1. Introduction
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.
2. Current state of mobility in Africa
3. Negative externatilies
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.
4. Challenges for African cities
5. Policies and strategies
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 role of AGCS
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.
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