Public-private partnerships (PPPs) are essential to unlock economic opportunities presented by the African Continental Free Trade Area (AfCFTA) in the transport and logistics industry for the movement of goods across the continent, says the Development Bank of Southern Africa (DBSA).
"Collaboration between the private sector and government is key to unlocking opportunities. For instance, the Lobito Railway Corridor is a brownfield project, where the private sector identified the opportunity and partnered with government," DBSA Senior Deal Originator Bongo Bacela said on Thursday.
The Lobito Corridor project entails the construction of almost 350 miles of rail line in Zambia, along with hundreds of miles of feeder roads, linking the southern part of the Democratic Republic of the Congo (DRC) and the northwestern part of Zambia to regional and global markets via Angola's Port of Lobito.
The Lobito Corridor ushers in myriad new opportunities for economic growth and development that will unlock the region's commercial competitiveness. This infrastructural investment is a powerful catalyst for the establishment of small businesses along the railway transport routes, fostering local economic growth.
"They [Zambia] entered into a concession agreement because the State-owned enterprise that was running the line was struggling to run it in an efficient manner, so given the experience and the knowledge of the industry by the private sector, they entered into a concession agreement with government.
"We believe that there will be economic opportunities that will be unlocked, traffic will be higher, both the DRC and Angola will benefit from a tax point of view. Jobs will be created and the whole world will benefit from the minerals that will be transported on the corridor," Bacela said.
The bank is involved in a number of transport corridors in the Southern African Development Community (SADC) region.
"We are involved in these projects because we understand the region needs regional integration to promote trade amongst the countries in Africa so we can achieve our developmental goals as the continent and improve economic activity between the various countries in the region.
"Without these [projects], there is now way that the countries can promote trade if we don't improve our transport infrastructure in the transport sector," Bacela said during a webinar hosted by the Department of Trade, Industry and Competition (the dtic) on Thursday.
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The bank is involved in the financing of the Lobito Railway Corridor, together with an American Development Finance Institution.
"We are looking to provide funding to the tune of up to $200 billion. We see this as an important corridor because of the minerals that are coming out of the DRC mines that must be evacuated and exported to markets such as China and the United States
"Our interest is mainly around some of the transition minerals such as lithium and some rare earth minerals that are coming from mines in the Zambia and the DRC," Bacela said.
The DBSA is a government-owned development finance institution mandated to promote economic growth as well as regional integration for sustainable development projects and programmes across the African continent.
It finances infrastructure projects in six sectors, namely, transport and logistics; Information and Communication Technologies (ICT); water and sanitation; energy, and social housing.
"Government cannot succeed without the private sector and the private sector cannot succeed without government because governments will have to issue licences and permits that are required for the private sector to operate the infrastructure," Bacela said.
He cited regulations, skills shortage, funding shortages and the currency mismatch as some of the challenges that the transport and logistics sector experience in the region.
