Improving the efficiency of transport markets in sub-Saharan Africa

The provision of transport services in Africa is largely left to the market. In many instances however, the market has not been working effectively. Development funds for the transport sector are mainly used for developing infrastructure but there is a potential to save on costs by focusing on improving the efficiency of vehicles themselves. Strong reform measures are required if the transport services provided and the mobility of people are to be improved.

The Transport ResearchLaboratory (TRL) analysed the transport sectors in the capital cities and onerural town each in Ghanaand Uganda toidentify ways in which transport services could be improved. In addition tointerviews with main stakeholders including public transport operators andtransport sector regulators, a range of surveys were carried out to identifymajor problems facing transport operators. The researchers also examinedrelevant regulations as well as the current organisation of transport servicesand their impact on the use of vehicles.

Following the liberalisation of economies and the removal ofgovernment controls on various sectors in the 1990s, transport services in Ghanaand Uganda are nowlargely controlled by the private sector. As a consequence, the number ofvehicles has increased substantially. In Uganda,vehicle registration doubled between 1993 and 1994, and vehicle ownership grewby twenty-two per cent per year between 1995 and 1998. Government interventionin monitoring and governing the transport sector is limited to vehiclelicensing. In spite of almost complete deregulation, the transport industryremains inefficient and operating costs are high due to a number of technicaland institutional factors.

The study highlights the following problems:

• Unrestricted access to urban transportactivities has led to an abundance of unreliable vehicles on the roads, whichincreases accidents, congestion, pollution, and breakdowns. Ugandadoes not have an age limit for vehicle imports and ninety per cent are usedvehicles.
• Freight transport is highly inefficient and serviceis unreliable. Although overloading is common, there is low vehicle utilisationand high empty shipment rates (particularly with regard to return loads).
• Relevant ministries lack the resources andinstitutional capacities to carry out planning, regulation, and monitoringfunctions adequately.
• Transport markets are not competitive.Established transport associations dominate, preventing non-members from enteringthe market. These associations have acquired significant influence, which hasled to political patronage and resistance to any changes.

A holistic approach to improving vehicle operations isrequired. Short-term technical improvements need to be complemented bylong-term policy reforms aimed at enhancing competition to increase operationand organisation efficiency of transport services.

The researchers recommend several measures including:

• Increase access to finance by potential vehicle owners by providing adequate leasing schemes,including reduced interest rates and extended repayment periods.
• Improve technical control including age limitson vehicle imports, improved standards of drivers and operators training, andcompulsory bus driving licenses.
• Establish an independent transport regulatorybody to maintain competitive market conditions and enforce transportregulations effectively.
• Establish a public-private partnershiparrangement for the development and management of bus and lorry parks toenhance competition and introduce more transparency.
• Provide technical assistance to relevantministries for institutional and capacity building to strengthen theirmanagement structure.

Transport services do not work effectively without adequateregulations and institutions. Therefore, a comprehensive approach includingdifferent reform measures, both technical and institutional is required toimprove efficiency. Many of these measures are controversial and require broaderlevel sensitisation and information sharing to gain critical support fromrelevant decision makers.