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Wednesday, November 30, 2022

How Milupi set to Land Link Zambia, Transform Regional Trade and help Diversify Economy

Columns How Milupi set to Land Link Zambia, Transform Regional Trade and help...

By Mwansa Chalwe Snr

The recently released 8th National Development Plan has correctly identified the low diversification of the economy and the high youth unemployment among the four persistent development issues that Zambia faces; and consequently, the priority areas. In order for the country to diversify its economy, its products and services ought to have access to external markets. And one of Zambia’s lowest hanging fruits for economic recovery are the trade markets of Democratic Republic of Congo (DRC) and Angola. Minister of Infrastructure, Housing and Urban Development Charles Milupi together with President Hakainde Hichilema have clearly decided to laser focus on road infrastructure that leads to these countries to take advantage of the long outstanding opportunities, we all have been crying for.

As a caveat, I do not know Mr. Charles Milupi, and neither do I have his brief nor that of the UPND administrations. I have criticised the New Dawn government on a number of issues such as the lack of a clear and comprehensive roadmap on Youth unemployment, the design of the CDF program which puts the cart before the horse, and on their strategy on the Mining industry without renegotiating development agreements especially the percentage forex retention by mining houses. At the same time, I have recognized the many good things they have done so far. And their strategy of promoting regional trade by focusing on the road network leading to Zambia’s borders thus linking Zambia to regional markets, the debt restructuring strategy, the establishment of Public Private Dialogue Forum (PPDF) and the recent phone conversation by President HH had with Chinese President Xi JinPing, to name but a few cases, are right decisions in my view, based purely on objectivity, data and facts at my disposal.

I was one of the major critics of the PF’s infrastructure programme. And in my book: China-West Battleground in Africa: Debt Ridden Zambia, I dedicate an entire chapter entitled: “Infrastructure, the Poisoned Well of the Zambian Economy”. I essentially argue that whereas infrastructure has both short term and long term economic benefits in most countries, in Zambia’s case, the Patriotic Front (PF)’s ambitious, massive infrastructure programme was singly responsible for the economic mess of the period 2011-2021 that Zambia found itself in. The improvement in infrastructure in terms of roads, energy and telecommunications should lead to economic growth. It makes travel, trade and communications easier and improves accessibility. In Zambia’s case, however, the expected benefits in the short and medium terms did not happen for a number of reasons apart from excessive foreign debt.

“Firstly, there was little or no planning. And the normal project management processes and principles of project evaluation and appraisal were not followed. The programmes were rushed and the PF claimed they were in a hurry to “develop”. Secondly, the choice in terms of priority of some of the infrastructure was poor and largely influenced by populist political imperatives. Thirdly, the contracts were mainly single sourced without any tendering as most of the infrastructure projects were tied to funding from Chinese financial institutions. Fourthly, the contracting process was generally not transparent, which created opportunities for rent seeking by politicians, government officials and politically connected persons. This, in turn resulted in the cost of construction to be more expensive than comparative projects in neighbouring countries. Fifth, the materials were sourced mainly from China,” the book argues.

It is on the basis of the apparent change in approach to infrastructure development, by the New Dawn administration, that I decided to pen this article to share with the public, while advising government to be even handed in their development strategy. They should also ensure Zambians start benefiting immediately from infrastructure construction carried out by foreign companies through outsourcing more work to locals and using more local materials for economic multiplier effects unlike in the past

Strategic Road Network to neighbouring countries

The Democratic Republic of Congo (DRC) is one country which previous administrations have not focused on, in terms of exploiting the potential of its 90million market. President Hakainde Hichilema has had several meetings with President Felix Tshekedi of DRC which have been focused on Trade and investment. And Infrastructure Minister, Charles Milupi has had meetings with the Governor of Katanga Province Governor Jacques Katwe in Solwezi. He also has had meetings with Lualaba Province Governor Fifi Saini. These resulted in plans to construct the following roads: Solwezi-Kambimba-Kolwezi road, Solwezi-Mushindamo to Kipushi to add to the existing road from Chililabombwe to Kasumbalesa. The roads will link Zambia to Katanga and Lualaba Provinces of Democratic Republic of Congo. Other planned strategic roads are the 125km Tapo- Sikongo – Angola Border, the Katete to Chanida enroute to the port of Beira in Mozambique, rehabilitation of the 225km of Livingstone –Sesheke- Katima Mulilo road leading to the port of Walvis Bay in Namibia.

