The transport and logistics sector has been highlighted as one of the key areas earmarked for growth under the UPND manifesto. The budget pronouncements made recently by the Minister of Finance Hon. Situmbeko Musokotwane, highlight a number of key areas of interest for the new administration.
The first of which is traditional road infrastructure. In this area, the UPND manifesto pledged to focus on rural transport infrastructure, particularly in connecting rural agricultural communities to national commercial centers in order to provide market linkages for rural communities. In his budget announcement to parliament, the Minister of Finance has pledged to prioritize the maintenance, rehabilitation and upgrading of feeder roads. In doing so, the Improved Rural Connectivity project aims to maintain a total of 4,300 kilometers of rural feeder roads. Special emphasis will be paid to economic roads such as the Lusaka-Ndola, Chinsali-Nakonde and Kazungula-Sesheke roads. In this area, the UPND government is consistent with its manifesto promise.
The second theme highlighted is rail infrastructure, wherein the UPND manifesto bemoaned the lack of adequate attention and investment in the railway sector by the previous government. In the Ministers budget speech he stated that railway transport has been facing a number of challenges, the major one being the poor state of the infrastructure. To ensure sustainability, priority in the near-term will be maintenance of the infrastructure. The Minister however, did not specify which rail lines are scheduled for rehabilitation, where the new rail lines, if any, would be built and how much this will cost.
The third point follows through from the previous two points and is consistent with their party manifesto. It concerns the financing of the proposed road and rail infrastructure. The minister in his budget speech was resolute on his stance that the financing requirements to construct new roads as well as rehabilitate and maintain existing roads is beyond the financial capacity of the Government. The same applies to railway infrastructure. Government will, therefore, aggressively pursue Public Private Partnerships in the overhauling of the existing line and construction of new railway spurs as well as roads. Clearly, the UPND government intends to utilize private public partnerships to the fullest extent possible as the main vehicle to realize their infrastructure goals. However, as stated in the previous article, the nationality of the potential investors and the amounts pledged remain unknown.
The fourth area of interest highlighted by the Minister of Finance is the aviation sector. The UPND manifesto focuses on the commercialization of the existing airports to maximize their return on investment. The Minister however, makes very little mention of this in the budget speech. Honourable Musokotwane only indicates government’s commitment to improve air infrastructure generically. In his speech, the Minister indicated that in the aviation sub-sector, focus will be on the completion of Kasama and Mbala airports. Further, rehabilitation and maintenance of provincial airports and aerodrome will continue to facilitate air transport for both cargo and passengers. The Transport Minister would need to elaborate on how they will intend to commercialize the existing air infrastructure.
The government has committed to several promises in the budget speech regarding the transport and logistics sector, however it is worth looking into budgetary allocation to the transport sector to get a clearer picture of these commitments. The figure below shows some of these statistics.
Figure 1.
Source: Ministry of Finance Estimates of Revenue and Expenditure 2022
According to the estimates of revenue and expenditure for the year 2022, the total budgetary allocation to the ministry of Transport and logistics is K462,785,784. Of this amount, K390, 311,661 is directly allocated to Air, Road, Railway and Maritime Transport development. Figure one shows that of the K390,311,661, 45% of it was directed towards Road and Rail transport services, 41% toward Air Transoport services and 14% towards Water transport services.
Of the K390,311,661, K3.7 million will cater for payment of personal emoluments, K133.8 million will cater for the use of goods and services of which K130 million is for infrastructure development, and K252.8 million will be used for transfers and subsidies for the operations of the Road Transport and Safety Agency (RTSA), Civil Aviation Authority, Tanzania Zambia Railways Authority (TAZARA), Zambia Airport Corporation Limited (ZACL) and Harbours.
Figure 2. below gives a detailed breakdown of the infrastructure allocation.
Figure 2.
Source: Ministry of Finance Estimates of Revenue and Expenditure 2022
Figure 2. shows that of the biggest beneficiary from the allocation was the Road Transport and Safety Agency followed by the Civil Aviations Transport Board. In third place is the Tanzania Zambia Railway Authority.
It’s worth noting that the amounts allocated are not exclusively intended for infrastructure development but also to run, regulate and operationalize the various entities funded. According to the Estimates of Revenue and Expenditure 2022, this will be used for the enhancement of the road transport safety and traffic management, rehabilitation of rail infrastructure and the recapitalization of the Tanzania Zambia Railways (TAZARA). Air Transport Services has been allocated K158.8 million and this will be channeled to support the operations and regulation of the aviation sub sector and upgrading of provincial and Strategic airports. Lastly, Water Transport Services has been allocated K 54.4 million and this will be used for management of water bodies and navigation safety.
From the budget pronouncements and allocations it is easy to discern that the UPND government intends to create an environment that encourages private sector institutions to participate in infrastructure development. Funding the various government institutions to make them efficient and operational means that private sector partners can focus solely on infrastructure investments and development without incurring administrative costs. Furthermore, a key institution that has not been included in the revenue expenditure report is the Road development agency. This could be an indication from the government that the days of rapid road and infrastructure development spearheaded by government are all but over.