By Elly Twineyo Kamugisha

A lot of writing on development issues tends to portray landlocked countries (these days we say that these countries are ‘landlinked’) in Africa as being in a situation that doesn’t allow them to achieve rapid growth just because of their locations. Is there a link between being least developed and being landlocked?

There are countries that are landlocked in Europe that have performed economically well: Switzerland, Austria, Luxemburg; and Botswana in Africa.  

Let us state that 34 out of the 49 least developed countries are in Africa; and on average, each country has four neighbours, and 16 African countries are landlocked (UNDP, 2011) – and most of these countries have very small economies with the GDP of the median African economy is $5.2b annually (calculated in constant 2000 US dollars).

Africa is home to over two-thirds of the world’s Least Developed Countries (LDCs), 12 of which have no access to the sea. In total 16 African countries are described as landlocked.

Thirty percent of African continent’s population lives in landlocked in landlocked countries, compared to only 3% of the population in Asia, and 4% elsewhere. Compared to Europe, for example, it has 15 landlocked countries but their total population is less than that of Ethiopia.

In East Africa, Burundi, Rwanda, Uganda, and South Sudan are landlocked. They mostly access the international waters either through Mombasa - Kenya or Dar es Salam and Tanga in Tanzania.

They have another window of accessing international waters through DR Congo but there are several security and political hurdles to address. Ultimately, these hurdles will be jointly addressed by African countries and there will access to the international waters via this huge country.

The challenges of being landlocked have been associated with distance from coast and numerous factors associated with dependence on transit neighbours key among which include dependence on neighbours’ infrastructure, dependence on good cross-border political relations, dependence on neighbours’ peace and stability; and dependence on neighbours’ administrative practices.

Landlocked countries face high trading costs than economies closer to the ocean coasts. Adam Smith in 1776, in the Wealth of Nations, alluded to this fact.

The role the state and leadership are urgent for the immediate 5- 15 years of these landlocked countries post-Covid-19 pandemic.

The following are necessary for the economic success of landlocked countries in Africa post-Covid 19 pandemic:

Domestic market: There has been a tendency by African countries looking outside of their market first. You need to start with the domestic market and then diversify and export. Build local infrastructure that will connect your country to the regional and international markets.

The home market is the testing centre for quality and suitability of use of the products that you can later send to the export markets. Italy started to test and promote its goods from its factors, which were small and cottage industries, using the domestic market.

Now we are all buying Italian products – leather, apparel and related. In Uganda, for example, Uganda Manufacturers Association (UMA) members have been supplying the domestic market and their products are now well known in this market. They are now exporting around 10 – 20 percent for those exporting companies. They can expand and grow.

Of course, there are some products that can be only for export. Those can be produced and supplied to the export markets directly considering quality and quantity.

Access to for foreign markets (or what is now called “global integration”): there is no country that will realise rapid economic growth without trading by particularly exporting its goods and services.

Therefore, countries working with their private sector have to have a clear agenda on producing quality and quantity for export. Export products have to be identified and promoted. Target markets have to be identified and targeted. Current and new private sector investments have to be carefully identified.

The attraction of foreign investments will have to be in line with a country’s competitiveness goals and targets. It is not about attracting every foreign investor but specifically those that fall well under the countries focus for the next 10 – 20 years. This is very important. In the past, African countries have been going everywhere inviting everyone to come into their countries.  This is understandable. The beginning is always different.

In addition to attracting quality foreign investors, countries need to attract investors who already have markets at home (e.g., UK; EU; China; UAE; India; Kenya; etc.). These companies can produce and sell in their home markets which they are familiar with. Joint ventures with current and future local investors should be encouraged for enhancing youth jobs, household incomes, and tangible economic growth.

Regional integration: Most of these countries are small and can’t form meaningful internal markets (as compared to China or India).

Being land locked is a permanent physical situation that cannot be changed by man. Therefore, good neighbours matter not only as transport corridors for overseas markets but as markets themselves. Countries require neighbours as markets.

Switzerland, a small country, is surrounded by neighbours who form part of its markets. Sometimes, because of history, culture, and geography, neighbours are sometimes culturally connected and therefore a good market for one another. Take the example of Tanzania. The people in southern Uganda are culturally connected to northern Tanzania. Ugandans in the east are culturally connected to western Kenya.

Ugandans in the northern region bordering with South Sudan are related with the communities across the border in the south of South Sudan. It is the same situations in Nigeria and Ghana and others.

African borders are not based on how communities live but by the decisions of those who partitioned Africa in Berlin, and in other areas in Europe, long time ago. While in other places in much of the world national borders changed over time to reflect ethnic, linguistic, and sometimes religious divisions, Africa has remained under the colonial arrangements.

