Address barriers in SADC countries to expedite regional development

Picture: Monirul BHUIYAN/AFP – Inadequate infrastructure remains a major obstacle towards the Southern African Development Community (SADC) achieving integration and full and economic growth potential. However, some progress made in developing Transport Corridors include the One-Stop-Boarder-Posts (OSBPs) and bridges such as the Kazungula Bridge and its OSBP built over the Zambezi river in Kazungula, Botswana.

By Lufeyo Banda

Inadequate infrastructure remains a major obstacle towards the Southern African Development Community (SADC) achieving integration and full and economic growth potential. For instance, the estimated financing requirement to close SADC’s infrastructure deficit amounts are huge.

SADC Regional Infrastructure Development Master Plan (RIDMP) estimates US$ 12 billion annually until 2027 as the investment required to bridge the gap. There are many reasons attributed to Regional Economic Communities poor infrastructure investment performance, and some among them being lack of well-prepared regional projects, and lack of investment.

Some Progress made in Developing Transport Corridors include:

• One-Stop-Boarder-Posts (OSBP) and Bridge:
• The Kazungula Bridge and OSBP.
• Nakonde/Tunduma OSBP.
• Beitbridge OSBP – some infrastructure modernisation on Zimbabwe side taking place in readiness for OSBP
• OSBP -Mwami/Mchinji
• OSBP- Mandimba/Chiponde
• Corridor development:
• Maputo Development Corridor.
• North-South Corridoro Serenje-Nakonde
• Mpika to Chinsali
• Dar es Salaam Corridor: Dar es Salaam – Chalinze Toll Road (109 km)
• Maputo Development Corridor (World Bank, $380 million Trade facilitation project)
• Nacala Development Corridor
• Walvis Bay Corridor:
• Walvis Bay-Ndola-Lubumbashi Development Corridor – In March 2021, Namibia ratified the Tripartite agreement for the Corridor
• Trans Kalahari Corridor – Botswana and Namibia established a Project Management Office

Some Challenges facing SADC in developing regional projects include:

Slow domestication of the protocols, annexes and regional agreements into national policies, laws, regulations and standards, SADC Model Policy, legal and regulatory instruments, guidelines and standards.

• Lack of harmonised infrastructure plans – national, regional vs Development Finance Institutions for developing regional projects.
• Weak administrative and technical capacity of member states to implement reforms and develop regional projects.
• Fiscal constraints from Risk Management Committee (RMC) to finance regional infrastructure projects.
• Multiplicity of financing instruments to fund regional projects.
• Lack of pipeline of bankable regional projects (Caused partly by dependency on donor funding).
• Lack of regional financial instrument for resource mobilisation to prepare and finance development of regionaL projects. (All other regions in Africa except SADC have regional development banks and Funds)

Few solutions to overcome these challenges

1. Harmonise infrastructure plans.

2. Project selection and prioritisation should be based on development impact and strategic alignment criteria.

3. Create regional financing instruments for:

• Project preparation (developing a pipeline of bankable projects)

• Mobilisation of resources for investment from PVT and Depository Participants

4. Use innovative financing mechanism e.g. Public-private partnerships (PPPs)

5. Political will from RMCs to work collectively and not in isolation.

Regional infrastructure is critical but faces challenges in development as this usually involves two or more countries. While much progress has been made on developing regional projects, work remains especially on the soft infrastructure side.

Prioritisation of regional projects is critical and requires dialogue and alignment with national and regional strategies, alignment with regional integration priorities, and alignment to developmental outcomes such as enhancement of regional integration, reduced transit costs, and job creation.

The region should increasingly look to using innovative financing instruments to crowd-in private sector in financing and implementing regional projects including build-operate-transferS (BOT) and PPP approaches and through special-purpose entities (SPVs) and this can easily happen through a regional financing instrument.

Banda is a Chief Regional Operations Officer at the The African Development Bank Group.

This article forms part of his presentation at a webinar hosted by the South African Institute of International Affairs titled: SADC Infrastructure Futures – Pathways to Complementary Regional Interconnectivity