herds from 

which the hides and skins are produced. Similar to other SSA countries and throughout 

the world, cattle, sheep, and goat herds in Ethiopia are primarily produced for subsistence 

dairy production and for their meat (and wool in the case of sheep), rather than for their 

hides and skins. Unlike livestock herds in developed countries, Ethiopia’s livestock is 

largely raised on small family land holdings rather than on large ranches. Ninety-five 

percent of slaughters are performed informally on family farms or in backyards, while the 

remainder are performed in small, unmechanized abattoirs (slaughterhouses) located in 

rural areas of the country.180

There are approximately 25 tanneries181 in Ethiopia, employing about 5,000 workers in 

total.182 Twenty-one of these tanneries are reportedly engaged only in the production of 

semiprocessed leather (i.e., pickled or wet blue) and not finished leather.183 There are 

over 850 firms engaged in manufacturing finished leather products in Ethiopia.184 Leather 

footwear accounts for the largest share of finished leather products, and there is limited 

production of leather garments. Finished leather products produced in Ethiopia are 

primarily destined for the domestic market, with only a small fraction exported.185 Firms 

producing finished leather products are reportedly operating at 10–70 percent of capacity 

due to insufficient supplies of quality hides and skins, lack of trained workers, and power 

outages.186

International Trade 

In 2007, global leather exports totaled over $17 billion, with five countries—Italy, Brazil, 

China, the United States, and Argentina—accounting for 50 percent of global leather 

exports (figure 6.11). By contrast, SSA accounted for only about 3.5 percent of total 

global leather exports that year. The largest SSA exporters of leather were Nigeria, South 

Africa, Ethiopia, and Kenya. Although Ethiopia only accounts for 10 percent of SSA 

exports of leather, the country’s economy is much more dependent than its larger African 

competitors on the leather and leather goods industry for national economic 

development.187 Ethiopian export earnings from leather accounted for about 7 percent of 

total export earnings in 2007, after coffee (43 percent), oil seeds (18 percent), and cut 

 180 Industry official, interview by Commission staff, Addis Ababa, Ethiopia, November 7, 2008. 181 A tannery is an operation that converts raw hides and skins into either semiprocessed leather or into 

finished leather. 182 International Trade Centre, Leatherline Africa Platform, “Country Profile: Ethiopia,” undated 

(accessed September 12, 2008). 183 Industry official, interview by Commission staff, Addis Ababa, November 7, 2008. Pickling is a 

technique to preserve raw hides and skins for further processing. Wet blue refers to semiprocessed leather 

that has undergone chrome tanning. Both pickled and wet blue semiprocessed leathers are internationally 

traded and used as inputs to finished leather production. 184 Embassy of India in Ethiopia, “Market Note on Ethiopian Leather and Leather Products,” October 1, 

2008. 185 For more information on the footwear industry in SSA, see USITC, Sub-Saharan Africa, 2008, 3-2–

3-14. 186 Embassy of India in Ethiopia, “Market Note on Ethiopian Leather and Leather Products,” October 1, 

2008. 187 Nigeria’s economy and exports are dominated by petroleum and petroleum products, and South 

Africa’s agricultural production is larger and more diverse. 
6-38 

Italy

14.8%

Brazil

12.8% China

10.0%

U.S.

6.3%

Argentina

6.0%

India

5.8%

South Korea

4.5%

Taiwan

4.0%

SSA

3.5%

Pakistan

2.4%

Thailand

2.1% Australia

1.8%

Uruguay

1.7%

Other

24.3%

Nigeria

42.0%

South Africa

24.8%

Ethiopia

10.3%

Kenya

7.2%

Other

15.5%

FIGURE 6.11 Leading global and SSA exporters of leather, 2007

Global exporters SSA exporters

$17,121 million $585.9 million

Source: GTIS, Global Trade Atlas Database. Annual data compiled from reporting countries’ official

statistics, including EU external trade.

Note: Data may not equal 100 percent due to rounding.

flowers and plants (10 percent).188 Globally, over two-thirds of leather exports are 

destined for China, Hong Kong, or the EU (figure 6.12). The EU is the largest market for 

SSA leather exports. 

Effects of Infrastructure Conditions on the Competitiveness of 

Ethiopia’s Leather Exports 

Poor infrastructure conditions compound the challenges faced by Ethiopian leather 

producers to acquire quality hides and skins from the hinterlands. Poor road conditions 

and long distances from livestock production areas in rural Ethiopia to tanneries located 

in Addis Ababa negatively affect the quality of hides and skins, often leading to high 

rejection rates and low prices paid by tanneries. High transportation costs and erratic or 

long delivery times for imported inputs create uncertainty of supply and can increase 

production costs. 

Infrastructure conditions are only one of many problems facing Ethiopia’s leather and 

leather goods industry. Other factors include poor access to capital for capacity upgrades 

and expansions throughout the supply chain and a shortage of highly skilled laborers to 

produce hides and skins and finished leather goods.189 These problems and others hamper 

Ethiopia’s leather and leather goods industry from meeting its long-term potential. 

 188 GTIS, Global Trade Atlas Database (accessed February 3, 2009). 189 Industry officials, interviews by Commission staff, Addis Ababa, Ethiopia, November 6–7, 2008. 
6-39 

China

25.4%

EU27

22.3%

Hong Kong

19.5%

U.S.

4.5%

Mexico

3.5%

South Korea

2.9%

Thailand

2.3% India

2.0%

Turkey

1.7%

Other

16.0%

EU27

64.9%

Hong Kong

8.7%

China

8.5%

U.S.

4.9%

Mexico

3.0%

Brazil

2.0%

India

1.9%

Other

6.1%

FIGURE 6.12 Leading markets for global and SSA exports of leather, 2007

Global export markets SSA export markets

$17,121 million $585.9 million

Source: GTIS, Global Trade Atlas Database. Annual data compiled from reporting countries’ official

statistics, including EU external trade.

Note: Data may not equal 100 percent due to rounding.

From Harvest to Tannery 

The primary use of livestock is for draft animals and subsistence dairy production in rural 

areas of Ethiopia. Meat consumption is low, and animals are typically slaughtered in 

backyard operations at the end of their useful lives. Establishing slaughter and meat 

packing facilities near livestock production is problematic, because the lack of an 

adequate and reliable electricity supply will not allow refrigeration. In addition, high 

transportation costs render selling to markets where meat is consumed uneconomical. As 

a result, livestock are often trekked on foot over long distances to slaughter facilities 

located closer to markets where meat, hides, and skins are traded. These journeys often 

damage the quality of meat, hides, and skins because of weight loss, disease, and injury 

to the animals.190 

Because hides and skins are byproducts of the slaughter process, they must be shipped to 

tanneries for further processing into leather. The quality of the hides and skins and the 

prices tanneries pay depend on the quality of the grain (or outside) surface. Damage to 

the grain surface may be due in part to animal husbandry practices on the farm or in 

transport of the live animal (scratches, bruising, or dirt contamination); damage during 

slaughter or removal of the hide; or inadequate preservation techniques.191 Within five 

hours of slaughter, hides and skins must begin the tanning process or be preserved in 

some other fashion. Salt is often used to preserve hides and skins; however, it is not 

always available in rural areas. In addition, transporting salt to these areas is expensive 

because of long distances and poor road conditions.192 Other factors, such as government 

 190 Industry official, interview by Commission staff, Addis Ababa, Ethiopia, November 7, 2008. 191 ICT, “Hide and Skin Quality,” undated (accessed January 9, 2009). 192 Industry official, interview by Commission staff, Addis Ababa, Ethiopia, November 7, 2008. 
6-40 

trade and industrial policies to encourage leather production, have also affected the 

supply of hides and skins to tanneries (box 6.3). 

BOX 6.3 Government Trade Policies Affecting the Leather Industry 

The government of Ethiopia has long used trade policy to encourage further downstream processing 

in the leather industry. In 1986, Ethiopia instituted a ban on the exportation of raw hides and skins in 

order to encourage the domestic production of leather and leather goods with inexpensive and 

plentiful inputs. The Ethiopian government sought to develop and strengthen the leather and leather 

goods industry, as well as boost downstream footwear production. Potential overseas markets for 

hides and skins were closed, and the only purchasers for hides and skins were merchants supplying 

domestic tanneries. The result of this policy was that the merchants had a captive supply of hides 

and skins and offered producers low prices. Low prices, coupled with long transit times from 

slaughter facilities to tanneries, had a dampening effect on the supply of hides and skins, and many 

hides and skins from the rural countryside never entered the distribution chain. As a result, tanneries 

continued to suffer from relatively low capacity utilization rates.a

In February 2008, the government of Ethiopia replaced the ban with export taxes of 150 percent on 

raw hides and skins and 5–20 percent on certain semiprocessed leathers.b

 This policy change was 

instituted primarily to meet membership requirements for joining the WTO,c

 and its long-term effect 

on prices for high-quality hides and skins is not yet known. However, some tanneries have 

experienced difficulties moving into finished leather processing. For example, one semiprocessed 

leather producer stated that, to avoid the export tax on semiprocessed leather, his company would 

need to invest $5–6 million in equipment; however, credit, technological skills, and skilled labor are 

difficult to obtain.d

 In January 2009, the government further increased the export taxes on certain 

semiprocessed leather from 5–20 percent to 150 percent in an effort to increase downstream 

processing.e

___________ a

 Van der Loop, “The Importance of the Leather Footwear Sector,” June 2003, 6. b Embassy of India in Ethiopia, “Market Note on Ethiopian Leather and Leather Products,” 

October 1, 2008. c

 Tadessem, “Ethiopia: House Imposes 150% Tax,” December 2, 2008. d

 Industry official, interview by Commission staff, Addis Ababa, Ethiopia, November 7, 2008. e

 Industry official, e-mail message to Commission staff, March 23, 2009. 

Only 60 percent of the hides and skins of slaughtered animals are sent to tanneries, with 

the remainder either discarded after slaughter or lost in transit to tanneries. Of those that 

reach their final destination, 20 percent of them, on average, are rejected because of poor 

quality, although rejection rates can reach 80 percent. Because quality is often not 

discernable in untanned hides, prices paid by tanneries are low to help offset the costs 

incurred from rejected hides and skins. Nevertheless, damage to hides and skins increases 

production costs to tanneries.193 

Processing at Tanneries 

Adequate and reliable electricity supply is a critical input to the tanning process. 

Tanneries are located near Addis Ababa because of the availability of relatively more 

reliable electricity. However, tanneries are often faced with frequent electricity outages, 

which disrupt the chemical processes to tan hides and skins into semiprocessed and 

finished leather. On-site power generators are used as backup power supply, but are 

costly to operate.194

 193 Industry official, interview by Commission staff, Addis Ababa, Ethiopia, November 7, 2008. 194 Industry official, e-mail message to Commission staff, August 12, 2008. 
6-41 

Unreliable shipment schedules and high transportation costs adversely affect the ability 

of tanneries to source needed production inputs. For example, tannery chemicals are not 

produced domestically and are thus imported.195 One tannery noted that it requires 60–80 

imported chemicals, as well as machinery, to produce finished leather. Because of the 

high cost of imported inputs, most of this tannery’s working capital is allocated to 

imported raw materials. In addition, because transit times for needed inputs can be three 

or four months, the tannery maintains a six- to seven-month supply of chemicals to hedge 

against the uncertainty of future delivery schedules.196

From Tanneries to Export Markets 

Ethiopia is landlocked, and Djibouti is the primary port for exports, accounting for 98 

percent of Ethiopia’s international trade access.

