World Bank to provide $500m to boost trade, competitiveness

Lusaka, April 6, 2009 – The World Bank has said it is prepared to approve an additional US$360 million over the next three years for a total of US$500 million in support of Africa's North-South Corridor (NSC) program.

On Monday in Lusaka, the World Bank's Vice President for Africa Ms. Obiageli Ezekwesili told a conference attended by several African heads of state that the Bank has already approved US$140 million in support of the core investment requirements of the Corridor, and is prepared to commit the additional funding over the coming three years.

The remaining US$500 million will be for non-core projects that are complementary to the NSC.

Core Corridor projects already being funded by the World Bank include the Tanzania Integrated Transport Project, and the Zambia Roads Rehabilitation and Maintenance Project. Existing complementary projects include the Beira Railway, and the Roads and Coastal Shipping Projects in Mozambique, and the Malawi Infrastructure Sector Investment Project. Planned complementary projects include a multi-modal transport project in the Democratic Republic of the Congo.

Meeting Monday in Lusaka, African leaders lauded donors for pledging up to US$1 billion for the NSC program, which is aimed at reducing the cost of doing business in 23 countries. The World Bank said it is committed to the NSC because of its vital role in inclusively developing Africa.

“The Program is creating a new paradigm for economic development in the region – one that deepens collaboration among regional economic communities, takes a holistic approach to trade facilitation and transport infrastructure, and builds new relationships with development partners and the private sector,” said Ms. Ezekwesili.

She applauded the member economic blocs of the NSC - the Common Market for East and Southern Africa (COMESA), East African Community (EAC) and the Southern African Development Community (SADC) - for their concerted effort in making the region more competitive in the wake of a global economic crisis.

“At a time when the global economic crisis severely threatens Africa's recent economic achievements, the Program highlights the central importance of focusing on regional solutions. More than ever, regional integration is an essential strategy for redressing the impacts of the current crisis, unlocking economies of scale, and sharpening competitiveness in Africa,” she said.

She, however, reaffirmed that unleashing economic growth through the NSC program requires policy administrative reforms supported by political will. She cited administrative reforms required to pull down national barriers in trade such as reducing cross-border clearing procedures, which lead to delays for both road and rail freight. She bemoaned the operational barriers between national rail networks.

“The Southern railway system is physically integrated, yet locomotives from one country are not allowed to travel on another country's network – we estimate the resulting delays in shipments cost as much as US$120 million a year,” Ms. Ezekwesili told the conference She, therefore, stressed the need to revisit contractual relationships and access rights linking the railways along the Corridor to make them more beneficial to trade in the region.

Earlier the African Union Commission Deputy Chairperson Mr. Erastus Mwencha told the conference that delays are not only at the border posts but at sea-ports as well where it takes an average of 23 days for a ship to off-load. One stop border crossings, such as the Chirundu post between Zambia and Zimbabwe, have been commended as an efficient way of reducing delays across borders.

The Africa Vice President applauded the four Heads of State who attended the conference, saying their leadership is key to the region's development. The host of the conference, Zambian President Rupiah Banda, was joined by President Mwai Kibaki of Kenya who is the chairperson of COMESA, South African President Kgalema Montlanthe chairperson of SADC, and Uganda's Yoweri Museveni who represented the EAC. Several other donors also attended the conference, including the European Union, DFID, USAID, and Japan