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Southern Africa Growth Belt Study -Integrated Regional Transport Program-

1

Southern Africa Growth Belt Study-Integrated Regional Transport Program-

May 4, 2010

Takeshi OIKAWA

Japan International Cooperation Agency

(JICA)

Presentation at AfDB/JICA Knowledge Sharing Seminar


2

Introduction

Purpose of the Study

To propose “Regional

Corridor Development

Programs” for prioritized

corridors, which can be

shared by governments,

RECs and Development

Partners.


3

Subject Countries and Corridors

10 Subject Countries

- Angola - Namibia

- Botswana - South Africa

- DRC - Tanzania

- Malawi - Zambia

- Mozambique - Zimbabwe

18 Subject Corridors

- Beira Corridor - North-South Corridor

- Central Corridor - Shire-Zambezi Corridor

- Limpopo Corridor - TAH Cairo – Gabarone Corridor

- Lobito Corridor - TAH Windoek Corridor

- Malanje Corridor - Tazara (Dar es Salaam) Corridor

- Maputo Corridor - Trans-Caprivi Corridor

- Mtwara Corridor - Trans-Kalahari Corridor

- Nacala Corridor - Trans-Cunene Corridor

- Namibe Corridor - Oranje Corridor


4

Step3:

Identification of Corridors that Better Contribute to the Growth Scenario

Step4:

Proposal of Corridor Development Programs for Selected Corridors

Study Methodology

Step1:

Extensive Analysis of Socio-Economic Situation/Potential of the Region

Step2:

Proposal of Desirable Growth Scenarios

Step3:

Identification of Corridors that Better Contribute to the Growth Scenario

Step4:


Step2:


Step3:

Prioritization of Corridors that Better Contribute to the Growth Scenarios

Step4:


Step1:


Step2:


Step1:


Step3:

Prioritization of Corridors that Better Contribute to the Growth Scenarios

Step2:


Step1:



5

Step1

Socio-Economic Situation/Potential of the Region


6

Headline Economic Indicators


7

GDP and Per Capita GDP


8

Population Growth

Population in the

Subject Countries

2000-2020

Population Growth

Rates (%) in the Subject

Countries

2000-2020


9

Governance in the Subject Countries


10

Exports Imports

Major Trading Partners


11

Intra-Regional Trade of Major RECs(with 2000 equal to 100)


12

Direction of Trade of RECs by Region(Annual Average of 2000–2005, %)


13

Ease of Doing Business


14

Resource Distribution

Minerals and Energy Agriculture


15

Step 2

Growth Scenarios of Southern Africa


16

Direct Investment to Africa reached a record level, and its growth rate

surpassed Asia. What are the potential engines of growth?


17

Direct investment in mining sector has declined after the crisis,

but now began to recover

Value of Cross-Border M&A Sales and Purchases

by Sector/Industry

(2007–2009a millions of dollars)

Source: UNCTAD, WIR 2009


18

Direct Investment by China and Brazil in mining have launched

Examples of Investment in the Mining Sector from Newly Emerging Economies

Source: Compiled from JOGMEC News Flash.

Country Investing Company Outline of Investment

Zambia China Nonferrous Metal

Mining Group Co (CNMC)

Acquired 80% shares of Luanshya copper mine

(October 2009)

Zambia China Nonferrous Metal

Mining Group Co (CNMC)

Started operation of Chambishi copper smelter

(Oct. 2009), planning to invest about USD 900

million by 2010

Zambia Jinchuan Group (China) Acquired 51% shares of Munali nickel mine

(August 2009)

Zambia Vale (Brazil) Plans to invest USD 50 million in 2010 to Konkola

North copper project, which is a 50:50 joint

venture V project with African Rainbow Minerals

(South Africa) and will start production in 2013

Mozambique Vale (Brazil) Plans to invest USD 595 million in the Moatize

coal project in 2010, and signed an MOU with the

Government of Mozambique on rail/transport

infrastructure development in the Northern area in

expectation of a planned Moatize II project.

