In what may be viewed as Africa’s millennial megaproject in trade and investment, Egypt and a number of other African countries are working on a highway linking the Mediterranean port city of Alexandria and Cape Town, South Africa, on the Atlantic. Egyptian Transport Minister Hisham Arafat told a parliamentary committee on Feb. 3 that Egypt has completed its part of the Alexandria-Cape Town Road extending to Egypt's border with Sudan. The roadway is now open to travelers.
The Pan-African road, at an expected 6,400 miles, will link Egypt, Sudan, South Sudan, Ethiopia, Kenya, Tanzania, Zambia, Zimbabwe, Botswana and South Africa. Egypt, which initiated the ambitious project, launched it in June 2015. Each country is financially, technically and logistically responsible for its part of the roadway.
It is hoped that the project will help pave the way for sustainable development on the continent. With this in mind, Egyptian and South African economists have urged African countries to devise a comprehensive transportation policy to balance the economic benefits of the road against its environmental costs.
“This is one of the most important megaprojects, one that will reshape the trade and investment chart in Africa,” Abdel Mottaleb Abdel Hamid, professor of economics at the Cairo-based Sadat Academy for Management Sciences, told Al-Monitor. “It also falls in line with Egypt’s inclination toward Africa to restore its influential role on the continent as it assumes the presidency of the African Union.”
Abdel Hamid added, “It will open the way for boosting inter-African trade, as the cost of transportation will be lower compared to maritime and air freight. In the medium and long terms, higher trade volumes among African countries will strengthen joint investments.”
At the end of 2018, public and private Egyptian investments in Africa stood at $10.2 billion according to data from the Egyptian cabinet's Information and Decision Support Center. Figures from the state-run Central Agency for Public Mobilization and Statistics (CAPMAS) put Egyptian exports to African countries at $6.2 billion between January and November 2018 and Egypt's imports from them at $1.98 billion.
Abdel Hamid said additionally about the Alexandria-Cape Town Road, “Along with the African Continental Free Trade Agreement, the road will open the way for the free movement of capital, trade, direct investment and labor across the continent. It will enhance an all-inclusive one-Africa market in the long run.” Abdel Hamid has hopes that it will open the door for qualified Egyptian labor to move across Africa.
Negotiations for the free trade agreement kicked off in 2015. The agreement is expected to create an entity unifying COMESA (Common Market for Eastern and Southern Africa), SADC (South African Development Community), and the EAC (East African Community). Connectivity among African countries will inevitably boost trade among them and create jobs for youths, Lebogang Chaka, a strategic adviser and CEO at Johannesburg-based Afro Visionary Legacy, told Al-Monitor.
“The Pan-African highway will increase trade and tourism not only for Egypt and South Africa, but for all countries it passes through,” said Chaka. “With intra-Africa trade sitting at 13%-14% of the continent’s total global trade, the primary benefit from the road is that we will see increased trade as this will reduce the bottlenecks and delays at ports. The road will bring relief to a much-burdened trade route within the continent.”
According to Chaka, transport infrastructure of this magnitude is vital to increasing tourism, by providing alternative routes for exploring the continent. “We often hear the term ‘backpacking Europe’ due to the interconnectedness of the region,” she remarked. “The Pan-African highway offers an opportunity for tourism to become interconnected between Egypt and South Africa, thus opening new economic opportunities for the locals.”
Chaka further remarked, “This road practically represents the notion of a united Africa and will see Africa trade [more] with itself. The high costs of transporting goods across the continent will be reduced due to the road network's connectivity. Locals will benefit from the economic activity generated by the road's users, and as such one hopes that this can be replicated across the continent.”
As for how African countries should take advantage of the Alexandria-Cape Town Road, Chaka urged African governments to engage land developers to ensure that sites near or adjacent to the new road are developed to increase economic activity, which was not addressed in the original plan.
“This may include incentives to encourage the development of housing, shops, offices, schools, universities and factories that can stimulate the local economy,” Chaka said. “African countries need to devise a comprehensive transportation policy that will balance the economic benefit of the road against the environmental cost. In practice, in Tanzania, the Mikumi National Park in the east and Serengeti National Park in the north provide examples where roads have balanced environmental needs and boosted tourism within the area.”
“Lastly, as this road will improve access to markets and foster greater economic integration, governments must look into special economic zones [SEZs] near the Pan-African highway,” Chaka said. “These SEZs will increase, attract and help facilitate foreign investment as well as integrate local firms into a Pan-African value chain. This will also increase export-oriented growth and create jobs within the local economy.”