Major New Infrastructure Initiative to Transform Southern and East African Trading Opportunities
Posted Mar 20, 2009
The project aims to create a reliable and efficient transport network and reduce bottlenecks along the main trading routes through eight African countries.
Faster border crossings and improved railways and highways will improve the access of producers, especially in landlocked countries, to regional and international markets, stimulating economic growth and investment.
In addition to upgrading infrastructure and simplifying customs and regulatory procedures, the integrated series of projects will also include measures to improve power supply and transmission in the 12 Southern African Power Pool members.
The extensive North South Corridor project is being driven by the Southern African Development Community (SADC), East African Community (EAC) and the Common Market for Eastern and Southern African (COMESA) in partnership with DFID.
The Corridor, which is a pilot Aid for Trade programme, comprises two priority NEPAD Corridors:
- The Dar es Salaam Corridor linking the Dar es Salaam port with the Copperbelt in Zambia and Democratic Republic of Congo; and
- The North-South Corridor, which links the Copperbelt to South Africa’s ports.
The key stakeholders will work with funders and businesses on a programme to reduce transport time and costs along the North South Corridor. The estimated total cost of implementing all projects and programmes is about US$1 billion over a five to 10 year period. Some of this will be in grants and concessionary loans but there are also many opportunities for private investment.
The Government of Zambia is hosting a high-level conference in Lusaka on April 6th and 7th, which will bring together Heads of State, International, Continental and Regional finantial institutions, , multilateral and bilateral organisations leaders of the RECs and the business community to secure the necessary funding and to highlight the investment opportunities for the private sector.
Included in the list of attendees are: EU Trade Commissioner Catherine Ashton, World Trade Organization Director General Pascal Lamy, President Donald Kaberuka of the African Development Bank, President Mwai Kibaki of Kenya who is also the chairman of COMESA, President Paul Kagame of Rwanda who is also EAC chairman , South African President Khalema Motlanthe who is also SADC chairman, World Bank Vice President Oby Ezekweseli and Erastus Mwencha, Deputy Chairman of the African Union. Zambian President Rupiah Banda will host the meeting.
EAC Secretary General Juma Mwapachu, who is the current chair of the RECs’ Tripartite Task Force, says: “Deepening regional integration and partnering with the private sector are key to addressing the challenges of resource mobilisation and improving competitiveness.
“Infrastructure is what unlocks the economic space so if it is not delivered, we cannot optimise the large market space we have created. For too long there has been the notion that financing infrastructure is a white elephant and a process riddled with corruption. But times have changed – we now have proper governance structures in all our economies.”
The UK’s International Development Minister, Gareth Thomas, commented:
“The UK Department of International Development is pleased to be backing this initiative and I would welcome other donors to join this unprecedented commitment to deliver infrastructure improvements on a scale that will put the region on a path to sustained growth and competitiveness, generating the jobs and opportunities necessary to tackle poverty.
“The drive to free up the transport blockages could be worth tens of millions of pounds a year to African economies and will strongly increase the incentives for more investment in the region."
World Trade Organization Director General Pascal Lamy says: “Aid for Trade is essential to support Africa's own economic growth agenda. The North South Corridor is an example of a highly innovative regional Aid for Trade approach that can transform competitiveness and enhance regional trade flows. The Corridor projects will promote development and poverty alleviation in the Southern African region and promote deeper regional integration. Such initiatives have never been more urgent than in the current global economic climate.”
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Dianna Games in Johannesburg on
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Notes to editors
Context and challenge
- The Southern and East African regions have vast untapped potential in the form of rich mineral deposits and a strong agricultural base. The cost of trading and transportation in the region, however, are significantly higher than the rest of the world. Inefficient and poor quality infrastructure is a major constraint to the ability to trade between countries and internationally, inward investment and economic growth.
- The North South Corridor was selected for the programme because it is the busiest corridor in the region in terms of values and volumes of freight. Poor road and rail infrastructure and long waiting times at borders and ports create significant costs and hamper regional producers’ ability to access regional and international markets.
- For example, transporting a single cargo of copper from the Copperbelt to Durban port currently takes, on average, two to three weeks. In Europe, the same distance would take 48 hours. It is estimated that the lost income in terms of interest alone on a trainload of copper is about US$16,000 per week of delay.
- The volume of goods moving along the corridor is expected to increase in the coming years and the infrastructure will collapse without remedial action being taken. The World Bank estimates that for every $1 spent on preventative road maintenance, $4 is saved on rehabilitation.
- The programme will also address bottlenecks caused by inefficient regulatory and administrative procedures at key points.
The solution
- N-S Corridor pilot programme is a highly innovative aid for trade initiative, which will ensure a coherent, co-ordinated and sequenced implementation of improvements, delivering one solution, rather than piecemeal improvements. The programme is unique in the way it blends a range of aid for trade projects to create a holistic and integrated solution, which could provide a new model for similar projects across the continent
- The initiative aims to improve 8,650 km of road and 600kms of rail track and maintain it in good order.
Potential outcomes from improvements along the Corridor include:
- A reduction in travelling times by road from Lusaka to Durban of 10 per cent;
- A reduction in transit times at the Chirundu border post (between Zimbabwe and Zambia) of at least 20 percent.
- An increase in generation and transmission of electricity in the region, particularly hydro-electric generation; and
- A reduction in transport cost savings to African businesses of about $50 million per year.
More information on the project can be found at www.northsouthcorridor.org