197 Containers must first clear the border 

between Ethiopia and Djibouti, and then be transported to the port. In 2007, the average 

time required to export containers from Ethiopia was 46 days,198 greater than the 25 days 

to export from Nigeria and 30 days from South Africa, and more than double the time to 

export from Italy or Brazil, the world’s largest leather exporters (figure 6.11).199 The cost 

to export a container from Ethiopia is four times the cost from China,200 and comprises 

both the cost of administrative delays and long transit times from the factory or tannery to 

the port. Recognizing these delays and congestion, Ethiopia’s Ministry of Transport and 

Communications is developing two domestic dry ports201 near the border with Djibouti—

one in Modjo and the other in Semera—to alleviate congestion at the port of Djibouti. 

The Modjo port was open for operation in December 2008, and the Semera port is 

scheduled for completion in early 2009.202 The dry ports will include warehouses, inland 

roads, container depots, customs offices, and insurance companies.203

 195 Only salt, sulfuric acid, and lime are reportedly available domestically. Industry official, interview 

by Commission staff, Addis Ababa, Ethiopia, November 6, 2008. 196 Industry official, interview by Commission staff, Addis Ababa, Ethiopia, November 6, 2008. 197 EIU, Country Profile 2008: Ethiopia, 2008, 17. 198 World Bank, Doing Business 2009 Database (accessed January 14, 2009). 199 Ibid. 200 Ibid. 201 A dry port is an inland intermodal terminal directly connected by road or rail to a seaport. Dry ports 

include facilities for storage and consolidation of goods in transit and customs clearance services. 202 Abebe, “Time for Dry Port Service,” November 1, 2008. 203 Zenebe, “Ethiopia: Spicing Up of Dry Ports’ Board,” September 9, 2008. 
6-42 

Tourism 

Summary of Findings 

Tourism represents an important export opportunity for SSA countries that can lead to 

significant foreign exchange revenues by promoting popular tourism attractions, 

particularly safari lands and beach areas.204 Tourism exports in SSA, however, have not 

reached their full potential, due in part to the lack of infrastructure services in many 

countries, including reliable electric power and transportation to tourist attractions.205

South Africa and Kenya are the two largest tourist destinations in SSA. South Africa’s 

superior infrastructure helps to attract tourists, as well as large numbers of business 

travelers from other SSA countries. However, tourists visit Kenya’s well-known safari 

lands and beaches despite the country’s poor infrastructure, particularly its road network. 

Therefore, while infrastructure conditions are not necessarily a primary driver of demand 

for SSA tourism exports as a whole, differing infrastructure conditions among SSA 

countries may be a crucial factor in tourists’ decisions to choose one SSA country over 

another as a vacation destination. Political factors, including civil unrest, economic 

conditions in tourists’ home countries, and the high cost of travel from many developed 

countries, are all likely to have a stronger impact on overall SSA exports of tourism 

services. 

While existing infrastructure conditions affect SSA exports of tourism services, the cause 

and effect relationship between tourism and infrastructure may work both ways—

increasing tourism in a particular area may also lead to improvements in infrastructure 

conditions that benefit local residents. In Swaziland, for instance, development of tourist 

resorts has brought infrastructure improvement to some local areas in the form of new 

roads, increased electric power access/supply, improved telephone access, and running 

water.206

Tourism in the Global Economy 

According to the World Travel and Tourism Council, annual growth of the global tourism 

industry is anticipated to average 4.4 percent in the coming decade, with SSA tourism 

projected to grow at a faster annual rate of 5.8 percent.207 SSA tourism exports totaled 

$16 billion in 2006, yet SSA was a relatively small tourist destination in terms of global 

tourism expenditures compared with larger destinations such as Europe and the United 

States (figure 6.13). South Africa is by far the predominant tourist destination in SSA, 

accounting for nearly one-half of the region’s tourism revenues, followed by Mauritius, 

Tanzania, and Kenya.208 Top global importers of tourism services (i.e., the largest 

expenditures by outbound tourists) in 2006 included Germany, the United States, and the

 204 Tourist expenditures on services such as hotels and restaurants by foreign visitors in SSA countries 

are considered to be exports of tourism services by SSA countries. Such exports include expenditures for 

both business and leisure travel. Conversely, tourist expenditures by SSA residents outside of their home 

countries are considered to be imports of tourism services. 205 Maritime infrastructure conditions have likely had a negligible effect on export competitiveness 

because the cruise industry in SSA is relatively small and accounts for a small proportion of total tourism 

revenues. 206 Naudé and Saayman, “The Determinants of Tourist Arrivals,” March 21–22, 2004; USAID and 

TechnoServe, “Tourism Industry Strategic Plan,” December 2006. 207 World Travel and Tourism Council, “Progress and Priorities, 2008/09,” March 1, 2008. 208 Countries are ranked in terms of total tourism expenditures. 
6-43 

U.S.

11.5%

Spain

6.9%

France

6.2%

Italy

5.1%

China

4.6%

U.K.

4.5%

Germany

4.4%

Australia

2.4%

Turkey

2.3%

Austria

2.2%

SSA

2.1%

Other

47.6%

South Africa

49.5%

Mauritius

6.3%

Tanzania

5.7%

Kenya 

3.4%

Namibia

2.4%

Uganda

2.2%

Madagascar

1.5%

Seychelles

1.4%

Other

27.5%

FIGURE 6.13 Leading global and SSA exporters of tourism services, by total tourism

expenditures, 2006

Sources: UNWTO, Tourism Highlights 2008 edition; UNWTO, Yearbook of Tourism Statistics 2006, 2007,

and 2008. Kenya data are from the EIU, Country Profile: Kenya, 2007.

Notes: A country’s exports of tourism services reflect expenditures by foreign residents on personal or

business travel in that country. Data may not equal 100 percent due to rounding.

Global SSA

$ 742 billion $16 billion

United Kingdom (figure 6.14). South Africa was the largest SSA importer of tourism 

services in 2006 by the same measure. 

In 2006, tourism exports accounted for 8 percent of total SSA exports of goods and 

services.209 During the 2000–06 period, tourist arrivals in several SSA countries increased 

rapidly, although there are not enough data to provide a reliable estimate of the rate of 

increase in tourist arrivals for the entire region (table 6.5). South Africa registered the 

largest absolute growth in the number of arrivals during the period, followed by Kenya, 

Swaziland, and Uganda. Sudan recorded a sharp increase in arrivals beginning in 2005, 

which may reflect business travelers connected to the oil industry. 

Several factors contribute to SSA’s above average growth in tourism exports. Despite the 

region’s relatively small size as a global tourist destination, new airline routes from 

Europe, Asia, and the Middle East have generated more traffic, and several SSA 

countries have greatly increased their marketing budgets around the world, helping to 

draw attention to tourist attractions throughout the region.210 However, the global 

financial crisis that began in the fall of 2008 may reduce these growth projections.

 209 IMF, International Financial Statistics Online Database. Percentage is calculated for the 29 SSA 

economies for which 2006 data on both exports of total goods and services and of travel services were 

available. 210 Michaels, “Travel Journal,” March 12, 2008; Ba and Mann, “Tourism: An Opportunity to Unleash 

Shared Growth in Africa,” July 2006. 
6-44 

Germany

10.0%

U.S.

9.7%

U.K.

8.5%

France

4.2%

Japan

3.6%

China

3.3%

Italy

3.1%

Canada

2.8%

South Korea

2.5%

Russian Fed.

2.5%

SSA

0.9%

Other

48.9%

South Africa

51.3%

Sudan

21.3%

Tanzania

8.1%

Mauritius

5.0%

Angola

2.2%

Uganda

2.1%

Other

10.0%

FIGURE 6.14 Leading global and SSA importers of tourism services, by total tourism

expenditures, 2006

Global SSA

$742 billion $7 billion

Sources: United Nations, World Tourism Organization (UNWTO), Tourism Highlights 2008 edition and the

Yearbook of Tourism Statistics 2006-08. 

Note: A country's imports of tourism services reflect expenditures by the residents of that country on

personal or business travel in other countries.

European and North American consumers are likely to reduce their tourism expenditures 

in response to the economic downturn, with particular pressure on locations in Africa that 

are often perceived as exotic destinations.211

Data are not available for the leading importers of tourism services from the SSA region 

as a whole, but there are data available for the two largest SSA destinations in terms of 

visitor arrivals, South Africa and Kenya. For South Africa, 74 percent of tourists arrived 

from within Africa in 2006, the majority from neighboring southern African countries. 

Europe accounted for 17 percent of tourist arrivals in South Africa, and the United States, 

3 percent.212 For Kenya, European travelers accounted for 73 percent of tourist arrivals in 

2004 (latest available), most prominently from Germany (22 percent of total arrivals) and 

the United Kingdom (17 percent). Travelers from other African countries accounted for 9 

percent of tourist arrivals in Kenya, and travelers from the United States accounted for 6 

percent.213 The greater share of African travelers to South Africa likely reflects that 

country’s status as a regional shopping and tourism destination. 

 211 For example, see World Bank, “The Impact of the Financial Crisis on the Developing World,” 

winter 2009; and Business Monitor International, “Tourism Industry to Feel the Pinch,” November 13, 2008. 212 UNWTO, Yearbook of Tourism Statistics 2008, 2006. 213 UNWTO, Yearbook of Tourism Statistics 2006, 2004. 
6-45 

Tourism and Infrastructure in South Africa 

South Africa is by far the leading tourist destination in the region, receiving 8.4 million 

overnight tourist arrivals in 2006, up from 5.9 million arrivals in 2000 (table 6.5). The 

vast majority (94 percent) were classified as leisure, rather than business, travelers. 

