AfDB Mobilizing Billions for Liberty Corridor

• • By Staff Reporter

 

• • May 30, 2024 Updated 22 hrs ago

— A Cornerstone for AfCFTA’s Success

The African Development Bank (AfDB) has signaled a new era of pan-African integration with its announcement to mobilize billions of dollars for the development of the Liberty Corridor. This critical rail infrastructure project aims to link Liberia and Guinea, fostering stronger economic ties between the two nations and acting as a cornerstone for the success of the African Continental Free Trade Area (AfCFTA).

The announcement, made by AfDB President Akinwumi Adesina during his opening remarks at the Bank’s 2024 Annual Meetings in Nairobi, Kenya, underscores the AfDB’s unwavering commitment to its ten-year strategic plan. This plan, spanning 2024-2033, prioritizes bridging national divides across Africa through infrastructure development and boosting regional trade.

The Liberty Corridor in Liberia is being developed by HPX and Guma Africa Group in partnership with the Government of Liberia. It will run parallel to the existing Yekepa to Buchanan Port infrastructure but extend further into Guinea. Plans also include the development of a deep water port at Didia, southeast of Buchanan.

The Liberty Corridor is not an isolated initiative. It joins a growing portfolio of strategic investments by the AfDB. Adesina highlighted the US$3.2 billion being raised for the East Africa standard gauge railway and the US$500 million pledged towards the Lobito corridor — being the inspiration for the Liberty Corridor — which will connect Zambia, Angola, and the Democratic Republic of Congo (DRC).

“The African Development Bank has consistently invested heavily in infrastructure,” Adesina said. “In the past nine years, we have invested well over US$50 billion in infrastructure projects on the continent, by far the largest investment of any multilateral Development Bank or institution. And the impacts are visible.

 

“We are raising US$3.2 billion for the East Africa standard gauge railway connecting Tanzania, Democratic Republic of Congo and Burundi.

 

“We are providing US$500 million towards the development of the Lobito corridor to link Zambia, Angola and the DRC.

 

“We are mobilizing US$375 million for financing the railway linking Nigeria to Niger republic.

 

“We are mobilizing $3.5 billion to $5 billion towards the development of the Liberty corridor to link Liberia and Guinea.

 

“We have worked with partners of the Africa Investment Forum to mobilize $15.6 billion of investment commitment towards the development of the Lagos-Abidjan corridor.

 

“Together with Africa50 we are mobilizing $630 million for the construction of the road and rail to link the Republic of Congo and the Democratic Republic of Congo.

 

“We are financing the Guercif-Nador highway in Morocco and the 1,000-kilometer highway linking Addis Ababa to Mombasa, which has expanded trade flows between Ethiopia and Kenya by 400%.

 

“That’s who we are: a solutions and impact-driven Bank,” the AfDB boss declared.

A Springboard for AfCFTA’s Dreams

The Liberty Corridor’s significance extends far beyond its immediate impact on Liberia and Guinea. It aligns perfectly with the ambitious goals of AfCFTA, a free trade agreement poised to revolutionize continental commerce. By 2033, the AfDB envisions a transformed Africa empowered by AfCFTA. This vision includes streamlined customs processes, a network of regional power grids fostering energy security, and the flourishing of regional value chains that leverage each nation’s unique strengths. Imagine a scenario where Guinean and Liberian iron ore — or even agricultural produce from either country for that matter — effortlessly shipped to global markets. The Liberty Corridor paves the way for this kind of interconnected future.

Bridging the Gap from Dreams to Reality

However, realizing this ambitious vision demands overcoming significant hurdles, the Bank noted. Currently, Africa grapples with a fragmented economic landscape where underdeveloped infrastructure acts as a major bottleneck to intra-African trade, which sits at a mere 15% of total African trade volume.

“Regional economic integration is a shared priority of Africa’s leaders,” says a statement from the AfDB’s new ten-year strategic plan. “Under AfCFTA, which builds on a network of sub-regional trade agreements, tariffs will gradually be dismantled on over 90% of intra-African trade by 2035.  If  the practical challenges are overcome, full implementation of AfCFTA could increase trade by US$450 billion by 2035, raising average incomes by 7% and lifting 30 million people out of poverty.”

The AfDB acknowledges these challenges and recognizes the need to dismantle non-tariff barriers that impede trade flows. Bureaucratic red tape, complex customs procedures, and a lack of harmonized regulations can all act as invisible walls, hindering the free movement of goods. The Bank’s strategic plan specifically addresses these issues, committing to working with African countries and regional economic communities to create a more streamlined trading environment.

Additionally, establishing common regulatory standards and prioritizing investments in cross-border infrastructure projects like the Liberty Corridor are crucial steps towards achieving AfCFTA’s full potential. By enabling the free flow of goods, services, and people across borders, the Liberty Corridor stands as a testament to the AfDB’s commitment to building a more integrated and prosperous Africa.

The Liberty Corridor, in the context of the other rail infrastructure projects, signifies the AfDB’s unwavering belief that AfCFTA can be the catalyst for an integrated Africa. It’s a future where trade flourishes between nations, people move freely across borders, and regional economies experience a collective upsurge. This project represents a concrete step on that path, a powerful symbol of the Bank’s commitment to bridging the gap between AfCFTA’s dreams and the reality of a more unified Africa.

“The Africa Regional Integration Index, jointly  produced by the Bank and the UN Economic Commission for Africa, tracks integration along five dimensions,” the Bank’s strategic plan says. “The index shows that Africa’s integration lags well behind other global regions, but with promising dynamics at the sub-regional level, with the East African Economic Community registering the highest score. Tellingly, goods traded within Africa have greater value-added than those exported outside the continent, which are often unprocessed minerals and primary  commodities. This  shows the potential  of  regional integration to drive economic growth.

 

“However, the removal of tariffs under AfCFTA and other free trade agreements is just a step towards regional economic integration. There will be further challenges around removing non-tariff barriers, clarifying rules, and moving towards common regulatory standards.  Intra-regional trade is also held back by poor infrastructure and limited transport connectivity. Major investments in ports and seafaring, roads, rail, and energy systems will be required to reduce the costs of trading across national borders,” the Bank’s strategic plan said.