Namibia East China Mineral

Exploration and Development

Bureau

Acquired 50.1% shares of Weatherly International

PLC (London), which owns the Otjhase, Tsume,

and Kombat copper mines, and Tsuemeb copper

smelter, which is the only copper smelter in

Namibia. (September 2009)


19

Large Scale Land Acquisitions “Land Rush” in Africa


20

Some countries in Southern Africa have high shares of agricultural FDI

inflow or stock.

Source: UNCTAD, WIR 2009

Inward FDI in Agriculture, Forestry and Fishing

(Flows and Stock, Various Years, Billions of Dollars and %)


21

Presence of South African economy & private

enterprises in the region is significant.

0

2,000

4,000

6,000

8,000

10,000

12,000

Botswan

a

Lethoto

Swaz

iland

Nam

ibia

Zimbab

we

Moza

mbiq

ue

Zambia

Other Investment (Private non-

banking secot)

Other Investment (Banking sector)

Other Investment (Public

corporations)

Other Investment (Monetary

authorities)

Portfolio Investment (Private non-

banking sector)

Portfolio Investment (Banking

sector)

Direct Investment (Private non-

banking sector)

Direct Investment (Banking

sector)

Direct Investment (Public

corporations)

Foreign Investment of South Africa in Selected Southern African Countries,

as of 31 December 2008 (ZAR million)


22

3 Growth Scenarios

Scenario b):

Growth through Intra-Regional Trade Promotion

Scenario a):

Mineral Resources Driven Growth

Scenario b):


Scenario a):


Scenario b):


Scenario a):


Scenario b):


Scenario a):


Scenario c):

Diversification and Advancement of the Industrial

Structure through Global Trade

Scenario b):


Scenario a):



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• As the global economy recovers, investment by “major” companies in mineral resources development in Angola, Botswana, the DRC, and Zambia will be fully resumed.

• Investment from companies from emerging economies will continue. Basic infrastructure (electric power, transportation) will be developed, and the investment in manufacturing, as well as other sectors (agriculture, forestry, and tourism) will be induced.

• Moreover, public and private investment in energy development projects (e.g., thermal power, hydroelectric power, gas) will be promoted to secure electric power supply.

Scenario a) Mineral Resources Driven Growth


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• In the regional trade centered on trade with South Africa, productivity and incomes in neighboring countries in the region improve through local procurement (e.g., of raw materials including agricultural products, services) by South African companies.

• Moreover, intra-regional trade that does not go through South Africa will be expanded, including trade in agricultural products and livestock, intermediate goods, and consumer goods.

• In particular, intra-regional trade of agricultural and related products based on the “complementary” structure will be promoted through the improvement of transport infrastructure.

Scenario b) Growth through Intra-Regional Trade Promotion


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Current pattern of intra-

regional trade except for

South Africa (with

substantial trade value)

Coal & oilAuto.& airplane

equipment

Food, petro,

chemicals,

machinery,

transport equip.

automobiles

Manufac. goods

Beverage,

tobacco

Mineral fuels,

lubricants

Machinery &

transport equip.

Beverage,

tobacco

Beverage,

tobacco

Mineral fuels,

lubricants

Mineral fuels,

lubricants


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Potential of intra-regional

trade flow of agricultural

and related products


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• Countries within the region will diversify and advance the industrial structure by linking industrial development potential based on natural resources and policies/systems to improve their production cost structures with the reduction of customs tariffs and distribution costs such as EPZs, FTZs and industrial parks.

• The diversification and advancement of the industrial structure will be promoted by the diversification of the export market outside the region.

Scenario c) Diversification and Advancement of the Industrial



28

2.2 Growth Scenarios (20)



0

10

20

30

40

50

60

70

80

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

India

0

10

20

30

40

50

60

70

80

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Brazil

Import Trends of China, India, and Brazil

(1995–2005/2006; in USD billion)

Source: Prepared from World Bank, Word Development

Indicators.

