7 The role of infrastructure in

regional trade in the SADC region

Verena Tandrayen–Ragoobur

7.1 Introduction
With 15 nations, including large countries, small and isolated economies,
and island states, the Southern African Development Community (SADC)
has recorded over the recent years important milestones and achieve-
ments in different domains, namely institutional, social, economic, and
peace and security. In particular, the SADC’s Regional Indicative Strategic
Development Plan 2020–2030 in line with the UN 2030 Agenda for
Sustainable Development and the African Union’s Agenda 2063 aimed at
achieving inclusive and sustainable development across all SADC countries
via deeper and enhanced regional integration. Deepening regional integra-
tion in the region raises the potential for higher growth and development for
member nations. The greater the level of integration across SADC countries,
the higher the market size will be, along with greater trading and investment
opportunities and the improvement of resource allocation across countries
(Fall & Gasealahwe, 2017).
Sustainable Development Goal (SDG) 9 focuses on the role of infrastruc-
ture to promote inclusive and sustainable development. In particular, SDG
9.1 emphasises the importance of developing regional and international infra-
structure to achieve this objective. Regional integration can be promoted via
efficient, cost-effective, and integrated cross-border infrastructure networks
and services. Infrastructural development englobes regional transport and
communications systems and adequate energy, water, meteorology, and sani-
tation infrastructures. Good infrastructural development is a predominant
channel in boosting regional trade and in promoting economic development.
Both hard and soft infrastructures are key in facilitating the movement of
goods, services, and people across countries within the SADC region. While
the region has made significant progress in regional infrastructural develop-
ment, it still faces an important infrastructure deficit. This infrastructure gap
is characterised by expensive and unpredictable transport and logistic ser-
vices, in particular for landlocked countries and small and remote states; lack
of low-cost access to information and communication technologies; insuf-
ficient energy supply; inadequate water supply, sanitation, and reticulation
systems; and inadequate and expensive broadband networks. Small islands,

DOI: 10.4324/9781003379379-9
This chapter has been made available under a CC-BY-NC-ND license.
124 Verena Tandrayen-Ragoobur

in particular, due to their geographical position, face greater disadvantages

in terms of connectivity and water and energy infrastructure. SADC member
states thus suffer from an important infrastructure deficit like the rest of the
African region.
The poor state of infrastructure poses a significant impediment to the
development pathway of countries. The infrastructure gap remains big in
Africa and in the SADC region (SADC, 2021). The African Development
Bank estimates that the continent’s infrastructure needs (including those of
SADC) are between $130 and 170 billion a year, with an annual financing
gap of $68 to 108 billion (SADC, 2020). According to World Bank (2023),
African infrastructure constrains economic growth by 2 percent every year
and cuts productivity by as much as 40 percent. It is also postulated that the
poor quality of the region’s roads and rail and port infrastructure increases
the costs of intra-African trade by some 30 to 40 percent (Infrastructure
Consortium of Africa, 2022). Adequate funding for infrastructural develop-
ment is crucial to ensure sustainable economic growth through intra-African
and international trade that will help to improve the welfare of the African
population. Infrastructural development and regional trade are also key ele-
ments of SADC's agenda for promoting economic growth, job creation, and
poverty reduction in the Southern African region. Through these efforts,
SADC aims to enhance the competitiveness of its member states, promote
regional integration, and foster sustainable development.
The existing empirical work on the infrastructure and trade nexus has
focussed primarily on the African region as a whole. For instance, Tandrayen-
Ragoobur et al. (2023) examine the impact of infrastructure on bilateral
trade flows across 51 African countries over the period 2003 to 2015. While
their results show that both soft and hard infrastructures matter for trade
on the continent, soft infrastructures matter most with a greater impact of
efficient trade facilitation measures in terms of streamlining trading rules
and procedures on intra-African trade. There is a complementary relation-
ship between soft and hard infrastructures in boosting trade across African
countries. In contrast, Ibrahim et al. (2022) focus on the effects of services
trade on development infrastructure across 38 African countries from 2000
to 2020. Adopting the directional causal link from trade to infrastructure,
they note that trade in services promotes the development of infrastructure
in the region. There is also evidence that urbanisation increases telecommu-
nication infrastructure and reduces trade or transport-related infrastructure.
Another study by Jiya et al. (2020) investigates the effect of economic infra-
structure and trade openness on the manufacturing and services sector across
14 COMESA member countries from 1993 to 2016. There is evidence of a
significant long-run dampening effect of trade openness on the link between
economic infrastructure and manufacturing output and between economic
infrastructure and service output. The study recommends higher and targeted
investment in energy infrastructure and telecommunication systems for coun-
tries in the COMESA region to benefit from trade liberalisation.
 The role of infrastructure 125

Evidence on the infrastructure and trade link for the SADC region has been
quite scant and many studies have been focusing on a few countries. One
study by Afreximbank (2021) analyses the trade-carrying infrastructure gaps
along the main transport corridors in the SADC region namely six key transit
markets of landlocked Botswana, Democratic Republic of the Congo (DRC),
Eswatini, Malawi, Zambia, and Zimbabwe, and the regions in South Africa.
The analysis ranks the importance of each corridor in increasing future intra-
African trade by assessing the condition, capacity, and competitiveness of
transport logistics in terms of border posts, seaports, railways, and roads.
Their findings show that in 2017, maritime states consisted of 91 percent of
all SADC trade flows, while landlocked states comprised only 5 percent and
island states covered just 3 percent. By 2040, it is projected that the share of
landlocked states will increase to 8 percent, while that of island states will
remain at 3 percent and maritime states will consist of 89 percent of all trade
flows. This chapter builds on the scant evidence on the SADC region by ana-
lysing the linkage between regional infrastructure and trade within the SADC
region with a distinct focus on island nations. The study first undertakes a
hard and soft infrastructure diagnostic of the region and probes into the
challenges that exist in member nations in terms of infrastructural develop-
ment. The main components of the infrastructure are analysed using differ-
ent indicators that are computed from varied databases. Second, the chapter
assesses intra-trade in the SADC region and compares trade performance
across member states, differentiating between island nations and other coun-
tries, namely landlocked territories. The link between regional infrastructure
and regional trade in the SADC area is next analysed. The methodology rests
on the use of secondary data from different sources namely data on infra-
structure from the World Bank Development Indicators (2022) and the trade
statistics from the International Trade Centre (2023). Different indicators
are computed to assess the trade potential within the region and the linkage
between infrastructure development and trade is further analysed.
The chapter is structured as follows: Section 7.2 reviews the literature on
infrastructural development and trade, while Section 7.3 sets out the data
and methodology used. Section 7.4 analyses both hard and soft infrastruc-
ture in the SADC region. Section 7.5 assesses the regional trade within the
SADC region, compares intra-SADC trade to other regional trading groups,
and links up the level of intra-SADC trade with infrastructural development
in the region. Section 7.6 concludes with relevant policy implications.

