North-South Corridor
Progress Made
Presentation to North-South Corridor
Capacity Building Training Workshop
Johannesburg, South Africa
29th March 2011
TradeMark Southern Africa
• TradeMark Southern Africa (TMSA) is a DFID funded
Programme;
• The overall objective of TMSA is to reduce poverty
through trade led inclusive economic growth;
• It focuses on two components- trade and infrastructure –
corridor development;
• Corridor Specific objective is to improve trade facilitation
through: improved efficiency of trade flows along
corridors (roads, railways, border crossings and ports);
reduced transaction costs/ costs of trading; reduced
transit times along the corridor including at border
crossing.
African trade – where we are now
• Africa accounts for less that 2.5% of world trade and
non-oil exports have been about 1% since 1992 - half of
their 1980 value. The level of intra-African trade is also
low - 10%, compared to about 40% in North America and
about 60% in Western Europe.
• Africa has the highest export product concentration and
a high export market concentration reflecting continued
reliance on primary commodity exports mainly to the EU,
US, and China.
• Africa ranks low on trade policy and facilitation
performance and for logistics performance.
• African markets remain fragmented and borders are
difficult to cross, which prevents the emergence of
regionally integrated industries and supply chains.
Economic Challenge:
• It costs about US$8,000 to ship a 20ft container from
Durban to Lusaka and takes about 10-15 days –
compare that to US$1,500 to ship the same container
from Japan to Durban.
• The region will remain a high cost producer unless the
underlying causes of these costs of transport are
addressed to open region for economic growth
opportunities and deeper regional integration.
• Inadequate and poor roads, railways, ports, inland
waterways, airports, energy and telecommunications
systems have been identified as being serious obstacles
to intra- and inter-regional trade in eastern and southern
Africa as they increase the cost of doing business and
have a negative impact on trade and economic growth.
Importance of the North South Corridor
•The North-South Corridor links the Copper belt region of
southern DR Congo and northern Zambia to the port of Dar es
Salaam in Tanzania and the ports of Southern Africa. The
corridor with its spurs, services eight countries- Tanzania, DR
Congo, Zambia, Malawi, Botswana, Zimbabwe, Mozambique
and South Africa.
•NSC has generated a lot of interest and donor support as an
Aid for Trade Pilot Programme which aims to improve both the
state of physical transport infrastructure, the regulatory
environment for trade and transport, and energy infrastructure.
•Support for NSC was demonstrated at the international
conference held in April 2009, in Lusaka, Zambia where
donors and development institutions pledged $1.2 billion to
finance the NSC Aid for Trade Programme.
Infrastructure Requirements of NSC
• Transport infrastructure requirements on the
NSC alone are enormous
- rehabilitation of roads and rail track;
- new rail rolling stock;
- improvements at border posts along NSC; and
- ports.
• There is also demand for new road and rail
infrastructure, ICT and energy infrastructure.
• NSC has been prioritised even under NEPAD.
Why Prioritise? Example of Copperbelt imports/exports options
Copper
Belt
1 Rail to Lobito – railway line
due to open in 2011
2 Rail to Dar es Salaam –
TAZARA
3 Rail to Durban
4 Road to Harare and Rail to
Maputo
5 Road to Harare and Rail to
Beira
6 Road to Durban
7 Road to Walvis Bay
There are also other road-rail
combinations. There are, in
addition, plans to increase the
number of routes and ports. Will
there be enough traffic to justify
new corridors and harbours? Is
there enough traffic to make these
routes economical? Should we
decide on the priority routes on a
regional basis?
Main Transport Corridors in
Eastern and Southern Africa
Ethiopia - Djibouti
Northern
Central
Dar es Salaam
Malanje
Lobito-Benguela
Nacala
Namibe
Trans-Caprivi
Trans-Cunene
Beira
North-South
Trans-Kalahari
Maputo
Priority NSC Roads – Roads Agencies
Country
Section
Description
Botswana
Nata-Kazangula
Botswana is currently financing the reconstruction of the worst
sections but requests for funding have been sent to TMSA
DR Congo
KasumbalesaKolwezi
The Director of Roads has stated that this section is being upgraded by government
Nsipe-Zalewa
Bwengu-Chiweta
Karonga-Songwe
KIA TO-Bunda TO
Kasunga-KIA TO
Malawi has requested assistance with the construction of all of
these road sections. The Tripartite has been informed that all
tender documents have been completed. However, the
Malawian Authorities have yet to submit these documents to
the Tripartite for evaluation.
Tunduma-Dar
Sections of this road are being rehabilitated using funds from
Danida and World Bank
Malawi
Tanzania
Serenje-Nakonde
Zambia
Lusaka-Chirundu
Zimbabwe
Beitbridge-V.Falls
Harare-Nyamapanda
The tender documents for the design for this road (613km)
have been completed in 3 sections and will be financed by the
EDF10 Regional Fund with COMESA as the Contracting
Authority.