0

100

200

300

400

500

600

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Agricultural raw materials imports

Food imports

Fuel imports

Manufactures imports

Ores and metals imports

China

China, Brazil and India: sharp increases in imports of

manufactured products and fuel (petroleum)

China : increasing imports of ores and metals, and food


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2.2 Growth Scenarios (20B)




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“Image” of the Growth Scenarios

Three growth scenarios are not mutually exclusive, but

rather complement each other.

“Growth Belt” Concept


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Step 3

Prioritization of Existing Corridors


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Methodology of Corridor Prioritization

Step 1:

Assessment in terms of :

a) Level of contribution

to each scenario

b) Cost/Benefit analysis

c) Traffic volume

analysis (OD Survey)

Step 3:

Final Composite

Scores

Step 2:

Assessment in terms

of Socio-Economic

Indicators:

a) Demographic

Potential

b) Scale of Economy

c) Governance

d) Business

Environment

+ =


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Corridor a)

Potential

Score

from

Scenario

b)

Traffic

Volume

c)

Traffic

Score

d)

Benefit

Score

e)

Cost

Score

f-1)

Overall

Score

f-2)

Overall

Score (Normali

zed

Maputo 4.85 200 4 2 1 38.80 2.50

North-South 4.65 250 5 4 3 30.99 1.79

Dar es Salaam 4.51 170 4 4 3 24.05 1.15

Beira 4.78 130 3 3 2 21.51 0.92

Trans-Caprivi 4.14 140 3 4 3 16.56 0.47

Trans-Kalahari 4.98 50 2 3 2 14.94 0.32

Nacala 4.73 50 3 4 4 14.18 0.25

Lobito 4.46 350 5 3 5 13.39 0.18

Oranje Corridor 2.38 120 3 2 2 7.15 -0.39

Trans-Cunene Corridor 2.80 50 1 3 2 4.20 -0.66

Shire-Zambezi Waterway 2.47 60 2 4 5 3.95 -0.68

Mtwara 2.41 110 2 3 4 3.61 -0.71

Malange 3.31 n.a. 1 4 4 3.31 -0.74

TAH/Tripoli-Windhoek 2.72 50 1 5 5 2.72 -0.79

TAH/Cairo-Gaborone 2.72 n.a. 1 5 5 2.72 -0.79

Central 1.27 n.a. 1 3 3 1.27 -0.93

Limpopo Corridor 1.82 10 1 2 3 1.22 -0.93

Namibe 1.35 n.a. 1 3 4 1.01 -0.94

Calculation of Overall Score:

f-1) = a) x c) x d) / e)

Step 1:

Assessment in terms of :

a) Contribution to the

scenarios

b) Cost/Benefit analysis

c) Traffic volume analysis

High

Medium

Low

Prioritization of Corridors (1/3)


34

Network AdequacyAnalysis based on OD Survey at 10 border posts

2009 2019


35

Corridor Country A Country B Country C Country D Overall Score (Normalized)

Ranking

Trans-Kalahari Namibia Botswana South A. 0.448 1

Oranje Corridor Namibia South

Africa0.436 2

Maputo Mozambique South

Africa0.247 3

North-South South Africa Zimbabwe Botswana Zambia 0.091 4

Trans-Caprivi Namibia Zambia 0.061 5

Dar es Salaam Tanzania Zambia Malawi 0.056 6

Mtwara Tanzania Malawi Zambia 0.056 7

Central Tanzania 0.051 8

TAH/Cairo-Gaborone Tanzania Zambia -0.001 9

Nacala Mozambique Malawi -0.018 10

Shire-Zambezi Waterway Mozambique Malawi -0.018 10

Trans-Cunene Corridor Namibia Angola -0.029 12

TAH/Tripoli-Windhoek DRC Angola Namibia -0.127 13

Lobito Angola DRC Zambia -0.202 14

Beira Mozambique Zimbabwe Zambia Malawi -0.210 15

Namibe Angola -0.232 16

Malange Angola DRC -0.277 17

Limpopo Corridor Mozambique Zimbabwe -0.478 18

Step 2:

Assessment in terms of

Socio-Economic

Indicators:

a) Demographic Potential

b) Scale of Economy

c) Governance

d) Business Environment



36

Combined Results and Selected Corridors

Step 3:

Final Composite Scores



37

8 Priority Corridors

1. Maputo Corridor

2. North-South Corridor

3. Dar es Salaam Corridor

4. Beira Corridor

5. Nacala Corridor

6. Trans-Caprivi Corridor

7. Trans-Kalahari Corridor

8．Lobito Corridor


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Soft Infrastructure: Cross-Border Transport

Facilitation – Candidate OSBP Projects (1/2)Border Crossing Traffic

(trucks per day)

Delay Time Institutional

Readiness

Possible Project Elements Other Possible

Donors

Chirundu High (270) High (various) High Risk management, integrated

border management, further

training, ICT, monitoring,

community development

DFID

Kazungula Medium (115) High (1.0–2.5

days)

High Potentially all aspects, with co-

financing from AfDB

AfDB, DFID

Beitbridge High (287) High

(1–2 days)

Medium Infrastructure/facilities, legal

aspects, and training

DFID

Kasumabalesa High (170-350) High

(1–3 days)

Medium ICT, legal aspects, document

harmonization, procedure

simplification, implementation of

OSBP procedures

France, DFID,

DBSA

Lebombo/

Ressano Garcia

High (200–300) Medium (6-7

hours)

Medium Immediate need is for proper

master planning and feasibility

studies

DIFD, DBSA

Wenela/

Katima Mulilo

Low (20–25) High

(1–3 days)

High All aspects, except for possibly

legal aspects

DFID, SIDA,

UNCTAD

Oshikango/

Santa Clara

Low (50) High

(3–5 days)

Low All aspects USAID

Trans Kalahari/

Mamuno

Low (60) Low

(1 hour)

High Facilities, ICT, and specification/

implementation of OSBP

operational procedures

USAID


39

Soft Infrastructure: Cross-Border Transport

Facilitation – Candidate OSBP Projects (2/2)

Border Crossing Traffic

(trucks per day)

Delay Time Institutional

Readiness

Possible Project Elements Other Possible

Donors

Mwami/

Mchinji

Low (25) Low

(1 hour)

Medium All aspects AfDB, EU,

Japan Export–

Import Bank

Mandimba (Milange)/

Chiponde (Muloza)

Low (6–7) Low

(30 minutes)

Medium All aspects AfDB

Dedza/

Calomue

Medium (80–160) 2–8 hours (Low) Low All aspects AfDB

Mwanza/Zobue Medium (100) 4–8 hours (Low

to Medium)

Low All aspects -

Forbes/

Machipanda

Medium (70) No data Medium - DFID, EU

Nakonde/

Tunduma

Medium (148) High

(4–5 days)

Medium Legal aspects DFID

Songwe/

Kasumulo

No data No data No data All aspects -

Negomano/

Mtambaswala

No data No data No data All aspects AfDB


40

Soft Infrastructure: Facilitation on a Regional Basis

(1/2)

• Transport Aspects

- Harmonization and Enforcement of Axle

Load Limits and Vehicle Dimensions

Standards

- Harmonization of Road User Charges for

Foreign Vehicles

- Third-Party Motor Liability Insurance


41

Soft Infrastructure: Facilitation on a Regional Basis

(2/2)

• Customs Aspects

- Customs Simplification and Harmonization

(e.g., Single Administrative Document)

