A new international rail system could be on its way to West Africa.
A spokesperson at the Senegalese company Africa Consulting & Trading, or ACT, confirmed to the International Business Times that the firm had been asked to help with fundraising and organization for a railway project involving four West African countries.
“Benin, Côte d'Ivoire, Burkina Faso and Niger are all indeed involved in this ambitious railway project that will interconnect these four countries and thus reinforce the economical, commerce and social links between them,” said the spokesperson.
The plan is in its earliest stages, and details on the deal are scant. “The amount and the modalities of the required initial investments which will go to rehabilitating existing lines and building new ones are not yet fixed and might require further studies and due diligence,” according to ACT.
If an international railway connecting the countries is eventually realized, it would be a boon for trade and development in the region.
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As it stands, intracontinental exchanges of goods and services make up only 10 percent of Africa’s total international trade. The rest is between African countries and their partners in the West, Asia and the Middle East.
But sub-Saharan Africa has much to gain from intracontinental trade. The region is rich in resources including oil, minerals, arable land, water and timber. Food insecurity is widespread, but Africa could actually feed itself if countries implemented smarter policies and encouraged more cross-border exchanges of crops and farming innovations. Poverty rates are high, but economies are growing at a breakneck pace; if this mounting wealth could flow more freely across borders, it could have a real impact on some poverty-stricken communities. The IMF reported last month that economic growth in sub-Saharan Africa will hit 6.1 percent in 2014, far better than the global average of 4 percent.
ACT is headed by CEO Ibrahima Cheikh Diong, who has experience working for the Senegalese government, the U.S. government, the World Bank Group and the United Nations. He told Ventures Africa, a business publication based in Nigeria, that the railway project would be good for the region.
“We see a lot of demand particularly in the government side with the projects that have been sitting in the backbone; railway projects, infrastructure projects and other projects where the government needs some structural support, resource mobilization and in some cases what we call chain management by bringing in some specialized skills to get the transactions moving forward,” Diong said.
A rail system would certainly be good for the businesses invested in West Africa. The region is rich in iron-ore, and several Western mining companies -- including Luxembourg-based ArcelorMittal (NYSE:MT) and Australia’s Sundance Resources (ASX:SDL) -- have already invested in railroad projects to ease their own operations on the continent. But an initiative backed by African governments instead of foreign investors could have far-reaching effects and greater benefits for citizens of the four countries involved.
“A project of this type will indeed be challenging to implement given the size and the global and regional environment,” said an ACT spokesperson. “But we believe that the governments of the four countries are fully committed to implementing it, as they have constantly demonstrated.”
This story was updated on 6/24/13 to include additional commentary from ACT.