Leaders of four African countries and representatives of European Commission (EC), World Trade Organizations (WTO), the World Bank (WB), African Union Commission, African Development Bank (AfDB) on Monday gathered in Lusaka to discuss joint efforts to improve the north-south corridor lifeline in the continent.
The four African Presidents committed to deepening regional integration and intensifying political support for the wide-ranging programme.
The African leaders include Zambian President Rupiah Banda, South African President Kgalema Motlanthe, Ugandan President Yoweri Museveni and Kenyan President Mwai Kibaki. The latter three respectively represent the Southern African Development Community (SADC), the Common Market for Eastern and Southern Africa (COMESA) and the East African Community (EAC).
The three regional economic communities (RECs) have pledged to work together towards the creation of a free trade area across their 26 member states. The corridor is the first major project under the newly formed Tripartite Task Force.
At the opening session of the two-day meeting, titled "North- South Corridor High Level Conference", the WB, the EC, the AfDB, Britain and a dozen other donors pledged 1.2 billion dollars in support of the North-South Corridor program.
Participants also include over 300 RECs delegates and more than 700 officials, business people, and diplomats.
The leaders and delegates will focus on the improvement of competitiveness in Africa by upgrading transport, trade environment and power supply.
The meeting will also deal with the details of the North-South Corridor Pilot Aid for Trade Programme, which is a joint COMESA- EAC-SADC initiative aimed at reducing the time and costs of land transport.
High costs and transit delays lead to lower production and trade levels, limiting the potential to raise GDP growth rates.
Zambian President Banda said limited infrastructure development on the continent is preventing countries from attracting the much needed foreign direct investment (FDI), stressing the need for concerted effort to overcome the challenge.
The Zambian leader said although the north-south project could go a long way in harmonizing customs procedures and upgrading infrastructure, it would increase trade and deepen the integration.
Kenyan President Kibaki said African countries need to move fast in increasing investment in infrastructure, adding it would be difficult to integrate African economies with poor infrastructure.
Roads, ports and railway networks should not be limited within national boundaries if they are to enhance inter-regional trade development, he said, citing telecommunications as an example in linking up remote communities and boosting trade.
President Kibaki said the COMESA, the SADC and the EAC have established the Free Trade Area (FTA), which is also a commitment to regional integration and eventual incorporation of the African continent.
The three trade regions will come up with an FTA encompassing 26 countries for the regional economic communities, he said.
South African President Motlanthe said Africa needs a robust master plan to improve its infrastructure. His Ugandan President Museveni said Africa needs financing for its infrastructure, urging African leaders to look for internal resources in view of the global economic recession.
African Union Vice Chairperson Erastus Mwencha told the official opening of the conference that infrastructure is key to Africa's competitiveness in the global economy, but bemoaned the current infrastructure challenges.
He said transport constitutes between 20 per cent to 40 per cent of production costs for landlocked countries on the continent, compared with 10 percent spent by developed nations, adding that it takes an average of six days for goods to be cleared at a customs check point at many African borders.
At an African harbour, it takes about three days for a ship to be off-loaded, he said, adding that all these factors were negative for Africa's development.
"With such costs, there is no way Africa can become competitive or integrated into the global economy," he said.
Pascal Lamy, WTO Director General, said the North-South Corridor is an example of a highly innovative regional Aid for Trade approach that can transform competitiveness and enhance regional trade flows.
"The project will promote development and poverty alleviation in the Southern African region and promote deeper regional integration. Such initiatives have never been more urgent than in the current global economic climate," the official said.
EAC Secretary General Juma Mwapachu, who is the current chairperson of the RECs' Tripartite Task Force, said the deepening of regional integration and partnership with the private sector is key to addressing the challenges of resource mobilization and improving competitiveness.
"Infrastructure is what unlocks the economic space so if it is not delivered, we cannot optimize the large market space we have created," he said.
According to AfDB President Donald Kaberuka, the cost of trading and transport in the region is currently much higher than the rest of the world. For example, transport costs in Southern Africa are 73 per cent higher than in the European Union and the United States.
This could be significantly reduced through investing in regional road and infrastructure, benefiting communities, businesses, producers and governments over the long-term, he said, adding that "improving infrastructure is vital if we are to realize the vast economic potential of Eastern and Southern Africa. "
The North-South Corridor comprises two priority NEPAD (New Partnership for Africa's Development) Corridors: Dar es Salaam Corridor linking the port of Dar es Salaam with the Copperbelt and North-South Corridor linking the Copperbelt to the southern ports in South Africa.
The Corridor, together with its adjacent spurs, services eight countries, including Tanzania, the Democratic Republic of Congo, Zambia, Malawi, Botswana, Zimbabwe, Mozambique and South Africa.
The North-South Corridor was selected because it is the busiest channel in the region in terms of values and volumes of freight. It is expected to get even busier in the years to come. However, if imports and exports that use the North-South Corridor continue to grow at the current rate, the corridor infrastructure will collapse unless remedial actions are taken.