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ECOWAS’s Infrastructure: A Regional Perspective

Africa Infrastructure Country Diagnostic:a multi-stakeholder effort

Methodology and approach

Methodology Data collection by local/international consultants and Bank staff

based on standardized methodology Baseline year for data is 2006, does not reflect subsequent

evolution Approach

Focus on benchmarking ECOWAS’s infrastructure against other African RECs and benchmarking ECOWAS member countries with each other

Key Message #1

Infrastructure could be contributing much more to

West Africa’s growth

Infrastructure contributed one percentage point to West Africa’s recent growth spurt

Catching-up on infrastructure could boost growth by five percentage points

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Telecom Power Roads

Key Message #2

West Africa’s economic geography makes regional

integration particularly critical

The burden of geography

Small countries unable to reap scale economies11 have economies <$5 billion8 have populations <10 million

Countries isolated from key resources6 rely on transnational river basins3 are landlocked relying on regional road corridors

Economic activity concentrated along coast

Topographical profile of ECOWAS countries

Spatial distribution of economic activity

Key Message #3

Soft issues are the main culprits for West Africa’s slow and

expensive road freight

Road freight transport is particularly slow and expensive in West Africa

Corridor Length (kms)

Road in good condition (%)

Trade density

(US$m per km)

Implicit velocity(km

/hr)

Freight tariff ($US/tonne-km)

Western 2050 72 8.2 6.0 0.08

Central 3280 49 4.2 6.1 0.13

Eastern 2845 82 5.7 8.1 0.07

Southern 5000 100 27.9 11.6 0.05

Corridors are almost entirely paved and mainly in reasonable condition

Corridors Good (%) Fair (%) Poor (%) Paved (%) Abidjan-Lagos 51 28 21 99

Tema-Ouagadougou-Bamako 67 31 2 100

Dakar-Bamako 48 20 32 100

Abidjan-Ouagadougou 33 23 44 100

Lome-Niamey 50 30 20 100

Cotonou-Niamey 50 8 42 99

Nouakchott-NDjamena 63 21 16 97

Condition of 7 main regional corridors

Only two of the corridors register reasonably high volumes of traffic

Percentage in traffic bands (AADT)

Corridors <300 300-1000 >1000

Abidjan-Lagos 55 1 44

Tema-Ouagadougou-Bamako 49 26 25

Dakar-Bamako 24 56 20

Abidjan-Ouagadougou 4 23 73

Lome-Niamey 0 83 17

Cotonou-Niamey 4 26 70

Nouakchott-N'Djamena 11 46 43

Traffic flows along 7 main regional corridors

Rail transport appears to be more competitive on parallel corridors

Administrative and waiting costs add at least $20 per ton to costs of exporting via sea ports

Administrative and waiting costs weigh even more heavily on imports

Key Message #4

Coastal countries appear to be neglecting roads on sea

corridors

Condition of broader regional road network

Traffic flows along broader regional road network

Some 80 percent of broader regional roads in reasonable condition

  Condition Type  Good (%) Fair (%) Paved (%)Benin 35.8 1.8 96.8Burkina Faso 58.2 33.6 100Cape Verde 0 0 0Côte d'Ivoire 16.1 47.1 90.3Gambia 0 89.4 47.4Ghana 70.3 23.6 100Guinea 22.2 20.7 89.1Liberia 39.4 55.9 47.5Mali 66.6 21.7 99.6Niger 31.2 31 88Nigeria 55.6 29.7 100Senegal 39.8 15.1 99.8Sierra Leone 19.5 58.4 33.6Togo 49.7 0 100ECOWAS 45.1 28.4 92.5

Key Message #5

West Africa’s railways do not readily form a regional network

West Africa’s disparate rail networks make use of multiple incompatible gauges

Operational performance of West African rail operators is relatively poor

Labor productivity

Locomotive productivity

Carriage productivity

Wagon productivity

Average passenger

yield

Average freight yield

Benin, OCBN 40 3 900 74 2 5.8

Burkina Faso – Côte d’Ivoire, SITARAIL 481 35   1,020 3.3 5.5

Ghana, GRC 84 7 416 458 2.4 4.4

Mali – Senegal, Transrail 339 40   804

2.2 6.4

Nigeria, NRC 37 13 737 59 ─ ─

SSA average for railways under concession 387 24 2,945 510

2.2 6.3

Railways are only lightly used

Key Message #6

West Africa lacks a functional transshipment hub

West African ports perform well behind global best practice

 

