nepadbusinessfoundation

1. RECOMMENDEDPRIORITY DEVELOPMENT CORRIDORS AND RELATED PROJECTSby John RochaSENIOR PROJECT MANAGERPROJECT MANAGEMENT OFFICE19 June 2008 www.nepadbusinessfoundation.org

2. African Context:Start from what we are! • Resource-based exporter of minerals/metals (oil & gas, gold, coal, iron ore & ferro-alloys, bauxite/aluminium, copper, diamonds, etc. (>70% of Africa’s exports); • Resource-basedexporter of agric & agric-based commodities (cocoa, cotton, fruit & juices, sugar, grains, wood & paper/pulp, wool, meat, fish, etc.); • Insignificant exporter of manufactured goods; and • Very weak HR base (skills) except for a few niche competencies. • Weak infrastructure links – curtail exploitation & beneficiation of resources.

3. Thus, Africa’s short to medium term potential lies in our natural comparative advantage: Resource-based industries (competitive platform for finished products in the longer term and market for resource inputs industries) • Agricultural • Mineral • Forestry • Tourism • Fishing/Aquaculture • Energy (coal/gas & HEP) technology R&D marketing capital HR/HRD Finished High-Value Products transport services energy etc… Raw Mat. - Int. Product - Semi-Manufacture - Fabricated

4. TRANSPORT vs DEVELOPMENT CORRIDORS “Transport Corridor” is : a multi-modal corridor connecting two, or more points of economic activity as reliably and as cost effectively as possible. Focus - economic efficiency rather than economic distribution and it should ideally provide users with transport choices. A “Development Corridor” on the other hand - Characterised by the integrated nature of its programmes It requires transport and energy infrastructure Then crowds-in investment in high potential areas Configures anchor sectoral investment projects This serves as a basis for integrated development at a local and regional level

5. SPATIAL DEVELOPMENT PROGRAM (SDP) OBJECTIVES Stimulate investment-led economic growth and development; Catalyse other (sustainable) sectors; Facilitate intra- and extra- Africa trade; Promote regional economic cooperation and integration; Optimize the provision and utilization of infrastructure; Encourage beneficiation and economic diversification; Enhance competitiveness of African economies; and Stimulate employment and wealth creation.

6. SDP METHODOLOGY: KEY ASPECTS Inherent economic potential: Natural resources (agri & mineral); Configuration of investments to ensure infrastructure viability through sustainable revenue streams; Crowding-in of private sector investment; Promotes PPPs where feasible; Secure political commitment (Heads of State) and provide the requisite conducive environment; Ensure rapid planning and delivery projects and programmes (momentum).

7. What value does it add? Addresses the urgent need for effective investment prioritisation based on sound economic rationale; Links and synchronises private sector economic investment project opportunities with key infrastructure projects; Promotes the realisation of wider development potential (densification) catalysed by infrastructure provision and anchor investments; Provides spatial focus for strategies to promote regional economic integration & development. However, it is only one component of an integrated growth & development strategy! Focuses on low-hanging-fruit to catalyse development

8. RECOMMENDED DEVELOPMENT CORRIDORS FOR SHORT-LISTING AND PRIORITIZATION

9. CRITERIA FOR SELECTION • Must be aligned to NEPAD and supported by SADC Secretariat • Preferably cross-sectoral in character • Demonstrable potential to generate SHORT, MEDIUM to LONG-TERM benefits for NBF members • Enjoy high level government support within HOST countries, therefore considered a priority project at national, regional and continental level • Enjoy high level political support/commitment within South Africa government structures (i.e existing political/economic agreements between SA and targeted countries • Demonstrable commercial potential/viability • Highest potential to ring fence opportunities for NBF members and enhance local private sector participation • Anchor projects ready for take off, particularly in mining (high level investor interest in identified anchor projects). In other words, projects beyond conceptual stage (at Pre-feasibility and feasibility stages)

10. Bas Congo: Angola, DRC & Rep.Congo Central: Burundi, Rwanda & Tanzania. (Uganda) Lobito: Angola, DRC & Zambia North-South: Botswana, DRC, South Africa, Zambia & Zimbabwe

11. RATIONALE FOR RECOMENDING THESE CORRIDORS

12. ACCESS TO POTENTIAL MARKETS AND CONSUMERS: POPULATION DENSITY & ESTIMATES2010-2020 12m-15m 10m-13m 4m-5m 9m-13m 69m-93m 43m-54m 18m-24m 13m-15m 1,9m-2,1m 48m-51m