7.2 Literature survey
There is extensive literature on the impact and importance of infrastructure
in trade, and it tends to provide support to the idea that infrastructure is an
important contributor to enhancing trade flows across countries (Sebastian
& Steinbuks, 2017). Infrastructure can be viewed in terms of both hard and
soft infrastructure (Portugal-Perez & Wilson, 2012; Brenton et al., 2014;
126 Verena Tandrayen-Ragoobur

Jouanjean et al., 2015; Tandrayen-Ragoobur et al., 2022). Hard infrastruc-

ture relates to physical infrastructure that is transport networks in terms
of roads, railways, airports, and ports; and energy, water, sanitation, and
information and telecommunication systems. Soft infrastructure is linked to
the business environment and trade facilitation measures such as customs
regulations, time, cost, and documentation needed for export and import
procedures, amongst others (Ismail & Mahyideen, 2015).
Infrastructure is seen as an important vehicle in connecting markets and
promoting trade flows. It contributes positively to development by ena-
bling countries to gain a comparative edge via trade (Rehman et al., 2020).
Countries with good infrastructures perform well in international trade,
while a lack of infrastructural network hinders trade flows (Portugal-Perez
& Wilson, 2012; Donaubauer et al., 2018). Infrastructure development con-
tributes positively to economic growth, development, and prosperity through
a varied number of channels. Investments in infrastructure reduce transac-
tion costs, increase the durability of goods, and foster trade and investment
(Zheng et al., 2022). Infrastructure development further helps in expand-
ing demand and supply and as such in achieving economies of scale and
scope. Infrastructure is also beneficial to growth by increasing productivity
gains and reducing adjustment costs for small firms. Infrastructure further
facilitates trade and foreign direct investment, therefore expanding access to
markets, which in turn increases the capacity of firms to supply larger mar-
kets and contributes to increased output and income. Higher income in turn
improves the standard of living, expands education and health outcomes,
and promotes economic inclusion. Though infrastructure is key in boost-
ing the level of trade (Clark et al., 2004), its role in trade theories has very
often been overlooked mainly because traditional trade theories assumed
zero transportation costs and thus ignore the dominant role of infrastructure
services in international trade (Djankov et al., 2010; Rehman et al., 2020).
Subsequently, transport costs became the focus of new trade theories. This
can be seen in the Samuelson model and in the advances of the new classi-
cal trade theory (Khider & Margoum, 2022). Melitz (2003) focuses on firm
heterogeneity and trade patterns whereby only the most productive firms
enter the international market due to fixed costs for exporting. Transport
costs affect the fixed costs of exporting and as such influence the decision of
the firm to participate in international trade. High transport costs limit the
number of enterprises that will enter the export markets and thus limit trade
flows across countries.
The empirical literature on infrastructural development, transport costs,
and international trade is rather extensive and is largely based on gravity
models. In addition, several indicators are used in the literature to meas-
ure infrastructural development in terms of soft and hard infrastructures.
Further, different estimation methods are applied to assess the impact
of infrastructure on trade. Recent empirical studies have emphasised the
distinction between ‘hard’ and ‘soft’ infrastructures when analysing the
 The role of infrastructure 127

infrastructure-trade linkage (Behar and Venables, 2011; Brenton et al., 2014;

Jouanjean et al., 2015; Ochieng et al., 2020; Tandrayen-Ragoobur et al.,
2022). With respect to hard infrastructure, Limao and Venables (2001) esti-
mate that poor infrastructure accounts for 40 percent of predicted transport
costs for coastal countries and up to 60 percent for landlocked nations. Brun
et al. (2005) further assess the impact of the quality of physical infrastruc-
ture measured by the quality of rail, roads, telecommunications, ports, and
airports on trade, and observe that all measures are important with ports
having the biggest impact on trade. Hoekman and Nicita (2008) also note
that a 10 percent reduction in transport costs increases trade by 6 percent,
whereas a 10 percent rise in infrastructural investment promotes exports by
5 percent in developing countries. Studies on the infrastructure-trade nexus
for the African continent have shown the importance of hard infrastruc-
ture in boosting trade. For instance, Coulibaly and Fontagné (2006) esti-
mate the elasticity of the trade performance to infrastructure endowments in
seven West African Economic and Monetary Union (WAEMU) nations and
observe that trade flows in this region would have been 3.2 times higher if
all the interstate roads were paved. The maintenance and upgrading of road
networks were further found to expand intra-African trade by 18 percent
annually (Buys et al., 2010). Carrere (2013) focussed on WAEMU and the
Central African Economic and Monetary Community (CEMAC) when ana-
lysing the infrastructure-trade linkage and found that the harmonisation of
infrastructural development amongst trade partners leads to large increases
in exports in both regional groups. In addition to transport infrastructure,
another dimension of infrastructural development in terms of telecommuni-
cation infrastructures has been analysed in explaining the African trade (Fink
et al., 2002). Longo and Sekkat (2014), for instance, estimate that a 1 per-
cent increase in the stock of telecommunication and transport infrastructure
in the exporting country promotes exports to other African countries by 3
percent. Similarly, Bankole et al. (2015) observed that the telecommunica-
tion infrastructures in terms of fixed telephony, mobile telephony, and inter-
net use have a positive impact on intra-African trade. Weak communication
links, low connectivity, and high telecommunication costs represent impor-
tant hindrances to trade across African countries.
Although hard infrastructures are crucial for trade and in particular for
intra-African trade, the evidence also shows the need to address bottle-
necks in soft infrastructure which hinder trade flows across the continent.
In terms of assessing the impact of soft infrastructures on trade, Anderson
and Marcoullier (2002) found that bilateral trade volumes are positively
influenced by the trading partners’ institutional quality. Nunn (2007) in turn
focuses on a particular aspect of institutions which is the enforcement of
contracts. The results show that imperfect enforcement of contracts reduces
the volume of goods. The institutions-trade nexus is further supported by
Do and Levchenko (2004) and De Groot et al. (2004), who argue that dif-
ferences in institutional quality and the quality of governance are important
128 Verena Tandrayen-Ragoobur