East Africa Southern Africa

West /Central Africa

Global best practice

Performance        Container Dwell Time (days) 5–28 4–8 11–30 <7

Truck Processing Time (hours) 4–24 2–12 6–24 1

Crane Productivity (containers per hour) 8–20 8–22 7–20 20–30

Crane Productivity (tonnes per hour) 8–25 10–25 7–15 >30

Charges        

Container handling (US$ per TEU) 135–275 110–243 100–320 80–150

General cargo handling charge (US$ per tonne) 6–15 11–15 8–15 7–9

Wide range of performance across West Africa’s ports

 Abidjan Apapa Cotonou Dakar Harcourt Lome Tema

 Côte

d’IvoireNigeria Benin Senegal Nigeria Togo Ghana

Performance             

Container Dwell Time (days) 12 42 12 730 13 25

Truck Processing Time (hours) 3 6 6 5

24 4 8

Crane Productivity (containers per hour) 18 12

─ ─ ─ ─ 13

Crane Productivity (tonnes per hour)

16 9 15 ─ 8 23 14

Charges             

Container handling (US$ per TEU) 260 155 180 160

─ 220 168

General cargo handling (US$ per tonne) 14 8 9 15

8 9 10

Key Message #7

Major progress with liberalization but safety remains a concern

ECOWAS performs below African comparators on several air transport benchmarks

Uneven development of air connectivity across Western and Eastern sides of continent

Regional air traffic heavily concentrated on Accra to Lagos route

Most countries have daily flight to one of region’s significant airports

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Benin 5 10 5 1 1 4 3 4

Burkina Faso 4 8 3 9 1 6 4

Cape Verde 1 1

Cote D'Ivoire 10 11 22 9 3 8 4 8 14 1 14

Gambia 4 4 2 12 4

Ghana 1 3 1 23 13 41 9 8

Guinea 8 4 2 1 2 7

Guinea-Bissau 1 9

Liberia 3 5 9 2 3 3

Mali 1 7 4 3 18

Niger 1 1 4 4 2

Nigeria 3 8 2 46 2 2 5 4

Senegal 3 6 7 14 11 7 9 1 16 2 5 4 2

Sierra Leone 1 5 7 6 3 4

Togo 5 4 15 4 1 2

Destination

Orig

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Major shift in fleet size towards Citi jets and commuter propeller planes

Differential responses to collapse of major regional carriers

West Africa has made most progress with air transport liberalization

Community General status of YD implementation Status of air services liberalization

Overall implementation score

AMU No implementation. No liberalization within the AMU initiated, but need is recognized. 1

BAGPrinciples of the YD agreed upon in a multilateral air services agreement.

Up to fifth freedom granted, tariffs are free, and capacity/frequency is open. 4

CEMACPrinciples of the YD agreed upon in an air transport program. Some minor restrictions remain.

Up to fifth freedom granted, tariffs are free, and capacity/frequency is open. Maximum two carriers per state may take part.

5

COMESA

Full liberalization agreed upon (“legal Notice No. 2”), but application and implementation remain pending until a joint competition authority is established.

Pending. Operators will be able to serve any destination (all freedoms), and tariffs and capacity/frequency will be free.

3

EACEAC council issued a directive to amend bilaterals among the EAC states to conform with the YD.

Air services are not liberalized, as the amendments of bilaterals remain pending. 3

SADC

No steps taken toward implementation, although the civil aviation policy includes gradual liberalization of air services within the SADC.