North Western and Western Province Trade Facilitation Routes

In December, 2021, Minister Charles Milupi announced a Public Private Partnership (PPP) deal which entailed a 25-year-Concession Agreement with Nkulu Zambia Limited, with the Southern Africa Business Development Forum for the construction and/or rehabilitation international road linkages and trade facilitation routes mainly involving North-Western and Western Provinces of approximately 2,208.5 kilometres .The deal was to be carried out through a Finance, Design, Construct, Rehabilitate, Operate, Maintain and Transfer Public Private Partnership Model. The package has been dubbed as: Development of the Western Province Trade Facilitation Routes inclusive of Resettlement Schemes and Border Facilities through a Finance, Design.

They are eleven roads involved in the deal which are: Tapo – Kalabo – Sikongo – Angola Border Road (125km), Sioma – Shangombo Road (175km),Lufwanyama – Kankolonkolo – Kasempa Road (225km), Kasempa – Kaoma Road – Luampa Junction (280km),Luampa Junction – Machile – Simungoma Road (340km),Livingstone – Katima Mulilo Road (225km),Resettlement Roads (minimum of 500km),Shangombo Bridge (approximately 8.5km),Sikongo Border Post and Trade Hub,Shangombo Border Post and Trade Hub and Katima Mulilo Border Post and Trade Hub.

However, despite the above plans, Minister Milupi has been criticized on the choice of the road network to construct and accused of abusing the PPP model. One of the critics is the former Ambassador to South Africa and the African Union in Addis Ababa, the PF Presidential aspirant Emmanuel Mwamba.

“In my view, Hon. Milupi has chosen to undertake roads in his constituency and his province under an opaque process whose cost burden will be borne by the country. If he genuinely wishes to do viable PPP projects, he should follow Zambia’s renowned trade routes such as the Lusaka-Chirundu, Lusaka-Livingstone, Lusaka-Ndola-Mufulira, Kapiri-Serenje – Mpika -Nakonde, and similar roads that are in an extremely dilapidated state but are core to trade/sea routes of the country,” He wrote in his article.

The Minister also caused some controversy in the Eastern Province when he was quoted as saying the Chipata – Vubwi Road was not economically viable to qualify for the PPP model. Senior Citizens in the Province led by Major (retired) Francis Kamanga, protested about what they termed as insensitive remarks. They pleaded for the equitable distribution of the road network by New Dawn the government. Lieutenant Colonel (retired) Bizwayo Nkunika even went further and cautioned the government about using the public-private partnership model to suppress development in some provinces.

Kasomeno-Mwenda toll road and Luapula Bridge to Lubumbashi – Why the delay?

There is no doubt that Minister Milupi and President Hakainde’s international land linking strategy should be applauded. However, they should be sensitive to ensure that other parts of the country’s strategic roads are given equal attention. The road that comes to mind is the shovel ready 92km Kasomeno-Mwenda toll road and 345m cable Luapula Bridge in Luapula province, which can link the Port of Dar-es-salaam in Tanzania to Lubumbashi via Mwenda in Luapula province. This road will cut the travelling distance by almost 300Kilometres and it was conceived under the PF administration.

The project was conceptualised by Groupe Europeen De Development (GED) projects Africa who structured a 25-year finance, design, build, operate-transfer project between its subsidiaries – GED Congo and GED Zambia, and the governments of the DRC and Zambia under separate agreements.

