Zambia shares borders with eight countries and can link Central and Southern Africa.
Zambia’s landlocked position is often cited as a setback to the country’s economic development. The lack of a seaport complicates trade arrangements, prevents access to export markets and drives up the cost of imports. But recently attitudes have begun to shift. Experts are increasingly looking at Zambia’s geographical setting as a blessing not a curse. It shares borders with eight countries and can be seen as the link between Central and Southern Africa, opening Zambian businesses up to a potential market of 170 million people. Politicians are now trying to market the country as a regional transport hub.
As a member of both the Southern African Development Community (SADC) and the Common Market for East and Southern Africa (COMESA) it is possible to import and export goods between other member countries without paying duties. Furthermore, proximity to the DRC is a key advantage. Companies that wish to tap into the Congolese market but are wary of the risks often choose to set up a forward operating base in Northern Zambia. If the government really wants to capitalize on these advantages, however, it must improve infrastructure.
Zambia’s road and rail networks have declined in recent years. The highway between Kitwe and Solwezi, a key route for trucks carrying copper concentrate from the pits to the smelters, is a patchwork mess of potholes, gravel and crumbling tarmac. The two towns are only 230 kilometers (km) apart and the journey from one to the other should take around two hours, but the reality is often close to five hours.
One of the main reasons behind the sudden deterioration was the increased traffic volumes brought about by the decline in rail transport.
Historically, trains carried most of Zambia’s heavy freight. Until the early 1980s, the mines received and dispatched most of their inputs and outputs via rail. Over the past 20 years, however, the quality of the network has declined. In 2003, the operation of the railways was sold off to a private concessionaire, but the new operator did not invest enough in the network around the Copperbelt. Known as the Intermine, this network connects the mining towns and plants around the region and was originally built to move materials. As the network deteriorated, mine operators turned to the roads. Trucks now carry most of Zambia’s freight, which has exerted a huge strain on the road network. The average lifespan of a road has greatly diminished in the past decades, while the number of accidents has shot up.
In 2012, the concessionaire was stripped of its operating license and the network was nationalized again. “Zambia Railways was handed the concession and provided with a grant of $120 million to rehabilitate the network,” said Godfrey Chibunde, director of freight services for Zambia Rail. “Our first priority was damage control: the Intermine was essentially dead and train speeds were so slow that our turnaround was too expensive to be economical. We embarked on a program to ensure that all the dysfunctional lines on the Intermine were rehabilitated and all the Copperbelt towns were reconnected.”
Improvements can already be seen. Mines are returning to rail as a means of transport within the country and as a route for exports. Average speeds for freight trains have increased from 15 km per hour (km/h) to 30 km/h and by the time the investment program ends this should further rise to 60 km/h. As speed increases so too will volumes. In 2014, the network shifted a grand total of 1 million metric tons (mt) of freight but by 2018, Zambia Rail plans to be transporting 5 million mt per year.
Alongside investment in rail, the Zambian government is also prioritizing spending on roads. Under the umbrella of its Link Zambia 8000 Program, the Road Development Agency aims to improve 8,200 km of poor quality roads and connect all the provincial capitals by 2017. So far over 2,000 km have been improved.
Durban remains the port of choice for most of the mines although its dominant position is now threatened by Dar Es Salaam and Walvis Bay. Since completing a large expansion program last year, waiting times for berths in Tanzania have improved dramatically. Meanwhile Namibia is investing heavily in improving infrastructure at Walvis Bay. Both offer significantly lower costs than Durban and a shorter distance to Zambia. “We currently transport a lot of goods back and forth between Zambia and Walvis Bay in Namibia,” said Elrick De Klerk, financial director at Buks Haulage Limited (BHL). “We believe this corridor is much more competitive than Dar Es Salaam or Durban as there is only one border crossing involved.”
Buks Haulage has seen so much demand for services to Namibia’s key port that it set up a permanent office in Namibia, Buks Haulage Logistics, in 2014 to complement its headquarters in Solwezi.
This article was written as part of research being conducted by GBR for its upcoming Mining in Africa Country Investment Guide (MACIG) 2016. A pre-release report on the Central African Copperbelt was released in May 2015 and can be accessed here. To participate in this report, please contact Molly Concannon at firstname.lastname@example.org or +243(0)826300684.