AfDB pumps K27bn for Nacala Corridor project

The African Development Bank (AfDB) on Wednesday granted Malawi $37 million (about K27 billion) financial support for the completion of phase V of the Nacala Corridor project in the country.

Once completed the project is expected to, among other things, improve transport infrastructure in the country that remains a concern for private sector’s doing business in the country.

A statement from the AfDB said its board of directors approved the funds on Wednesday last week for the project as a sub-regional integration project in Southern Africa.

The project is to renovate a 55-kilometre stretch of road between Nsipe in Ntcheu and Liwonde in Machinga.

The project is expected to commence next month and it is projected to be completed in 2024.

On the other hand, the project will build a border post between Malawi and Mozambique.

Reads the statement: “The objective of this project is to facilitate trade between Malawi, northern Mozambique and Zambia by improving connectivity between the three countries. The Nacala Corridor represents the shortest route from the seaport to the two last mentioned countries.

“More than two million people regularly use this corridor for private trips and also for economic activities. Import-export companies from Malawi, Zambia, northern Mozambique, as well as tourists use this road to access various desired sites in the three border countries”.

The AfDB’s contribution towards the completion of the corridor represents 59 percent of the total project cost, and the European Union (EU) will contribute US $ 12 million (about K8.8 billion) to the project, representing 30 percent of the total cost.

It is expected that the remaining 11 percent contribution will be paid by the Malawi government.

Ministry of Finance, Economic Planning and Development spokesperson Davies Sado described the AfDB grant as a welcome development, saying the sector of the road needed uplift through comprehensive rehabilitation.

He said government is ready to commit its 11 percent contribution towards the project as in terms of counterpart funding from Treasury in agreed terms with development partners in the project.

Said Sado: “Through the AfDB funds, we will be able to work on the road and complimentary One Stop Border Post projects as agreed upon. Economically, the road is very important because it will ease trade and facilitate movement of goods and services to and from all angles of the corridor.

“Having completed the Liwonde-Mangochi road, we needed to complete that stretch to ensure that whichever route one takes, should be easily accessible as a route of economic importance.

Sado added that apart from the Liwonde–Mangochi Road and the new project in the offing, the regional project also constructed the Liwonde – Mandimba road with support from the African Development bank.

The Malawi Confederation of Chambers of Commerce and Industry (MCCCI) Malawi Business Climate Survey indicated that high transport costs weighs heavily on doing business.

The findings pointed out that 60 percent of exporters and close to 80 percent of importers both local and international lament of high transport costs especially road infrastructure, which leaves a lot to be desired in the country.

The report indicated that effective transport system would play a vital role in developing Malawi’s export base.

The private sector has been lamenting that burdensome procedures and corruption at foreign borders, inappropriate technology skills, tariff barriers abroad and technical requirements may be addressed through the one border post projects being implemented.n