Export revenues from tourist expenditures in South Africa were $7.9 billion in 2006, 

upfrom $2.7 billion in 2000, equal to 10.4 percent of all South African exports of goods 

and services.214

According to one local industry representative, good quality infrastructure is “the 

backbone of the tourism industry in South Africa,” making the industry exceptionally 

competitive compared with those in other SSA countries.215 There are adequate roads to 

the country’s major tourist sites, such as game lodges, national parks, and the Western 

Cape area. By comparison, some popular sites in Botswana are only accessible to tourists 

by airplane. South Africa is continuing efforts to upgrade its infrastructure to the benefit 

of the tourism sector. For example, the respective governments are collaborating to fund 

an extensive project to upgrade and expand the principal road between Witbank, South 

Africa, and Maputo, Mozambique, in part to increase access for international tourists.216 

One significant drawback to South Africa’s efforts to attract tourists, however, is the lack 

of an adequate public transportation system, which forces tourists to hire private drivers 

or use a tour company to travel around the country. This increases costs for independent 

travelers that prefer not to join a tour group, and thus likely reduces the overall number of 

independent travelers visiting the country. In addition, South Africa receives a significant 

number of tourists from elsewhere in SSA that come to South Africa as a shopping 

destination; this type of tourism would particularly benefit from improved public 

transit.217 

Electric power availability and reliability is an important issue nationally, but does not 

appear to be as significant of a problem for the tourism industry as it is for other 

industries, including manufacturing. The principal tourist venues, which are generally 

located in rural areas, tend to be fully self-reliant, with their own generators and in some 

cases solar or gas-fired power supplies.218 Occasional problems do occur, however. In 

addition to the higher costs and noise pollution associated with relying on generators, 

unreliable electricity supply can lead to other problems. In one recent instance, 

approximately 500 tourists were trapped on top of Table Mountain, a popular tourist 

attraction in Cape Town, when load-shedding rendered a cable car inoperable. Thirtyseven passengers were stuck in the cable car for three hours, and those atop the mountain 

were not rescued until after 1:00 am.219

 214 UNWTO, Yearbook of Tourism Statistics 2008, 2006; IMF, International Financial Statistics Online 

Database (accessed October 29, 2008). 215 Industry official, interview by Commission staff, Johannesburg, South Africa, October 24, 2008. 216 Industry official, interview by Commission staff, Johannesburg, South Africa, October 24, 2008; 

TRAC, “Objectives and Benefits,” undated (accessed December 12, 2008). 217 Industry official, interview by Commission staff, Durban, South Africa, October 15, 2008. 218 Industry official, interview by Commission staff, Durban, South Africa, October 15, 2008. 219 Macdonald, “Don’t Turn Out the Lights,” February 5, 2008; De Waal, “Power Cut,” January 22, 

2008. 
6-46 

 TABLE 6.5 Tourist arrivals in SSA countries, available data, 2000–2006 

 

Country 2000 2001 2002 2003 2004 2005 2006 CAGR % 

Absolute 

growth, 

2000–2006 

 1,000 visitors 1,000 visitors 

Angola 51 67 91 107 194 210 121 15.5 70 

Benin 96 88 72 175 174 176 180 11.0 84 

Botswana 1,104 1,049 1,037 975 (a

) (a) (a) (a) (a) 

Burkina Faso 126 128 150 163 222 245 264 13.1 138 

Burundi 29 36 74 74 133 148 201 38.1 172 

Cameroon 277 221 226 (a

) 190 (a) (a) (a) (a) 

Cape Verde 115 134 126 150 157 198 242 13.2 127 

Central African 

Republic 11.2 9.9 2.9 5.7 8.2 (a

) (a) (a) (a) 

Chad 43 57 32 21 (a) (a) (a) (a) (a) 

Comoros 24 19 19 14 18 (a

) (a) (a) (a) 

Congo, Rep. of 19 27 22 (a

) (a) (a) (a) (a) (a) 

DRC 103 55 28 35 36 61 (a

) (a) (a) 

Djibouti 20.1 21.6 22.5 23.2 26.3 (a

) (a) (a) (a) 

Eritreab

 70 113 101 80 87 83 78 1.8 8 

Ethiopia 136 148 156 180 184 227 290 13.5 154 

Gabon 155 169 208 222 (a

) (a) (a) (a) (a) 

The Gambia 79 57 81 73 90 108 125 7.9 46 

Ghana 399 439 483 531 584 (a

) (a) (a) (a) 

Guinea 33 38 43 44 45 45 46.1 5.7 13 

Guinea-Bissau (a

) 7.8 (a) (a) (a) 5.4 11.6 (a) (a) 

Kenyab

 899 841 838 927 1,199 1,479 1,601 10.1 702 

Lesothoc

 302 295 287 329 304 304 347 2.3 45 

Madagascar 160 170 62 139 229 277 312 11.8 152 

Malawi 228 266 383 424 471 (a

) (a) (a) (a) 

Mali 86 89 96 110 113 143 153 10.1 67 

Mauritania 30 (a

) (a) (a) (a) (a) (a) (a) (a) 

Mauritius 656 660 682 702 719 761 788 3.1 132 

Mozambique (a

) 323 541 441 470 (a) (a) (a) (a) 

Namibia (a

) 670 757 695 (a) 778 833 (a) (a) 

Niger 50 53 39 55 57 60 60 3.1 10 

Nigeria 813 850 887 924 962 (a

) (a) (a) (a) 

Rwanda 104 113 (a

) (a) (a) (a) (a) (a) (a) 

São Tomé & 

Príncipe 7.1 7.6 9.2 10.0 10.6 15.8 12.3 9.6 5 

Senegal 389 396 427 354 363 (a

) (a) (a) (a) 

Seychelles 130 130 132 122 121 129 141 1.4 11 

Sierra Leone 16 24 28 38 44 40 34 13.4 18 

South Africa 5,872 5,787 6,430 6,505 6,678 7,369 8,396 6.1 2,524 

Sudan 38 50 52 52 61 246 328 43.2 290 

Swaziland 281 283 256 461 459 839 873 20.8 592 
6-47 

TABLE 6.5 Tourist arrivals in SSA countries, available data, 2000–2006—Continued 

 

Country 2000 2001 2002 2003 2004 2005 2006 CAGR % 

Absolute 

growth 

2000–2006 

 1,000 visitors 1,000 visitors 

Tanzania 459 501 550 552 566 590 622 5.2 163 

Togo 60 57 58 61 83 81 (

a

) (a) (a)

Uganda 193 205 254 305 512 468 539 18.7 346 

Zambiad

 457 492 565 413 515 (

a

) 670 6.6 213 

Sources: UNWTO, Yearbook of Tourism Statistics 2008, 2006; EIU, Country Profile: Kenya, 2007. 

Note: CAGR is the compound annual growth rate. 

a

Not available. 

b

Data for 2005 and 2006 from Kenyan Tourism Ministry for departures (WTO data not available). 

c

Data for total visitors, includes same-day and cruise ship arrivals. d

Data for 2006 from EIU (WTO data not available). 

The South African government created an incentive program for foreign investment in 

the tourism industry, specifically for projects located outside the metropolitan areas of 

Johannesburg, Cape Town, and Durban, the three most developed areas of the country. 

Investments in rail, road, and maritime transport infrastructure projects related to tourism 

are specifically included in the incentive program.220

Tourism and Infrastructure in Kenya 

Tourism is one of Kenya’s largest export sectors, by far its largest service export 

industry, and the largest foreign exchange earner after foreign remittances.221 Exports of 

tourism services were valued at $687.5 million in 2006, equal to 11.5 percent of all 

Kenyan exports of goods and services.222 Tourist arrivals in Kenya reached 1.6 million in 

2006, up steadily from 899,000 in 2000, with a compound average growth rate of 10.1 

percent (table 6.5).223 Of this total, 65 percent were classified as leisure, rather than 

business, travelers.224

Although not yet reflected in the national statistics, Kenya’s tourism industry suffered a 

serious blow in 2008 from ethnic unrest following the presidential election of December 

2007. Early forecasts predicted total tourism revenues of $1 billion in 2008, but 

government estimates in spring 2008 were forecasting revenues of one-half that amount 

for the year. Occupancy rates in many Kenyan hotels dropped to 20 percent in early 

2008, from a standard occupancy rate of approximately 80 percent, prompting layoffs of 

 220 Grant amounts vary based on the size of the project, with a smaller share of costs covered by the 

grant as total project costs rise. Government of the Republic of South Africa, DTI, Programme Guidelines, 

July 4, 2008. 221 Other important export sectors are tea, coffee, horticulture, sugar, and apparel. World Bank, Kenya: 

Unleashing the Potential, February 2007, xv–xvi, 73–74; EIU, Country Profile: Kenya, 2007. For more 

information on Kenya’s apparel exports, see the case study presented in chap. 6 of this report. 222 IMF, International Financial Statistics Online Database (accessed October 29, 2008); EIU, Country 

Profile: Kenya, 2007. 223 Tourist arrivals data in Kenya are likely to be underestimated, as government data do not include 

arrivals by railways, road, and water passenger transport. See Lumiti, “Country Moves to Create a Tourism 

Data Base,” February 2, 2009. 224 UNWTO, Yearbook of Tourism Statistics 2006, 2004. 
6-48 

staff, reduced revenue from souvenir sales, and sharply decreased national park revenues 

from entrance fees.225 Tourism earnings for third quarter 2008 were down 30 percent 

compared with the same period in 2007, and tourist arrivals were down 22 percent 

compared with 2007; the Kenya Tourist Board anticipates recovery efforts to continue 

throughout 2009. Moreover, Kenya’s tourist arrivals also suffered from the high fuel 

prices that affected the rest of the global tourism industry.226 

On a more positive note for Kenyan tourism, several observers foresee an increase in 

tourist arrivals from the United States and elsewhere following President Barack 

Obama’s election. Tour operators have organized itineraries covering Nyang’oma Kogelo 

(the home village of President Obama’s father), the surrounding Luo ethnic areas, and 

other local tourist sites; these operators anticipate strong interest.227 Within two weeks of 

the U.S. election, the Ministry of Tourism had announced that plans were underway to 

brand the village as a tourist destination along “the Obama route,” and had begun work to 

upgrade the local roads and to supply electricity to the village.228

Kenya’s tourism industry focuses on the three pillars of safari, beach, and business 

conference tourism, but infrastructure problems, particularly poor roads, are seen as 

significant factors restraining the industry’s growth potential.229 Kenya has not built any 

significant new roads since the 1960s, even though tourist arrivals have tripled, the 

number of hotels has quadrupled, and nontourist automotive traffic in Kenya has grown 

exponentially. The result is extremely crowded roads that make it very difficult for 

tourists or other travelers to move around the country. Mombasa, one of Kenya’s primary 

tourist destinations, does not have a bypass road around the city, so all traffic must move 

through the city center, leading to extreme traffic congestion. Traffic congestion deters 

tourists from leaving their resorts to explore the city, thus greatly reducing tourism 

receipts beyond the resort areas.230 Outside of the resort areas, tourists have also cited 

poor road quality as the worst part of their experience in Kenya. On a typical seven-day 

safari, a tourist will drive 2,500 km on bitumen roads with extensive potholes, an 

experience about which tourists have complained in exit surveys.231

The Kenya Tourist Board’s corporate strategic plan for 2005–08 recognized that poor 

road quality is a major problem for the nation’s tourist infrastructure. The plan 

particularly cited the need to repair vital roads leading to the national parks, such as the 

Narok Road which leads to the Maasai Mara game reserve. The plan proposed increasing 

private-sector involvement in developing new roads and rehabilitating existing roads, as 

well as increasing government funding for road maintenance and new toll roads.232

Kenya’s tourism sector suffers from two main problems associated with electricity. First, 

electric power is very expensive, and prices increased sharply in July 2008. According to 

one industry representative, the total energy cost for an average hotel is higher than total 

 225 Gettleman, “Kenyan Tourism Suffering Badly,” February 29, 2008; Crilly, “After Violence, Kenya 

Tourism Struggles,” March 4, 2008. 226 Lumiti, “Kenya Tourism Yet to Recover,” November 2, 2008. 227 Tourism Review.com, “Obama Effect,” November 25, 2008. 228 Mayoyo, “Obama Father’s Birth Place ‘Kogelo Village’ Declared Touristic Destination,” 

November 18, 2008. 229 Other constraints cited by the World Bank were, most importantly, the regional and domestic 

security situation, the deterioration of the country’s tourism facilities (such as hotels) and tourism-related 

services, and weak government marketing and promotion activities. World Bank, Kenya: Unleashing the 

Potential, February 2007, 75. 230 Industry official, interview by Commission staff, Mombasa, Kenya, October 28, 2008. 231 Industry official, interview by Commission staff, Mombasa, Kenya, October 28, 2008. 232 Kenya Tourist Board, “Corporate Strategic Plan 2005–2008,” undated. 
6-49 

employee wages. Second, supply is inadequate. Hotels are forced to compensate for 

supply shortages by maintaining expensive on-site generators, which also leads to higher 

costs that are passed on to tourists.233 However, given other factors that influence tourism 

exports, such as political unrest and economic conditions in importing countries, it is not 

clear to what extent such increased costs for electric power dampened exports of Kenyan 

tourism services. 