determinants of trade patterns. Depken and Sonora (2005) measure institu-

tional quality in terms of economic freedom and note that better institutional
quality in the partner country has a positive effect on the amount of exports
from the US to that particular nation. Further, higher institutional transpar-
ency is also found to have an important effect on the trading environment
in the Asia-Pacific region (Helbe et al., 2007). Yu (2010) uses a measure of
democracy to measure soft infrastructure, and their findings indicate that
democratisation significantly increases trade, contributing to around 3 to 4
percent growth in bilateral trade flows. Logistics, customs procedures and
clearance, documentation, and transit time are important complementary
elements to hard infrastructural development. For instance, Hoekman and
Nicita (2011) and Brenton et al. (2014) observe that logistics quality is cru-
cial, as poor logistics across countries impede market integration and trade
within a region. Likewise, Iwanow and Kirkpatrick (2007) underline the spe-
cific role of customs procedures (trade facilitation) in improving intra-Afri-
can trade. Freund and Rocha (2011) and Dennis and Shepherd (2011) stated
that a reduction in trade costs and domestic delays through trade facilitation
promoted export diversification.
The existing empirical work further advocates the need to address both
soft and hard infrastructures when probing into the infrastructural develop-
ment and trade relationship (Portugal-Perez & Wilson, 2012; Rehman et
al., 2020). It is postulated that soft infrastructure maximises the benefits of
investments in hard infrastructure in promoting trade (Hoekman & Nicita,
2011). In essence, Ochieng et al. (2020) investigate the impact of ICT and
transport infrastructures as well as quality institutions on bilateral exports
between 11 countries within the East African region. They note a positive
linkage between exports and the combination of both soft and hard infra-
structures. Similarly, Tandrayen-Ragoobur et al. (2023) examine the impact
of both soft and hard infrastructure on bilateral trade flows across 51 African
countries. Their findings indicate the importance of both soft and hard infra-
structures in enhancing trade on the continent. However, soft infrastructures
matter most with a greater impact of efficient trade facilitation measures, but
they complement hard infrastructures and help in increasing intra-African
trade. Although there is a general consensus on the positive contribution of
infrastructure investments in fostering trade, existing evidence on the effects
of both soft and hard infrastructures is scant (Tandrayen-Ragoobur et al.,
2023) and more so for the SADC region.

7.3 Methodological approach
The chapter uses secondary data from different sources namely World
Development Indicators (World Bank, 2023), the African Development
Bank database (2023), and the United Nations World Integrated Trade
Solution (WITS, 2023). Two important indicators are used to probe into
the infrastructure and trade dimensions in the SADC region. The African
 The role of infrastructure 129

Infrastructure Development Index (AIDI) and the Logistic Performance

Index (LPI) measure the level of infrastructural development while regional
integration is proxied by the African Regional Integration Index (ARII).
The AIDI is a weighted average of nine indicators covering four dimensions
of infrastructure namely electricity, ICT, transport and water, and sanitation.
The electricity index is modelled by the net generation (kWh per inhabitant)
while the ICT composite index is calculated by a combination of indicators.
These are total phone subscriptions per 100 inhabitants (including fixed-line
telephone and mobile cellular subscriptions), number of internet users per
100 inhabitants, fixed (wired) broadband internet subscribers per 100 inhab-
itants, and international internet bandwidth. Transport is determined by a
mix of indicators in terms of total paved roads in km per 10,000 inhabitants,
total road surface (both paved and non-paved), and exploitable land area.
The last component is water and sanitation which is evaluated via two indi-
cators, improved water source (percentage of population with access) and
improved sanitation facilities (percentage of population with access). The
indicators are computed by subregion as a weighted average of the normal-
ised components of the countries within the subregion. The weighting vari-
ables selected are population size for electricity, water, sanitation, and ICT
subscriptions (phone and internet), while for paved roads, road network size
is used (African Development Bank, 2023). The LPI complements the AIDI
by measuring soft infrastructure in terms of six major dimensions, i.e., cus-
toms and border management, ability to track and trace, logistics services
quality, trade and transport-related infrastructure, availability of competi-
tively priced international shipments, and timeliness of shipments. The PCA
is also applied in this case to generate the composite index ranging from 1
(very low logistics performance) to 5 (very high performance).
The study uses the ARII to measure regional integration in SADC. It
covers five dimensions, namely trade integration, productive integration,
macroeconomic integration, infrastructure, and free movement of people,
measured by 16 indicators. Trade integration is computed by using five indi-
cators: average tariff on imports, the share of intra-regional imports as a
share of GDP, the share of intra-regional exports over GDP, the share of
intra-regional trade, and the AfCFTA. Productive integration probes into
intra-regional intermediate exports and imports as a share of GDP as well
as merchandise trade complementarity index. Macroeconomic integration is
captured by the number of bilateral investment treaties, regional inflation
differential, and regional convertibility of the currency, while infrastructure
integration is the AIDI and the proportion of intra-regional flight connec-
tions. The last indicator is the free movement of people modelled by the
number of countries where travellers can obtain a visa upon arrival and those
nations where there is a visa requirement as well as the Kigali Free Movement
of Persons Protocol. The Principal Component Analysis is applied to derive
the composite ARII. However, all the dimensions as per the Abuja Treaty are
not captured in the measurement of the ARII. In essence, in 2020, the African
130 Verena Tandrayen-Ragoobur

