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  • United States International Trade Commission

    Investigation No. 332-477USITC Publication 4071April 2009

    Sub-Saharan Africa: Effects of Infrastructure Conditions on Export Competitiveness, Third Annual Report

  • Address all communications to Secretary to the Commission

    United States International Trade Commission Washington, DC 20436

    U.S. International Trade Commission

    Director, Office of IndustriesKaren Laney-Cummings

    Director of OperationsRobert A. Rogowsky

    COMMISSIONERS

    Shara L. Aranoff, Chairman Daniel R. Pearson, Vice Chairman

    Deanna Tanner Okun Charlotte R. Lane

    Irving A. Williamson Dean A. Pinkert

  • U.S. International Trade CommissionWashington, DC 20436

    www.usitc.gov

    April 2009Publication 4071

    Sub-Saharan Africa: Effects of Infrastructure Conditions on Export

    Competitiveness, Third Annual Report

    Investigation No. 332-477

  • This report was prepared principally by

    Project Leaders Erland Herfindahl

    erland.herfindahl@usitc.gov

    Alan Treat alan.treat@usitc.gov

    Principal Authors

    Chapter 1: Cathy Jabara cathy.jabara@usitc.gov Chapter 2: Michael Ferrantino mferrantino@usitc.gov Chapter 3: Isaac Wohl isaac.wohl@usitc.gov Chapter 4: Joann Peterson joann.peterson@usitc.gov Chapter 5: Dennis Luther dennis.luther@usitc.gov Chapter 6: Coffee: Mark Simone mark.simone@usitc.gov Shea butter: Dan Cook justin.cook@usitc.gov Tropical fruit: Brendan Lynch brendan.lynch@usitc.gov Natural rubber: Philip Stone philip.stone@usitc.gov Textiles and apparel: Dawn Heuschel dawn.heuschel@usitc.gov Leather: John Fry john.fry@usitc.gov Tourism: Laura Bloodgood laura.bloodgood@usitc.gov

    Primary Reviewers Nannette Christ and Karl Tsuji

    Special Assistance

    Diane Bennett, Brenda Carroll, Andrew Gately, Joe Kowalski, David Lundy, Cynthia Payne, Laura Polly, and Danielle Vu

    Under the direction of

    Richard W. Brown, Chief, Services Division richard.brown@usitc.gov

  • Gambia

    Sub-Saharan Africa

  • i

    Abstract This report describes conditions in the land transport, maritime transport, and electricity infrastructure sectors, and examines their effects on export competitiveness in sub-Saharan Africa (SSA), particularly on the following industries: coffee, shea butter, and certain tropical fruit (pineapples and bananas) in the agricultural sector; natural rubber and related downstream products, textiles and apparel, and leather in the manufacturing sector; and tourism services in the services sector. Infrastructure conditions in SSA have a significant effect on the ability of firms to produce and export goods and services competitively. Relatively poor infrastructure conditions place many SSA producers and exporters of goods and services at a competitive disadvantage in regional and global export markets, increasing costs and compromising product quality, rendering both merchandise and services exports less competitive vis--vis exporters that may not be similarly disadvantaged. Roads in SSA are often unpaved and poorly maintained, rail networks are limited, and ports lack sufficient capacity. As a result, SSA producers often incur increased transportation costs and shipment delays. Electricity infrastructure is largely inadequate, unreliable, and poorly developed, particularly in rural areas, requiring producers to rely on more expensive on-site power generators, which further increase production costs. However, SSA governments and the private sector are implementing various strategies, including government regulatory reform, increased investment, and new applications of technology to improve infrastructure conditions within SSA, often in conjunction with neighboring countries, SSA regional organizations, multilateral institutions, and non-SSA countries.

  • iii

    CONTENTSPage

    Abstract ........................................................................................................................... i

    Executive Summary ............................................................................................... ix

    Chapter 1: Introduction and Overview ................................................. 1-1

    Approach .......................................................................................................................... 1-2Organization of report ...................................................................................................... 1-3Infrastructure, economic growth, and welfare ................................................................ 1-3Bibliography .................................................................................................................... 1-9

    Chapter 2: Synthesis and Implications of Findings ..................... 2-1

    Infrastructure and production costs .................................................................................. 2-1Direct production costs .............................................................................................. 2-1Technology substitution ............................................................................................ 2-2Infrastructure and export profiles .............................................................................. 2-4

    Infrastructure and economic distance .............................................................................. 2-4Transport costs .......................................................................................................... 2-5Transport time ........................................................................................................... 2-6Economies of scale .................................................................................................... 2-7

    Infrastructure and uncertainty .......................................................................................... 2-8Uncertainty in truck and ship arrival times ............................................................... 2-8Uncertainty in electrical power supply ...................................................................... 2-9

    Bibliography .................................................................................................................... 2-10

    Chapter 3: Land Transport ............................................................................ 3-1

    Conditions of the land transport sector ............................................................................ 3-1Land transport infrastructure ..................................................................................... 3-1Service providers ....................................................................................................... 3-7Soft infrastructure: Borders ....................................................................................... 3-10

    Effects of land transport infrastructure conditions on export competitiveness ................ 3-11Effects on international trade .................................................................................... 3-11Effects on intra-SSA trade ......................................................................................... 3-13

    Efforts to improve the land transport sector .................................................................... 3-14Reforms ..................................................................................................................... 3-14Investment ................................................................................................................. 3-15

  • iv

    CONTENTSContinuedPage

    Chapter 3: Land TransportContinued

    Regional cooperation ................................................................................................. 3-18Bibliography .................................................................................................................... 3-20

    Chapter 4: Maritime Transport .................................................................. 4-1

    Conditions of the maritime transport sector ..................................................................... 4-2Port infrastructure ...................................................................................................... 4-2Service providers ....................................................................................................... 4-4Soft infrastructure: Customs ...................................................................................... 4-6

    Effects of port infrastructure conditions on export competitiveness ............................... 4-7Efforts to improve the maritime transport sector ............................................................. 4-8

    Port governance ......................................................................................................... 4-10Investment in port infrastructure ............................................................................... 4-11

    Bibliography .................................................................................................................... 4-14

    Chapter 5: Electricity ........................................................................................... 5-1

    Conditions of the electricity sector .................................................................................. 5-3Electricity infrastructure ............................................................................................ 5-3Service providers ....................................................................................................... 5-7

    Effects of electricity infrastructure conditions on export competitiveness ...................... 5-8Effo

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