 233 Industry official, interview by Commission staff, Mombasa, Kenya, October 28, 2008. 
6-50

Bibliography 

Coffee 

ACDI/VOCA. “Rwandan Coffee Gets High Marks,” December 2007. 

http://www.acdivoca.org/acdivoca/PortalHub.nsf/ID/FeatureRwandaCoffee. 

———. “Specialty Coffee: Increased Quality & Profits for Smallholders,” undated. 

http://www.acdivoca.org/852571DC00681414/Lookup/coffeebroweblayout/$file/coffeebrowebla

yout.pdf (accessed September 9, 2008). 

Baffes, John. “Restructuring Uganda’s Coffee Industry: Why Going Back to the Basics Matters.” World 

Bank Policy Research Working Paper no. 4020, October 2006. 

Boudreaux, Karol C., and Puja Ahluwalia. “Cautiously Optimistic: Economic Liberalization and 

Reconciliation in Rwanda's Coffee Sector.” Unpublished paper, 2008 

http://works.bepress.com/cgi/viewcontent.cgi?article=1019&context=karol_boudreaux (accessed 

September 30, 2008). 

Dougherty, Carter. “Rwanda Savors the Rewards of Coffee Production.” New York Times, July 27, 2004. 

http://query.nytimes.com/gst/fullpage.html?res=9502E6DC153DF934A15754C0A9629C8B63&f

ta=y. 

Dow Jones Newswires. “Uganda Coffee Exports Still Halted by Kenya Violence,” January 9, 2008. 

http://www.flex-news-food.com/pages/13428/Coffee/Uganda/uganda-coffee-exports-haltedkenya-violence-dj.html. 

Economist Intelligence Unit (EIU). Country Profile 2008: Rwanda. London: Economist Intelligence Unit, 

2008. 

Fraser, Laura. “Coffee, and Hope, Grow in Rwanda.” New York Times, August 6, 2006. 

http://ocir.vrsrv.com/archive/ocir_nyt_0806.htm. 

Global Trade Information Service, Inc. (GTIS). Global Trade Atlas Database (accessed October 1, 2008). 

Gottlieb, Benjamin. “Rwanda Project Members Discuss Coffee-Bike.” Daily Nexus, February 22, 2008. 

http://www.dailynexus.com/article.php?a=15950. 

International Coffee Organization. “Field Processing,” undated. http://www.ico.org/field_processing.asp

(accessed January 9, 2009). 

Lewin, Bryan, Daniele Giovannucci, and Panos Varangis. Coffee Markets: New Paradigms in Global 

Supply and Demand. Washington, DC: The World Bank, 2004. 

Loveridge, Scott, Edson Mpyisi, and Michael T. Weber. “Farm Level Perspectives In Rwanda’s Coffee 

Supply Chain Coordination Challenge.” Department of Agricultural Economics. Michigan State 

University. International Development Collaborative Policy Briefs no. RW-FSRP-PB-2E, March 

2002. 
6-51

Project Rwanda. “The Coffee Bike,” undated. http://projectrwanda.org/cargo-bike (accessed September 9, 

2008). 

Schilling, Michele, and Tom McConnell. “Model for Siting Coffee Washing Stations in Rwanda.” Paper 

presented at Environmental Systems Research Institute, Inc., International Users Conference, San 

Diego, CA, July 2004. http://gis.esri.com/library/userconf/proc04/docs/pap1697.pdf. 

Sweet Maria’s Coffee Cupping Reviews. “Africa: Rwanda,” undated. 

http://www.sweetmarias.com/coffee.africa.rwanda.html (accessed September 30, 2008). 

United Nations Industrial Development Organization (UNIDO). Regional Office for Ethiopia, Uganda, 

and Rwanda. “Agro-Industries Development in Ethiopia.” Addis Ababa, Ethiopia, 2007. 

U.S. Agency for International Development (USAID). “Producers Wake Up and Smell the Coffee,” July–

August 2005. http://www.usaid.gov/press/frontlines/fl_julaug05/infocus.htm. 

U.S. Department of Agriculture (USDA). Foreign Agricultural Service (FAS). Production, Supply, and 

Distribution Online Database. http://www.fas.usda.gov/psdonline/psdHome.aspx (accessed 

February 3, 2009). 

U.S. Department of State. U.S. Embassy, Addis Ababa. “USITC Report: Ethiopia’s Infrastructure Effects 

on Export Competitiveness (ADDIS ABABA 002868),” October 8, 2008. 

U.S. International Trade Commission (USITC). Hearing transcript in connection with inv. no. 332-477, 

Sub-Sahara African: Effects of Infrastructure Conditions on Export Competitiveness, Third 

Annual Report, October 28, 2008. 

———. Sub-Saharan Africa: Factors Affecting Trade Patterns of Selected Industries, Second Annual 

Report, USITC Publication 3989. Washington, DC: USITC, 2008. 

World Bank. Doing Business Online Database. http://www.doingbusiness.org (accessed various dates). 

Shea Butter 

Chalfin, Brenda. Shea Butter Republic: State Power, Global Markets, and the Making of an Indigenous 

Commodity. New York: Routledge, 2004. 

Elias, Marlene, and Judith Carney. “African Shea Butter: A Feminized Subsidy from Nature.” Africa 77, 

no. 1 (January 1, 2007): 37–63. 

Fintrac, Inc. “Buying and Selling Shea Butter: A Marketing Manual for West Africa,” October 2002. 

http://www.gasselconsult.com/shea/sheadocs/Buying%20and%20Selling%20Shea%20Butter%20

Fintrac.pdf.

LMC International, Ltd. “The Impact of Directive 2000/26/EC on the Economies of those Countries 

Producing Cocoa and Vegetable Fats Other than Cocoa Butter: Main Report.” Prepared for the 

European Commission, DG Agriculture and Rural Development, New York, June 2006. 

USAID. “Mali Food Security Update.” FEWS NET Mali, February 2008. 

http://www.fews.net/docs/Publications/mali_2008_02eng.pdf. 
6-52

USITC. Sub-Saharan Africa: Factors Affecting Trade Patterns of Selected Industries, Second Annual 

Report, USITC Publication 3989. Washington, DC: USITC, 2008. 

World Bank. Snapshot Africa: Ghana; Benchmarking FDI Competitiveness, 2006. Washington, DC: 

World Bank Group and Multilateral Investment Guarantee Agency, January 2007. 

Tropical Fruit 

Dole Ocean Cargo Express. “Sailing Schedules,” undated. http://www.doleoceancargo.com/etrade.html

(accessed November 14, 2008). 

Food and Agriculture Organization of the United Nations (FAO). FAOSTAT Global Production 

Database. http://faostat.fao.org/site/567/default.aspx#ancor (accessed various dates). 

GTIS. Global Trade Atlas Database (accessed October 1, 2008). 

Hapag-Lloyd. “Schedules,” undated. http://www.hapag-lloyd.com/en/index.html (accessed December 3, 

2008). 

Maersk Line. “Route Schedules by Map-Africa,” undated. 

http://www.maerskline.com/globalfile/?path=/pdf_maps/newnetwork/africa/WAF10_NB

(accessed October 3, 2008). 

Minot, Nicholas, and Margaret Ngigi. “Are Horticultural Exports a Replicable Success Story? Evidence 

from Kenya and Côte d'Ivoire.” International Food Policy Research Institute and Egerton 

University. Conference paper no. 7. Presented at the Success in African Agriculture Conference, 

Pretoria, South Africa, December 1–2, 2003. 

USITC. Sub-Saharan Africa: Factors Affecting Trade Patterns of Selected Industries, Second Annual 

Report, USITC Publication 3989. Washington, DC: USITC, 2008. 

Natural Rubber 

Adenikinju, Adeola. Analysis of the Cost of Infrastructure Failures in a Developing Economy: The Case 

of the Electricity Sector in Nigeria. African Economic Research Consortium. AERC Research 

Paper 148, February 2005. 

Africa News. “Liberia: President Issues Executive Order,” November 22, 2008. 

———. “Nigeria: Common Tariff Will Kill Manufacturing Effort; Dunlop MD,” July 29, 2007. 

Baker, C.S.L., and W.S. Fulton. “Rubber, Natural.” In Kirk-Othmer Encyclopedia of Chemical 

Technology, edited by Jacqueline I. Kroschwitz and Arza Seidel, 1–24. Hoboken, NJ: John Wiley 

and Sons, 1997. 

BBC News. “Michelin to Close Nigerian Plant,” January 18, 2007. 

http://news.bbc.co.uk/2/hi/business/6274697.stm. 

Bogetic, Zeljko, and Issa Sanogo. “Infrastructure, Productivity and Urban Dynamics in Côte d’Ivoire: An 

Empirical Analysis and Policy Implications.” World Bank. Africa Region Working Paper Series 

no. 86, July 2005. 
6-53

Business Times (Singapore). “Olam, Wilmar in 50:50 African Joint Venture; They Will Make Three 

Initial Investments Totaling $209USm,” November 16, 2007. 

GTIS. Global Trade Atlas Database (accessed December 18, 2008). 

International Rubber Study Group (IRSG). “The African Rubber Industry.” Secretariat Conference Paper, 

2002. 

———. Rubber Statistics Bulletin 62, nos. 4 and 5, January–February 2008. 

Jones, Andrew. “Vietnam Mulls Africa Rubber Plantations To Feed U.S., Europe.” Dow Jones Asian 

Equities Report, July 15, 2008. 

OECD and AfDB. African Economic Outlook 2007/2008. Paris: OECD, 2008. 

Rubber & Plastic News. “Houses of Liberian Legislature Ratify Pact with BFS Plant,” April 14, 2008. 

Tumanjong, Emmanuel. “Sinochem Intl To Be Major Consumer Of Cameroon Rubber: Report.” Dow 

Jones Commodities Service, November 10, 2008. 

U.S. Department of State. U.S. Embassy, Abidjan. “Response to Request for Information on 

Infrastructure Conditions (ABIDJAN 000682),” October 2, 2008. 

USITC. Sub-Saharan Africa: Factors Affecting Trade Patterns of Selected Industries, Second Annual 

Report, USITC Publication 3989. Washington, DC: USITC, 2008. 

World Bank. Doing Business Online Database. http://www.doingbusiness.org (accessed January 15, 

2009). 

Textiles and Apparel 

Blanke, Jennifer, and Thea Chiesa. The Travel & Tourism Competitiveness Report 2008: Balancing 

Economic Development and Environmental Sustainability. Geneva, Switzerland: World 

Economic Forum, 2008. 

Eskom Holdings Limited. Together, Rising to the Challenge: Annual Report 2008. Johannesburg, South 

Africa: Eskom, 2008. 

http://financialresults.co.za/eskom_ar2008/ar_2008/downloads/eskom_ar2008.pdf. 

GTIS. Global Trade Atlas Database (accessed October 1, 2008 and January 12, 2009). 

Just-style.com editorial team. “South Africa: 640 Jobs to Go as SANS Fibres Closes,” November 6, 

2008. http://www.just-style.com. 