For example, while Germany’s borders generally enclose German-speakers; Spain’s borders generally encompass Spanish-speakers of Europe; Thailand is a country with Thai people; most African countries are different. Its countries are not largely defined by its peoples’ heritage but defined by the borders created by colonialisms.

Regional integration in Africa is necessary to the prosperity of landlocked countries. We know that such blocs have had some cracks in EU with the Brexit and UK pulling out.

There are currently issues with fishing in the waters between UK and France after Brexit too. Trump pushed for the US efforts to leave NAFTA (North America’s free trade area – USA, Canada, and Mexico). Such issues will always crop up. This doesn’t mean that regional integration for trade and security is not good. Landlocked countries of Africa need to penetrate regional and international markets. 

The EAC, COMESA, SADC, ECOWAS, and others, and the new African Continental Free Trade Area (AfCFTA) are important for these countries. Of course, this should not stop Governments of these countries supporting their private sector by seeking duty-free and quota-free market access beyond the regional integration efforts to negotiating the markets in Middle East, China, EU, UK, and USA.

Joint development of roads and railways transport connecting the hinterland to the international waters/seas. Access to the regional and international markets involves long-distance movement of goods (and documents).

For a landlocked country to access another country with its merchandise exports, in most cases, requires good roads and/or railway transport. What is the problem with undertaking joint roads and railways transport projects that benefits the countries that are neighbours?

Let us note that neighbouring countries usually have some trade going on between them. And the benefits of good roads and railways transport, storage, ports, harbours, etc. among such countries go beyond trade encompassing security and defence – and enhancing peace and stability.

We need to conclude this part by stating that poor landlocked countries in Africa need a lot of cooperation than competition. As Krugman, the Economics Nobel Laureate, argued, that countries don’t compete in a similar manner as companies (where competition is a zero-sum game where if one customer buys a product of X, it is Y’s direct loss) and referred to such a view of countries’ competition in that manner as a dangerous of obsession. Countries, in his example USA and Japan, don’t compete as competing companies for instance selling substitutes. 

The industrial policy: it is timely that a landlocked country rethinks the need for an industrial policy (export promotion or import substitution), and industrialization strategies, that will boost the domestic competitiveness and enhance exporting of its goods and services. Let us have both industries with and without smokestacks.

Modern horticulture farming (e.g., a flower farm) and tourism, with its related sub-sectors, are industries without smokestacks. Careful analysis and planning will help countries decide which industrial policy they require first - export promotion or import substitution.

Evidence shows that most economies begin with import substitution as the industrial strategies and later when they have grown their domestic manufacturing or industries, they undertake export promotion strategies and increase foreign exchange receipts. It is necessary that Governments require to look at key sectors of the economy and work with their sector captains to design strategies for investment and business competitiveness and find markets and penetrate them.

Technology; and R&D: First, technology – as an enabler of production and productivity - whether adopted, as Japan did when it adopted it from USA, or it based on tacit knowledge is an ingredient in the mixing of factors of economic growth.

Usually, capital and labour (and where they have it, land) need technology and entrepreneurship to produce quality and quantity goods and services that will enhance economic growth. While mainly the private sector will produce goods and services and do business, the Government that needs to support development of technology.

R&D is important for technology and firm performance. In history, and recently due to Covid-19 pandemic, we have seen the role of the state in supporting R&D in USA and UK, among others. R&D is expensive. Some of the R&D work does not give final successful results. Therefore, investment in R&D needs to be done jointly by the companies and Government.

Leadership: This is an important element in the package deal for the rapid growth of these countries post-Covid. No one landlocked country in Africa however big or powerful can achieve growth without working with its neighbours. You can not rely on air transport only. You do not, for example, need to fly coffee or tea from any East African country to Mombasa or Dar es Salaam. It is not cost-effective. It reduces profitability of companies in your country.

Currently needed in these landlocked countries are leaders who will work towards successful regional integration – not to tear it apart. They need to work together on building roads, railways, water transport (where water exists), and bridges. Literally, and in fact, to build bridges of infrastructure, security, unity, peace, and stability in the region.

Without peace and stability in the region, landlocked countries will find it a tall order to realise rapid and sustained economic growth after this pandemic. Countries need leaders who are unequivocal about the direction of the country with regard to economic growth and prosperity of their societies.

While It is not my view, recent evidence has shown that most leaders who have led their countries to economic miracles have been described as benevolent leaders.

The writer is an economist, author, and Executive Director, Uganda Export Promotion Board