Multidimensional Regional Integration Index (ARMII) was launched by the

African Union to cover emerging areas like migration and the environment in
line with Agenda 2063 (African Union Commission, 2020). AMRII consists
of eight dimensions and 33 indicators. The pillars are split into the free move-
ment of persons, environmental integration, financial integration, infrastruc-
ture integration, political and institution integration, monetary integration,
social integration, and trade integration.

7.4 Infrastructural development in SADC

Under the SADC’s Regional Indicative Strategic Development Plan 2020–
2030, one priority area encompasses the development of cost-effective and
efficient transnational infrastructural development to promote regional inte-
gration and economic development, which can help in the alleviation of pov-
erty in the region. Over the years, there has been a greater involvement of the
private sector in regional integration and as such the need to modernise and
harmonised regulatory frameworks, policies, and strategies for the develop-
ment of efficient and technology-driven cross-border infrastructure services,
enhanced integrated infrastructure, and networks to support and facilitate
deeper regional integration.
There have been significant improvements over the past decades in the
development of key infrastructure such as rail and ports, road networks, ICT
and telecommunications, access to energy, water, and sanitation, to name a
few. From 1995 to 2005, improvements in infrastructure boosted growth in
SADC by 1.2 percent per capita per year (World Bank, 2010). This has been
attributed mainly to mobile telephony. It was also estimated that if infrastruc-
tural developments matched those of Mauritius, this would increase SADC’s
overall growth performance by 3 percent. Infrastructure development in the
SADC region is analysed using the AIDI (African Development Bank, 2023)
and the Logistics Performance Index (World Bank, 2023).

7.4.1 Hard infrastructures in the SADC region

The AIDI is a weighted average of nine indicators measuring four dimensions

of infrastructure, namely electricity, ICT, transport, and water and sanita-
tion. The AIDI focuses mainly on hard infrastructure rather than soft infra-
structure. The AIDI values for all 16 SADC countries and the average for the
SADC region from 2005 to 2022 are shown in Table 7.1.
The figures show that Seychelles (98.88), South Africa (81.67), and
Mauritius (81.44) are the top three countries with the highest AIDI value
in 2022. Mauritius and Seychelles, being island nations, have relatively
higher infrastructure development compared to many countries within the
SADC region. Several factors can contribute to this outperformance, namely
the fact that both have relatively stable economies and sustained economic
growth over the past decades. This economic, political, and social stabil-
ity has allowed significant investment in infrastructural development. In
 The role of infrastructure 131

Table 7.1 The Africa Infrastructure Development Index (AIDI) from 2005–2022 for
SADC countries

Country 2005 2008 2011 2014 2017 2020 2021 2022

Angola 7.96 9.41 12.58 16.39 17.48 20.07 20.20 20.65

Botswana 28.45 28.98 31.89 34.76 36.61 37.50 37.90 39.02
Comoros 18.49 19.57 20.26 21.64 22.15 24.13 24.40 25.09
DRC 4.27 5.06 6.46 7.57 8.17 8.64 9.34 9.69
Lesotho 13.16 13.75 14.40 15.46 15.68 16.33 19.10 19.90
Madagascar 3.46 4.09 5.79 7.47 8.47 11.29 11.45 11.89
Malawi 12.24 13.32 14.81 17.14 18.44 21.79 21.92 22.84
Mauritius 44.51 48.75 58.92 71.21 75.49 79.12 79.87 80.44
Mozambique 6.84 7.48 8.95 11.20 12.30 12.60 12.62 13.68
Namibia 24.70 26.29 28.88 28.27 28.64 29.98 30.11 30.53
Seychelles 50.86 63.54 73.82 89.57 94.11 96.73 98.45 98.88
South Africa 46.78 51.70 55.96 73.81 79.63 79.34 80.19 81.67
eSwatini 14.78 16.32 19.34 23.40 25.43 28.21 28.42 29.12
Tanzania 5.27 6.40 8.42 11.12 12.24 14.89 15.28 16.22
Zambia 15.03 16.31 18.07 20.87 22.12 23.97 25.05 26.04
Zimbabwe 20.15 21.85 21.81 23.86 24.43 25.54 26.23 26.65
Mean-SADC 19.90 22.22 25.34 30.14 31.95 33.73 34.41 34.52
Source: Compilation and computation from the African Development Bank Database (AfDB,
2023)