Porter, Michael, and Klaus Schwab. The Global Competitiveness Report 2008–2009. Geneva, 

Switzerland: World Economic Forum, 2008. 

Searates.com. “Statistical Data of Transit Time,” undated. 

http://www.searates.com/container/transit/stat/?fsealine=10&fport1=706&fport2=15786&fport3=

0&fport4=0&fport5=0&fport6=0&fport7=0 (accessed January 14, 2008). 
6-54

Swaziland Electricity Board. “Tariff Rates for 2006 and 2007,” undated. 

http://www.seb.co.sz/Tariffs.html (accessed November 13, 2008). 

U.S. Department of Commerce (USDOC). Office of Textiles and Apparel (OTEXA). “Trade Preference 

Programs, By Category, 11/2008 Data,” November 2008. http://otexa.ita.doc.gov/agoacbtpa/catv1.htm (accessed October 9, 2008). 

USITC. Hearing transcript in connection with inv. no. 332-477, Sub-Saharan Africa: Effects of 

Infrastructure Conditions on Export Competitiveness, Third Annual Report, October 28, 2008. 

Leather

Abebe, Frew. “Time for Dry Port Service.” The Reporter, November 1, 2008.

http://en.ethiopianreporter.com/content/view/185/1/. 

EIU. Country Profile 2008: Ethiopia. London: Economist Intelligence Unit, 2008. 

Embassy of India in Ethiopia. “Market Note on Ethiopian Leather and Leather Products,” October 1, 

2008. http://www.indianembassy.gov.et/FINAl_800by600/mar_ser/leather.htm. 

Ethiopian Privatization Agency (EPA). The Leather Industry Overview, July 15, 2002. 

http://www.telecom.net.et/~epa/sectors/leather.html. 

GTIS. Global Trade Atlas Database (accessed January 30, 2009 and February 3, 2009). 

International Council of Tanners (ICT). “Hide and Skin Quality,” undated. 

http://www.tannerscouncilict.org/hideskinquality.htm (accessed January 9, 2009). 

———. “Introduction to Leather,” undated. http://www.tannerscouncilict.org/introtoleather.htm

(accessed January 8, 2009). 

———. “Perspective on Leather: Its Place in the World,” undated. 

http://www.tannerscouncilict.org/perspective.htm (accessed January 9, 2009). 

International Trade Centre. Leatherline African Platform. “Country Profile: Ethiopia,” undated 

http://www.intracen.org/appli2/leather/africanplatform/default.aspx (accessed September 12, 

2008). 

Pro-Poor Livestock Policy Initiative (PPLPI). “The Political Economy of Pro-Poor Livestock Policy 

Making in Ethiopia.” PPLPI Working Paper no. 19, March 24, 2004. 

Tadessem, Kirubel. “Ethiopia: House Imposes 150% Tax on Hide and Skin Exports,” December 2, 2008. 

http://nazret.com/blog/index.php?title=ethiopia_house_imposes_150_tax_on_hide_a&more=1&c

=1&tb=1&pb=1. 

UNIDO. A Blueprint for the African Leather Industry. Addis Ababa, Ethiopia: UNIDO, 2004. 

———. A Strategic Action Plan for the Development of Ethiopian Leather and Leather Products 

Industry. Volumes I and II. Addis Ababa, Ethiopia: UNIDO, 2005. 

USITC. Sub-Saharan Africa: Factors Affecting Trade Patterns of Selected Industries, Second Annual 

Report, USITC Publication 3989. Washington, DC: USITC, 2008. 
6-55

Van der Loop, Theo. “The Importance of the Leather Footwear Sector for Development in Ethiopia.” 

RLDS Policy Brief no. 1, June 2003. Addis Ababa, Ethiopia: Addis Ababa University Printing 

Press. 

World Bank. Doing Business Online Database. http://www.doingbusiness.org (accessed January 14, 

2009). 

Zenebe, Wudineh. “Ethiopia: Spicing Up of Dry Ports’ Board to Speed Decision Making,” September 9, 

2008. http://allafrica.com/stories/200809090598.html. 

Tourism 

Ba, Demba, and Shaun Mann. “Tourism: An Opportunity to Unleash Shared Growth in Africa.” World 

Bank, Note no. 16, July 2006. 

http://www.siteresources.worldbank.org/EXTRAFRSUMAFTFS/Resources/note_16.pdf. 

Business Monitor International. “Tourism Industry to Feel the Pinch,” November 13, 2008. 

http://www.fdi.net/bmi/bmidisplay.cfm?filename=OEMO_20081105_216120_xml.html. 

Crilly, Rob. “After Violence, Kenya Tourism Struggles.” Christian Science Monitor, March 4, 2008. 

http://www.csmonitor.com/2008/0304/p07s03-woaf.html. 

De Waal, Leandra. “Power Cut: Cable Car Panic.” News24.com, January 22, 2008. 

http://www.news24.com/News24/South_Africa/News/0,,2-7-1442_2256141,00.html. 

EIU. Country Profile: Kenya; Main Report, December 1, 2007. London: Economist Intelligence Unit, 

2007. 

Gettleman, Jeffrey. “Kenyan Tourism Suffering Badly from Violence.” International Herald Tribune, 

February 29, 2008. http://www.iht.com/articles/2008/02/29/africa/kenya.php. 

Government of the Republic of South Africa. Department of Trade and Industry (DTI). Programme 

Guidelines, Enterprise Investment Programme, Tourism Support Programme, July 4, 2008. 

http://www.thedti.gov.za/teo/EIP_guidelines_tourism.pdf. 

International Monetary Fund (IMF). International Financial Statistics Online Database. 

http://www.imfstatistics.org/imf/ (accessed October 29, 2008). 

Kenya Tourist Board. “Corporate Strategic Plan 2005–2008,” undated. 

Lumiti, Cedric. “Country Moves to Create a Tourism Data Base.” East African Business Week, February 

2, 2009. http://www.individual.com/story.php?story=95696142. 

———. “Kenya Tourism Yet to Recover.” East African Business Week, November 2, 2008. 

http://www.busiweek.com. 

Macdonald, Shaun. “Don’t Turn Out the Lights.” The Zimbabwean, February 5, 2008. 

http://www.thezimbabwean.co.uk/index.php?option=com_content&view=article&id=11005:dont

-turn-out-the-lights&catid=32:zimbabwe%20tourism&Itemid=67. 
6-56

Mayoyo, Patrick. “Obama Father’s Birth Place ‘Kogelo Village’ Declared Touristic Destination in 

Western Kenya.” MajimboKenya.com, November 18, 2008. 

http://majimbokenya.com/home/2008/11/18/obama-fathers-birth-place-kogelo-village-declaredtouristic-destination-in-western-kenya/. 

Michaels, Daniel. “Travel Journal: Gambia’s Tourism Woes; Sun, Sand and Peace Remain a Tough Sell 

in West African State.” Wall Street Journal Asia, March 12, 2008. 

Naudé, W.A., and A. Saayman. “The Determinants of Tourist Arrivals in Africa: A Panel Data 

Regression Analysis.” Paper prepared for the International Conference, Centre for the Study of 

African Economies, St. Catherine’s College, University of Oxford, March 21–22, 2004. 

Tourism Review.com. “Obama Effect: Great Help to Tourism Industry,” November 25, 2008. 

http://www.tourism-review.com/top_weekly_full.php?id=1235. 

Trans Africa Concessions Ltd. (TRAC). “Objectives and Benefits,” undated. 

http://www.tracn4.co.za/Company_Profile/Objectives_and_Benefits.aspx (accessed 

 December 12, 2008). 

United Nations World Tourism Organization (UNWTO). Yearbook of Tourism Statistics, 2008. Madrid: 

World Tourism Organization, 2006. 

———. Yearbook of Tourism Statistics, 2007. Madrid: World Tourism Organization, 2005. 

———. Yearbook of Tourism Statistics, 2006. Madrid: World Tourism Organization, 2004. 

USAID and TechnoServe. “Tourism Industry Strategic Plan: Harnessing the Growth Potential in 

Swaziland’s Tourism Industry.” Discussion Document, December 2006. 

World Bank. “The Impact of the Financial Crisis on the Developing World.” World Bank Research 

Digest 3, no. 2 (Winter 2009). http://siteresources.worldbank.org/DEC/Resources/84797-

1154354760266/2807421-1222979971506/5435009-

1222980080964/The_Impact_of_the_Financial_Crisis.pdf. 

———. Kenya: Unleashing the Potential for Trade and Growth. Report no. 37688-KE, February 2007. 

http://siteresources.worldbank.org/INTRANETTRADE/Resources/Kenya_DTIS.pdf. 

World Travel and Tourism Council. “Progress and Priorities, 2008/09,” March 1, 2008. 

http://www.wttc.org/bin/pdf/original_pdf_file/progress_and_priorities_2008.pdf. 
 

 

APPENDIX A 

Request Letter 
 

 
 

 

A-3

APPENDIX B 

Federal Register Notice

B-3
B-4
B-5

APPENDIX C 

List of Hearing Participants 

C-3 

CALENDAR OF PUBLIC HEARING

 Those listed below appeared as witnesses at the United States International Trade Commission’s 

hearing: 

 Subject: Sub-Saharan Africa: Effects of Infrastructure Conditions on 

Export Competitiveness, Third Annual Report 

 

 Inv. No.: 332-477 

 Date and Time: October 28, 2008 - 9:30 a.m. 

 

 Sessions were held in connection with this investigation in the Main Hearing Room (room 101), 

500 E Street, S.W., Washington, D.C. 

EMBASSY APPEARANCE:

Embassy of the Kingdom of Lesotho 

Washington, D.C. 

His Excellency David Rantekoa, Ambassador of the Kingdom of Lesotho to the United States of 

America 

ORGANIZATION AND WITNESS:

The Honorable Christopher E. Goldthwait, 

 Former U.S. Ambassador to Chad 

Audrey Adams, Border Management and Customs Consultant 

 working on USAID funded projects 

African Coalition for Trade, Inc. 

Washington, D.C. 

 Paul Ryberg, President 

TechnoServe 

Washington, D.C. 

 Scott Clark, Senior Program Manager, Africa Division 
C-4 

ORGANIZATION AND WITNESS:

General Electric 

Washington, D.C. 

 Timothy J. Richards, Managing Director, International 

 Energy Policy 

Nathan Associates Inc. 

Arlington, VA 

 Paul E. Kent, Ph.D., Vice President, Infrastructure 

 Planning and Economics 

-END-
APPENDIX D 

Summary of Views of Interested Parties 

D-3 

Summary of Views of Interested Parties 

The Commission held a public hearing on October 28, 2008, and also invited interested 

persons to file written submissions. This appendix provides summaries of hearing 

testimony and written submissions for each interested party.1

Embassy of the Kingdom of Lesotho2

In hearing testimony presented before the Commission, His Excellency David Mohlomi 

Rantekoa, Lesotho’s Ambassador to the United States, described the conditions of 

Lesotho’s infrastructure and its importance to the competitiveness of key industries, such 

as apparel. Ambassador Rantekoa noted that Lesotho is a landlocked country, completely 

surrounded by South Africa, and therefore dependent on South Africa’s land and 

maritime transportation system, and to a lesser extent, its electrical system. He said that 

the country’s largest trading partner is the United States, overwhelmingly due to apparel 

exports under AGOA. 

