South Africa Ratifies Luxembourg Rail Protocol: A Transformative Milestone in Advancing Rail Modernisation and Economic Integration Across Africa
28 January 2025, The African Rail Industry Association (ARIA) commends South Africa’s strategic ratification of the Luxembourg Rail Protocol, a critical decision poised to drive rail modernisation and deepen economic integration across Africa. This landmark move reaffirms South Africa’s commitment to enhancing its rail infrastructure and positions the country as a leader in advancing the continent's transport and economic objectives. By adopting the Protocol, South Africa is solidifying its role in modernising transport networks, promoting seamless regional connectivity, and supporting Africa’s sustainable economic growth, all while reinforcing the importance of efficient rail systems in the broader African development agenda.
On 27 January 2025, Her Excellency, Ambassador Nosipho Nausca-Jean Jezile, South Africa’s Ambassador to Italy, officially presented the Instrument of Ratification to UNIDROIT Secretary-General Professor Ignacio Tirado. This milestone, effective from 1 May 2025, establishes South Africa as the sixth country globally and the second in Africa, following Gabon, to adopt this pioneering treaty. Aligned with the objectives of the African Continental Free Trade Agreement (AfCFTA) and the African Union’s Agenda 2063, this ratification highlights South Africa’s leadership in promoting sustainable, rail-driven economic growth and fostering a borderless, connected Africa.
What is the Luxembourg Rail Protocol?
The Luxembourg Rail Protocol, developed under UNIDROIT, is a groundbreaking treaty designed to modernise railway financing. It introduces an international registry for registering security interests in railway rolling stock, such as locomotives, wagons, coaches, trams, metro trains and light rail train sets, based in Luxembourg, but accessible 24/7 through the Internet. Central to this system is the Unique Rail Vehicle Identification System (URVIS), which assigns a permanent identity to each rail vehicle. This innovation boosts transparency, prevents fraud, and enhances cross-border asset management.
Five Key Benefits for South Africa
- Cheaper Financing: International registry protections provided by the Luxembourg Rail Protocol lower borrowing costs for acquiring rolling stock, enabling more affordable financing options for rail infrastructure.
- Unique identification: The implementation of a global system of permanent IDs through URVIS enhances asset management, which can be integrated into digital platforms, reduces the risk of theft, and streamlines the maintenance process, improving overall operational efficiency.
- Boost to Local Manufacturing: Export credit guarantees at a lower cost facilitate the global competitiveness of South African manufacturers, enabling them to compete more effectively in the international market.
- Investor Confidence: The legal certainty provided by the Protocol attracts private capital, stimulating investment in rail modernisation projects and fostering job creation within the sector.
- Economic Growth: The introduction of more efficient rail transport systems helps reduce logistics costs, enhancing the competitiveness of South African exports in the global market.
South Africa’s ratification of the Luxembourg Rail Protocol sets a powerful example for other African nations, encouraging regional adoption of rail-driven economic development. Countries such as Namibia, Zimbabwe, the Democratic Republic of Congo (DRC), Eswatini, and Mozambique are already exploring the Protocol, signaling a growing interest in rail infrastructure as a key driver of economic growth. This move fosters regional collaboration and aligns with Africa’s sustainability goals, as rail transport offers a greener, more energy-efficient alternative to road transport, significantly reducing carbon emissions. By enabling secure and efficient rail systems, the Protocol unlocks substantial potential for intra-African trade—facilitating the smooth movement of resources such as minerals from the DRC to Durban ports or fresh produce from Zambia to South African markets, thereby strengthening trade links across the continent.
Unity Through Rail
ARIA calls on all stakeholders to take decisive action: governments are urged to ratify the Protocol and implement policies that balance the roles of the public and private sectors; financial institutions are encouraged to develop innovative funding models to support rail modernisation; and businesses are invited to leverage URVIS to optimise cross-border logistics and asset management. “South Africa has shown the way. Let us now work collectively—governments, businesses, and institutions like Transnet—to ensure rail becomes Africa’s engine of inclusive growth,” concluded Mesela Nhlapo, CEO (ARIA).
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