addition, both island nations have shown effective, efficient, and transpar-
ent governance and strategic planning in their development initiatives. Good
institutions and governance have helped in the adequate use of resources and
smoother implementation of projects. Mauritius and Seychelles have also
actively sought international partnerships and foreign investment. Mauritius,
for instance, has been actively seeking the support of India and China. These
partnerships have brought in expertise, technology, and funding for infra-
structure projects. Moreover, both island nations have been very active in
promoting sustainable development practices including projects in waste
management, renewable energy, and environmentally friendly infrastructure
projects. The geographical locations of Mauritius and Seychelles make them
well-positioned for international trade and connectivity. This has encouraged
investments in transportation infrastructure. Both islands have recognised
the role of infrastructure in stimulating economic growth. Improved trans-
portation networks, communication systems, and utilities attract businesses
and have helped create jobs and enhance overall economic activity in both
countries.
In contrast, countries with low AIDI are Mozambique (13.68), Madagascar
(11.89), and the DRC (9.69). The latter has been facing the most daunting
infrastructure challenge on the African continent due to conflicts that have
seriously damaged its infrastructure. Its vast geography, low population den-
sity, extensive forestlands, and crisscrossing rivers make the development of
new networks in DRC more complicated (. In the case of Mozambique, the
132 Verena Tandrayen-Ragoobur

country is progressing steadily after two decades of debilitating civil war. It

faces an important infrastructure deficit, but there has been a drive from gov-
ernment and development partners to improve infrastructure investment plan-
ning that allows for a maximisation of benefits from investments. Similarly,
Madagascar has accumulated a significant capital shortfall by regional stand-
ards due to poor economic management and political instability, which have
impacted infrastructural development. Madagascar, being an island nation,
has over the years faced economic challenges, including periods of political
instability, corruption, and mismanagement. These factors have hindered the
allocation of resources towards long-term infrastructure development pro-
jects. Unlike Seychelles and Mauritius, Madagascar is a larger country with
a more diverse geography. Its size and resource distribution make it more
challenging to develop and maintain infrastructure across the entire country.
The average index for the SADC seems to have improved from 19.9 in 2005
to 34.52 in 2022, showing that infrastructural improvement has taken place
across most SADC countries. It is however important to analyse in which
sector infrastructural development has taken place. The AIDI is further split
to analyse where SADC countries stand in terms of infrastructural develop-
ment in transport, ICT, electricity, and water and sanitation (see Table 7.2).
The data compares the four dimensions of the AIDI in 2005 and 2022.
One noticeable improvement over the years has been in ICT and telecom-
munications. The ICT index for all SADC countries has progressed from
zero in many cases to more than 50. In 2022, Seychelles tops up the list
with an index value of 55.60 followed by Mauritius with a value of 50.84,
while both islands had an average value of only 0.023 in 2005. Seychelles
and Mauritius have recognised the importance of ICT for economic growth,
service delivery, and social development. Their efforts to establish advanced
ICT infrastructure and promote digital literacy have contributed to their rep-
utation as countries with well-developed ICT sectors in the region. Botswana
and South Africa have also made significant progress over the period. Many
SADC member states have established cross-border transmission links using
fibre technology. In addition, countries like South Africa, Botswana, and
Tanzania for instance, have already achieved the 2025 SADC broadband
target of providing 80 percent of the population with access to broadband
services (SADC, 2020). Regional infrastructure is important across SADC
countries, as regional optic fibre links have allowed to connect landlocked
countries within the region. In terms of energy, the electricity composite index
has also improved with significant progress being noted for countries like
Seychelles, Mauritius, Botswana, and Eswatini. Island nations like Seychelles
and Mauritius have high rates of electricity access, as they are relatively small
countries with concentrated populations, which in essence make it easier
compared to larger and more geographically dispersed nations. In fact, the
SADC Regional Energy Access and Strategic Action Plan 2010–2020 has
encouraged member states to embrace universal energy access and to halve
the number of people without access to energy by 2020 (SADC, 2020). There
Table 7.2 Different dimensions of the AIDI in 2005 and 2021 for SADC

Transport Electricity ICT WSS Transport Electricity ICT WSS

composite composite composite composite composite composite composite composite
index index index index index index index index

2005 2021

Angola 2.49 1.64 0.001 46.01 4.41 5.81 12.82 61.43

Botswana 25.79 8.18 0.007 78.64 25.28 20.20 31.30 91.60
Comoros 17.42 0.85 0.001 61.20 14.66 1.52 8.73 72.07
DRC 1.83 1.93 0.000 34.77 1.48 2.12 6.89 40.44
Lesotho 7.75 2.52 0.002 44.49 7.27 4.29 16.88 72.89
Madagascar 3.58 0.72 0.001 14.55 2.87 1.57 6.28 35.81
Malawi 6.24 1.78 0.000 45.46 3.73 2.51 8.09 67.94
Mauritius 37.15 27.01 0.022 98.56 36.62 42.96 50.84 99.80
Mozambique 2.19 11.24 0.001 7.68 2.05 9.70 8.55 52.30
Namibia 25.10 12.82 0.004 58.62 17.34 10.45 21.38 71.53
Seychelles 36.31 40.61 0.024 93.17 51.68 84.47 55.60 97.58
South Africa 13.74 73.22 0.023 79.87 22.30 76.73 35.32 93.98
eSwatini 9.24 4.54 0.003 57.65 13.08 13.94 16.53 78.31
Tanzania 3.29 1.28 0.001 13.25 3.34 2.09 13.86 56.75
Zambia 8.82 12.34 0.001 35.19 6.64 12.52 14.27 56.23
Zimbabwe 13.22 11.93 0.007 68.10 12.09 9.14 16.13 67.30
Source: Compilation and computation from the African Development Bank Database (AfDB, 2023)
The role of infrastructure
133
134 Verena Tandrayen-Ragoobur