The ambassador provided a summary overview of the apparel industry in Lesotho and 

related infrastructure issues. The apparel industry is the largest formal sector employer in 

Lesotho, directly employing approximately 46,000 individuals, as well as many more 

indirectly. It takes approximately 45 days in order to transport apparel products from 

factories in Lesotho to the U.S. market. Part of the delay in exporting goods out of the 

country stems from “soft” infrastructure impediments, such as customs procedures at the 

border between Lesotho and South Africa, and also from physical infrastructure 

constraints, such as the lack of an adequate bridge linking the apparel producing region of 

Mafeteng to nearby transportation routes in South Africa. 

The ambassador stated electricity and other infrastructure services are relatively scarce 

and expensive in Lesotho. He also stated that the country generates most of its own 

electricity, but also imports some from South Africa. In recent years, demand for 

electricity has outstripped supply, resulting in load-shedding and higher costs for firms, 

which are compelled to use costly diesel generators. These conditions have constrained 

economic growth. There is also a lack of sufficient water services and information and 

communication services in the country, although funding from the Millennium Challenge 

Corporation will target both of these vital sectors. 

The ambassador recommended several steps to address infrastructure constraints in 

Lesotho, including devoting more trade capacity-building funds to physical 

infrastructure, encouraging more public-private partnerships, and placing a greater 

emphasis on regional cooperation for infrastructure issues. 

 1

 In many instances, the appendix reflects only the principal points made by the particular party. The 

views expressed in the summarized materials should be considered to be those of the submitting parties and 

not the Commission. In preparing this summary, Commission staff did not undertake to confirm the accuracy 

of, or otherwise correct, the information summarized. For the full text of hearing testimony and written 

submissions, see entries associated with Investigation No. 332-477 (2008) at the Commission’s Electronic 

Docket Information System (http://searchapp.usitc.gov/edis3/app). 2

 USITC, Hearing transcript, October 28, 2008, 6–17. 
D-4 

Christopher E. Goldthwait, former U.S. Ambassador to 

Chad3

In written and hearing testimony presented to the Commission, the Honorable 

Christopher Goldthwait, former U.S. Ambassador to Chad (1999–2004), described how 

poor conditions in Chad’s road and electricity infrastructure constrain the country’s social 

and economic development, and also how poor infrastructure conditions affect the export 

competitiveness of various industries in Chad. He cited the lack of adequate road 

infrastructure and insufficient trucking capacity as the largest obstacles to both social and 

economic development in the country. For example, the poor road infrastructure limits 

the population’s access to education because it is difficult for teachers to travel to and 

from the capital city of N’Djamena during the rainy season. Similarly, people with 

limited capacity to travel long distances face difficulties reaching the few medical care 

facilities within the country. 

The former ambassador explained that large regions of Chad are effectively cut off from 

one another during the rainy season, and that there is limited capacity to transport 

commodities between different regions. As a result, it is often easier to import 

commodities such as grain to a region within Chad, than to transport them from a region 

within Chad that has a surplus. Ambassador Goldthwait noted that Chad has no national 

electricity grid. Few cities have public electricity generation, and power is generally 

produced from imported generators and diesel fuel. As a result, Chad has one of the 

highest electricity costs in the world. 

The former ambassador also described how poor road conditions and high electricity 

costs affect the export competitiveness of Chad’s livestock, sugar, and textiles industries. 

He noted that over one-third of Chad’s population is dependent on nomadic herding, with 

animals driven by hoof over large distances to reach a handful of markets within the 

country. Animals lose weight, and many die along the way, whether they are driven to 

domestic markets or for export to Nigeria. As a result, herders lose revenue and export 

volumes are lower than would be the case if animals were transported by truck over allweather roads. 

He noted that high power costs make Chad’s textiles industry less competitive than 

textiles produced in neighboring countries. He further noted that Chad no longer exports 

cut and chilled meats to neighboring countries largely because of prohibitively high 

electricity costs and a lack of cold-storage trucking capacity. 

Audrey Adams, Border Management and Customs 

Consultant4

In her oral testimony presented before the Commission, Ms. Adams stated that she is a 

retired senior executive from U.S. Customs and Border Protection with over 35 years of 

experience managing border crossings between the United States and Mexico. Ms. 

 3

 Goldthwait, Written testimony to the USITC, September 22, 2008; USITC, Hearing transcript, 

October 28, 2008, 32–38. 4

 USITC, Hearing transcript, October 28, 2008, 39–46. 
D-5 

Adams described various border management practices that could be used to help 

improve economic security and export competitiveness through enhanced trade 

facilitation in SSA. 

Ms. Adams stated that it is prudent to review the procedures, or “soft” infrastructure, that 

are in place at various border crossing points in order to understand reasons for border 

crossing delays. She said that a one-stop border post is an important step to develop the 

full potential of land transport corridors with truly seamless borders, because such posts 

reduce costs by decreasing transaction times and redundant bureaucracy between two 

countries. In addition, by eliminating the need for duplicate handling, the potential for 

cargo damage is significantly reduced. She also indicated that a one-stop border post 

creates opportunities for data sharing and potential savings to both industry and 

government. 

Ms. Adams explained that, by submitting cargo information to border management 

authorities in advance of arrival, border managers would be able to better assess the risk 

of a specific shipment and allocate inspection time and effort. She expressed the view 

that low-risk shipments can and should be allowed to proceed with only minimal 

government intervention. 

Ms. Adams stated that there are challenges that need to be addressed in order to create a 

viable one-stop border processing point, and that the decision to develop one-stop border 

posts is particular to individual countries, adding that government officials in many 

developing countries insist that all cargo must be examined. She stated further that 

electronic systems for data exchange can be developed rather easily, and that individual 

ministries and countries should be made aware of the benefits of electronic data 

exchange. Ms. Adams underscored the need for collaboration, transparency, and funding 

for the construction of the necessary facilities and electronic infrastructure. 

Paul Ryberg, President, Africa Coalition for Trade, Inc.5

In his hearing testimony, Mr. Ryberg, president of the Africa Coalition for Trade, Inc. 

(ACT), stated that ACT is a nonprofit association representing private-sector African 

companies that export to the United States under AGOA. Mr. Ryberg indicated that ACT 

has been involved in the development, implementation, and amendment of AGOA, and 

acts as one of the main spokespersons for the African private sector. 

Mr. Ryberg stated that the duty-free preferences under AGOA have helped improve the 

export competitiveness of various sectors, especially the textiles and apparel sector, 

where U.S. imports of textiles and apparel from AGOA beneficiaries increased by almost 

300 percent during the first five years of AGOA (2001–05). He noted that the growth in 

textiles and apparel trade was not widely dispersed among AGOA beneficiaries. Rather, 

it was concentrated in six countries—Lesotho, Kenya, Madagascar, Swaziland, South 

Africa, and Mauritius—which together accounted for 90 percent of apparel exports to the 

United States. He stated that infrastructure conditions and geographic location are key 

determinants of the competitive position of SSA textiles and apparel producers. 

 5

 USITC, Hearing transcript, October 28, 2008, 47–53. 
D-6 

Mr. Ryberg noted that, with the exception of Lesotho and Swaziland, which are 

surrounded by South Africa, the successful apparel exporting countries under AGOA are 

all coastal countries, and, therefore, are not subject to the high inland transportation costs 

and potential delays of transporting goods from landlocked countries to coastal ports for 

export. He said that high inland transportation costs and long delays have generally 

prevented landlocked SSA countries from significantly increasing apparel exports to the 

United States under AGOA. He cited three exceptions, Botswana, Malawi, and Uganda, 

and noted that their increased exports under AGOA were all from relatively small bases 

compared to coastal SSA countries. 

Mr. Ryberg stated that textile production is highly capital intensive and requires access to 

reliable supplies of electricity and clean water—in short, adequate and reliable 

infrastructure. He stated that textile production is even more concentrated than apparel 

production, with just South Africa, Mauritius, and Lesotho having significantly increased 

textile production and exports in response to AGOA. Mr. Ryberg noted that these 

countries have relatively superior infrastructure compared to their neighbors. 

Mr. Ryberg said that there is a clear connection between having a successful textile 

industry and a successful apparel industry. He indicated that apparel production becomes 

more competitive when it is vertically integrated with on-site or nearby textile production 

to reduce or eliminate transport costs, time delays, and other costs associated with 

sourcing inputs from far distances. However, because textile production is dependent on 

relatively advanced infrastructure, such as adequate and reliable transportation, 

electricity, and water infrastructure, Mr. Ryberg expressed the view that prospects for 

rapidly expanded vertical integration with the downstream apparel sector are dim. As a 

result, he expects that SSA’s apparel sector will continue to be at a competitive 

disadvantage versus other regions due in large part to the constraints imposed by poor 

infrastructure conditions. 

Scott Clark, Senior Program Manager, Africa Division, 

TechnoServe6

In his testimony before the Commission, Mr. Clark stated that TechnoServe is a nonprofit 

organization that provides business training to small companies in poor rural areas of the 

developing world in order to build businesses, create income, and improve economic 

growth. He said that TechnoServe is funded by the U.S. government, foundations, and 

corporations. 

Mr. Clark indicated that, in SSA, TechnoServe operates in East, West, and southern 

Africa, and has worked to improve the competitiveness of the coffee, shea butter, and 

tropical fruit sectors. In Tanzania, TechnoServe works with small-holder coffee farmers 

to improve the production and preprocessing stages of coffee. Mr. Clark stated that one of 

the principal challenges to coffee production is transport delays caused by poor feeder 

roads, which increase the amount of time it takes farmers to transport coffee cherries to 

processing facilities. He noted that time is a critical factor because if cherries are not 

pulped within eight hours of picking, the quality of the coffee bean is compromised. He 

further noted that the washing of coffee requires electricity, which is virtually nonexistent 

 6

 USITC, Hearing transcript, October 28, 2008, 53–58. 
D-7 

in most rural areas of SSA or sufficiently unreliable such that diesel generators are used 

instead. 

Mr. Clark stated that TechnoServe is focused on improving the quality of shea nuts and 

shea butter in Ghana for export. He noted that the majority of shea butter is used as a 

substitute for cocoa butter in the production of chocolate in export markets. Mr. Clark 

stated that most shea nuts are collected largely by women in poor rural areas of northern 

Ghana, consolidated at markets, and processed at large-scale processors in Ghana or 

exported for processing in Europe. TechnoServe’s aim is to have more women process 

the shea nuts themselves to locally capture the value added. Mr. Clark noted that 

adequate and reliable electricity is a principal challenge facing small-scale processors; 

many small-scale processors rely on expensive diesel generators. 

With respect to tropical fruit, Mr. Clark stated that TechnoServe is active in Kenya, 

Uganda, and Tanzania. He stated that adequate cold storage along the supply chain is 

critical to maintaining the quality of the fruit. Mr. Clark noted that fruit is harvested early 

in the morning before the temperature rises, and that the fruit is transported to pack 

houses on feeder roads that are often of very poor quality. This results, he explained, in a 

fair amount of damage to the fruit, leading to increased rejection rates of fruit destined for 

export. 

Timothy Richards, Managing Director, International 

Energy Policy, General Electric Company7

In hearing testimony presented before the Commission, Mr. Richards highlighted the 

history of electricity policy in SSA and its implications for economic development, and 

steps that African governments should pursue in order to increase the availability and 

reliability of electricity within their countries. General Electric (GE) has a long history of 

involvement in the electricity sector in SSA, both as a provider of power-generating 

equipment to domestic utilities and independent power producers (IPPs) and in its role as 

an investor in individual power projects. 