There have been allegations in some circles in Luapula Province that the UPND has put the project on ice or on go slow because Luapula is a PF stronghold. They argue that the DRC government has already signed their part of the Concession with the Project managers-GED, but Zambia has yet to sign. The other short distance viable roads that need quick attention are Mufulira – Mukambo road (19Km) plus Pedicle, Ndola-Mufulira(62km) and Ndola–Sakania Border (36Km) enroute to Lubumbashi. Recently, the Former Finance Minister, Ng’andu Magande appealed to the New Dawn Administration to attend and finish beneficial projects that were started by the PF.

“Even if we show concern, these people are out of government. Embrace all these projects. If there were meant for the benefit of the people, try to finish them and see from there, we can think of a new programme. Everything that somebody started which is for the benefit of the people, go ahead and finish it and move on,” he was quoted as saying in an interview with News Diggers Newspaper of 3 June,2022.

The expectation by many observers was that the Kasomeno-Mwenda toll road and Luapula Bridge would get the top most priority by the New Dawn government, rather than the green field roads in Western and North Western Provinces referred to earlier, which are just on the drawing board. This road is important to the country’s economy. And it’s urgent. Recently, they have been reported congestion at Kasumbalesa border Post with queues of trucks reaching Chililabombwe and Chingola.

In order to allay the above allegations, Minister Milupi is well advised to expedite its urgent commencement. He should even consider undertaking a physical visit to Luapula via pedicle road, like he has done to some other provinces. The Kasomeno-Mwenda toll road and Luapula Bridge is not just an economically imperative project; but it is also a politically smart road to attend to. It is likely to change some people’s perceptions. The impact of the optics of President HH having the long-awaited groundbreaking ceremony with his DRC counterpart, Felix Tshekedi cannot be underestimated.

Conclusion

President HH’s administration’s strategy in promoting trade and investment by first focusing on our neighbours, through improving links to their markets, before looking to more competitive international markets, should be applauded and supported. In the last nine months of the UPND administration being in charge, Minister of Infrastructure, Housing and Urban Development has proved to be among the few effective ministers. He seems to know what he is doing at his Ministry. As for President HH, in order for him succeed and speed up policy implementation, he is advised to delegate more, empower his ministers more and desist from the temptation of micro management. Government bureaucracy is more complex than even trillion dollar valued companies. Management in the public sector requires humility to learn a few new skills set for those coming from private sector, like the Author and the President.

The writer is a Chartered Accountant and Author. He is a retired international MSMEs Consultant and an independent financial commentator. He is also an Op-Ed Contributor to the Hong Kong based, Alibaba owned, and South China Morning Post (SCMP) Contact: [email protected]

5 COMMENTS

  1. Forget what roads PF built……….

    Those roads will need to be repaired 100 times before any economic benefits is realised…………,…

    As for airports , they were vastly over ambitious and expensive and will not be profitable , ever……….KK international was built to cater for more than 100 planes landing per week.

    Even the $265 million digital migration of TV will never be profitable for atleast 50 years . ……again too expensive……..
    You will be migrating to T3 and still stuck paying for your T2………..

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  2. The previous people spent money tarring these roads.With us we told them that we don’t eat roads,now that we are in office……………….

  3. Other qualifying areas should just promote their case for new road networks rather than saying that Barotse Province does not deserve to be opened up.
    This is a Pull Him Down syndrome common among certain parts of Zambian people.
    It is time to practice equity in order to achieve equality.

  4. I am from N/W province. But as a matter of expediency, fix what is broken first, then get the low hanging fruit in cost and economic benefits, and last but not the least, new projects. That is the decision process I would advise GRZ.
    There, Chirundu Kasumbalesa, Nakonde would be P1. Livinstone/Kazungula Lusaka. Ndola Mufulira, Pedicle. Solwezi Kalumbila. These are routes to already economically active areas. Then the other projects can follow. UPND should realize that they are not in power forever. They only have 4+ years left before next judgement.

  5. No mention of skills and poor education outcomes as a cause for high youth unemployment numbers? A ministry of human resources is required to develop skills, entrepreneurs, etc to build this country!

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