Wednesday, April 1 2009
In depth: Road transport problems slow development
By Joe Lamport
In March, a trucking company manager in Mali had heard enough of her drivers complaining about more and more checkpoints where they were being asked to pay bribes by police, gendarmes and customs agents.
The manager marched across town to the office of the interior minister and talked to him directly. Two weeks later, the minister announced a reduction in the number of checkpoints in Mali. How much her meeting affected his announcement is open to speculation, but her initiative is one way West Africa’s well-known transportation problems can be addressed: The private sector has an important role to play – and political will is an important means to solving those problems.
In short, road transport in West Africa costs too much and takes too long. Of all the costs aside from taxes that importers and exporters must pay to move goods, transport is the largest: As much as 70 percent, according to the Trade Hub’s research. And the cost of transporting goods in West Africa is among the highest in the world, other studies have shown.
Delays plague the movement of goods and people – with negative consequences. A 2006 World Bank study reported that each day of delays along an export corridor reduces a country’s export volumes by about 1 percent. As an example, it said if Burkina Faso reduced its factory-to-ship time from 71 days to 27 days, “exports may increase by nearly 45 percent.”
The good news is that the problems affecting transport are well documented. There is agreement on what the problems are, what causes them and what needs to be done. The bad news is that the studies have not emphasized the role the private sector can – and some would say, must – play to resolve the problems.
“The private sector has a very significant role to play in resolving West Africa’s transportation issues,” said the Trade Hub’s transportation expert, Dr. Andy Cook. “The impacts of poor infrastructure, delays and road transport corruption fall heavily on the private sector, and companies have to tackle the problems directly if we want to see improvement.”
The frustration the transport sector’s woes are causing are great – perhaps mostly because so little seems to have changed for decades.
“We’ve been talking about the problems for as long as I’ve been a consultant, over 20 years,” lamented a transport expert at the Salon International des Transports d’Afrique de l’Ouest (SITRAO), the first regional conference on transport, which was held in Bamako in March. “These problems could be fixed tomorrow. All that’s missing is the will to do it.”
The transport context
Importers and exporters use trucks, trains, boats and airplanes to move goods in to and out of West Africa. Each has its advantages and disadvantages; together they keep the region's economies moving and provide for the daily needs of the region's over 300 million people.
Planes are perfect for an exporter like Pirogue Bleue, a Trade Hub-assisted fish and seafood company in Senegal, which sends fresh fish to Europe. The fish and seafood arrives quickly, ready for sale in fish markets in cities like Milan, Athens and Paris. But it’s the most expensive way to move goods.
Outside of air, international shipping revolves largely around container ships that bring thousands of the 20- and 40-ton metal boxes to West Africa every month. Ships for commodities are also common, and in many cases seasonal. Improving ports to facilitate the traffic is important. These ships move goods along West Africa’s coast, to international destinations although very few are direct to the final port of call, increasing transit time and costs.
Trains are good for exporters of raw materials and importers of non-perishable food stuffs. Trains can carry larger loads than trucks and generally move the goods faster. Trains also do not involve paying as many bribes along the way, a sector expert said. But the rail network in the region is limited. The system is also not interconnected, and most destinations are not on the rail lines, requiring use of trucking as well.
Road transport is easily the most important form of transportation in the region: Trucks carry far more of the goods moving across West Africa than any other form of transport. The region has approximately 40,000 km of interstate highways and tens of thousands of trucks. The Trade Hub’s work has focused on road transport because of its significance and the opportunity to influence and facilitate improvements.
Why is it so hard to get from here to there?
The road infrastructure in West Africa is in poor condition and lacks the capacity to meet ever increasing demand.
Overloading of trucks is common – and dramatic. A 2008 study of the problem in Burkina Faso showed that at least a third of trucks were carrying on average twice the weight they were meant to. Regional regulations allow trucks to carry up to 51 tons, 11.5 tons per axle. On one route, 60 percent of the trucks were overloaded, weighing 62 percent more than allowed. The trucks were carrying up to 30 tons per axle and as much 142 tons total.“The overloading of trucks is destroying my roads,” said an executive who oversees regional infrastructure projects. “A road that should last 15 years is, at best, lasting eight.”
