African Development Bank and Germany Partner to Modernise Railways and Boost Regional Trade
The African Development Bank Group (AfDB) has signed a letter of intent with Germany’s Federal Ministry for Economic Cooperation and Development (BMZ) to strengthen cooperation on railway development, improve cross-border connectivity and accelerate regional economic integration across Africa.
The agreement establishes a framework for collaboration aimed at reducing transport costs, improving the interoperability of railway networks and promoting sustainable, low-carbon transport solutions.
It also seeks to strengthen local railway-sector skills through vocational training, knowledge transfer and the creation of sustainable employment opportunities.
The letter of intent was signed by Mike Salawou, the African Development Bank Group’s Director for Infrastructure and Urban Development, and Michael Krake, BMZ’s Deputy Director-General for Economic Cooperation, during the inaugural African-European Industry Dialogue on Railways, held as part of the InnoTrans International Trade Fair for Transport Technology.
The initiative brings together African and European stakeholders to explore practical solutions for modernising railway infrastructure and improving transport links across the continent.
Proposed African Rail Competence Centre to Build Local Expertise
An initial priority under the partnership is a joint feasibility study for a proposed African Rail Competence Centre.
The study, to be implemented by the German Agency for International Cooperation (GIZ), is intended to explore how the centre could support railway innovation, technical training and the development of specialised skills across Africa.
The proposed centre would help build the local expertise needed to plan, construct, operate and maintain modern railway systems.
Strengthening these capabilities is essential to ensuring that investments in new infrastructure deliver long-term economic benefits.
Beyond infrastructure development, the partnership recognises the importance of developing a skilled workforce capable of supporting the expansion and maintenance of railway networks.
For African countries, improved technical capacity could reduce dependence on external expertise over time while creating employment opportunities for engineers, technicians and other railway professionals.
Railways Key to Africa’s Regional Economic Integration
Africa’s railway network remains relatively limited compared with those of other regions, accounting for an estimated 8% to 10% of the global network.
However, growing demand for cross-border trade and passenger transport is increasing the need for more efficient and interconnected railway systems.
The African Continental Free Trade Area (AfCFTA), which aims to facilitate trade among African countries, presents significant opportunities for rail transport to support the movement of goods and people across national borders.
Modern railway infrastructure can help lower logistics costs, improve access to regional markets and strengthen links between industrial centres, agricultural production zones, mining operations and seaports.
For landlocked countries in particular, reliable railway connections to ports and neighbouring economies can improve export competitiveness and reduce the cost of importing essential goods and industrial inputs.
However, achieving these benefits requires more than building new railway lines. Differences in technical standards, operational procedures and border-crossing arrangements can limit the efficiency of cross-border services.
The AfDB-Germany partnership therefore places particular emphasis on railway interoperability and coordinated transport policies.
Major Railway Corridors Supporting Continental Connectivity
The African Development Bank is already supporting railway and transport corridor projects intended to improve connectivity and facilitate trade across the continent.
These initiatives include the Lobito Corridor in Southern Africa, the Standard Gauge Railway programme in East Africa, the Nacala Corridor, Algeria’s North-South Rail Corridor and Morocco’s high-speed rail system. The Bank also supports urban rail projects in Senegal and Nigeria.
Such investments are intended to strengthen connections between production centres, ports and consumer markets while improving the movement of freight and passengers.
In Southern Africa, the development of strategic transport corridors is particularly important for mineral exports, agricultural trade and regional industrial development. Improved rail links can help connect mining and manufacturing operations with international markets while easing pressure on road infrastructure.
For countries such as Zambia, which depend on regional transport corridors to access seaports, more efficient and interoperable railway networks could help reduce logistics bottlenecks and strengthen the competitiveness of exports.
The effectiveness of these corridors will depend on coordinated investment, efficient border procedures and reliable railway operations across the countries they serve.
Five Priorities for Africa’s Railway Transformation
Mike Salawou outlined five priorities for strengthening Africa’s railway sector: developing a continental rail market supported by the AfCFTA, implementing reforms that encourage a shift towards rail transport, establishing interoperable technical standards, mobilising financing that attracts private investment, and developing the skills required to operate railway networks effectively.
These priorities highlight the need for a coordinated approach that combines infrastructure investment with policy reform, financing and workforce development.
Mobilising private capital will be particularly important given the scale of investment required to modernise existing networks and develop new cross-border connections.
Public development finance can help reduce project risks and attract additional investment through guarantees, blended finance and technical assistance.
At the same time, governments and railway authorities must provide clear regulatory frameworks, credible feasibility studies and long-term operational plans to give investors confidence in railway projects.
The partnership also underscores the importance of involving financiers early in project preparation to improve the quality, bankability and long-term sustainability of infrastructure investments.
Germany and AfDB Emphasise Sustainable Transport Development
Germany reaffirmed its commitment to working with African partners to improve regional connectivity and support sustainable economic development.
Through cooperation on railway interoperability, technical training and skills development, the partnership aims to strengthen the foundations for more efficient and environmentally sustainable transport systems.
Rail transport can offer a lower-carbon alternative to road freight, particularly when networks are modernised and supported by efficient operations and cleaner energy sources.
Expanding its role could help African economies manage growing transport demand while supporting broader climate and sustainability objectives.
The initiative also presents opportunities for European industry to contribute technical expertise and equipment while supporting local content, skills transfer and the development of African railway-sector capabilities.
Turning Railway Investment into Long-Term Economic Benefits
The AfDB-Germany partnership reflects a broader effort to make Africa’s transport infrastructure more integrated, competitive and sustainable.
By combining infrastructure development with technical training, operational reforms and investment mobilisation, the initiative aims to address several of the structural challenges limiting the performance of the continent’s railway systems.
Successful implementation could help lower freight costs, improve cross-border trade, expand access to markets and create skilled employment opportunities.
It could also strengthen the role of railways in supporting industrialisation, mineral value chains and regional supply networks.
Ultimately, Africa’s railway transformation will depend on countries working together to harmonise standards, improve operations and secure sustainable financing.
The partnership provides a framework for advancing these objectives and strengthening rail transport as a driver of continental economic integration.
