Diversifying Corridors To Reduce Risk

Speak to Zambians and theyll tell you straight the country is not landlocked, but land-linked. This mindset comes as Zambia leverages its strategic location to become a key gateway for regional trade and growth, reducing its historic dependence on South Africa as the main entry port. There is a realisation that it cant be the victim of being landlocked. Zambia is the key conduit for trade into the Democratic Republic of the Congo DRC from southern Africa and also serves as a trading hub for Malawi. They trade into parts of the DRC, Mozambique, Zimbabwe, Namibia and Botswana, said Duncan Bonnett, a partner at Africa House. Projects like the Kazungula Bridge and the Lobito Corridor, which will now extend into Zambia, add new dimensions to regional trade. With ongoing upgrades to roads and railways, Lusaka is increasingly playing a vital subregional role in business development and trade. Zambia has deliberately moved away from relying on just one route for its trade, seeking to diversify its corridors to ensure greater efficiency and reduce risks. If you look beyond Zambia and the broader Copperbelt region, there are many options Dar es Salaam, Nacala, Beira, Maputo, Walvis Bay and Lobito and thats excluding South Africa, said Bonnett. In fact, South Africa has lost the bulk of the copper trade from Zambia and the DRC over the past two years due to port inefficiencies and increased risks. He said time was also a crucial factor in choosing new trade routes. It takes 35 days for cargo to move from Kolwezi to Durban, compared to just eight days by train to Lobito. Border complexities, issues with foreign truck drivers in South Africa and rising truck hijackings have increased the risk premium for using South African routes. Other corridors are shorter and less risky, and Zambia is focused on not being locked into a single export route. He added that while having multiple route options was a positive development for Zambia, the opposite was true for South Africa. For every outbound shipment of copper, there needs to be a backhaul, and with alternative routes through Dar es Salaam, Lobito, Beira or Walvis Bay gaining importance, South Africa is not only losing the copper trade but is also seeing a decline in general trade. Experts agree that to regain its position as a key trade hub, South Africa must urgently invest in upgrading its port infrastructure and streamlining border procedures to reduce delays and risks. The country also needs to demonstrate a strong commitment to improving security for freight transport, particularly for valuable minerals like copper. With regional competitors rapidly enhancing their corridors, South Africa has little time to lose if it wants to reverse the current trend and win back lost business, said Bonnett. LV