States are addressing overloading through the use of weighbridges. But as the Trade Hub’s 6th report on road transport corruption showed, in some cases agents of the states are using the weighbridges simply to extort money from truck drivers, and not requiring them to either pay a fine for overloading or offload excess cargo.
Too many checkpoints
The Trade Hub’s road transport corruption reports, initiated in 2006, have provided snapshots of the extent of checkpoints along three road corridors connecting Ouagadougou to Bamako, Lome and Tema. The results are not pretty: At almost 90 checkpoints along these routes, truck drivers are paying hundreds of thousands of dollars in bribes every year and the movement of goods is slowed to a standstill as a result.
“It’s not so much the money as the delays the checkpoints cause,” said the representative of a transportation company in Ouagadougou that moves goods from that city to the Port of Tema in Ghana.
Under the auspices of ECOWAS, states have resolved to reduce checkpoints, but in reality they have not implemented their own resolution.
The trucks carrying goods across the region are mostly old and break down too often, decreasing efficiency and contributing to road accidents and fatalities.
Transit documentation that should apply across the region often serves only within a given country. So, when a truck arrives at a border, the driver has to present new documentation.
“A transporter drives from Lome to Ouagadougou but at the border he basically has to throw the paper he was given in Lome into a trash bin,” said a regional transport official. “It would be more efficient to have one piece of paper.”
Unprofessional trucking ‘companies’
The trucking companies providing services in the region can be separated into two classes: A few sophisticated companies in each country with large fleets – and everyone else, mainly small companies that may not even be trucking companies per se but rather individual traders who have bought trucks and hired drivers to operate them. The small informal sector ‘companies’ tend to operate in a haphazard and ad hoc fashion, experts said. They are inefficient and more likely than the big companies to overload their vehicles and pay bribes to pass checkpoints.
Truck drivers in the informal sector are also often illiterate. This adds to delays of imports and exports, which take place in a bureaucratic environment of documentation. In addition, these drivers may be unaware of the traffic laws and regulations, making them vulnerable to bribery by police officers and magnifying the danger that their trucks may not meet regional technical norms.
Lack of competition
In 2008, a World Bank study partly blamed the region’s high costs for road transport on the lack of competition within the sector. The study said that agreements between coastal countries and landlocked countries that allocate one-third of cargo to trucking companies in the coastal country and two-thirds to those in the landlocked country had allowed monopolies to develop.
A “queuing” system at the ports put these agreements into effect. An organization in each port allocates freight to trucks according to the restrictive “one-third, two-thirds” rule. In this system, trucks are more or less guaranteed freight to carry – they simply line up and wait. The system diminishes incentives for a truck owner to invest in a new truck: If the truck is guaranteed a load, what difference does the truck’s age make? Also, if the truck has to wait a long time for its cargo, it has an incentive to take as much cargo as possible when it’s available. The biggest cause of delays, according to the 2008 European Union study, was repairing broken down trucks (see figure, top of page) and similar problems identified as "other."
In at least some ports, however, the queuing system actually only applies to goods being imported by governments, not by private sector companies, which do the lion’s share of importing, industry experts said.
Inefficient use of trucks
It’s not uncommon to see empty trucks on West Africa’s highways. Trucks carry loads of rice, cooking oil, textiles and other imported goods from ports to landlocked countries; but they have nothing to carry back on the return trip. The Trade Hub is launching a “backhaul” survey to clarify the extent of the problem and make recommendations to solve it.
Making trucking happen
Solving transport sector problems requires both a concerted, long-haul effort and quick, efficiency-minded changes.
Eliminate checkpoints. Getting rid of checkpoints would allow goods (and people) to be moved more easily – in far less time and less expensively. The Trade Hub and UEMOA have published quarterly reports on the extent of road corruption in Burkina Faso, Ghana, Mali and Togo, and are expanding the initiative this year (see story). If more people understand how the checkpoints are impeding economic development, then government officials could be pressured to act on the problem.
