Africa: Sustainable mobility in urban areas

This AGCS ESG risk briefing focuses on sustainable mobility in Africa and its relevance for social and economic development in the continent.

Efficient and urban mobility is essential for African economic and social development. Mobility enables citizens to access jobs and markets, and therefore enhances quality of life. Current trends indicate that in Africa more people will choose to use motorized transport over walking or biking in the next decades.

Nevertheless, growing motorization and unmanaged transport in African cities are resulting in chronic traffic congestions, air pollution and other negative externalities. This risk briefing intends to raise awareness of the aforementioned negative externalities while underlining the challenges faced by African cities to achieve sustainable mobility. Moreover, it supports progress in moving towards more sustainable transport systems in Africa.

As urban sprawls grow, and the middle class expands, a higher demand for motorized and non-motorized transport is seen in the continent. Primary forms of non-motorized transport in Africa include walking and bicycles. At higher income levels, communal taxis and moto-taxis are popular, accounting for between 75 to 80% of Africa’s total motorized trips.
Car ownership is still unaffordable for a large part of the African population. Nonetheless, current data indicates that there will be significant growth in the demand for motorized services. This could be attributed to a lack of cycling culture and infrastructure to support it, high risks for pedestrians and the view of non-motorized transport options as symbols of poverty.
In recent years, high levels of pollution have been an environmental concern in Africa. Even though the motorization rate in the continent is low, second-hand vehicles have contributed to the deterioration of air quality in cities. High-sulphur diesel and gasoline, still allowed by African countries, also add to the aforementioned problem. On average, African Sulphur limits in diesel are 200 times above the European limit, and in some countries this figure is as high as 1000.

Poor city planning, and the increase in car ownership has led to long commuting times and traffic congestion. For instance, the average Lagos commuter spends over three hours in traffic every day.

Furthermore, 40 of the 50 countries in the continent have the highest road-fatality rates globally, despite Africa accounting for just 2% of the world’s registered vehicles.

African cities are constrained by the lack of long-term strategies and their limited ability to plan. Most cities do not have a well-developed single authority to deal with urban mobility and transport challenges. Instead, responsibilities are often distributed among national, regional and metropolitan entities, resulting in responsibilities being neglected or confusingly held by two or more entities.
Large portions of Africa’s urban labor force remain trapped in low-productivity services. Around 38% of African adults are illiterate, and low skill level issues will continue to be a problem. As more automotive companies land in the continent and work becomes more technical, the skills deficit is likely to impede access for Africans to the well-paying job market. Lack of mechanical knowledge makes it harder for companies to cope with the production of modern cars.

In an attempt to decrease pollution, African governments have implemented regulations on imported vehicles. Incremental taxes on age or bans on imported vehicles older than 8 years are the most common policies established. Quality of fuels have also been tackled by policy-makers, lowering sulphur levels to 50 ppm.

Governments have also offered appealing financial incentives to automotive companies increasing domestic production of new vehicles. Similarly, African governments have increasingly adopted Bus Rapid Transit systems which offer a reduction in emissions and congestion, and a fast and affordable service for the population.

Automakers have recognized the advantages of narrowing the skills gap in the continent. Hence, training programs focused on auto mechanics and information & communication technologies have been developed. Moreover, companies are increasingly offering car-sharing and ride-hailing platforms, offsetting the costs of owning a vehicle, reducing the amount of toxic emissions released, and increasing employment in the continent.

Finally, as a deviation from fuel dependency, electric vehicles are positioning themselves as a potential innovation in the African automotive market. In South Africa, automobile manufacturers are partnering with governments and electricity providers to overcome infrastructure barriers and electricity shortages, accelerating the transition to a more sustainable mobility system.

The enormous potential digitalization offers for building a sustainable future also pose short and long-term risks. Insurers provide traditional risk transfer for emerging technologies and associated risks by providing insurance solutions such as business interruption or cyber. Moreover, AGCS supports its clients to identify and assess material risks and develops recommendations on how to mitigate these risks. In a fast changing world, AGCS identifies emerging issues and develops risk management strategies.

Our consulting team is available at: AgcsSustainability@allianz.com

We are dedicated to deliver the best possible solutions to the management, control and reduction of risks.

RESOURCES AND LINKS

Impact.Engineered (2018) The African commute: city transport trends. Trend analysis on African transportation by Engineering for Change in partnership with Yamaha Ventures

International organization of Motor Vehicle Manufacturers (2017) Vehicles in Use Statistics

Deloitte. (2016) Africa Automotive Insights. Navigating the African Automotive Sector: Ethiopia, Kenya and Nigeria.

The World Bank (2015) A plea for Action against Pollution in Nigeria

PublicEye (2016) Dirty Diesel. How Swiss Traders Flood Africa with Toxic Fuels.

Bloomberg (2014) Traffic Costs Nairobi $570,000 a Day as No. 2 Africa Hub

The Economist (2015) Worse than Malaria. Road death in Africa.

African Development Bank (2013) Mortality in Africa: The Share of road Traffic Fatalities.

UNECE (2015) UNECE and Global NCAP call for worldwide adherence to UN car Safety Standards

The Earth Security Report (2017) Sustainable Development Goals for Business Diplomacy and Growth

UN-Habitat (2010) Sustainable Mobility in African Cities

Africa Transport Policy Program (2015) Policies for Sustainable Accessibility and Mobility in Urban Areas in Africa.

The World Bank (2015) Lagos’ Bus Rapid Transit System: Decongesting and Depolluting Mega-Cities
Angela Quiroga
angela.quiroga@allianz.com
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