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Thursday, 10 July 2008

A new hub policy?

A strong hint from Rupiah Banda earlier this week that perhaps the government is finally realising that being landlocked need not be a curse. What you need is a smart transport policy that reduces the transport costs by leveraging your advantages:

"For many years to come, the cheapest route from the eastern to the western coast of this part of Africa and vice-versa is potentially via Zambia especially once we have been connected to Angola. This is why we are looking for partners to develop inland and dry ports as well as air cargo hubs....."

9 comments:

  1. It would be interesting to know how they want to structure that development. How much if any of the new infrastructure is going to be foreign owned?

    I hope the goverment will structure such development much better than they did the development agreements, but this could be a great development.

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  2. Agreed.

    We perhaps can learn lessons from how Mozambique is approaching this issue. They have been quite successful in leveraging private sector investment.

    I think we need a new policy on aviation and rail, because these two are clearly critical to turn Zambia into a successful transport hub.

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  3. Dumb is smarter these days. Can we addresse the land issue in Zambia apart for narrowing it to Zimbabwe.How can cheese with holes said to be eaten when the holes merely signify that parts were taken just as cheese was and is made. Mandate it using hands and body.

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  4. http://www.postzambia.com/content/view/13420/40/

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  5. Kafue,

    Good find, and good for Avlow Zambia, heavy machinery service is an industry long overdue given the history of mining. The only problem with this is if the government has awarded too much protection from domestic not just foreign competition, because one company does not a "hub" make, and without a vibrant competitive industry with an established reputation for excellence it would be too easy to take away. That goes for air and rail transport as well, lack of competition has stifled them, and the least efficient (fuel or speed) trucks are winning.

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  6. Yakima,

    I assume the Investment Protection and Promotion agreements refer to the protection of the investor's investment from risks such as nationalization of property without fair compensation, rather than restricting industry competition.

    http://www.zda.org.zm/sites/zda/files/attachments/Investor%20Guide%20Handbook%20March%202009_1.pdf

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  7. Kafue,

    Indeed I do hope that this is the extent of it, and that the government will follow through on the "hub" concept by allowing the marketplace to expand in order to include multiple outfits (domestic preferably, even infant industry protected at first) trying to service that demand. Otherwise the "hub" concept won't work in the long term, unlike certain ocean ports, Zambia's location is not really that great from a shipping point of view. Excellence is what will bring heavy machinery from all eight neighbors and beyond to Zambian workshops, and that won't be accomplished (seriously no offense to Avlow, they deserve whatever head start they can preserve) without some pretty rigorous competition. These machines are being designed and manufactured overseas, so they already have the intimate expertise knowledge and will maintain that by releasing a steady stream of new proprietary models. Zambia can excel by repairing and extending the lifespan of aging equipment (which describes most of it in the region). It is a niche, but a niche that can be easily outsourced by neighbors unless there is an undeniable wealth of expertise across the border in Zambia. Otherwise this is just another favoured company sub-contracting to favoured mining interests, and therefore status quo and unexciting.

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  8. Using the hub concept, I believe fiber optic cables could be crisscrossing Zambia due to its central location in southern Africa. So telecommunications could theoretically become very cheap due to plentiful supply. Unlike mines which have limited reserves, one can always add a telecom network, also new technology such as VOIP provides additional communication channels.

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  9. Kafue,

    Yes! I very much agree there, because I just can't conceive of the lower costs for laying undersea cables making up for covering the whole distance around the Horn. Cables would have to become a lot lot cheaper per meter to enable that, so I definitely think there is geographic advantage to be gained in cable networks including power as well (unless this whole wireless power thing really takes off soon, which I just don't see happening on the macro scale). Aircraft routing might also benefit from a Zambian hub, but only if the uphill fuel costs can be rectified.

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