Chad Rail Link Supports Trend, But Financing Lacking
West and Central Africa are increasingly following in East Africa's footsteps in terms of plans to integrate the region's rail networks in order to provide greater logistics capacity for landlocked neighbours and to boost regional trade. On June 3 Cameroon and Chad signed an agreement confirming the route for an extension of Cameroon's rail network to the Chadian capital city of N'Djamena - 700km from where the current Cameroonian network ends in Ngaoundere. At a cost of CFA1.4trn (USD2.9bn), should the project be realised it will provide a major boost to Cameroon's construction industry.
The line is part of Cameroon's rail development master plan which was released in 2012, but will serve to offer Chad a major boost in terms of its capability to export goods. Around 80% of Chad's imports and exports already pass via Cameroon's commercial capital of Douala, but they travel by a road route which significantly increases costs. We have seen similar efforts in East Africa to provide landlocked South Sudan, Uganda, Rwanda and Burundi export options in Tanzania and Kenya through the development of the region's rail networks.
We note that financing for the project is yet to be arranged, posing a serious risk to the project's realisation. While the newly agreed upon route's development is to be managed by Bolloré Africa Logistics, which operates Camrail and should offer reassurances to potential investors, we note that similar projects have failed to be realised. An alternative route via the city of Moundou was floated by Chad in 2010, and in 2011 China Civil Engineering Construction Corp. (CCECC) reportedly was set to begin construction, with financing for the project in place. However, no news on the project's progression has been seen since. Even rail development projects in Cameroon which are to support the vital mining industry have stalled previously.
|Boost To Chad's Export Potential|
|Cameroon's Rail Network and Proposed Extension|