The transport and logistics sector of the Zambian economy is a key priority area for the UPND government. According to its 2020-2026 manifesto under a climate of steady growth the current regime intends to deepen investments in export promotion, a sector that is highly reliant on transportation and logistics services. These services as the manifesto espouses, are critical to the economic activity, trade, tourism, and development of the Zambian economy.
The overarching objective of the UPND government in the transport and logistics sector is to enhance market linkages at a local, regional, and global level. This is intended to connect local players to the global markets thereby enhancing local participation, increasing competitiveness of Zambian produce, and reducing the cost of doing business. To achieve this, The UPND government intends to leverage both private public partnerships (PPP) and foreign direct investment (FDI) to further its agenda of enhancing the transport and logistics sector. This appears to be a significant shift in policy with regards to infrastructure development in the transport sector which has historically been fueled primarily through the acquisition of government debt.
Furthermore, the manifesto acknowledges the biased investment patterns in transport infrastructure which has traditionally been focused exclusively on road transport infrastructure to the detriment of rail infrastructure. In a recent statement by the new Minister of Transport and communication, the government has singled out Zambia railways as “a key a strategic institution that cannot be allowed to die. The minister bemoaned the aged infrastructure of the trains and highlighted the interest that other players have in partnering with Zambia Railways”.
The focus on rail infrastructure could have important efficiency and cost implications thereby reducing the imported freight service bill. The Minister of Transport and Communication further hinted that “Zambia railways is set to receive at least $1.2 billion in funding to recapitalize the railway authority, redesign locomotive, increase the speed of the trains and refurbish the railway tracks.”
The announcement by the Minister is timely as Angolan Ministry of Transport intends to launch a concession for the operation and maintenance of the Benguela Railway. “The 1344km line travels through the Lobito corridor and connects Mineral rich Democratic Republic of Congo (DRC) and Zambia to the Atlantic coast via the Port of Lobito”. In addition, former Vice President Enock Kavindele intends to expand his railway, North-Western railway from the mining town of Chingola to the border town of Jimbe along the Angola – Zambia border. The line is expected to play a significant role in reducing transit time between the two mineral resource rich countries compared to the traditional routes of exports that run through Dar es Salaam in Tanzania and the port of Durban in South Africa which stand at 1922Km and 2591km from the Copperbelt respectively. The pronouncement could help the UPND government achieve its goal of turning Zambia into a regional hub by connecting to this time efficient route.
In the aviation sector, a lack of modernization and commercialization strategies have been highlighted in the manifesto. To counter this the UPND intends to modernize, integrate and commercialize the airports and maximize the return on investment. According to a statement by the minister of transport on the 21st of September 2021 during a tour of the new terminal at Kenneth Kaunda international Airport “Mr. Tayali noted that the new terminal is a marvel as it matches to the international standards. He stressed the need to commercialize the facility for the country to reap the much-needed returns”.
The manifesto intends to increase local participation and transparency in the procurement system. In a statement made to the press, President Hichilema stressed the need to create efficient procurement measures that will facilitate timely delivery of material procured, with good quality and at a right price that will benefit the people of Zambia and the country at large.
Among the other policy statements, the UPND manifesto includes “bringing advanced technology to border post management to ensure efficiency and transparency in the movement of goods and people.” This policy is in tandem with recent development regarding commencement of one stop border posts with Malawi, Namibia and Mozambique to facilitate trade. According to a statement by Ministry of Commerce and Trade Permanent Secretary, Mushuma Mulenga, “the country is a key transit route for imports and exports in the region and other transport corridors. In view of this strategic position, it is important for Zambia to foster trade facilitation reforms and create an enabling environment for facilitation of trade and cost reduction in Zambia”.
While the recent pronouncements by the new administration appear to be promising, several key points remain to be addressed by the current government. The first being the assumption that rail infrastructure is cheaper to build and maintain compared to roads. Secondly, considering distance and time to seaports once the Lobito corridor is connected to the Zambian rail network. This has important implications for how government will incorporate local participation in the transport and logistics sector. The industry could experience a crowding out effect wherein most exporters would prefer to use rail as it may be cheaper, and their commodities would reach a deep seaport faster as opposed to road freight. Thirdly, without additional information, it is impossible to discern whether these investors in Zambia Railways are a foreign consortium or local investors without speculating. Whether Zambians will be allowed to participate in the railway sector given the high barriers to entry remains to be seen. Fourthly apart from overnight passes as clearly indicated in the manifesto, the current regime has not clearly articulated how they intend to fully commercialize the existing airports.
It may be too early to judge if the current government will align its actions with its manifesto considering it has not yet clocked a 100 days. However, the pronouncements made by the President, Transport Minister and other government officials, suggest that the transport and logistics sector is set to boom in the medium to long term.