Sub-Saharan Africa has a serious infrastructure deficit—estimated at about $48 billion a year—which is impeding the continent's competitiveness and hence its economic growth. How to solve this problem? Some advocate building more infrastructure while others suggest privatizing, or contracting out to the private sector, the management of infrastructure so that the discipline of the market will lead to more and better quality services. This book graphically illustrates the problem in the case of Africa's ports. With the exception of Durban, cargo dwell times—the amount of time cargo spends in the port—average about 20 days in African ports, compared with 3-4 days in most other international ports. None of the past attempts to solve this problem have worked. The reason—and this is the major contribution of this volume—is that long dwell times are in the interest of certain public and private actors in the system. Importers use the ports to store their goods. Customs brokers have little incentive to move the goods because they can pass on the costs of delay to the importers. And when the domestic market is a monopoly, the downstream producer has an incentive to keep the cargo dwell times long as a way of deterring entry of other producers. The net result is inordinately long dwell times, ineffective interventions, and globally uncompetitive industries in African countries. The solution to decrease dwell time in these ports relies mainly on the challenging task of breaking the private sector's collusion and equilibrium between public authorities, logistics operators, and some shippers and not on investing massively in infrastructure. Addressing the challenge will also require that there be political support from the general public for reforms that will promote their interests. And before they offer their political support, the public needs to be informed. This book is a step in that direction.
China and India's new-found interest in trade and investment with Africa - home to 300 million of the globe's poorest people and the world's most formidable development challenge - presents a significant opportunity for growth and integration of theSub-Saharan continent into the global economy. Africa's Silk Road finds that China and India's South-South commerce with Africa isabout far more than natural resources, opening the way for Africato become a processor of commodities and a competitive supplier of goods and services to these countries - a major departure from its long established relations with the North. A growing number of Chinese and Indian businesses active in Africa operate on a global scale, work with world-class technologies, produce products and services according to the most demanding standards, and foster the integration of African businesses into advanced markets.There are significant imbalances, however, in these emerging commercial relationships. These can be addressed through a series of reforms in all countries: 'At-the-border' reforms, such as elimination of China and India's escalating tariffs on Africa's leading exports, and elimination ofAfrica's tariffs on certain inputs that make exports uncompetitive 'Behind-the-border' reforms in Africa, to unleash competitive market forces and strengthen its basic market institutions 'Between-the-border' improvements in trade facilitation mechanisms to decrease transactions costs Reforms that leverage linkages between investment and trade, toallow African businesses to participate in global productionnetworks that investments by Chinese and Indian firms can generate.
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