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Is Africa ready for North American rail operators?

George Kaulbeck

July 2, 2025

With world-class infrastructure in place, Africa’s standard gauge railways are ripe for top-tier freight operators to unlock their full potential.

Summary

• Africa’s main railway lines have high freight potential 

• North American rail operators have expertise Africa needs 

• Confidence in African rail profitability is rising 

• Will Africa embrace a new rail operating model? 

Africa is home to three major standard gauge railways (SGRs) that have been developed to global engineering and safety standards: 

• Ethiopia-Djibouti Railway 

• Kenya’s Mombasa-Naivasha railway line 

• Tanzania’s Central Corridor SGR 

All three represent a massive investment in rail infrastructure intended to catalyze trade, reduce logistics costs, and spur economic growth across the continent. 

Yet, despite strong potential, the two operational SGRs (Ethiopia-Djibouti and Kenya) are significantly underused. Freight volumes are well below line capacity, and operational revenues are insufficient to cover costs, let alone generate profits. 

What’s missing? One possible answer: world-class freight operators with the commercial discipline, marketing prowess, and operational efficiency of their North American counterparts. 

Why now? Changing risk profiles and modern infrastructure.

Unlike legacy narrow-gauge systems where substantial investment is required just to reach minimum service standards, these new SGRs are built to perform. Moreover, they were developed under government-led investment models—not as a private build-operate-transfer (BOT) public-private partnership—reducing entry costs and risks for operators. 

The traffic opportunity 

All three lines are strategically positioned to carry significant volumes of freight: 

• Ethiopia-Djibouti: Ethiopia is one of Africa’s fastest-growing economies with high demand for containerized imports and bulk exports such as fertilizer, cement, coffee, oilseeds. 

• Kenya SGR: This railway targets imports through Mombasa for the Kenyan hinterland and neighboring countries, with core traffic in containers, fuel, cement, and agricultural exports. 

• Tanzania SGR: Poised to serve key mining exports such as nickel and copper, agricultural products, and container traffic between Dar es Salaam and inland countries: Rwanda, Burundi, and Democratic Republic of the Congo (DRC). 

None of these systems are anywhere near saturation 

Current freight volumes are generally under 25% of line capacity and far below original projections. This underperformance has been driven by the absence of private sector operating expertise and limited service offerings. 

While road transport remains competitive due to its flexibility and informal logistics chains, these new SGRs outperform trucks on key factors such as transit time, cargo security, and reliability—particularly in cross-border trade and in corridors plagued by road congestion, poor pavement quality, and weighbridge bottlenecks.  

Rail also has a vital role to play in enabling Africa’s mineral potential. The continent is rich in critical minerals—including copper, cobalt, lithium, and nickel—essential for the global energy transition. 

SGRs provide the scale, reliability, and cost-efficiency to move these bulk commodities from inland production zones to ports, unlocking investment and long-term freight flows. 

The case for North American freight operators 

North American freight operators—such as CN, BNSF, or shortline specialists like Genesee & Wyoming—are experts in running long-haul, heavy-axle-load freight networks efficiently. 

Bringing this expertise to African SGRs would: 

• Optimize asset utilization—wagons, locomotives, and terminals 

• Improve customer responsiveness and traffic onboarding 

• Drive volume growth through better service reliability and marketing 

• Improve operational cost structures through technology, safety focus, training, and scale 

With infrastructure already built, the risk profile is favorable: this isn’t a greenfield build-operate-transfer (BOT) project, or a broken legacy system. It’s modern track with new equipment and significant market potential.  

Unlike North America, where freight operators typically own both infrastructure and rolling stock, Africa’s public ownership model requires concessionary or access-based arrangements. New models tailored to this context that are performance-based contracts or joint ventures, could enable private participation while preserving public control. 

While major Class 1 railways may find the scale and risk profile challenging, the opportunity may be ideal for entrepreneurial short line and regional operators such as Genesee & Wyoming, Watco, or OmniTRAX—companies with experience in short lines, terminal operations, and adaptable service models. 

Signs of growing confidence in African rail 

Recent moves by major international investors further signal confidence in the profitability of African rail: 

• In Angola, the Lobito Atlantic Railway (LAR) consortium, comprising Trafigura, Mota Engil, and Vecturis, has secured a 30-year concession for the Lobito Corridor. The agreement includes commitments of over $450 million in investments in infrastructure, rolling stock, and operations, with $100 million in concession fees payable to the Angolan government. This is in addition to anticipated upgrades along the corridor in Zambia and the DRC. 
   

• In Tanzania, the Chinese government is negotiating a long-term concession for the TAZARA, the Tanzania-Zambia Railway Authority. The proposed deal reportedly involves an investment of over $1 billion, with a 30-year operating concession under discussion. The intent is to revitalize the existing line, integrate it with the cape gauge network, and significantly boost mineral and agricultural freight. 

Time for a new operating model 

Africa has done the hard part, which is building the infrastructure. The next step is unlocking its value. With a different risk-return profile than legacy concessions, and world-class assets in place, the continent is primed for the entry of seasoned, performance-driven freight operators. The opportunity is clear for governments, private operators, and the millions of people who rely on efficient logistics for growth.

Is Africa ready for North American rail operators? The better question might be: are they ready to seize the opportunity?
Let’s open the throttle and unlock the potential of Africa and its rail systems.

About CPCS 

CPCS is a Canadian-based management consulting firm focused on transport and power infrastructure. We have a 50-year track record in Africa’s railway sector, and in recent years, we have delivered assignments in 50 African countries, including Ethiopia, Tanzania, Kenya, and Angola. Our work spans feasibility assessment, PPP structuring, corridor development, and private sector engagement. 

About the Author 

George Kaulbeck is a Partner at CPCS and has led the firm’s rail practice for over 15 years. He has overseen railway sector reforms, concession strategies, and freight development plans across Africa and beyond. George brings deep experience in aligning public and private interests in rail infrastructure and welcomes your thoughts on the future of rail in Africa and the role of high-performing operators in unlocking its potential. 

Appendix – Details of Standard Gauge Railway (SGR) development 

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