- Electronic Data Interchange between

Customs Administrations

- Establishment of Single Windows in the

Region

- Regional Customs Bond Guarantee


42

Last Step

Proposed Corridor Development Programs

Maputo Corridor

North-South Corridor

Dar es Salaam Corridor

Beira Corridor

Nacala Corridor

Trans-Caprivi Corridor

Trans-Kalahari Corridor

Lobito Corridor


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8 Priority Corridors

1. Maputo Corridor

2. North-South Corridor

3. Dar es Salaam Corridor

4. Beira Corridor

5. Nacala Corridor

6. Trans-Caprivi Corridor

7. Trans-Kalahari Corridor

8．Lobito Corridor


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Proposed Corridor Development Program

Priority Sector and Sector Strategies

Chapter 5 Regional Corridor Development Programs

Development Directions to Overcome Infrastructure Bottlenecks (Section 4..2.4)

Direction under

Growth Scenario a)

Direction under

Growth Scenario c)

Direction under

Growth Scenario b)

Regional Transport

Facilitation

Maputo Corridor Development Program

North-South Corridor Development Program

Dar Es Salaam CorridorDevelopment Program

Beira Corridor Development Program

Nacala Corridor Development Program

Trans-Caprivi Corridor Development Program

Trans-Kalahari Corridor Development Program

Clarification of

Infrastructure

Bottlenecks under

Growth Scenarios

(Section 4.1)

Selection of

Corridors with

High

Development

Priorities

(Section 4.2)

Lobito Corridor Development Program


45

Maputo Corridor


46

Regional Infrastructure Development in Southern Africa

– Maputo Corridor (1/2)

• Major Bottlenecks under Growth Scenarios:– The major bottleneck is the border crossing at

Lebombo and Ressano Garcia.

– Even though the distance between Maputo and Johannesburg is only about 600 km, shorter than that from Johannesburg to the major ports in South Africa, the long border crossing time reduces the competitiveness of the Port of Maputo.

– The limited depth and sedimentation of the Port of Maputo causes delays in port clearance.


47


– Maputo Corridor (2/2)

• Priority Sectors: Border Post and Port

• Development Direction:

– Short term • Approaches to reducing the border crossing time

at Lebombo/Ressano Garcia should be prioritized.

– Long term• The physical development of the Port of Maputo or

an alternative port in the vicinity of Maputo as well as an improvement in operation systems at the port should be targeted.


48


– North-South Corridor (1/2)

• Major Bottlenecks under Growth Scenarios:

– The railway network is not operated efficiently due to

issues related to “hard” infrastructure and operations.

– The only missing road (bridge) link is currently at the

Kazungula border crossing.

– The long border crossing times, of the order of 1–2

days at Chirundu and at Beitbridge, are being

addressed by ongoing projects, but these efforts must

continue.

– Similarly, long border crossing times at Kasumbalesa,

between Zambia and the DRC, must be addressed.


49


– North-South Corridor (2/2)

• Priority Sectors: Bridge (Roads), Border Posts,

and Railway


– Short term

• Bridge construction and OSBP development along the road

corridor should be a focus.

• Measures to improve railway operations could be

implemented.

– Long term

• Improvements of railway capacity through both hard and soft

infrastructure measures should be targeted.


50

Dar es Salaam Corridor

Base map by the University of Texas at Austin


51


– Dar es Salaam Corridor (1/2)

• Major Bottlenecks under Growth Scenarios:– Rolling stock availability of TAZARA has been

decreasing with consequent adverse effect on line capacity in recent years.

– The long clearance time involving various stakeholders at the Port of Dar es Salaam is more critical for the dry bulk cargo hauled.

– The Nakonde/Tunduma border crossing is moderately busy and has relatively long border crossing times (4-5 days on average).

– Since some heavy minerals are transported by road due to a shortage of railway capacity, road conditions have deteriorated rapidly along this corridor.


52


– Dar es Salaam Corridor (2/2)

• Priority Sectors: Port, Railway, and Border Post


– Short term • Rolling stock to improve railway service,

streamlined port procedures, and rehabilitation of deteriorated road sections should be the focus.

– Long term• Increasing railway capacity should be prioritized to

facilitate a shift of heavy minerals from road to rail.