No liberalization has been initiated. 2

WAEMU The YD is fully implemented. All freedoms, including cabotage, granted. Tariffs have been liberalized. 5

Huge shifts in market share have taken place in recent years

Airline Share 2001 Share 2004 Share 2007

Air International 5.6 20.9 21.8Virgin Nigeria (replaces Nigerian Airways)     11.5Bellview Airlines Ltd. 1.7 9.8 10.8Société Nouvelle Air Ivoire   10.7 8.8Air Burkina 2.6 9.4 7.5Slok Air International     7.4Ethiopian Airlines 3.9 3.4 7Airways 0.1 0.2 5.1SN Brussels Airlines 7.3   0.3Air France 4.8   0.2Air Afrique 32.0    Ghana Airways Corp. 14.8 15   Cameroon Airlines 1.4 5.4  

Air safety standards in West Africa are low

West Africa’s aircraft fleet has renewed significantly

Airport charges in West Africa are significantly higher than international standards

Key Message #8

Regional power trade could save US$0.5 billion annually as well as 5 million tons of CO2

Emerging regional power transmission network

Power is widely accessible but highly expensive and unreliable

Only 70 percent of the effective demand for power is being met

Country Total net demand in 2005

% of suppressed demand as a total of net demand

Market demand 2015*

Social demand with national targets 2015

Total net demand 2015

Benin 0.6 94 0.9 0.8 1.7Burkina Faso 0.5 98 0.6 0.9 1.5Cote d’Ivoire 2.9 88 4.0 1.4 5.4Gambia 0.1 78 0.2 0.2 0.4Ghana 5.9 85 10.8 2 12.8Guinea 0.7 76 1.3 0.8 2.2Guinea-Bissau 0.1 88 0.1 0.1 0.2Liberia 0.3 71 0.6 0.7 1.3Mali 0.4 95 0.6 1.2 1.8Mauritania 0.2 98 0.5 0.3 0.8Niger 0.4 98 0.6 0.7 1.2Nigeria 16.9 61 45.6 13.6 59.2Senegal 1.5 85 2.5 1 3.5Sierra Leone 0.2 51 0.5 0.5 1Togo 0.6 89 0.8 0.7 1.5WAPP 31.3 70 69.6 24.8 94.3SAPP 258.8 99 383 14 396.9EAPP/NB* 100.6 99 144.8 24.2 169CAPP 10.7 92 17.1 3.1 20.2

Today there are two major power traders: Cote d’Ivoire and Ghana

Deepening regional power trade saves WAPP half a billion dollars annually (about 3%)

  Trade Stagnation Trade ExpansionGeneration    Investment cost 3,365 3,527Refurbishment cost 258 258Variable cost (fuel, O&M) 3,442 2,728T&D and connection    Investment cost 3,584 3,701- Cross-border 0 117- Domestic 3,584 3,584Refurbishment cost 752 752Variable cost 1,320 1,320Total    Capital cost 7,959 8,238- Investment cost 6,949 7,228- Refurbishment cost 1,010 1,010Variable cost 4,763 4,049 Total 12,722 12,287

Trade expansion would boost volume of power traded from 5 TWh to over 15 TWh

Trade Expansion Trade Stagnation

Many countries need to invest in cross-border interconnectors and mainly Guinea in hydro

WAPPNew Cross Border

Transmission Additional hydroBenin 160 0Burkina Faso 0 0Cote d’Ivoire 2,226 0Gambia 19 0Ghana 979 0

Guinea 2,283 3,711Guinea Bissau 818 0Liberia 258 0Mali 2,703 0Mauritania 79 0Niger 206 0Nigeria 366 0Senegal 487 29Sierra Leone 661 0Togo 5 18

Most countries save substantially on power spending with further regional trade

Guinea emerges as by far the largest power exporter and Ghana as the largest importer

Many WAPP countries would import more than half their power needs

Trade increases the share of hydro power in the regional generation portfolio by 4 points

Increasing hydro brings annual savings of 5 million tons of CO2

  WAPP SAPP EAPP CAPP Total WAPP SAPP EAPP CAPP Total

Production difference (TWh) Emissions savings (M ton)

