By Adonis Byemelwa
The international investment community has spoken of Africa in terms of “potential” for decades, but a sobering consensus is building that the continent’s worst enemy remains its own physical and regulatory “cages” which fragment its markets.
The International Finance Corporation and top players now caution that Africa works as a cluster of 54 disconnected monetary islands, making an obstacle which no measure of personal affluence has to date figured out how to adequately disentangle.
This systemic fragmentation results in an almost dystopian red tape even the best business talents cannot navigate, capping capital and labour that shouldn’t stop at arbitrary borders.
The diagnosis is bleak: a single placard should read cause to trader, and what an externally publicly capture the world’s geographic mass is instead thousands of paltry citadels – identity or physical barriers – across the land, where even driving across a border can take weeks.
Under current enablement scenarios, the cost of transitioning goods between adjoining West African ports regularly outweighs the price ticket of delivering these products across the Atlantic Ocean from Spain to reach landlocked outposts, which have also misplaced bakery roots.
This “logistics tax” is further exacerbated by a divided-up aviation market, illustrated in the continent’s startup class being entirely grounded to make it work by short regional flights costing at least $600 and putting the opportunity for competitive local growth out of reach.
The current ridiculousness in the maritime and aviation space is that African countries don’t control shipping lanes; they are literally put at the mercy of foreigners who own vessel networks.
By outsourcing logistics, the wealth generated within the continent usually drips away via transport costs instead of being reinvested into local infrastructure and regional expansion.
The human cost of the border also goes beyond fiscal costs, as getting people across continues to be a deterrent to investment, given the reality on the ground, where crossings sometimes take weeks despite promises of unified trade areas.
The absence of free movement of people and services means the continent cannot reach the economies of scale required to compete in a globalised world; that last task will shift from negotiating treaties to achieving delivery.
The struggle is not only about freight but about a working person of African descent forced to leave a birthplace where they are often seen as an unwanted outsider in neighbouring territory, caught between two lands that levy taxes in their name to sustain them and yet restrict movement through visas on both sides, regardless of which direction they cross.
Thus, even the richest individual can be delayed by bureaucracy, while a billionaire may need dozens of visas to meet partners, and a small-scale farmer has little chance to expand beyond a few villages or a single city.
IFC has played a role that has evolved from just providing financial assistance to developing an enabling environment (which they refer to as “Renaissance”) for value addition, which finally allows raw materials to be processed in the areas where they are cultivated.
It entails a reinvention of regional infrastructure, from reopening 400 “mini-dams” long since idle to provide year-round irrigation to adopting digital customs that can convert two-week border delays into transactions lasting as little as fourteen minutes.
The new infrastructure aims to connect rural hinterlands and dynamic urban hubs, while also establishing a supply chain resilient to global price shocks and climate variability. Through building water security and energy independence, the continent can escape this dependency loop once and for all, of exporting raw materials and importing high-value finished goods from abroad.
Gone are the days of the “armchair investor”, up is a model predicated on “skin in the game” whereby international bodies collaborate with those that have their wits and backs on the line to absorb first-industrial risk. The cage is still locked, but with energy and logistics from the private sector, a roadmap has been developed that the public must follow by enabling ease of movement of labour and capital to finally unlock it.
Not only does it send out a strong signal to the rest of the world that local investors see past such imaginary risks into the very real rewards offered by a growing middle class, but it is also confirmation of a greater faith in Africa. This change from an aid and charity narrative to a partnership narrative featuring sustainable commercial growth is only possible through this lead-by-example approach.
In the end, “African Renaissance” is a struggle against geography and red tape to take back shipping lanes from foreign monopolists to link ageless youth across stricken hinterlands. And if these bottlenecks are cleared, Africa’s long-discussed promise will materialise as a thriving manufacturing landscape that guarantees a trader in Lomé will reach Abidjan just as easily as one in Paris reaches Berlin.
Bridges to the World aims, however, to take Africa from a continent of offering potential to one of results: the only thing crossing borders more easily than goods is that prosperity. The current generation of leaders is saving Africa, fully integrated, thriving and, still more important, free from the “cages” of history to pass it on as a legacy to the next generation.
