AfCFTA Must Own Ships, Cargo Planes & Warehouses To Facilitate Trade – McDan

By Prosper Kay 

February 20, 2024

Chairman of McDan Group, Dr Daniel McKorley has joined other officials of the African Continental Free Trade Area (AfCFTA) to discuss the Guided trade and the AfCFTA Trading Company across Africa.

The strategic meeting also discussed AfCFTA owning its own ships, cargo planes and warehouses across the continent to help facilitate trade among member states.

It is believed that the Africa’s air transport network includes a total of 14,762 air routes (connecting each airport with the other 121 airports), and implementing AfCFTA would double the number of tonnes transported by air from 2.3 to 4.5 million.

Air traffic is expected to double in 2030 compared to 2019.

According to officials, AfCFTA’s aims at promoting industrialization and diversify economies by encouraging the development of regional value chains and the manufacturing sector, need to be intensified.

This diversification can lead to increased productivity, job creation, and higher value-added exports among African countries.

Speaking to McDan, he indicated the importance of transportation to AfCFTA growth adding that, with AfCFTA in absolute terms, over 25 per cent of intra-African trade gains in services would go to transport alone; and nearly 40 per cent of the increase in Africa’s services production would be in transport.

He said, Energy, Infrastructure and Services Section of ECA unpacks AfCFTA investment opportunity in the transport sector and that AfCFTA is expected to significantly increase traffic flows on all transport modes: Road, Rail, Maritime, and Air, but that such gains will only be optimized if the AfCFTA is accompanied by implementation of regional infrastructure projects.

He said, AfCFTA provides an opportunity to build Africa’s railway network. It would increase intra-Africa freight demand by 28 per cent; demand for maritime freight will increase the most.

According to the research findings, AfCFTA requires 1,844,000 trucks for bulk cargo and 248,000 trucks for container cargo by 2030. This increases to 1,945,000 and 268,000 trucks respectively if planned infrastructure projects are also implemented.

The largest demand for trucks to support AfCFTA is within West Africa (39 per cent); demand from West to Southern Africa is 19.8 per cent and from Southern Africa to Western Africa by 9.9 per cent.

The key questions is how will implementation of AfCFTA affect demand for transport infrastructure and services? What would be the demand for different modes of transport, and what are the implications for investment in infrastructure development?

However, McDan Aviation recently, acquired cargo planes and sea trade vessels to support the African Continental Free Trade Area (AfCFTA)’s implementation.

The acquisition follows the signing of a Memorandum of Understanding (MoU) between its CEO, Daniel McKorley, and the General Secretary of the AfCFTA Secretariat, Wamkeke Mene.

According to Daniel McKorley, McDan Aviation acquired cargo planes and sea trade vessels to support the AfCFTA and encouraged Africans to make investments in that area.

He said, as AfCFTA implementation begins, all the ports will become busy, generate more revenue and employment and add to the country’s GDP and if one look at maritime, “AfCFTA is offering a lot of opportunities because it also has to do with air, such as intra-country air connections at cargo airports. The same thing that affects maritime also affects the air like the planes, airport, air insurance and legal regulations.”

He said it will create an enlargement of cargo, as instead of cargo moving from different countries in Africa, these cargoes will need more vessels to carry them from one point to the other, thereby resulting in a arise in the acquisition of vessels, cottage industry will also arise because products exhibited for export to get some people interested in importing them in other countries.

“So, what is going to happen is that because there is an increment in demand, supply will have to increase to meet the demand. The maritime sector has a role to play in this, making sure that all these benefits are attracted to Africans. That is why it is important for AfCFTA to own its own ships, cargo planes and warehouses,” he said.