Road infrastructure is critical to the economic development of any country because it enables the free movement of people, goods, and services. For countries in Africa, road infrastructure can play a key role in promoting trade. World Bank studies show that a 10 percent drop in transport costs could result in a 25 percent increase in total African trade. While there have been some improvements on regional roads connecting people and countries, local roads still have room for improvement. 

Micro, Small, and Medium-sized Enterprises (MSMEs) are at the core of Africa’s trade and economy. These small enterprises provide an estimated 80 percent of jobs across Africa and are essential to economic growth. For MSMEs, quality road infrastructure can reduce transport costs and make it easier for small businesses to reach internal and external markets. Building new roads to connect markets and improving current road conditions could enhance their performance, which could contribute to job creation and poverty reduction. 

One of the foremost developmental structures lacking in most African countries is efficient roadway transportation systems. Thirty-two percent of African countries are landlocked and depend on coastal countries to access regional and international markets. A more advanced level of infrastructure development could reflect on the overall economic status of Africa if there were provisions for more robust road infrastructure systems. Infrastructure development for transport is critical for the movement of people and goods. 

Will BRI help?

China’s Belt and Road Initiative (BRI) is a Chinese infrastructure project connecting Asia with Africa and Europe via land and maritime networks to increase trade and promote economic growth. A significant priority for the BRI is infrastructure connectivity, which Africa needs. The BRI is associated with investments in infrastructure development, including roads and railways. China’s investments in Africa have risen significantly since the concept of the BRI was launched, with total spending from the Chinese government and Chinese State-Owned enterprises estimated to be about US200 billion.

The initiative has seen many strategically constructed roads built in Africa, for example, the Chechell Beltway Project, which connects Algeria with Niger, Nigeria, and Chad and provides access to a combined market of 275 million people, including connecting the landlocked market to Algerian seaports. Another project is the Addis Ababa Djibouti Railway which provides landlocked Ethiopia with access to the sea linking the capital Addis Ababa with Djibouti and the port. With the many projects undertaken under the BRI, it is safe to say that Africa’s infrastructure is benefitting. Understanding the crucial role of infrastructure in development is an essential aspect of BRI.

So, will the Belt and Road Initiative help? Yes. African leaders still have more work to ensure that the continent has improved road infrastructures to promote regional and cross-border trade by Micro, Small, and Medium-sized Enterprises and entrepreneurs.

There are many benefits to improving Africa’s road infrastructure and transport systems. The expansion of different communities, countries, and regions via better roads can assist in rapid regional development and increase small business establishment. Providing quality road infrastructure in rural communities will facilitate the growth of businesses and create employment opportunities that can promote economic development.  

The availability of good roads helps to improve citizens’ quality of life and facilitate economic activity. Mauritania, the Democratic Republic of the Congo, Madagascar, and Guinea are some countries with the worst road quality throughout the globe. Through proper strategies to revamp and construct quality roads, African nations can bolster MSMEs’ performance.

Quality road infrastructure can assist in improving different aspects of development, including benefiting small businesses, which account for about 70% of GDP in some African countries.

Quality road infrastructure can boost MSMEs’ performance because it will:  

• Support participation in AfCFTA

Trade between African countries currently represents only 12% of total economic activity in the region, compared to 60% in Europe and 40% in Asia. The African Continental Free Trade Area (AfCFTA) has the potential to increase trade within Africa. Trading can create more jobs as exports increase. Efficient road infrastructure can support this trade agreement, especially for small businesses, by making countries more accessible. Improved roads can also support informal cross-border trade, which is a source of income for about 43 percent of Africa’s population. The insufficiency of road networks, in addition to red tape at border crossings, makes trade by road expensive and difficult for small businesses and cross-border traders. 

• Promote Rural Agribusinesses

Limited road infrastructure disrupts food circulation. Rural roads are key to getting farm produce to the market. Without good roads, agricultural produce gets rotten and is thrown away leading to food waste. Additionally, bad roads lead to lengthy transport of produce to the market, leading to food waste because products become bad along the way. Investing in roads, including feeder roads, can contribute to food security by enabling farmers to get to the market on time. It can also ensure that farmers are able to generate revenue from their produce before it spoils. Across the agribusiness value chain, road infrastructure plays a key role in ensuring the success of agripreneurs and farmers alike. 

• Widen Scale of Production

Providing quality and efficient road infrastructure can also assist in widening the scope and scale of production for small businesses. The more effective road transportation becomes, the larger the market size that can be reached, leading to increased production. With an advanced transport system offering cost, time, and reliability advantages, small businesses can easily transport their goods over longer distances. A better transport system facilitates job creation and mass production through economies of scale because small enterprises could hire more workers to meet the demand for the production of goods that are demanded when trading increases.

• Increase Business Competition

Poor infrastructure makes the costs of transporting goods in Africa high, affecting prices and making small businesses less profitable. African goods are, therefore, less competitive with those from other regions around the world. Efficient road transportation will impact the level of competition between business entities. The availability of good road infrastructure could reduce the cost of doing business and lead to an increase in enterprise competition within countries. The rise in the total number of companies offering the same product could bring about high-quality and innovative products. The healthy competition, for customers’ attention, between firms will promote variety in the African market and boost general production output.

The provision of standard and efficient road infrastructure in African countries can provide opportunities to boost MSMEs’ performance. Through a developed road network, higher performance becomes possible for young entrepreneurs and small business owners who would be able to move around quickly and access new markets around the continent. Improved road infrastructure could provide openings for youth entrepreneurs to facilitate the creation of new enterprises. 

Conclusion

Efficient road Infrastructure is highly significant to Africa’s micro and small businesses. Better roads can improve MSMEs’ performance by supporting their participation in AfCFTA to boost intra-Africa trade, promoting rural agribusinesses, widening their production scale, and increasing the business competition rate among African enterprises. 

Every economy needs reliable infrastructure to connect supply chains and move goods and services across borders. African governments can develop better roads and transport systems through various strategies: soliciting financing for the construction of new roads, rehabilitating old and damaged roads, and improving drainage systems. In addition, the maintenance of roads is a critical aspect of developing transport infrastructures. With adequate planning and strategies, leaders can build a continent with well-connected roads that will connect all regions and serve as an essential catalyst for trade promotion and small business growth.

Improving small businesses’ performance is vital because they contribute to Africa’s economic development and can create jobs. Roads are essential for promoting trade. With a population of over one billion, developing the proper roads and road networks will enable MSMEs to increase trade by giving them access to new markets.