Some African states signed and ratified the Luxembourg Rail Protocol considered a game changer as it would give private lenders and lessors full confidence to invest in railway rolling stock on the continent without the fear of losing out in case of a default by debtors, due to clauses on state guarantees.
“The Protocol’s Unique Rail Vehicle Identification System (URVIS) would be critical for identifying asset owners hence making it easy to finance railway rolling stock projects, supporting manufacturing and protecting operators across borders,” Mesela Nhlapo, the head of the Railroad Association of South Africa, said.
tephen Karingi, the Director of the Regional Integration and Trade Division of ECA, said that the “rapid urbanization and massive industrialization in Africa will create transport challenges that can be best addressed by railways and rolling stock. The rail will be the future land transport mode of choice in Africa.”
He said Africa was unlikely to reap the full benefits of the African Continental Free trade Area (AfCFTA) if it did not improve its transport infrastructure, noting that the Luxembourg Rail Protocol provided an opportunity to do that.
ECA is set to undertake a campaign to spell out the merits of signing and ratifying the Luxembourg Protocol on Rail to the attention of member States.