Coal   -41.5 0.7   -40.8   -37.8 0.6   -37.2

Diesel -0.8 -0.3 0.3   -0.8 -0.6 -0.2 0.2   -0.6

Gas -9.2 -5.3 -42.4   -56.8 -4.7 -2.7 -21.5   -28.9

HFO 0.2   0.4 -4.9 -4.3 0.1   0.3 -3.6 -3.2

Hydro 11.5 47.5 43.4 5.1 107         0

Total 1.6 0.5 2.4 0.3 4.7 -5.2 -40.7 -20.4 -3.6 -69.9

Trade leads to substantial savings in LRMC of power particularly for some smaller countries

(US cents/kWh)

Trade expansion

Trade stagnation

Absolute differential

Percentage differential

CAPP 7 9 -2 -22EAPP 12 12 0 0SAPP 6 7 -1 -14WAPP 18 19 -1 -5Benin 19 19 0 0

Burkina Faso 25 26 -1 -4

Cote d’Ivoire 15 15 0 0Gambia 8 7 1 14Ghana 10 10 0 0Guinea 7 6 1 17

Guinea-Bissau 9 16 -7 -44Liberia 8 14 -6 -43Mali 25 28 -3 -11Mauritania 14 15 -1 -7Niger 25 30 -5 -17Nigeria 13 13 0 0Senegal 43 47 -4 -9

Sierra Leone 9 10 -1 -10Togo 10 11 -1 -9

Rate of return on interconnectors can be very high

Country Unit gain (US $ KWh)

Net power trade (TWh)

Annual benefits (US$m pa)

One time investment

(US$m)

Rate of return

(%)

EXPORTERS          

Guinea 0.07 17.4 1462 7,860 19

IMPORTERS          

Mauritania 0.01 0.8 8 100 8

Sierra Leone 0.01 1 10 70 14

Mali 0.03 1.8 54 260 21

Guinea Bissau 0.07 0.2 14 50 28

Liberia 0.06 1.3 78 20 390

Senegal 0.04 3.5 140 30 467

Key Message #9

Relatively good access to signal and cables, yet prices remain

high, more competition needed

West Africa’s regional fiber optic backbone is taking shape

Access to ICT is relatively good but the region faces high prices for critical services

  ECOWAS CEMAC COMESA EAC SADC

Broadband subscribers (per 100 inhabitants) 0.03 0.01 0.04 0.02 0.36International Internet bandwidth (per capita) 16 11 9 11 19Internet subscribers (per 100 inhabitants) 0.24 0.06 0.09 0.05 0.53

Main telephone lines outside largest city (per 100 inhabitants) 0.39 0.2 0.53 0.24 1.89

Mobile telephone subscribers (per 100 inhabitants) 25 22 12 21 31

Prices (US$)          Prepaid mobile monthly price basket 14.04 15.11 9.09 12.18 11.32Price of a 3 minute call to USA 0.83 5.68 2.2 1.37 1.5Price of the 20 hour Internet basket 79.98 67.97 50.91 95.7 75.6

Price of the fixed telephone monthly price basket 9.35 12.59 6.85 13.33 13.27

Region’s larger economies doing significantly better on ICT access

Wide range of price levels across West Africa

In some countries, it is cheaper to call the US than to call within ECOWAS

West Africa relatively well-advanced on regional roaming agreements

To

From Benin * n * n n n n * * n * * *

Burkina Faso * * * * * * * * *

Cape Verde PO PO PO PO PO PO PO PO PO PO

Côte d'Ivoire n l l l l n n n l l l l l l

Gambia PO PO PO PO PO PO PO PO PO PO PO PO

Ghana n n PP n n n PP PP PP

Guinea n * n * n n n l l n l *

Guinea-Bissau n * n * n n n l l n l

Liberia n n * n n n n

Mali PP PP l PP PP l l l PO l PO PP

Niger * l * l l l l

Nigeria n n PO n n n PO PO PO

Senegal PP PP PO l PP PO l l PO l l PP PO PP

Sierra Leone * * * * * * * * * *

Togo PO PO PO PO PO PO PO

ONE (Zain)

