May 8, 2009
News Release 09-039
Inv. No. 332-477
Contact: Peg O'Laughlin, 202-205-1819

Poor infrastructure conditions in the land transport, maritime transport, and electricity sectors undermine significantly the export competitiveness of many sub-Saharan African (SSA) industries, reports the U.S. International Trade Commission (USITC) in its publication Sub-Saharan Africa: Effects of Infrastructure Conditions on Export Competitiveness, Third Annual Report.

SSA governments and the private sector are pursuing government reform, increased investment, new applications of technology, and other strategies to improve infrastructure conditions. Many of these strategies have been implemented in cooperation with neighboring countries, SSA regional organizations, multilateral institutions, and development agencies.

The USITC, an independent, nonpartisan, factfinding federal agency, completed the report for the U.S. Trade Representative. In the last of three annual reports on sub-Saharan Africa, the USITC examined conditions in the land transport, maritime transport, and electricity sectors; efforts to improve conditions in these sectors; and the effects of these conditions on the export competitiveness of the following industries in SSA: 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. Highlights of the report follow.

• Poor infrastructure conditions in SSA increase costs and export times and can compromise product quality, rendering both SSA merchandise and services exports less competitive than global competitors. Poor infrastructure conditions also increase costs and add delays on the import side for necessary production inputs, such as textiles for apparel production in Kenya or chemicals for leather production in Ethiopia.
• Many roads in SSA are poorly maintained and often unpaved, and truck fleets generally consist of aging fuel-inefficient vehicles that are often overloaded and contribute to further road degradation. Truck breakdowns often slow the movement of goods, damage goods in transit (particularly perishable goods), and increase transport costs. Rail networks in SSA are limited and generally even less reliable than trucks. In addition, excessive check points, burdensome administrative procedures, and inefficient processing at border crossings often cause long delays.
• Most ports in SSA are inefficient by global standards and lack sufficient capacity, resulting in increased port charges, elevated maritime freight costs, and delays, all of which adversely affect SSA's export competitiveness.
• Electricity infrastructure in SSA is among the least developed, least accessible, least reliable, most costly to operate and, on average, highest priced of any region in the world. As a result, energy costs account for a higher proportion of production costs in many SSA industries, relative to global competitors.
• Governments, development agencies, multilateral organizations, and the private sector have implemented a broad array of efforts to ameliorate infrastructure conditions in SSA. In Uganda, a public-private-multilateral partnership consisting of the government, Sithe Global Power (U.S.), and multilateral development agencies are financing the Bujagali hydroelectric power project. In Mozambique, the government has granted a concession to a private sector consortium to operate the port of Mapu while retaining regulatory authority over port assets. Swaziland is using new technology to streamline customs procedures to facilitate truck traffic across its borders while Kenya is using Electronic Data Interchange systems to reduce customs clearance times at the port of Mombasa.
• Some SSA producers have been able to achieve higher returns in recent years despite infrastructure constraints. In particular, by focusing on quality improvements that increase the appeal of its coffee to international buyers, Rwanda has been able to improve the competitiveness of its coffee exports.

Sub-Saharan Africa: Effects of Infrastructure Conditions on Export Competitiveness, Third Annual Report (Investigation No. 332-477, USITC Publication 4071, April 2009) will be available on the ITC's Internet site at http://www.usitc.gov/publications/332/pub4071.pdf. A copy of the report may be requested by emailing pubrequest@usitc.gov, calling 202-205-2000 or by writing the Office of the Secretary, U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436. Requests may also be faxed to 202-205-2104.

ITC general factfinding investigations, such as this one, cover matters related to tariffs or trade and are generally conducted at the request of the U.S. Trade Representative, the Senate Committee on Finance, or the House Committee on Ways and Means. The resulting reports convey the Commission's objective findings and independent analyses on the subjects investigated. The Commission makes no recommendations on policy or other matters in its general factfinding reports. Upon completion of each investigation, the ITC submits its findings and analyses to the requester. General factfinding investigation reports are subsequently released to the public unless they are classified by the requester for national security reasons.