UEMOA is developing another way to address the problem: Affix a special tag at the point of departure to trucks that have been fully inspected and approved to travel. The tag would signal to police, customs and gendarmes that the truck should not be delayed or asked to pay any “unofficial” fees in order to pass. The tag could go into effect in 2009.
Another tack is to build joint border posts to streamline the process of crossing the border. One is near completion at the Togo-Burkina Faso border city of Cinkasse and at least half a dozen others are planned.
Build political will. When Mali’s interior minister, Gen. Sadio Gassama, told a roomful of transport stakeholders on March 12 that he would reduce by half the number of unofficial checkpoints along Mali’s highways by April 1, they burst into applause.
He said it just minutes after the Trade Hub's Amadou Ba had presented the results of the 6th joint Trade Hub-UEMOA report on road corruption, which again showed Mali with the dubious distinction of the worst levels of bribery and delays at the higest number of checkpoints of the three corridors surveyed.
“It’s a great commitment,” said Ali Traore, general director of the Conseil Burkinabe des Chargeurs. “It’s a manifestation of political will and that’s remarkable. That will diminish the corruption along the route. We all applauded his decision.”Influencing political will involves marshaling information first to inform leaders about the problem, but it also requires affecting public opinion. Mali’s minister of transport, Hamed Diane Semega, confirmed the importance of good information when he commented on the road corruption reports.
“The report itself does not annoy us,” said Semega. “As a decision-maker, I need to have all of the information, no matter whether I like it or not.”
Invest in infrastructure. The transportation sector regularly needs significant sums of money to build new roads and fix old ones. A regional official said that at a recent meeting he and his colleagues and counterparts from other agencies estimated that to fix all of the roads in the eight countries that make up the West African Economic and Monetary Union, at least 3,790 billion FCFA (about $US 7.6 billion) was needed. Of that, about 1,400 billion FCFA had already been committed by various funders – the World Bank, USAID, the European Union, the African Development Bank and others, including $US 316 million for the renovation underway on 739 km of the Bamako to Dakar route.
But at the same time that the costs of building and repairing roads are increasing, development assistance for such work has dropped, Michael Pulichino, a transport expert, told participants at SITRAO. For example, the European Union’s assistance for infrastructure has dropped from 19 percent of total development assistance for the period 1985-1994 to 11 percent for the period 1995-2004.
Prevent overloaded trucks from using the highways. How can West Africa protect its roads from rapid deterioration? Imposing stiff fines and removing overloaded trucks from the highways could cause a significant increase in transport costs – driving up the prices of goods for consumers. Countries are using weighbridges to stop overweight trucks.
Complicating the problem is the fact that many truck owners have reinforced their trucks to carry extra heavy loads – even empty their trucks are heavy. Experts propose some sort of buy-out program for owners of these trucks, paying them to take the trucks off the road. It is unclear how easily a truck that has been reinforced can be somehow “un-reinforced.”
‘Liberalize’ the trucking sector. Competition could lead to lower prices for transport. If the World Bank’s study that cited monopolies as the cause of high costs is correct, then governments should consider dismantling the systems that cause the monopolies. Healthy competition would also get older trucks off the roads – they would not be able to compete effectively with newer trucks.Simplify the rules and apply them uniformly across the region. Transit rules should not vary from state to state – the differences slow down trucks at border crossings and at ports. Regional bodies have set guidelines for policies, but it is up to member states to implement them. The Trade Hub is analyzing the gap between what states commit to at ECOWAS and what they actually do in practice.
Use information technology to track truck movement. Ghana currently uses GPS devices to monitor trucks as they travel north to Burkina Faso, eliminating the need for customs officials to escort trucks in convoys to ensure they do not unload bonded cargo along the way. Other countries are now looking at using information technology to make transport more efficient. It could be used to help empty trucks find loads as they travel from a landlocked country to a port, for example.
The need for more efficient transportation, which is faster and more competitively priced, remains significant in West Africa. Without continued improvement, the delays and costs will continue to weigh down the region’s economic development.