Orange Zone l l l l l l l

One World (MTN) n n n n n n n n

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Large mobile groups dominate the regional telecom market

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Other note Benin 51% 75% 1 3 Globacom (Nigeria) Burkina Faso 51% 51% 100% 3 Cape Verde 2 2 Portugal Telecom (40%)

Teylium (Cote d'Ivoire) (70%) Cote d'Ivoire * 85% 65% * 1 5 Warid (UAE) Gambia * 3 Other=Lintel (Lebanon,

100%) Ghana 100% 75% 98% 2 5 Globacom (Nigeria)

Vodafone (UK) (70%) Guinea 38% 75% 2 4 Teylium (Cote d'Ivoire)

Cellcom (US) Guinea Bissau

42% 100% 2

Liberia 60% * 1 3 Cellcom (US) Mali 30% 51% 2 Niger 57% 80% 90% * 4 Other=ZTE (China) and LAP

(Libya) Nigeria 40% 66% 76% 3 Senegal 42% 100% 3 Sudatel (Sudan) (100%) Sierra Leone 100% * * 2 Other=Lintel (Lebanon,

100%) Togo * 1 TOTAL 6 6 2 2 5 7 4  

Three major networks with regional roaming

Network Country coverage

Orange zone Côte d’Ivoire, Guinea, Guinea-Bissau, Mali, Niger, Senegal

Zain One Burkina Faso, Ghana, Niger, Nigeria, Sierra Leone

One World of MTN

Benin, Côte d’Ivoire, Ghana, Guinea, Guinea-Bissau and Nigeria

Relative to other parts of Africa, ECOWAS well connected to several submarine cables

However, many countries remain unconnected to submarine infrastructure

Five new submarine cables underway for 2012

Despite submarine connections, costs of ICT services are high due to lack of competition in international gateways

 Price per minute for a call

within Sub-Saharan ($)Price per minute for

a call to US ($)

Price for 20 hours per month of dial-up Internet access ($)

No access to submarine cable (SSA) 1.34 0.86 68Access to submarine cable (SSA) 0.57 0.48 47Monopoly international gateway(SSA) 0.70 0.72 37Competitive international gateway (SSA) 0.48 0.23 37No access to submarine cable (ECOWAS) 0.26 0.49 63Access to submarine cable (ECOWAS) 0.47 0.44 52Ghana 0.21 0.15 35Benin 0.26 0.4 41Nigeria 0.32 0.3 119Senegal 0.31 0.37 26Cote d'Ivoire 0.48 0.22 48Cape Verde 1.24 1.2 47Monopoly international gateway(ECOWAS) 0.57 0.77 47Burkina Faso 0.48 0.38 75Benin 0.26 0.35 41Senegal 0.31 0.31 26Cape Verde 1.24 2.05 47Competitive international gateway (ECOWAS) 0.53 0.34 63Ghana 0.21 0.15 35Nigeria 0.32 0.3 119Niger 1.09 0.61 51Cote d'Ivoire 0.48 0.29 48

West Africa can complete a basic regional fiber optic network with modest investments

Country Gaps(km) Cost

Burkina Faso 218 6

Cote d'Ivoire 93 3

Ghana 210 6

Guinea 288 8

Guinea Bissau 113 3

Liberia 382 10

Niger 75 2

Nigeria 200 5

Sierra Leone 326 9

Total 1905 51

Completing regional fiber optic backbone looks to be a high return investment

 Induced Price

(US$/mo.)Induced Subscriptions

(‘000s)Benefits

(US$mnyr) Costs (US$m) Rate of Return (%)

  After Before AfterGreenfield Investment

Spending Needs Greenfield Last mile

Benin 73.5 2.7 7.4 2.7 2   134  Burkina Faso 57.0 4.5 11.5 3.3 20 6 17 56Côte d'Ivoire 27.7 10 74.8 8.5 27 3 31 337Gambia 41.0 0.3 1.4 0.3 5   5Ghana 27.8 23 55.9 7.9 8 6 97 139Mali 34.6 5.3 20.4 3.2 26   12Niger 166.2 0.6 2.3 1.7 12 2 15 86Nigeria 65.6 67.8 258 77.0 59 5 130 1,425Senegal 24.9 47.4 49.2 8.7 26   34Togo 116.3 1.9 1.8 1.6 4   36  

