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At their regular meetings on Thursday, November 26, 2015, the Board of Directors of the African Development Bank Group (AfDB) approved two major transport support and facilitation programmes for Tanzania, Côte d’Ivoire and Mali, as well as an economic governance support programme for Cape Verde to be financed with combined loans and grants totaling US $545 million.
Under the approvals, Tanzania will receive a US $75.43-million African Development Fund concessional loan and a US $270.95-million African Development Bank loan to finance its Transport Sector Support Programme, which involves interventions in the country’s roads, rail and air transport sub-sectors.
Identified as a key part of the country’s transport sector priorities to support economic development, the programme includes the rehabilitation and upgrading of nearly 500 kilometres of roads to bitumen standard in Mainland Tanzania and Zanzibar Island; capacity building and construction of social infrastructure as well as studies in railway and air transport sub-sectors.
The development of Tanzania’s transport sector will make it possible for the country to develop its vast natural resources including agriculture and tourism and promote economic growth to help attain its aspirations to attain middle income status as enshrined in the Country’s Vision 2025.
For instance, the Tabora, Katavi and Ruvuma regions in the northwest and southwestern parts of the country are said to be delivering a fraction of their full agricultural potential due mainly to lack of infrastructure.
Thus, the target beneficiaries include farming communities in the two regions where about 90% of the population is engaged in agriculture, and where the road network remains relatively underdeveloped compared to the rest of the country. In Zanzibar, the road improvements will benefit communities engaged in the tourist and agriculture sectors. Under the social infrastructure component, the project will provide sanitation facilities at hospitals, schools and markets, fish-drying and bee-keeping facilities, upgrade of access roads to hospitals, and construct a jetty for fishing communities in Zanzibar. They will also serve as links between Tanzania and the neighbouring countries of Malawi and Mozambique through the Mtwara Corridor; and Zambia and Democratic Republic of Congo through the Tunduma/Nakonde border and Kasanga Port, respectively, and will benefit cross-border trade.
The project, to be implemented in five years, is estimated to cost US $384.29 million. The Bank’s contribution represents 88% of total costs while the government will provide the remaining 12%.
The approved funding for the project comprises African Development Fund and Transition Support Facility grants and loans amounting to US $70.77 million to Mali and African Development Bank and ADF loans totaling US $107.84 million for Côte d’Ivoire, which is accessing the AfDB’s non-concessional resource for the first time by virtue of the Bank’s new credit policy.
The multinational Mali-Côte d’Ivoire Road Development and Transport Facilitation Project on the Bamako-Zantiebougou-Boundiali-San-Pedro Corridor involves the upgrading of road sections on the Bamako-San Pedro corridor between Mali and Côte d'Ivoire, which provides an alternative road to neighbouring hinterland or landlocked countries.
The Bank’s intervention is in response to the critical needs of opening up the production areas of the two countries and thus contributing to improving competitiveness, diversifying their economies as well as reducing poverty. It will further assist the emergence of the Port of San Pedro in Côte d’Ivoire as a key transit port for neighbouring landlocked countries such as Mali and Burkina Faso. The project will connect the two countries via the Port of San Pedro, which will become a real transit port for Mali, Burkina Faso and the northern part of neighbouring Guinea. These roads are included in the priority programs of the West African Economic and Monetary Union (WAEMU) and the Economic Community of West African States (ECOWAS).
Aside from helping to develop San Pedro Port as a competitive transit port connecting the West-Central, South-West and North-West parts of Côte d’Ivoire to its hinterland and the neighbouring landlocked countries of Mali and Burkina, the project will also connect to the Eastern regions of Guinea and Liberia on completion.
In addition, the transport facilitation measures are designed to free the corridor of all non-tariff barriers through a proactive use of information and communication technologies. These include the construction of a One-Stop Border Post, the interconnection of customs IT systems, the establishment of a port’s single window at the Port of San Pedro and an electronic tracking system for cargo and vehicles along the corridor.
Some of the project’s deliverables include (i) improved level of service on the corridor and increased traffic and trade between the two countries; (ii) reduced logistics and transportation costs; and (iii) enhanced living conditions of local populations and their access to basic social services (safe water, schools, health centre facilities, etc.).
The project, to be implemented in five years from March 2016 to December 2020, is estimated to cost US $233.18 million (UA 166.93 million). The Bank’s contribution represents 84.32% percent of the total project cost.
PACE II is the first phase of a series of two programme-based budget support operations packaged to consolidate the gains of previous operations and contribute to sustained economic growth by improving the efficiency of public investment and supporting the promotion of private sector development.
Through structural reforms, the first component focuses on (i) improving public corporate governance and the public investment framework; and (ii) modernizing the framework of public-private partnerships. The second component will target (i) improving the business environment; and (ii) supporting entrepreneurship and the formalization of informal activities.
The programme is aligned with both the Bank’s Ten-Year Strategy (2013-2022) and the Country Strategy Paper (CSP) 2014-2018. It is in line with the Government’s 2014-2018 Growth and Poverty Reduction Strategy Paper (GPRSP III), which focuses on good governance and strengthening of the private sector, among other Bank and country policy and strategy documents.
It seeks to solve several challenges that could hamper Cape Verde’s economic growth in the medium term such as structural constraints relating to the small size of its domestic market, the country’s fragmentation (several islands), and the dearth of natural resources over which the authorities have little or no control. Others include (i) control of the debt levels by seeking other sources of financing, especially private, and by improving the management of public enterprises and major public investment projects to ensure better achievement of the desired effects in terms of economic growth; (ii) diversification of the economy by creating conditions conducive to the promotion of the private sector, given that the latter, being limited in size and often in the throes of problems due to insularity, is faced with a number of difficulties related to the cost of factors of production (electricity and transport), the poor quality of labour, bureaucracy and the weakness of the supervisory structure put in place to support the development of small and medium-sized enterprises (SMEs).
Proper management of public investments and a more developed private sector will improve the living conditions of the local population. Ultimately, the programme is expected to improve the quality of public services provided to users. The private sector will become more dynamic and responsive to increased opportunities from the massive public investment projects. These positive effects will spur economic growth in the country for the good of the people.
The programme will help to improve the living conditions of the poor and vulnerable groups including women as better management of structural public investment will create conditions for sustained economic growth as well as help to improve competitiveness and the country’s attractiveness for domestic and foreign private investments.
It is designed to impact gender issues in general, and women’s status in particular, notably through significant structural reforms that sustain the promotion of entrepreneurship through the operationalization of incubators for the tourism and agribusiness sectors, where women are most active. For instance, the programme envisages the number of new micro, small and medium-sized enterprises run by women would increase from 30 in 2014 to about 150 by 2017.