has also been increased emphasis on affordable and clean energy (SDG 7)
with various initiatives to ensure universal access to reliable, convenient,
affordable, and safe electricity.
With regards to the transport composite index, it is still on the low side
for many countries, and many nations have even seen a decline in the value
of the index, apart from Seychelles, South Africa, Eswatini, and Tanzania.
However, there have been developments regionally in terms of three main cor-
ridors, namely the North-South Corridor running north from Durban, South
Africa; the Maputo Corridor running through Mozambique, and the Dar
es Salaam Corridor in Tanzania (SADC, 2020). Similarly, the establishment
of One-Stop Border Posts (OSBP) at the Chirundu border between Zambia
and Zimbabwe and the Nakonde-Tunduma border between Tanzania and
Zambia have helped in reducing transaction costs for crossing borders. There
remain still many challenges like financial and technical constraints for main-
taining and rehabilitating the region’s roads, railways, ports, and airports.
Seychelles and Mauritius’ smaller geographic areas make it more manageable
for them to develop and maintain transport networks compared to larger
mainland countries. Owing to their dependence on tourism and international
trade, both countries have established strong air and sea connections with
various destinations, facilitating the movement of passengers and goods. The
governments of Mauritius and Seychelles have prioritised the maintenance of
their transport infrastructure, leading to better longevity and functionality.
In contrast, the water and sanitation composite index has improved sig-
nificantly across all SADC countries, with Mauritius having the highest
score of 99.80 followed by Seychelles (97.58), South Africa (93.98), and
Botswana (91.60). There has been important development in transboundary
water supply and sanitation infrastructure. For instance, four transbound-
ary water supply and sanitation projects are underway: the Kunene (Angola
and Zambia) and Lomahasha/Namaacha (Eswatini and Mozambique) water
projects, as well as the Chirundu Cross-Border Water Supply and Sanitation
(Zambia and Zimbabwe) and Kazungula Water Supply and Sanitation
Project (Zambia). In addition, islands like Mauritius and Seychelles have lim-
ited freshwater resources, and there has been a great emphasis on efficient
water management and conservation efforts. Hence, investment in water and
sanitation has been a priority for the authorities. Likewise, island states tend
to be highly vulnerable to public health risks so the authorities have been
prioritising safe water and sanitation systems to prevent waterborne diseases.

7.4.2 Soft Infrastructures in the SADC region

In addition to hard infrastructures, soft infrastructural development plays

a key role in boosting regional trade. Soft infrastructure is measured by the
Logistics Performance Index, which is based on various factors such as infra-
structure, customs efficiency, ease of arranging shipments, quality of logistics
services, tracking and tracing capabilities, and timeliness. Table 7.3 computes
 The role of infrastructure 135

Table 7.3 Soft infrastructures in the SADC region from 2010 to 2022

Logistics performance index 2010 2012 2014 2016 2018 2022

Ability to track and trace 2.602 2.584 2.588 2.576 2.577 2.589
consignments (1=low to 5=high)
Competence and quality of logistics 2.561 2.560 2.568 2.565 2.563 2.568
services (1=low to 5=high)
Ease of arranging competitively 2.602 2.605 2.605 2.592 2.587 2.592
priced shipments (1=low to
5=high)
Efficiency of customs clearance 2.427 2.431 2.423 2.417 2.420 2.431
process (1=low to 5=high)
Frequency with which shipments 2.978 2.978 2.984 2.968 2.965 2.969
reach consignee within scheduled
or expected time (1=low to
5=high)
Quality of trade and transport- _ 2.445 2.441 2.443 2.437 2.447
related infrastructure (1=low to
5=high)
Overall (1=low to 5=high) 2.607 2.606 2.607 2.599 2.597 2.604
Source: Compilation and computation from the World Development Indicators (World Bank,
2023)

the average Logistics Performance Index from 2010 to 2022 for the SADC
region. It can be observed that the overall index declined from 2.607 in 2010
to 2.604 in 2022. This can be attributed to several factors, namely important
infrastructure deficiencies, including inadequate road networks, ports, air-
ports, and railways. Poor infrastructure can lead to delays, increased trans-
portation costs, and inefficiencies in the movement of goods. In addition,
many Southern African countries are characterised by lengthy and compli-
cated customs procedures that hinder the smooth flow of goods across bor-
ders. Delays in customs clearance lead to increased costs and unpredictability
in supply chains. This is supported by the index whereby the efficiency of the
customs clearance process has the lowest values over the years. Cumbersome
regulatory processes and administrative red tape further slow down logistics
operations and increase transaction costs for businesses. Another factor is
the lack of access to technology and information such as tracking and tracing
systems or electronic documentation that hinders logistics efficiency.

7.5 Intra-regional trade in Africa and the SADC

The study first compares the degree of regional integration across different
Regional Economic Communities (RECs) across the African continent. The
Africa Multidimensional Regional Integration Index (AMRII) is used (see
Table 7.4). The value of the AMRII based on the arithmetic mean methodol-
ogy of the scores in the eight dimensions is on a scale of 0 to 1. The score
for the integration process across Africa is 0.62. Amongst the RECs, the
Table 7.4 Africa Multidimensional Regional Integration Index (AMRII), 2021 across Regional Economic Communities (RECs)

Overall Free Social Trade Financial Monetary Infrastructure Environmental Political and
index – movement integration integration integration integration integration integration institutional
AMRII of persons integration

AMU 0.52 0.62 0.48 0.51 0.44 0.56 0.58 0.47 0.52
CENSAD 0.54 0.53 0.41 0.50 0.51 0.62 0.66 0.51 0.55
COMESA 0.68 0.67 0.60 0.79 0.73 0.60 0.66 0.62 0.73
136 Verena Tandrayen-Ragoobur