Key Message #10

Regional spending needs of $1.5 billion a year affordable for region but

insurmountable for some countries

Achieving regional integration would take $1.5 billion a year for a decade

  Power Transport ICT Total

Country Inv O&M Inv O&M Inv O&M Total Inv Total O&MTotal

(Inv+O&M)Benin     2 8     2 8 10Burkina Faso     3 15 0.59 0.03 4 15 19

Cote d'Ivoire 27   3 18 0.25 0.01 31 18 48

Gambia, The   7 1 1     1 8 9

Ghana 5   9 20 0.31 0.02 14 20 34

Guinea 786 80 28 24 0.78 0.04 815 104 919Guinea-Bissau 5   2 5 0.55 0.03 7 5 12

Liberia 2   10 6 1.03 0.05 13 6 19

Mali 26   24 16     50 16 66

Mauritania 1   14 5     15 5 20

Niger 1   9 18 2.36 0.12 12 18 30

Nigeria 2 137 21 72 0.24 0.01 23 209 232

Senegal 3   8 19     11 19 30

Sierra Leone     7 5 0.88 0.04 8 5 13

Togo     0 2     0 2 2

ECOWAS 858 224 141 234 7 0.35 1,006 458 1,464

Regional spending needs just 1% of GDP, but burden weights very heavily on smaller nations

Regional spending needs would absorb 2-15% of existing infrastructure budgets

Regional integration in surface transport: achievements, challenges and promise

Sector Achievements Challenges Promise of regional integration

Roads Road are paved and in good quality along several major intra-regional corridors

Traffic quality is the worst in the world. Very high transport prices due to the level of truck utilization and the oversupply level, due to the existence of cartels

Ports Increase in cargo and container traffic West African ports charge high prices and operational performance needs to be improved

Rails Two relatively successful concessions (SITARAIL and TRANSRAIL). Intraregional railways offer competitive prices

Low levels of passenger and freight traffic, poor operational performance of railways. Railways facing stiff competition from other modes of transport

Regional integration in air transport: achievements, challenges and promise

Sector Achievements Challenges Promise of regional integration

Air Transport

Reasonable levels of inter-regional connectivity.

WAEMU and BAG are most liberalized markets in Africa

Low levels of connectivity within ECOWAS. Lack of a strong regional hub.

Aging fleet and limited progress in achieving international safety standards.

Regional integration in power: achievements, challenges and promise

Sector Achievements Challenges Promise of regional integration

Power

Electrification rates are high relative to other regions.

Cost recovery is better than in other regions.

Principle of regional trade already well established

Lack of generation capacity leads to unreliable service with only 70 percent of demand being satisfied.

Utilities highly inefficient with regard to distribution and revenue collection.

Deepening regional integration would save the WAPP area US$435 million in annual energy costs, and annual savings in carbon emissions of some five million tons of carbon.

Long-run marginal cost of power in the WAPP would fall by US$0.01 per kilowatt-hour or 5 percent.

The overall rate of return on regional integration investments is 33%.

Regional integration in ICT : achievements, challenges and promise

Sector Achievements Challenges Promise of regional integration

ICT

Access to ICT services amongst highest in Africa. Significantly cheaper to call on landline within ECOWAS than outside the region. Roaming arrangements relatively advanced.

Associated regional telecom regulators have been active in promoting harmonization. Relative to the rest of Africa has several submarine fiber optic cables.

West Africa faces relatively high prices for access to ICT.

Many counties not connected to the submarine cable.

Even where submarine connections exist costs remain relatively high due to lack of competition on the international gateways.

Achieving regional integration of ICT will cost only US$5.1 million annually, and bring benefits of US$ 115 million annually, a return of over 400 percent.

Benefits derive primarily from lower prices inducing higher rates of subscription to broadband services. The overall rate of return on regional integration investments (existing Greenfield and filling in gaps is 52 percent.