53

Beira Corridor


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– Beira Corridor (1/2)


– Only small feeder vessels have been able to enter the

Port of Beira due to the critical sedimentation of the

port’s approach channel.

– There are two railway routes to inland countries, one

of which, the Sena Line, is now under rehabilitation/

reconstruction.

– No financing source has been identified for the Sena

Corridor road, which has a long unpaved section that

trucks avoid by taking a roundabout route to Malawi.


55


– Beira Corridor (2/2)

• Priority Sectors: Railway and Port

• Development Direction:– Short term

• Insufficient dredging at the Port of Beira (and rehabilitation/ reconstruction of the Sena Railway Line) should be targeted as priority issues.

• A feasibility study of unpaved sections of the Sena Road Corridor running through major production areas should be undertaken, followed by basic and detailed design studies.

– Long term• Attempts to reduce railway and road transport time and costs

including implementation of OSBPs should be a focus.


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Nacala Corridor


57


– Nacala Corridor (1/2)

• Major Bottlenecks under Growth Scenarios:– Trunk route from neighboring countries to the port

currently serves low traffic volumes.

– Due to track deterioration, railway operating speeds and capacity are relatively low.

– Most road sections along the corridor are unpaved and/or have high roughness levels.

– Considering potential industrial development and the improvement of inland transport in the near future, traffic at the port is expected to increase rapidly beyond its current capacity.


58


– Nacala Corridor (2/2)

• Priority Sectors: Railway, Port, and Road


– Short term

• Rehabilitating roads and undertaking feasibility studies for

railway track rehabilitation should be accorded the first

priority.

– Long term

• The corridor railway should be rehabilitated and the port

should be improved.

• Border post improvements should follow road improvements

and the development of traffic.


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Trans-Caprivi Corridor


60


– Trans-Caprivi Corridor (1/2)


– Even though the route has high potential for bulk

cargo transport from inland areas in Namibia and

neighboring countries, the railway link is available

only for 600 km from the port to Grootfontein.

– Congestion at the container terminal at the Port of

Walvis Bay is expected to become an issue in the

near future.


61


– Trans-Caprivi Corridor (2/2)

• Priority Sectors: Port and Railway


– Short term

• Similar to the case of the Trans-Kalahari Corridor,

container terminal development at the Port of

Walvis Bay should be prioritized.

– Long term

• Construction of the railway could be initiated.


62

Trans-Kalahari Corridor


63


– Trans-Kalahari Corridor (1/2)

• Major Bottlenecks under Growth Scenarios:– Although this corridor traverses a route with high

mining potential, currently railway service is available only between the Port of Walvis Bay and Gobabis in Namibia.

– Since the Port of Walvis Bay provides a high level of service and its containerized traffic has been increasingly rapidly, container traffic there is expected to exceed the current terminal capacity in the short term.

– The road condition along this corridor is relatively good although road traffic volumes are not especially high.


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– Trans-Kalahari Corridor (2/2)



– Short term

• After the ongoing Walvis Bay container terminal feasibility

study is completed, the first phase of the construction should

be undertaken.

– Long term

• The railway along the corridor should be extended.

• A new coal terminal development at the port should be

developed for the export of coal from Botswana.


65

Lobito Corridor


66


– Lobito Corridor (1/2)


– Although the Copperbelt in southern DRC and

Zambia was connected with the Port of Lobito by

railway before, the railway service has been

terminated since the Angolan civil war. Rehabilitation

of the railway section between Munhango and Luau

was commenced in February 2009.


67


– Lobito Corridor (2/2)



– Short term

• Rehabilitation/expansion of the container terminal.

– Long term

• Rehabilitation of Benguela Railway (DRC and

Angola, Short to Long Term). The Project is to

revitalize the Lobito rail line linking the Port of

Lobito with the DRC/Zambian Copperbelt.


68

Thank you for your attention.

Presentation at AfDB/JICA Knowledge Sharing Seminar

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