Mr. Richards noted that electricity is a crucial component of economic and business 

development, and that SSA as a region is currently underserved in terms of the 

availability and reliability of electricity. He attributes this lack of sufficient electricity 

supplies to problems related to the management and regulation of electric utilities in 

Africa. He said that electricity in SSA historically was provided by state-owned 

monopolies, which charged artificially low rates and suffered from political interference 

in hiring and management. Starting in the 1990s, multilateral development banks 

encouraged privatization and the participation of IPPs. He said that the pricing structure 

established in most countries was not sustainable; IPPs charged market-based rates to 

electric utilities for wholesale power, but the utilities charged below cost rates to 

consumers. He indicated that this ultimately led to pressure on IPPs to renegotiate rates, 

and caused many foreign investors who controlled the IPPs to divest their assets. 

He said that even South Africa, the country with the largest power generation capacity in 

SSA, recently faced shortages of electricity due to electricity demand expanding more 

 7

 USITC, Hearing transcript, October 28, 2008, 58–66. 
D-8 

rapidly than supply. He noted that oil- and gas-rich Nigeria has had difficulty generating 

sufficient quantities of electricity; GE recently supplied the country with gas turbines, but 

the turbines have not yet been installed due to difficulties with the installation contracts. 

He said that Ghana has one of the highest electricity rates on the continent, but businesses 

are still hampered by outages. 

Mr. Richards suggested several steps to mitigate the current situation. According to Mr. 

Richards, electric utilities must be able to generate positive returns, and have the power to 

make long-term investment decisions. He indicated that this requires a regulatory system 

that allows for sufficiently high electricity prices such that firms can fund further 

investment in the electric systems. 

Paul Kent, Vice President Infrastructure Planning and 

Economics, Nathan Associates8

In his hearing testimony, Dr. Kent stated that he is a port specialist with Nathan 

Associates, an economic consulting firm. Dr. Kent indicated that he has experience 

working on port reform in 40 countries worldwide, including six in SSA. Dr. Kent 

described the importance of ports to economic development and the current state of 

African ports, and listed steps that could mitigate the problems associated with poor port 

performance in SSA. 

Dr. Kent noted that there are a number of recently published economic studies that show 

a strong relationship between economic and trade performance and infrastructure 

conditions. He cited in particular a recent paper by Kent and Fox that estimates that the 

removal of port inefficiencies could increase annual GDP growth by 0.47 percent. 

Additionally, he cited a recent World Bank study that shows that delays in shipment time 

effectively increase the economic distance between countries. 

Dr. Kent also noted that ports in SSA are characterized by a number of problems, 

including lengthy berth waiting times, slow vessel turnaround times, and long cargo 

dwell times. There are also problems with truck connections from the ports due to an 

imbalance of trade flows and other factors. He attributed the inefficiencies and delays 

partly to a lack of effective economic regulation in conjunction with monopoly port 

operators. With the expansion of the Panama Canal, Dr. Kent expects vessel size to 

increase, resulting in lower frequency of port calls and higher volumes. He said that this 

will increase the pressure on port infrastructure at peak times. Simultaneously, higher fuel 

costs are increasing transportation costs generally, resulting in countries focusing more 

on regional trade. 

To mitigate these problems, Dr. Kent maintains that transportation corridor competition 

should be increased, port concessions should be properly structured to regulate against 

anticompetitive behavior by operators, truck visits to ports should be scheduled to 

alleviate traffic congestion, and appropriate infrastructure should be developed, such as 

inland ports and truck staging areas. 

 8

 USITC, Hearing transcript, October 28, 2008, 67–75. 
D-9 

Vijaya Ramachandran, Senior Fellow, Center for Global 

Development9

In written testimony submitted to the Commission, Dr. Vijaya Ramachandran, senior 

fellow, Center for Global Development, stressed the importance of U.S. support for the 

development of African infrastructure. She stated that Africa’s private sector, and hence 

economic growth, is hindered by critical deficiencies in the power and road sectors. 

Dr. Ramachandran noted that, in many African countries, energy as a share of total 

business costs is much higher than in countries such as China. In order to alleviate this 

situation, she suggested that the United States support a “Clean Infrastructure Initiative,” 

which would focus on producing electricity from renewable sources. Dr. Ramachandran 

added that Africa has an abundance of potential sources for renewable energy production, 

including wind, solar, hydro, and biomass. She indicated that harnessing these sources of 

energy would allow Africa to avoid air and water pollution associated with coal, and also 

provide a viable solution to the challenges of providing off-grid power supplies to remote 

populations. She suggested that the United States encourage investment in clean energy 

development via the Overseas Private Investment Corporation, which could establish a $1 

billion Clean Energy Fund for Africa to provide guarantees and facilitate technology 

transfers. 

Dr. Ramachandran also suggested that the United States provide support to multilateral 

institutions such as the African Development Bank and the World Bank in order to build 

and maintain a trans-African road network. She noted that the African Development 

Bank has proposed road networks to connect all African capitals and cities with more 

than 500,000 residents. She added that best-practice models and technical expertise exist 

within multilateral institutions for dealing with the complexities—such as corruption 

concerns, environmental concerns, and maintenance funding mechanisms—of building 

major road networks. 

 9

 Ramachandran, Written testimony to the USITC, October 27, 2008. 

APPENDIX E 

Trading Across Borders Indicators: 

Sub-Saharan Africa 

E-3 

TABLE E.1 World Bank Doing Business indicators: Trading Across Borders (imports) in sub-Saharan Africa, 

2009

 Rank Trading Across Borders 

Economy 

In 

SSA 

Overall 

trading 

across 

bordersa 

Overall 

ease of 

doing 

businessa 

Documents 

for import 

(number)b 

Time for 

import 

(days)c 

Cost to 

import (US $ 

per 

container)d 

Mauritius 1 20 24 6 16 677 

Cape Verde 2 56 143 5 18 1,129 

Senegal 3 60 149 5 18 1,920 

The Gambia 4 73 130 8 23 922 

Ghana 5 76 87 7 29 1,130 

Togo 6 84 163 8 29 963 

São Tomé and Príncipe 7 88 176 8 29 577 

Seychelles 8 90 104 5 19 1,839 

Tanzania 9 103 127 7 31 1,475 

Madagascar 10 109 144 9 27 1,660 

Guinea 11 110 171 9 32 1,191 

Guinea-Bissau 12 111 179 6 24 2,349 

Liberia 13 115 157 9 17 1,212 

Gabon 14 128 151 8 22 1,955 

Benin 15 129 169 7 40 1,393 

Comoros 16 129 155 10 21 1,057 

Sierra Leone 17 132 156 7 34 1,535 

Equatorial Guinea 18 133 167 7 49 1,411 

Cameroon 19 137 164 8 33 1,672 

Sudan 20 139 147 6 49 2,900 

Mozambique 21 140 141 10 32 1,475 

Lesotho 22 141 123 8 49 1,715 

Nigeria 23 144 118 9 42 1,306 

Uganda 24 145 111 7 37 3,290 

South Africa 25 147 32 9 35 1,721 

Kenya 26 148 82 8 26 2,190 

Botswana 27 149 38 9 42 3,064 

Namibia 28 150 51 9 24 1,813 

Ethiopia 29 152 116 8 42 2,893 

Zambia 30 153 100 9 64 3,335 

Swaziland 31 154 108 11 33 2,249 

Côte d'Ivoire 32 155 161 9 43 2,437 

Mauritania 33 158 160 11 42 1,523 

Chad 34 159 175 9 102 6,020 

Dem. Rep. of the Congo 35 160 181 9 66 2,483 

Zimbabwe 36 162 158 9 73 3,999 

Eritrea 37 163 173 13 60 1,581 

Mali 38 166 166 11 42 2,902 

Malawi 39 167 134 10 54 2,550 

Rwanda 40 168 139 10 42 5,070 

Niger 41 169 172 10 64 3,545 

Burundi 42 170 177 10 71 3,705 

Angola 43 172 168 9 62 3,325 

Burkina Faso 44 173 148 11 54 3,630 
E-4 

TABLE E.1 World Bank Doing Business indicators: Trading Across Borders (imports) in sub-Saharan Africa, 

2009—Continued 

 Rank Trading Across Border 

Economy 

In 

SSA 

Overall 

trading 

across 

bordersa 

Overall 

ease of 

doing 

businessa 

Documents for 

import 

(number)b 

Time for 

import 

(days)c 

Cost to 

import (US $ 

per 

container)d 

Central African Republic 45 175 180 18 66 5,074 

Rep. of the Congo 46 176 178 12 62 2,959 

 SSA average 9 41 2,279 

 

Regional averages 

 East Asia & Pacific 7 25 949 

 Eastern Europe & Central Asia 8 32 1,822 

 Latin America & Caribbean 7 22 1,384 

 Middle East & North Africa 8 27 1,205 

 OECD 5 11 1,133 

 South Asia 9 33 1,487 

 SSA 9 41 2,279 

Source: World Bank, Doing Business Online Database. http://www.doingbusiness.org (accessed 

January 12, 2009). 

 aOut of 181 economies. bIncludes bank documents, customs clearance documents, port and terminal handling 

documents, and transport documents. 

 cIncludes the time for obtaining all documents, inland transport, customs clearance and 

inspections, and port and terminal handling. Does not include ocean transport time. 

 dIncludes the cost of obtaining all documents, inland transport, customs clearance and 

inspection, and port and terminal handling. Includes official costs only. 
E-5 

TABLE E.2 World Bank Doing Business indicators: Trading Across Borders (exports) in sub-Saharan Africa, 2009 

 Rank Trading Across Borders 

Economy 

In 

SSA 

Overall 

trading 

across 

bordersa 

Overall 

ease of 

doing 

businessa 

Documents 

for export 

(number)b 

Time 

for 

export 

(days)c 

Cost to export 

(US $ per 

container)d 

Mauritius 1 20 24 5 17 725 

Cape Verde 2 56 143 5 19 1,325 

Senegal 3 60 149 6 14 1,078 

The Gambia 4 73 130 6 24 831 

Ghana 5 76 87 6 19 1,003 

Togo 6 84 163 6 24 940 

São Tomé and Príncipe 7 88 176 8 27 690 

Seychelles 8 90 104 6 17 1,839 

Tanzania 9 103 127 5 24 1,262 

Madagascar 10 109 144 4 23 1,279 

Guinea 11 110 171 7 33 720 

Guinea-Bissau 12 111 179 6 25 1,545 

Liberia 13 115 157 10 20 1,232 

Gabon 14 128 151 7 20 1,945 

Benin 15 129 169 7 32 1,237 

Comoros 16 129 155 10 30 1,073 

Sierra Leone 17 132 156 7 29 1,450 

Equatorial Guinea 18 133 167 7 30 1,411 

Cameroon 19 137 164 9 27 995 

Sudan 20 139 147 6 35 2,050 

Mozambique 21 140 141 8 26 1,200 

Lesotho 22 141 123 6 44 1,549 

Nigeria 23 144 118 10 25 1,179 

Uganda 24 145 111 6 39 3,090 

South Africa 25 147 32 8 30 1,445 

Kenya 26 148 82 9 29 2,055 

Botswana 27 149 38 6 31 2,508 

Namibia 28 150 51 11 29 1,686 

Ethiopia 29 152 116 8 46 2,087 

Zambia 30 153 100 6 53 2,664 

Swaziland 31 154 108 9 21 2,184 

Côte d'Ivoire 32 155 161 10 23 1,904 

Mauritania 33 158 160 11 35 1,520 

Chad 34 159 175 6 78 5,367 

Dem. Rep. of the Congo 35 160 181 8 46 2,607 

Zimbabwe 36 162 158 7 53 2,678 

Eritrea 37 163 173 9 50 1,431 

Mali 38 166 166 9 38 2,012 

Malawi 39 167 134 12 45 1,671 

Rwanda 40 168 139 9 42 3,275 

Niger 41 169 172 8 59 3,545 

Burundi 42 170 177 9 47 2,147 

Angola 43 172 168 12 68 2,250 

Burkina Faso 44 173 148 11 45 2,132 

 
E-6 

TABLE E.2 World Bank Doing Business indicators: Trading Across Borders (exports) in sub-Saharan Africa, 2009—

