Widespread concessioning of railways has generally improved service and boosted revenues, but concessioning alone probably cannot provide sufficient financing to rehabilitate Africa’s railways
Since 1993, several governments in Africa have concessioned their railway systems, often in tandem with a rehabilitation program funded by international financial institutions. Fifteen rail concessions are in place or under way, leaving another 11 rail systems still under the control of state-owned enterprises (see figure).
Although results have been mixed, many concessionaires have increased traffic volumes and generally performed more efficiently than their state-owned predecessors, and there has been little evidence of monopolistic behavior. But relations with governments have often been fraught, and it is clear that many governments had unrealistic expectations about the difference the private sector could make in improving operations and generating investment.
Because traffic volumes are low and tariffs constrained by competition with road freight, few railways are able to generate sufficient revenues to fund significant track renewal. As a result, concessionaires fund only day-to-day maintenance, plus some renewal of rolling stock.
Finding financing for asset renewal and upgrades remains an open question for most of the African rail network. Unless such investments are made, competition from road networks will make it impossible for rail to survive except to carry large-scale mineral traffic.
Map of Africa’s rail concessions