The last section (about 23km) will be financed using a TTA
grant leveraging DBSA loan finance.
Zimbabwe have requested a design for the widening of these
road sections. TMSA financed a condition survey and are
awaiting a RFP.
Example Lusaka-Chirundu
Lusaka–Chirundu road.
In 4 sections. Escarpment
road already done. 2
sections (Lusaka-Kafue and
Kafue to top of escarpment
to be done by World Bank.
Last section (bottom of
escarpment to Chirundu to
be finance through TTA +
DBSA.
Railways
•Railway transport systems are operation under concession
agreements in many countries in ESA. These agreements
have not yielded the desired results.
•The cargo share transported by rail has fallen to very low
levels, 5% of all cargo, yet rail should be the cheapest mode
of transport. The situation is unsustainable (it’s a failure).
•Government may have to renegotiate the agreements and
ensure that have a voice and can invest in infrastructure and
also generate revenue from rail systems.
•TMSA supporting the Tripartite on railways:
-assisting TAZARA prepare a business plan;
-preparing a rail track assessment; and
-developing a policy paper on concessioning.
Ports
• Donors and IFIs working with Tanzania Ports
Authority (TPA) to implement the TPA master
plan.
• Institutional reforms are resulting in average
processing times being reduced.
• Various proposals are prepared for coal
terminals at Beira and Nacala.
• Container terminals usually concessioned.
• TMSA is supporting the development of a ports
statistics database for PMAESA.
Energy
• Energy remains one of the most scarce resources in the
region mainly due to lower levels of power generation.
• The Southern Africa Power Pool is working with various
partners including TMSA in mobilising resources to
invest in more power generation and transmission
projects which include:
- ZAZIBONA
- Zambia-Tanzania
- Malawi- Mozambique
- DRC- Zambia, etc
• TMSA facilitated the Zambia-Tanzania-Kenya
Interconnector now being funded under the EDF
resources.
Financing Infrastructure
• The main infrastructure funds that can be
accessed to finance regional infrastructure
include:
- The EU-Africa Infrastructure Fund
- Funds from the Regional Development Banks
(with DBSA being the main funder)
- Funds from the African Development Bank –
grants, loans and concessionary loans
- World Bank – grants, loans and concessionary
loans
- Emerging Africa Infrastructure Fund (commercial
lending).
Financing Infrastructure
- Tripartite Trust Account – a leverage fund
supported by DFID (GBP67m) and DBSA
(GBP1m) and other donors interested in
supporting this.
- COMESA Development Fund – portfolio
closed-end fund with blending from the
COMESA Infrastructure Fund.
- SADC Project Preparation and Development
Fund hopefully will soon be operational to help
fund project development’ and
- Private-Public Partnerships
Other Areas covered
Under the NSC programme other areas covered
include:
-Establishment of the Tripartite FTA- with much of the
trade being serviced through the NSC and its spurs;
-Trade facilitation where the RECs have agreed on
one integrated trade facilitation programme Comprehensive Tripartite Trade and Transport
Programmes (CTTTP); and
- Elimination of NTBs – a presentation already made.
Milestones on the North South Corridor:
May 2007
NSC concept (holistic, sequenced, Aid-forTrade, integrated, transport solution) agreed by Tripartite Task Force.
May 2008
Scoping study and projects presented to stakeholders in Pretoria, South Africa in the form of a GIS map.
April 2009
High Level Conference in Lusaka – attended by
4 Presidents and most major donors and International Finance
Institutions - and pledges of US$1.2billion made specifically to NSC
projects, plus other non-specific pledges.
May 2010
Tripartite Trust Account established; a pipeline
of projects prepared and projects prepared for submission to the fund
manager of the Tripartite Trust Account; GIS map layered by corridor;
roads categorised by condition/level of preparedness; one-stop
border posts implemented; rail projects identified and private sector
interest gauged; financing identified for the PPU to establish the ZTK
interconnector; and financing identified for the design of the SerenjeNakonde road.
NSC Milestones
Feb 2011 - Following projects prepared for financing: Kafue weighbridge, Chirundu approach Rds,
Chirundu Rd (bottom of escarpment to
border),
- Projects completed or being implemented Chirundu border post (fibre optic links, bridge
rehabilitation, fast-track booth, signage,
partitioning, micro-wave link).
- Projects under preparation - Tender documents
prepared for Serenje-Nakonde Road; PIU design
for ZTK
completed and discussions with CEC
started; Work to on
TAZARA strategy/
business plan started; and Rds projects for
Zimbabwe, Malawi & Botswana being submitted.
For more information consult
the NSC website at
www.northsouthcorridor.org
Thank You