EAC 0.73 0.96 0.79 0.85 0.66 0.65 0.70 0.58 0.77
ECCAS 0.62 0.62 0.58 0.64 0.55 0.58 0.62 0.75 0.6
ECOWAS 0.74 1.00 0.79 0.84 0.60 0.56 0.53 0.67 0.93
IGAD 0.53 0.56 0.42 0.49 0.46 0.63 0.61 0.65 0.53
SADC 0.61 0.58 0.59 0.67 0.81 0.65 0.70 0.67 0.46
Mean 0.62 0.68 0.57 0.66 0.60 0.61 0.63 0.60 0.64
for all
African
RECs
Source: Compilation and computation from the African Integration Report 2021 (African Union Commission, 2022)
where AMU – Arab Maghreb Union (Union du Maghreb Arabe); CENSAD – Community of Sahel-Saharan States (Communauté des États Sahélo-Sahariens);
COMESA – Common Market for Eastern and Southern Africa; EAC – East African Community; ECCAS – Economic Community of Central African States
(Communauté Économique des États de l’Afrique Centrale); ECOWAS – Economic Community of West African States (Communauté Économique des États
de l’Afrique de l’Ouest), and IGAD – Intergovernmental Authority on Development.
 The role of infrastructure 137

average score across all eight pillars varies from the highest value of 0.74 for
ECOWAS to the lowest score of 0.52 for AMU. The scores reflect the efforts
made by each of the RECs, and it can be observed that ECOWAS fares well
in three dimensions, which are the free movement of persons (AMRII has a
value of 1), political and institutional integration (score of 0.93), and social
integration (0.79). SADC does well compared to other RECs in financial
integration (0.81), monetary integration (0.65), and infrastructure integra-
tion (0.70). SADC has, however, achieved less in terms of free movement
and social, institutional, and political integration, with scores below 0.60. In
contrast, EAC performs relatively well in four pillars, namely trade integra-
tion (0.85), social integration (0.79), monetary integration (0.65), and infra-
structure integration (0.70). ECOWAS, EAC, COMESA, and SADC seem to
have been making considerable efforts, as all of their eight indices are above
the average value of 0.5. Other RECs lagging behind are IGAD, CENSAD,
and AMU. When RECs do not have defined plans or programmes in some
dimensions of regional integration like free movement of persons and finan-
cial and monetary integration, this may negatively affect their overall perfor-
mance and ability to integrate deeper within the continent (African Union
Commission 2020,). At the regional infrastructural level, SADC and EAC
outperform the other RECs with a score of 0.70, followed by COMESA and
CENSAD. However, infrastructure remains a problem for many groups and
for the continent as a whole, as the current level of infrastructural develop-
ment fails to support effectively the integration process. Financial constraints
in funding infrastructural projects, poor quality of current infrastructures in
different parts of Africa, and the slow progress made in the implementation
of regional infrastructural projects are some of the key factors that explain
the low levels of infrastructural integration (AUC-UNECA, 2022).
Probing further into the different dimensions across SADC member states,
the study uses the ARII 2022 (African Union-UNECA, 2022).1 The analy-
sis further investigates the level of integration across SADC countries and
the factors that hinder intra-trade within the region. SADC average score
for regional integration stands at 0.35 with countries like Angola, Eswatini,
Madagascar, Malawi, and Zambia having low scores below 0.3, showing
that the level of integration is quite low amongst these countries within the
region (see Table 7.5). The only country that stands out in this group is
South Africa, with an overall regional integration index of 0.625. Apart from
South Africa and Mauritius (score is 0.424), the score of the overall ARII
for the remaining SADC countries is below 0.4, which shows low levels of
regional integration. The overall score on regional integration tends to be
pulled down by the index for regional infrastructure, which appears on the
low side for most SADC countries. While South Africa performs well with
an index of 0.898, Seychelles and Mauritius score far below with score val-
ues of 0.531 and 0.487, respectively. The bottom five performers are DRC,
Eswatini, Lesotho, Madagascar, and Tanzania scoring near zero. It can be
noted that the four islands in the SADC region do not perform well in both
Table 7.5 The different dimensions of the African Regional Integration Index for all SADC countries, 2021

Overall Scores and ranks by dimensions

score

Country Regional R Trade R Productive R Macroeconomic R Infrastructural R Free R

integration integration integration integration integration movement
of people

Angola 0.238 16 0.308 14 0.340 2 0.077 16 0.149 10 0.388 11

Botswana 0.302 11 0.496 6 0.245 5 0.342 9 0.242 6 0.105 13
Comoros 0.350 6 0.200 16 0.141 11 0.410 5 0.166 9 1.000 1
Eswatini 0.288 13 0.730 1 0.097 14 0.280 13 0.124 15 0.105 13
138 Verena Tandrayen-Ragoobur

Madagascar 0.296 12 0.305 15 0.120 13 0.352 7 0.126 14 0.655 3

Malawi 0.282 15 0.369 10 0.174 9 0.219 14 0.148 11 0.580 5
Mauritius 0.424 2 0.348 12 0.169 10 0.633 1 0.487 3 0.426 9
Mozambique 0.380 5 0.411 9 0.239 6 0.320 10 0.141 12 0.944 2
Namibia 0.337 7 0.715 2 0.271 4 0.301 11 0.215 7 0.080 16
Lesotho 0.308 10 0.655 3 0.052 15 0.297 12 0.080 16 0.444 8
Rep. of the 0.317 8 0.448 7 0.049 16 0.462 2 0.140 13 0.475 7
Congo
Seychelles 0.393 3 0.352 11 0.129 12 0.347 8 0.531 2 0.655 3
South Africa 0.625 1 0.627 4 1.000 1 0.423 3 0.898 1 0.093 15
Tanzania 0.312 9 0.323 13 0.205 8 0.422 4 0.197 8 0.420 10
Zambia 0.287 14 0.431 8 0.324 3 0.185 15 0.258 5 0.229 12
Zimbabwe 0.387 4 0.550 5 0.221 7 0.357 6 0.261 4 0.574 6
Source: Compilation and computation from the African Integration Regional Index Database (African Union Commission, 2022)
 The role of infrastructure 139

