MAKING MOVES

Zambia 2017 | TRANSPORT | REVIEW

As Zambia's transport and logistics sector looks to expand after a difficult couple of years, the country's central position and ambitious infrastructure spending projects are expected to facilitate renewed growth.

Surrounded by Tanzania, Malawi, Mozambique, Zimbabwe, Botswana, Angola, Namibia, and the DRC, Zambia is a land-locked country with significant potential in its transportation sector. An effective, well-maintained, and extensive transport network is essential for nearly all of the country's key sources of economic activity, and stakeholders are working to strengthen the country's relevant infrastructure. With an economy that is heavily reliant on mineral extraction, effective rail systems are particularly important, but funding for all manner of initiatives has been difficult to come by. As a land-locked nation, public and private officials alike are cognizant of the fact that international synergies and efficacious solutions are necessary pieces of the transportation sector's health. As Zambia seeks to become a preferred transport point for shipping across southern Africa, it is tackling the industry's most pressing problems with renewed vigor.

Roads

Zambia's road network stretches across roughly 67,671km, 40,265km of which is classified as the core network. Though only 23% of the core network is paved, according to the United Nations Development Programme's (UNDP) Zambian Human Development Report for 2016, this figure is better than some of Zambia's regional neighbors. Rural areas often have inferior road systems, few of which are paved or even open all year. This can create problems for individuals employed in the agricultural sector, which is the majority of the country, because workers who cannot get their product to market are often left without income. According to the UNDP, only 17% of the population that relies on the agriculture industry for their livelihood lives less than 2km from a road that is open all year. Government leaders have long discussed plans for improving this system, and a number of corrective ideas have been floated. Increased revenue collection through tolls and other user-based forms have been considered, and public-private partnerships have been discussed.

One of the government's most important infrastructure projects has been the Link Zambia 8000 Road initiative. This three-phase, USD5.46 billion project is focused on extending and upgrading the country's road infrastructure over the next few years. Initiated in 2012, the project has sought to create 24,000 jobs while simultaneously transforming the country's road infrastructure by building more than 8,200km of roads and achieving extensive international and domestic land linkages by 2024, according to Zambia's Road Development Agency. Under Phase I of the project, 3,947km of roads have been built, and 678km have been opened to commuters, generating more than 6,000 jobs in the process. Phase II includes constructing 2,500km of existing roadways, 380km of which have been set aside specifically for Zambian-owned companies. Phase III is set to begin this year. Pave 2000 is a similar project tasked with overhauling and building 2,000km of roadways in more densely populated areas using concrete block technology and cobblestones instead of asphalt. The project is currently in its third phase, road construction, and this ZMW6.9 billion initiative is expected to be completed in 2019. Thus far, the project has led to more than 400 direct jobs, and experts expect it to generate far more. According to the RDA, an important aspect of Pave 2000 has been the employment and economic enfranchisement of women and youth in Zambia, and the scores of workers in these categories have been trained and hired.

Rail

With such a heavy reliance on mineral extraction in the economy, Zambia's rail networks are key transporters. Bulk goods and extracted materials rely on the railways, and these lines are key economic corridors. The country relies on two main, state-controlled operators: Railway Systems of Zambia (RSZ) and the Tanzania and Zambia Railway Authority (TAZARA). RSZ focuses its activities on the north-south lines that interconnect with operators in Zimbabwe and eventually connects Zambia with the Port of Durban in South Africa. The RSZ line is nearly 1,200km long (900km of mainline and 300km of branch lines) and stretches from Sakania, near the Democratic Republic of Congo, to Victoria Falls, near Zimbabwe, and incorporates the vital Copperbelt region of the country. The network is one of the largest in the region and it provides the livelihoods for more than 1,000 people. The operator's fleet includes 48 locomotives and more than 4,000 wagons.

TAZARA controls the rail system in the east of the country, a corridor that facilitates access to Dar es Salaam. The 1,860km of railways is jointly owned by Tanzania and Zambia, and much of Zambia's copper is shipped internationally via this route. The railway had seen improved growth in a number of categories in recent years. First quarter YoY growth in freight transport grew 9.4% between 2015 and 2016, improving from 26,571 metric tons to 29,061 metric tons. First-quarter YoY growth in passenger traffic increased 20.2% between 2016 and 2017, jumping from 111,335 passengers to 133,863 passengers.

