Nacala Road Corridor Project Phase III (Nsipe-Lowonde-Mangochi) Malawi


Overview

  • Reference: P-Z1-DB0-084
  • Approval date: 03/12/2013
  • Start date: 26/03/2015
  • Appraisal Date: 12/07/2013
  • Status: OngoingOnGo
  • Implementing Agency: NATIONAL ROAD AUTHORITHY
  • Location: Malawi

Description

The project will consist of 4 components as follows, road rehabilitation and safety improvements; transport and trade facilitation; social inclusiveness and climate change; and support to project management.


Objectives

The project development objectives are two-fold: at regional level, the objective is to contribute to improving road transportation and trade facilitation along the Nacala Road Corridor; and at national level, the development objective is to contribute to improving transport services in the Machinga-Mangochi districts to stimulate and support local economic activities (agriculture, tourism, and fisheries).

The expected project outcomes are, improved transport services between Liwonde and Mangochi (transport costs are expected to reduce by 20% marginal reductions in vehicle operating costs and travel time; improved processing time for clearance of imports and exports, expected to reduce from the current 20days to 10 days in 2017; and improved safety of the Liwonde-Mangochi. Accident rates are expected to fall by 40% after rehabilitation of the road because of the expected enhanced traffic calming features along the road.


Rationale

The project meets regional and national social-economic growth strategies. The national development strategy for Malawi for the next 5 years (MGDS II, 2011 -2016) is designed to create wealth and reduce poverty. To achieve this, the MGDS focus on nine key priority areas, among which transport infrastructure is a key priority area. The Bank's Country Strategy Paper for Malawi (CSP, 2013-2017), supports the MGDS and is anchored on two pillars: addressing infrastructure bottlenecks to enhance competitiveness and growth; and supporting actions to expand private sector investment and trade. The Nacala Road Corridor Development Project meets the above goals. In addition to the above, the Corridor is one of the important regional Transport Corridors identified by the SADC and contained in its 2012-2027 Regional Infrastructure Master Plan (SADC, RIMP) to be developed to enhance regional competitiveness. Based on the above, by supporting the project, the Bank will be contributing to addressing infrastructure and trade facilitation bottlenecks in the region to make it competitive.

The Bank is already supporting the Nacala Road Corridor Development Project. The proposed project is Phase IV of the Nacala Road Development Project. Other Phase phases include, Phase I involves rehabilitation of 348 km of road from Nampula to Cuamba in Mozambique and construction of 13 km bypass road west of Lilongwe city in Malawi); Phase II involves rehabilitation of 360 km of road from Luangwa Bridge to Mwami in Zambia; Phase III involves rehabilitation of 175 km of road from Cuamba to Mandimba-Lichinga in Mozambique. The Bank should thus support financing of Phase IV to ensure full realization of the economic benefits of the other road rehabilitation phases of the project under implementation along the corridor. In other words, if some sections of the road along the corridor are in good conditions while others are in poor conditions, those in good condition will be affected by the road sections in poor conditions in terms of overall corridor transport costs (travel time and vehicle operating costs).


Benefits

Malawi's competitiveness in international trade, as for other SADC landlocked countries depends on the efficiency of international transport corridors to reduce the high cost of transportation of imports and exports. Two major factors are attributed to the high cost of transportation, these are: long distances to the sea-ports and long and cumbersome clearance process for imports and exports.

Most of Malawi imports and exports are transported by road from Durban port to Blantyre (2,340 km); from Beira port through Tete to Blantyre (825 km) and Dar-e-Salaam to Lilongwe (1,667 km). By directing its imports and exports to the Port of Nacala, Malawi is expected to benefit from the short distance to the sea port in terms marginal reduction in transportation costs. The proposed project will contribute to improving one the important road links along the Nacala Road Corridor, the Liwonde and Mangochi road (75km).

Currently traders deal with several Government departments to clear imports and exports. The time taken to prepare and clear imports and exports documentation is on average, 20 days. The project will support Government in alleviating administrative barriers through establishment of a National Single Window (NSW), which will enable traders to submit all required documents through an electronic system. The project will also support establishment of one-Stop-Boarder-Posts between Malawi and Mozambique and between Malawi and Zambia to facilitate quick movement of traffic at the two border crossings.

The proposed project will contribute to movement of goods and services along the Nacala Road Corridor through improvement of key road sections and improvement of trade facilitation through establishment of One-Stop-Border-Posts at Mchinji and Chiponde as elaborated above.


Key contacts

MAKASA Davies Bwalya - OITC2


Costs

Finance source Amount
ADFUAC 42,970,000
GovernmentUAC 2,420,000
TotalUAC 45,390,000