On Friday, Malawi inaugurated the country’s part of Nacala Corridor; the Kachaso-Nkaya railway section of the $4.9 billion (about K3.6 trillion) Nacala Railway Corridor Project.
The development follows a 30-year public-private partnership (PPP) arrangement between the Government of Malawi and Vale Logistics Limited in 2011.
The objective for developing transport corridors is to facilitate movement of goods and people, within, to and from Malawi for the land-locked country.
A train departing for Mozambique during the inauguration
UN Economic Report on Africa (2016) shows that Malawi’s transport sector accounts for 56 percent of landed transport costs and 30 percent of export costs, thereby increasing the costs of imported consumer goods by 15 percent and hurting Malawi’s regional trade competitiveness.
Chairperson of the boards of director of Nacala Corridor Logistics companies, Renato Torres, says while Malawi stands to enhance transport of both exports and imports, the country will be able to generate about $50 million (about K37 billion) annually, which is partly three percent of the 2017/18 National Budget.
“Nacala Corridor is the cheapest
and more efficient way to Malawi and we are confident that developing more the Nacala Corridor will have more solutions to Malawi.
“Malawi will be able to rake in about $50 million per year through concession fees. Again, we will be injecting $100 million [about K7.3 billion] annually towards developing the project and this means communities alomg the lines will still be able to benefit after this inauguration,” he said.
The fruition of the project means that the country will be able to increase by three fold its exports which currently stand at 100 000 tonnes per year on average for exports, according to Torres.
Minister of Transport and Public Works Jappie Mhango said aside from impacting on the transport costs, the country will benefit in terms of job creation and poverty reduction.
“From an economic perspective, government will be raising a lot of money through concession fees which will be utilised in the social sector. So far, 2 000 Malawins have benefited from the project getting employment which has an imopact on their income levels.
“This railway will translate into ease of movement and enhance doing of business by small and medium entrepreneurs,” he added.
Catholic University head of economics department Gilbert Kachamba asaid in the near future, imports to Malawi will become cheaper could also mean alt to the economy and one thing is by reducing forex pressure,” he said.
Started in 2012, the Nacala Corridor project has been led by Brazillian mining conglomerate Vale Logistics and Mozambique’s State port and railway operator CFM, with support from Mistui of Japan. n
Business News – The Nation Online