Continued

 Rank Trading Across Borders 

Economy 

In 

SSA 

Overall 

trading 

across 

bordersa 

Overall 

ease of 

doing 

businessa 

Documents 

for export 

(number)b 

Time 

for 

export 

(days)c 

Cost to export 

(US $ per 

container)d 

Central African Republic 45 175 180 8 57 5,121 

Rep. of the Congo. 46 176 178 11 50 2,490 

 SSA Average 8 35 1,879 

 

Regional averages: 

 East Asia & Pacific 7 23 902 

 Eastern Europe & Central Asia 7 30 1,649 

 Latin America & Caribbean 7 20 1,230 

 Middle East & North Africa 7 23 1,024 

 OECD 5 11 1,069 

 South Asia 9 33 1,339 

 SSA 8 35 1,879 

Source: World Bank, Doing Business Online Database. http://www.doingbusiness.org (accessed 

January 12, 2009). 

 a

Out of 181 economies. 

 b

Includes bank documents, customs clearance documents, port and terminal handling documents, 

and transport documents. 

 c

Includes the time for obtaining all documents, inland transport, customs clearance and 

inspections, and port and terminal handling. Does not include ocean transport time. 

 d

Includes the cost of obtaining all documents, inland transport, customs clearance and inspection, 

and port and terminal handling. Includes official costs only. 
APPENDIX F 

Logistics Performance Index and Select 

Indicators: Sub-Saharan Africa 

F-3 

The Logistics Performance Index (LPI) provides a cross-country assessment of logistics performance. LPI 

scores, based on a scale of 1 to 5 (lowest to highest performance), are aggregated from more than 5,000 

country evaluations and surveys by professionals engaged in international trade within 150 countries. 

Logistics performance is evaluated in seven domains: (1) efficiency of the clearance process by customs 

and other border agencies; (2) quality of transport and information technology infrastructure for logistics; 

(3) ease and affordability of arranging international shipments; (4) competence of the local logistics 

industry; (5) ability to track and trace international shipments; (6) domestic logistics costs; and (7) 

timeliness of shipments in reaching destination.1

 1

 For more information on the Logistics Performance Index, see Jean-Francois Arvis, et al., Connecting to Compete: Trade 

Logistics in the Global Economy, World Bank, 2007. 
TABLE F.1 Logistics Performance Index: SSA and regional comparisons, 2007

LPI ranking Indicator 

SSA Int'l Country 

LPI 

score Customs Infrastructure 

Int'l 

shipments 

Logistics 

competence 

Tracking 

and 

tracing 

1 24 South Africa 3.53 3.22 3.42 3.56 3.54 3.71 2 57 São Tomé and Príncipe 2.86 2.50 2.20 3.40 3.00 3.00 

3 62 Guinea 2.71 2.50 2.33 2.50 2.67 2.83 

4 64 Sudan 2.71 2.36 2.36 2.67 2.83 2.92 5 67 Mauritania 2.63 2.40 2.20 2.60 2.70 2.80 

6 76 Kenya 2.52 2.33 2.15 2.79 2.31 2.62 7 77 The Gambia 2.52 2.25 2.33 2.67 3.00 2.33 8 83 Uganda 2.49 2.21 2.17 2.42 2.55 2.33 9 84 Cameroon 2.49 2.57 2.00 2.33 2.25 2.50 

10 85 Comoros 2.48 2.30 2.46 2.33 2.64 2.50 

11 86 Angola 2.48 2.40 2.25 2.50 2.50 2.38 

12 89 Benin 2.45 1.80 1.89 2.78 2.56 2.89 13 91 Malawi 2.42 2.25 2.13 2.56 2.56 2.00 

14 93 Nigeria 2.40 2.23 2.23 2.49 2.38 2.36 

15 100 Zambia 2.37 2.08 2.00 2.40 2.44 2.80 

16 101 Senegal 2.37 2.38 2.09 2.09 2.73 2.30 

17 102 Côte d'Ivoire 2.36 2.22 2.22 2.13 2.38 2.00 

18 104 Ethiopia 2.33 2.14 1.88 2.43 2.00 1.83 

19 105 Liberia 2.31 2.40 2.14 2.83 2.00 2.00 

20 108 Lesotho 2.30 2.40 2.00 2.50 2.20 1.83 

21 109 Mali 2.29 2.17 1.90 2.23 2.21 2.38 22 110 Mozambique 2.29 2.23 2.08 2.25 2.36 2.00 

23 113 Burundi 2.29 2.20 2.50 2.50 2.50 2.00 

24 114 Zimbabwe 2.29 1.92 1.87 2.27 2.21 2.64 

25 116 Guinea-Bissau 2.28 2.14 2.25 2.22 2.00 2.22 

26 119 Togo 2.25 2.10 2.25 2.40 2.40 2.20 27 120 Madagascar 2.24 2.24 2.13 2.25 2.00 2.19 

28 121 Burkina Faso 2.24 2.13 1.89 2.67 2.33 2.13 

29 124 Eritrea 2.19 2.14 2.00 2.00 2.67 2.50 

30 125 Ghana 2.16 2.00 2.25 2.25 1.75 2.25 31 126 Namibia 2.16 2.14 2.00 2.14 1.83 1.83 

32 127 Somalia 2.16 2.43 1.63 1.88 2.25 1.75 

33 132 Mauritius 2.13 2.00 2.29 2.20 1.75 2.25 

34 134 Gabon 2.10 2.25 2.40 1.67 2.00 2.00 35 137 Tanzania 2.08 2.07 2.00 2.08 1.92 2.17 

F-4 
TABLE F.1 Logistics Performance Index: SSA and regional comparisons, 2007—Continued

LPI ranking Indicator 

SSA Int'l Country 

LPI 

score Customs Infrastructure 

Int'l 

shipments 

Logistics 

competence 

Trackin

an

tracin

36 142 Chad 1.98 2.00 1.80 1.83 1.82 1.937 143 Niger 1.97 1.67 1.40 1.80 2.00 2.038 144 Sierra Leone 1.95 1.58 1.83 1.82 1.91 2.0

39 148 Rwanda 1.77 1.80 1.53 1.67 1.67 1.6

 SSA average 2.35 2.21 2.11 2.36 2.33 2.3

Region 

 1 Europe & Central Asia 2.59 2.39 2.39 2.61 2.53 2.5 2 East Asia & Pacific 2.58 2.41 2.37 2.64 2.54 2.5

 3 Latin America & Caribbean 2.57 2.38 2.38 2.55 2.52 2.5 4 Middle East & North Africa 2.42 2.24 2.27 2.44 2.33 2.3

 5 SSA Average 2.35 2.21 2.11 2.36 2.33 2.3

6 South Asia 2.30 2.06 2.07 2.28 2.32 2.32 

Income groupsa 

 1 High income 3.67 3.45 3.66 3.52 3.64 3.7

 2 Upper middle income 2.85 2.64 2.70 2.84 2.80 2.8

 3 Lower middle income 2.47 2.31 2.27 2.48 2.40 2.4 4 Low income 2.29 2.12 2.06 2.32 2.29 2.2

Source: Logistics Performance Index Online Database. http://www.worldbank.org (accessed January 12, 2009). 

aIncome groups are based on 2005 gross national income per capita, and calculated using the World Bank Atlas method. Income gr

following: low income ($875 or less), lower middle income ($876–3,465), upper middle income ($3,466–10,725), and high income ($10

F-5

APPENDIX G 

Harmonized System Categories 

TABLE G.1 Harmonized System (HS) categories by select SSA industry sector

Industry sector 

HS chapters, 

headings, or 

subheadings included 

Description 

Coffee 0901 Coffee, whether or not roasted or decaffeinated; coffee 

husks and skins; coffee substitutes containing coffee in 

any proportion 

Tropical fruit 0803 

0804.30 

Bananas and plantains, fresh or dried 

Pineapples 

Shea butter Shea nuts and shea butter fall under HTS subheadings 1207.99.02 and 

1515.90.21, both of which include other types of nuts and oils/fats not 

elsewhere specified or included. The HTS at the legal rate line (8-digit) level 

does not include statistical reporting provisions that pertain solely to shea nuts 

or shea butter. 

Natural rubber 4001 Natural rubber, balata, gutta-percha, guayule, chicle 

and similar natural gums, in primary forms or in plates, 

sheets, or strip 

Textiles and apparel For this study, the Commission includes in the definition of textiles the following 

headings and chapters: 5004, 5005, 5006, 5007, 5105, 5106, 5107, 5108, 

5109, 5110, 5111, 5112, 5113, 5203, 5204, 5205, 5206, 5207, 5208, 5209, 

5210, 5211, 5212, 5306, 5307, 5308, 5309, 5310, 5311, 5407, 5408, 5507, 

5508, 5509, 5510, 5511, 5512, 5513, 5514, 5515, 5516, 56, 57, 58, 59, 60, and 

63. Apparel includes chapters 61 and 62. 

Leather 4104 

4105 

4106 

4107 

4112 

4113 

4114 

4115 

Tanned or crust hides and skins of bovine (including 

buffalo) or equine animals, without hair on, whether or 

not split, but not further prepared 

Tanned or crust skins of sheep or lambs, without wool 

on, whether or not split, but not further prepared 

Tanned or crust skins of other animals, without wool or 

hair on, whether or not split, but not further prepared 

Leather further prepared after tanning or crusting, 

including parchment-dressed leather, of bovine 

(including buffalo) or equine animals, without hair on, 

whether or not split, other than heading 4114 

Leather further prepared after tanning or crusting, 

including parchment-dressed leather, of sheep or 

lamb, without wool on, whether or not split, other than 

leather of heading 4114 

Leather further prepared after tanning or crusting, 

including parchment-dressed leather, of other animals, 

without wool or hair on, whether or not split, other than 

leather of heading 4114 

Chamois (including combination chamois) leather; 

patent leather and patent laminated leather; metallized 

leather 

Composition leather with a basis of leather or leather 

fiber, in slabs, sheets or strip, whether or not in rolls; 

parings and other waste of leather or of composition 

leather, not suitable for the manufacture of leather 

articles; leather dust, powder and flour 

Source: Compiled by Commission staff from U.S. International Trade Commission, Harmonized Tariff 

Schedule of the United States (HTSUS) (2007). Use of the 2007 HTSUS corresponds with the last year of 

trade data used in the study. 

G-3