the trade integration and productive integration indicators, as they are geo-
graphically isolated from mainland countries. This physical separation can
pose challenges to the efficient and cost-effective transportation of goods.
Being smaller economies, they have limited scale of production and demand,
influencing severely on the volume and scope of trade. Further, their econo-
mies depend primarily on sectors such as tourism, agriculture, and fishing.
Trade diversification is not as extensive, limiting the range of products avail-
able for export or import.
Next, the Pearson correlation between the regional integration index and
the trade integration index with the other dimensions including the infra-
structure development pillar is calculated. This is depicted in Table 7.6. The
Pearson correlation coefficient between ARII and infrastructural integration
is as high as 0.836 and significant at 1 percent. This strong and statistically
significant coefficient confirms the need for infrastructural integration to pro-
mote regional trade. The correlation coefficient is also positive and statis-
tically significant between trade integration and infrastructural integration.
The value stands at 0.252 and is significant at 5 percent. Infrastructure seems
to play an important role in the SADC area, especially with respect to pro-
moting trade flows in the region.
With respect to the other dimensions, productive integration as well as
macroeconomic integration appear to be positively related to trade integra-
tion. Macroeconomic integration is generally pursued to enhance economic
cooperation and efficiency amongst countries. It facilitates economic cooper-
ation and promotes mutual benefits amongst member countries. By reducing

Table 7.6 Pearson Correlation Coefficient between regional trade integration and

infrastructure integration for all SADC countries, 2021

Productive Macroeconomic Infrastructural Free

integration integration integration movement
of people

Overall ARII
Pearson 0.778 0.561 0.836 –0.067
Correlation
Coefficient
T-Statistics 2.424** –2.242** 3.254*** –2.359**
Trade
Integration
Index
Pearson 0.431 –0.118 0.252 -0.595
Correlation
Coefficient
T-Statistics 1.836** –1.220 2.015** –1.65*
Source: Compilation and computation from the African Integration Regional Index Database
(African Union Commission, 2022)
140 Verena Tandrayen-Ragoobur

trade barriers, enhancing market access, and stimulating investment, it cre-

ates an environment that fosters trade integration and regional economic
growth. Free movement of people, however, is negatively correlated to both
the ARII and the trade integration index. The coefficient is statistically sig-
nificant. In many SADC countries, free movement of people can lead to a
situation of ‘brain drain’, where skilled workers and professionals are leav-
ing their home countries for better opportunities abroad. This is likely to
result in a loss of human capital and will have a negative impact on economic
development and trade potential. Managing borders and ensuring security
can become more challenging with the free movement of people. Striking a
balance between facilitating movement for legitimate purposes and prevent-
ing illegal activities can be a complex task.

7.6 Conclusion and policy implications

The chapter analyses the regional infrastructural development in SADC and
its linkage with regional trade integration within the region. Different indices
are used to analyse the level of regional integration and the level of regional
infrastructural development within the region. On one hand, infrastructural
deficits in terms of inadequate hard and soft infrastructures are viewed as
important challenges for SADC member states. On the other hand, intra-
regional trade within the region remains low with countries trading more
with non-SADC member states rather than regionally. While infrastructure
gaps remain a significant challenge for SADC countries, the data reveals
that island economies like Mauritius and Seychelles have performed rela-
tively well in infrastructural development. They tend to outperform the other
member states in terms of ICT infrastructure, access to electricity, water,
and sanitation as well as transport infrastructure. This can be explained by
a combination of factors in terms of their small size, concentrated popula-
tion, good institutions, and governance along with a conducive macroeco-
nomic environment coupled with political and social stability. Though being
island states, Comoros and Madagascar tend to lag behind. Madagascar is
more populated and larger in size. It has also been characterised by periods
of political instability, corruption, and mismanagement. These factors have
hindered the allocation of resources towards long-term infrastructure devel-
opment projects. Similarly, Comoros has encountered coups and changes
in leadership causing political turmoil, which has disrupted development
plans, discouraged foreign investment, and created uncertainty for long-term
projects.
While, our analysis shows a clear link between regional infrastructure
and trade across SADC countries, a different picture emerges across island
economies. Although islands like Seychelles and Mauritius surpass the other
SADC countries in terms of infrastructural development, they tend to lag
behind in trade integration and productive integration. Being isolated and
far from mainland Africa, their geographical position may hinder their active
 The role of infrastructure 141

participation in trade and regional or global value chains. Cost of transpor-

tation and logistics, small market size, as well as their high dependence on
trade and on a few economic sectors may constrain their ability to trade in
the region.
While infrastructure plays an important role in fostering trade, greater
investment in infrastructure projects is needed. This can be achieved through
public and private sector funding, foreign direct investment (FDI), and
regional development banks. Governments should prioritise infrastructure
spending in their national budgets and explore innovative financing mecha-
nisms to attract more investment. Encouraging public-private partnerships
can help leverage private sector expertise and financing for infrastructure
development. Governments should create an enabling environment for
public-private partnerships, including clear regulatory frameworks and risk-
sharing mechanisms, to attract private sector participation.
Moreover, improved coordination amongst SADC member states is crucial
for efficient and effective infrastructure development. Regional infrastruc-
ture plans should be harmonised to ensure complementarity and to avoid
duplication of efforts. Additionally, countries can pool resources for regional
projects, leading to cost-sharing and increasing overall impact. In addition
to new infrastructure projects, attention should be given to the maintenance
and upkeep of existing infrastructure. Neglecting maintenance can lead
to infrastructure deterioration and higher long-term costs. SADC member
states can collaborate with international partners and development agencies
to mobilise additional resources and technical expertise for infrastructure
projects. Engaging with multilateral institutions can help secure conces-
sional financing and access to global best practices. Lastly, SADC member
states should undertake policy reforms to remove regulatory barriers and
streamline approval processes for infrastructure projects. Creating a condu-
cive business environment can attract more investment and expedite project
implementation. By adopting a holistic approach and focusing on a regional
policy approach, SADC member countries can make significant progress in
addressing infrastructure deficits and achieving sustainable infrastructure
development for the region's economic growth and prosperity.

Note
1 The AMRII is not available by country, hence the use of the ARII despite the fact
that it covers only six dimensions.

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