Better transport and trade infrastructure across Africa will make it quicker and cheaper to transport goods, while lower tariff and non-tariff barriers will reduce the cost of goods and increase competition between companies and the competitiveness of products.

Lower costs to trade will enable businesses to pursue more opportunities in a wider area and will drive economic activity and growth on the continent.

Further, as trade flows improve and goods are able to reach markets more easily, companies will invest in digital solutions to further optimise logistics and the tracking and tracing of trade. This means that significant logistics and efficiency gains can be expected over the medium to long term in Africa.

However, this would only happen if the continent addressed the infrastructure, integration and non-tariff barriers challenges it was facing, as companies would not invest if they could not get their goods and services to the intended markets efficiently, said University of Johannesburg Department of Transport and Supply Chain Management head Professor Noleen Pisa during a Transport Forum event on August 29.

"Transport infrastructure in Africa is limited and this is one of the main reasons that there is limited intra-African trade.

"When tariff and non-tariff barriers are added to this problem, there are significant obstacles to trade within Africa and this is why it is easier and more seamless for Africa to trade with the rest of the world," she said.

These challenges, which include closing infrastructure gaps and eliminating customs and administration barriers, need to be addressed before Africa can reap the benefits of the African Continental Free Trade Area (AfCFTA) Agreement and before its implementation can be effective, she said.

About $411-billion worth of investment in transport infrastructure across all modes was needed. More than 25% of the increase in intra-Africa trade in services would be in transport services, she noted.

Freight transport volumes on roads are expected to double to 403-million tonnes a year, from 201-million tonnes a year at present, while maritime freight volumes are expected to double to 131.5-million tonnes a year from 58-million tonnes a year, and air freight volumes are also expected to nearly double to 4.5-million tonnes a year from 2.3-million tonnes a year.

Further, there will be an increase of about 39% in the demand for trucks as road networks are expanded. This translates to an estimated 1.84-million trucks needed for bulk cargo and 248 000 trucks needed for container cargo.

In terms of infrastructure gaps, there needs to be an increase of about 26 500 km of new railways to support an expected 28% increase in intra-African freight demand. This will increase the number of wagons needed for bulk cargo to 132 000 wagons, and 36 800 wagons needed for container cargo.

Implementation of the AfCFTA Agreement requires infrastructure investment to facilitate trade. The volumes of trade will not happen if infrastructure is not in place.

"However, lower trade costs increase the competitiveness of local production and lead to an expansion of trade and economic growth in the AfCFTA region, and will further boost demand for transportation services," Pisa said.

"Once companies can efficiently move goods and services to prospective markets, participation in regional value chains will increase. Tariff reduction and trade facilitation will reduce the general prices of goods and services, thereby improving economic growth rates.

"Then, sustainability initiatives will be more easily adopted in businesses, once the economic gains are realised from the improvements in trade," Pisa said.

Africa is home to about 17% of the world's population, contributes about 4% of global GDP, contributes about 2% of global manufacturing and has about a 3% share of global trade.

Intra-African trade has grown to about 16.3%, up from 10% to 14% prior to 2020, but 75% of intra-African trade takes place within regional trading blocs.

Africa typically trades commodities and primary products with the rest of the world, but trades more value-added goods on the continent, said United Nations Development Programme AfCFTA regional coordination specialist Dr Ify Ogo.

"As the world goes greener, this will affect production and trade. A lot of Africa's traditionally traded products could be stranded as policies and opportunities change. On the one hand, markets may close for certain types of commodities and products, it may open for other opportunities, such as new-energy and electric vehicles.

"What is happening globally affects what Africa can trade and make. This also holds true for the adoption of new technologies, such as AI, robotics, drone and blockchain systems, which are being adopted and used in Africa."

All these changes will have an effect on how Africa trades because, as technologies are adopted, there will be questions on what is more competitive, more efficient or what is quicker.

As the dynamics of products change, the product basket in Africa would also change, she added.

"One implication is that it will increase the demand for businesses and transport-specific services. This includes trade information and advisory services, for which there is a significant need, as well as transport services, such as cargo handling, storage, warehousing and freight forwarding, which are all levers to pull trade through," she said.