ITC Reports that Poor Infrastructure Conditions Undermine Certain Sub-Saharan Export Competitiveness

The ITC's report describes conditions in the land transport, maritime transport, and electricity infrastructure sectors, and examines their effects on export competitiveness in 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.

(ITC notes that this is its third annual report. This series of reports was originally requested by the U.S. Trade Representative in July 2006. In response, the ITC instituted investigation No. 332-477 and delivered its first and second reports in April of 2007 and 2008. (See ITT's Online Archives or 04/17/07 and 05/13/08 news, 07041730 and 08051325, for BP summaries.)

Poor SSA Infrastructure Conditions Increase Costs, Delays for Exports & Imports

The ITC reports that 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.

Infrastructure Conditions that Adversely Affect SSA Export Competitiveness

In its report, the ITC discusses the following infrastructure conditions that adversely affect SSA's export competitiveness:

Poorly maintained roads, etc. According to the ITC's report, 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.

Inefficient ports.ITC reports that 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.

Underdeveloped electricity. ITC also states that 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.

(See ITC report for complete findings, including efforts to ameliorate infrastructure conditions in Uganda, Mozambique, Swaziland, and Kenya, etc.)

(See ITT's Online Archives or 08/08/08 news, 08080830, for BP summary of the ITC's initiation of this investigation.)

ITC press release (09-039, dated 05/08/09) available at http://www.usitc.gov/ext_relations/news_release/2009/er0508gg3.htm

ITC report (Inv. No. 332-477, dated April 2009) available at http://www.usitc.gov/publications/332/pub4071.pdf