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Ghana@63: The Railway Journey since Independence… why the US$21bn renovation should concern you

March 9, 2020

This is why when I read some time ago that Ghana is set to revive its railways industry budgeting $21 billion (with a B), I screamed “YES!!!!”. It will take some time to complete BUT IT WILL HAPPEN.

When it does, it will be open season for those that can see how it connects whole new markets within about half of the nation with the other half, and how it betters many existing ones. Here is Ghana @ 63; The Railway Journey since Independence, and why the US21bn renovation should concern you.

Context is now complete. Let’s dive in. I’ll stick to the facts. This is an opinion piece.

History of Ghana’s railways

It’s been nearly 120 years since our British
colonialists constructed the first railway lines. The colonial infrastructure
made over a century ago helped shape the economic geography of Ghana. As a
British colony, Ghana (then known as the Gold Coast) was developed by Europeans
for Europeans. At the time, railways were considered the best mode of
transportation. How else could that many produce and minerals be transported way
back then. STC was not in service.

The railway system of Ghana began in 1898 under
the Gold Coast Civil Service, with its headquarters at Sekondi. But after the
construction of the Takoradi Harbour, it was transferred to Takoradi. The
purpose of the railroad was to transport minerals and crops from the mainland
to the harbour, which were then shipped to Europe.

Two railway lines, built by the British in
1898-1918, were primarily established for military domination against natives
or other colonial powers. But the railway also supported the extensive
extraction of precious minerals and cash crop agriculture.

The first railroad, the Western line,
linked the coastal town of Sekondi with the gold-rich enclaves of Obuasi and
Tarkwa. It was then extended to the hinterland city of Kumasi for military
domination. Mining required the transportation of heavy machinery, large
quantities of firewood (or coal), and labourers from other regions. European
mining companies reaped benefits through this railway system of precious
minerals such as gold, bauxite, manganese, and diamonds.

The second, the Eastern line, linked the
capital city of Accra to the network through Kumasi, affecting the economic and
spatial development of Ghanaians through integration. This railway connectivity
strongly affected the production of cash crops such as coffee and cocoa. As
soon as the second line opened, farmers decided to use it to transport crops,
massively decreasing their transportation costs (aha!).

Fun Fact: The Governorship of William E. Maxwell
(1895-97) was instrumental to shaping the railway system back then, because he
had previous experience in Malay State where railways were used in tin mines.

In 1919, Sir Gordon Guggisberg was appointed
governor of the Gold Coast. He believed that the country was capable of
attaining the development levels of Europe. He undertook the advancement and
extension of the railway system, built a seaport, and constructed an extensive
network of roads. Guggisberg focused on promoting the growth of the economy to
give Ghana a competitive advantage in the world market. His policy aimed at rapid
development of the country. By the mid-1920s, rail lines covered large portions
of the southern part. The expenses accounted for 31.4% of total public
expenditure between 1898-1931.

Around 80% of cocoa, the country’s main export
commodity, was transported through rail, making Ghana the world’s largest
exporter of the crop by 1911. By 1927, cocoa amounted to 80% of Ghana’s exports.
By the 1960s, railways transported nearly 2 million tonnes of freight and 8 million
passengers a year. This cheaper, convenient mode of transportation was a
quicker way to carry more cargo.

Why Railways

The country inherited a functional railway
system at the time of independence. But by the mid-1970s, the system began to
see a decline due to poor management, lack of maintenance, and the competition from
roads. Decades of neglect by
post-independence governments have brought the sector down to its knees. As the
country developed, people opted in favor of road travel and others. Currently,
only about 13% of Ghana’s original networks are operational, and I use the word
“operational” very conservatively.

Countries all over the world recognize the
importance of an effective railway system. Ghana is not unaware of its inherent
value. Railroads have the potential to positively impact transportation,
income, infrastructure, development, productivity and trade. An efficient
network can contribute to intercontinental and international trade creating
massive macroeconomic implications.

With 96% of transportation via road, Ghana is
consuming a lot of fuel per person. Trains can diminish the costs of
transportation for both people and goods, making commodities cheaper. Trains
can reduce poverty by connecting villages, integrating the labour force and
goods markets, as well as providing more opportunities to the citizens. An
expansive route can help farmers obtain higher profits with the help of
acquiring cheaper agricultural necessities. And it can help prevent food
wastage when harvest cannot be transported to markets in time. These
significant gains can be obtained from market integration by connecting areas
through the railroad.

Railway lines will reduce transportation costs
of many production businesses, making export markets profitable. More farmers
and other investors will be willing to invest in crop cultivation, a labour-intensive
field. As a result, crop-producing villages will experience rural growth and urbanization,
soon transforming into trading towns with railway stations.

Plan of action

The government plans to invite developers and
diversify funding sources for construction. In July 2017 the Ghana
Railway Development Authority signed
an MoU with a Russian railway company Geoservice to build a 947-km line from
Accra to Paga and other routes on a build-operate-transfer basis. Also, a plan
backed with a China Exim Bank loan to connect Kumasi to the north was reported
in July 2018. This “central spine” will open up the economic corridor with the
rest of Africa.

However, the most significant agreement was
signed in mid-2017, a $19bn deal with China. Ghana will give China 5% or less
of its bauxite reserves in exchange for a variety of infrastructure projects
that includes railways network expansion, bridges, new roads, etc. Ghana has
960m tonnes of bauxite resources, valued at $460bn.

Ghana has also signed a $3bn deal with South
Africa in November 2018, the famous Accra
Sky Train Project
. I found such a project as an excellent example of
intra-Africa co-operation towards development of Africa by Africans.

Connecting Kumasi to Paga, amongst other endeavours by the Ministry of Railways Development, will be a major feat, greatly reducing traveling time and keeping urban migration in check. However, $70.7 million will be spent on compensating people whose properties will be affected, and rightly so.

The price of getting Ghana’s railway network
back to normal functionality is big. What IS “normal” in this case? What
standards have we set for ourselves? If we’re to take from Minister , Hon.
Joe Ghartey, standards are quite high, and optimism is at its peak. Still,
many are skeptical of the future. As with all things Africa, proper
management is paramount. Nonetheless, I for one am pretty excited about the
notion of having a local railways system matching the functionality and
reliability of those in the developed countries. You should be excited as well.

This has
been an opinion piece.

Hit me up on social media and let’s keep the conversation
going! I read all the feedback you send me on LinkedIn, Twitter, Instagram and
Facebook.

Have a lovely
week!

Maxwell Ampong - ghanatalksbusiness
Maxwell Ampong, Author

Maxwell Ampong is the CEO of Maxwell Investments Group, a
Trading and Business Solutions provider. He is also the Business Advisor for
the General Agricultural Workers’ Union of TUC (Gh). He writes about trending
and relevant economic topics, and general perspective pieces.

LinkedIn:/in/thisisthemax   Instagram:@thisisthemax   Twitter:@thisisthemax   Facebook:@thisisthemax   Website: www.maxwellinvestmentsgroup.com   Email:
maxwell@maxwellinvestmentsgroup.com  
Mobile: 0249993319

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Source : African Media Agency (AMA)

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