According to the UNDP's Zambian Human Development Report, traffic densities across the country are lower than the minimum required threshold of 2 million tons per kilometer to make these railways economically viable. This has disincentivized upgrades and expansion on the lines, and shifted much of the railway's cargo potential to the country's roadways. This had led to an overemphasis on and overburdening of the roadways. According to the Zambian Human Development Report, renewed investment in the rail system could lead to substantial economic benefits for the entire country.

Air Transport

Though still somewhat more limited than its road and rail transport infrastructure, Zambia's air transport infrastructure and capabilities have been improving. The country's National Airports Corporation operates Zambia's four largest airports in Lusaka, Ndola, Livingstone, and Mfuwe.

While the air transport industry has faced hurdles in recent years, including the closing of the national airline, Zambian Airways, and the departure of other large international carriers from the market, officials are confident that their improvements and overhauls will reinvigorate the industry. In an exclusive interview with TBY, Hon. Eng. Brian Mushimba MP, Cabinet Minister of the Ministry of Transport & Communication, discussed some of the country's efforts to support the sector. “In the aviation sector specifically, we have enacted new laws that have streamlined and aligned our industry to international requirements, and we have signed bilateral air agreements and extended fifth freedom rights to ensure efficient passenger movements in and out of the country," said Mushimba. “However, expected increased flows of traffic, as Zambia becomes more of a tourist destination, demand improved infrastructure and we continue to do just that with the commissioning of the new airport terminal at HMNIA in Livingstone and new radar system at both KKIA and HMNIA. We are expanding and modernizing KKIA by adding a new airport terminal able to handle up to 4 million more passengers per year with many amenities such as airport hotels and shopping malls."
Mushimba expects this project to be finished by 2020. Additionally, the government is getting ready to begin work on the new Copperbelt International Airport in Ndola, and this USD400 million project is expected to handle 2 million passengers a year. Other improvements are also in the works for Mfuwe international airport and smaller facilities around the country. KKIA is currently undergoing a USD360 million upgrade by the Chinese contractor China Jiangxi, and it is slated to be completed at the end of 2018.

Logistics

While 2016 was a rough year for Zambian logistics, with volumes being pushed down by a declining kwacha, falling commodity prices, domestic drought, and energy cuts, 2017 is poised to deliver important and much-needed recovery. Relying on its central location in southern Africa, Zambia is trying to turn itself into a transportation hub in the region. Firms across the country are trying to take advantage of improving economic fundamentals by expanding their business and offering more comprehensive logistics services to the market.
As Zambia endeavors to become a logistics and transportation hub for southern Africa, private industry leaders are excited by the county's potential. Zambian transport firms hope to utilize the country's four distinct travel corridors to move goods across the region. In an exclusive interview with TBY, Oscar Gutierrez, General Manager of J&J Transport Zambia, explained Zambia's strong transportation potential. “It is the historical, natural, and most cost-effective gateway serving Zimbabwe, Zambia, the eastern Democratic Republic of Congo, and Malawi," said Gutierrez. “Zambia is a relatively young country with great potential to grow." With the addition of linkage roads between economic and export centers and natural resource extraction zones, such as the Copperbelt, Zambia is paving the way toward transportation growth.

The government also has the ability to make doing business easier in the country, and industry leaders have a clear idea of exactly which reforms and improvements they would like to see. Olivier Terra, Managing Director of Bolloré Transport & Logistics Zambia, enumerated a few of these in a recent interview. “On a practical level, we need to work on improving border management and alleviate congestion at the borders," said Terra. “Elsewhere, we see a stronger and more regulation-heavy approach from the Ministry of Transport." While Terra is not overly pleased with the specifics of the most recent regulatory decisions, he believes the government's interest bodes well for the future. By recognizing that problems exist within the sector, the government has opened the door to addressing them in an effective and long-lasting way.
2017 looks to a be a year of growth for transportation in Zambia. As long as stakeholders in the public and private sector continue to develop creative solutions and focus on visionary infrastructure development, transport in the country is poised to have its best year in quite some time.