AfDB approves $243m for road project in Southern Africa

The Development Bank (AfDB) has approved a sum of $243m for road project within the Southern African, Zambia.

The AIIB, with authorized capital of 100 billion U.S. dollars, is designed to finance infrastructure construction, as many countries do not have the capacity to fund the infrastructure upgrades they need.

Impressed with the proposal to establish a China-Asian Infrastructure Investment Bank (AIIB), the African Development Bank’s (AfDB) has lauded the initiative, pledging to work together with the new financial organisation to cope with the infrastructure challenges in Africa.

Speaking at a seminar hosted by a Chinese think tank Center for China and Globalization in Beijing, last week, AFDB president, Mr. Donald Kaberuka, who said the proposal was a good sign of better days ahead said: “I sense that the AIIB would be a game changer in international financial architecture”.

Kaberuka believes that the AIIB, as a major cooperation partner of the AfDB and other financial institutions, will provide a new source of development funding to the increasing need of countries around the globe.

Only recently, multilateral development banks, such as the World Bank and the AfDB, and the International Monetary Fund signaled plans to extend more than 400 billion dollars in financing, especially in the poorest and most fragile countries, over the next three years.

However, more is needed. Investment needs in infrastructure alone reach up to 1.5 trillion dollars a year in emerging and developing countries, according to a joint statement from the institutions.

According to Kaberuka, there is an estimated annual infrastructure’ funding gap of 50 billion dollars in his continent at present. Thus “we should work with the AIIB closely, ensuring the money being put into the right place,” said Kaberuka.
On the continent, only South Africa and Egypt, among the total 57 prospective founders, signed the charter for AIIB on July 1.
“Though the AIIB is fundamentally established to deal with Asian countries, it is an open institution and I will be more than willing to work with it in Africa’s infrastructure sector,” Kaberuka said.

Kaberuka also noted that China and Africa have a long history of sound collaboration.

China joined the AfDB in 1985. In 2014, the People’s Bank of China and AfDB signed a 2-billion-dollar co-financing fund known as the Africa Growing Together Fund, which is used alongside the AfDB’s own resources to finance eligible sovereign and non-sovereign guaranteed development projects in Africa.

The Board of Directors of the African Development Bank Group (AfDB) has approved a US $193-million Bank loan and a US$ 50-million loan from Africa Growing Together Fund (AGTF), to support the rehabilitation of the Chinsali-Nakonde road, a section of the North-South Corridor in Zambia, connecting Tanzania.

The project aims to improve road transport infrastructure and services as well as reduce transport costs between northern Zambia and southern Tanzania. It is also expected to provide efficient, cost-effective and fully integrated transport infrastructure and operations that addresses the needs of users and promotes socio-economic development.

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It comprises the reconstruction of the 210-km road between Chinsali and Nakonde; institutional support and capacity building; and resettlement and compensation. The civil works component also covers social infrastructure that includes the rehabilitation of 50 kilometres of feeder roads, construction of truck stops/ rest station at three locations to improve road safety and stimulate local trading opportunities.

The project also includes sensitisation on HIV/AIDS and environmental protection, as well as road safety; training opportunities for youth and women in road maintenance; and technical assistance to support specific aspects in the road sub-sector in Zambia, such as the operationalisation of the road maintenance strategy.

The Chinsali-Nakonde road is a strategic national and regional road link that forms a section of both the North-South Corridor, which traverses eight countries and the Trans-Africa Highway (Cape to Cairo).

The road section connects northern Zambia to Tanzania, and provides connectivity and access to the sea for landlocked Zambia. It links the port of Dar-es-Salaam in Tanzania to the Copper-belt in Southern Democratic Republic of Congo and Northern Zambia. It also connects the Copper-belt to the southern ports of South Africa. The present degraded condition of the road, which was constructed in the 1970s, is an impediment to national and regional mobility.
The rehabilitation project is aligned with the government’s 2014-2016 Mid-Term Expenditure Framework and the 2013-2016 Revised Sixth National Development Plan, as well as the 2030 National Long Term Vision.

It is also consistent with the first pillar of the Economic Diversification through Infrastructure Development of the revised Country Strategy Paper as well as the objectives of the Bank’s 2013-2022 Strategy.

With a total cost estimated at US $255.76 million; the AfDB and AGTF loans represent 75.5% and 19.5% of the costs, respectively. Zambia’s government is expected to provide the remaining 5% or US $12.76 million in the form of