13. Mineral Resources Occurrence: Anchor Projects to Unlock SDI Potential

14. SignificantAgri-potential

15. Important forestry production, and large potential

16. And water potential…

17. TOURISM (North-South): OKAVANGO TRANSFRONTIER PARK

18. THE IMPACT OF INFRASTRUCTURE UPGRADE ON BUSINESS AND TRADE OPPORTUNITIES WITHIN RECOMMENDED PRIORITY DEVELOPMENT CORRIDORS • A study conducted by the Development Research Group of the World Bank posits a 5-year period for network upgrading, followed by a 10-year period of operation before new upgrade (Road Network Upgrading and Ovreland Trade Expansion in Sub-Saharan Africa, Uwe Deichmann and David Wheeler, February 2006) • The study estimates trade expansion in the range of U$ 20 billion annually or U$ 203 billion for the ten-year operational period • The assumption is that trade growth to full volume phases in continually during the initial 5-year period, adding U$ 50 billion to total trade volume • The estimated cost of upgrading is U$ 20,7 billion, with an annual maintenance cost of U$ 900 million that would phase in during the first 5 years and remain constant for the next 10 years • An estimated 8.4 million person-years of employment would be generated by upgrading, and employment of 365, 000 people for continuous maintenance • Overall the balance sheet looks good for network upgrading in Sub-Saharan Africa with total trade expansion over 15 years of U$ 254 billion, weighed against total costs of U$ 47 billion (U$ 5.9 billion/year for the first five years and U$ 1.8 billion/year thereafter)

19. Current Trade Estimate Along Recommended Corridors (U$ Million) Bas Congo Central Lobito North-South Source: Development Research Group, World Bank, February 2006

20. Post-Upgrading Trade Estimate Along Recommended Corridors (U$ Million) Bas Congo Central Lobito North-South Source: Development Research Group, World Bank, February 2006

21. City Trade Impacts of Corridor Upgrade (U$ Million)

22. ONGOING AND PLANNED PROJECTS ALONG RECOMMENDED DEVELOPMENT CORRIDORS

23. CENTRAL SDI Lake Kivu Gas Xstrata Kanga Project (Nickel) 2011, U$ 1,5bn Lake Victoria (Passenger & Goods) Rehabilitation of Dar Es Salaam Port (1,5 tonnes by 2015) Dar-Kigoma Rail Rehab (Concessioned) Airport Isimbara Gold Mine Muremera Mine, Burundi Agriculture: tea/coffee (Rwanda, Burundi & Tan), Cotton, sugar (Illovo), rice, vegetable oil & biofuels, fisheries Rehab Nelson Mandela Highway Road Rehab Oil Pipeline

24. LOBITO DEVELOPMENT CORRIDOR LOBITO SDP Lobito Port Rehabilitation Lobito Oil Refinery (U$ 3bn Lobito Gas Project. FS concluded. Com: 2007 The Copperbelt Agricultural Zone Lobito Railway Rehabilitation (2011) Designated Industrial Development Node Gove Hydro Project: FS, Com: 2008, Rehab U$ 28m Forest Zone Eucalyptus

25. ZAMBIA: Lobito & North-South SDI/Bas Congo (The Copperbelt) FS=Feasibility Luapula Hydro, FS-no, Exp.Com:2015, U$ 1500m Konkola North Copper Project Railway rehab FS Lumwana Project (Cu) (Equinox Minerals) Ndola Copperbelt Project Mukambo Project, ICS Copper Systems Kolwezi-Solwezi, Trans. DRC-Zambia, No FS, 2009 Special Economic Zone (China) U$ 250 m Copper Smelter Mumbwa Copper-Gold Project Kazungula Bridge (FS 08) Kafue Upper Expand, FS, Com: 2005/2006/2007 U$ 20m/U$20m/U$20m Okavango Transfrontier Park Livingstone-Katima (Zambia-Namibia), FS, Com: 2009, U$ 45m

26. NORTH-SOUTH DEVELOPMENT CORRIDOR The Copperbelt (DRC & Zambia) Economic Development Zone (China) Kolweizi-Solwezi Transmission 330kV, U$ 25m Lupane Gas project U$ 250m Okavango Transfrontier Park Kazungula Bridge Zimbabwe Great Dyke Mmamabula Coal Project Livingstone-Katima Mulilo Transmission, FS, U$ 45m Route 1 Route 2 Bushveld Complex Zambia-Namibia HVDC, FS, U$ 220m Mowana Copper Mine Waterberg Coal Fields

27. Grand Inga, FS, U$ 4025m, Exp.com: 2012 Planned and Ongoing Projects-Bas Congo/North-South Inga- Kolwezi Transmission (U$ 170m, FS,Exp.com:2010) AngloGold (gold), Anvil Mining (Copper & Silver), Nikanor (Copper & cobalt), Phelps Dodge (copper & cobalt), Kumba, First Quantum etc. Banro (Gold), TEAL INGA 3 (WESTCOR) U$ 3500m, FS ongoing Kinshasa-Brazzaville Bridge Matadi Port Feasibility Complete (U$ 78m)-Rehab Exp.Com: 2007 Kolweizi-Solwezi DRC-Zambia, No FS, 2009 (U$ 20m) Feasibility Study Complete (U$ 30m) Exp.Com: 2010 Luita Copper & Cobalt Proc.Fac (CAMEC) Aluminium Smelter (BHP) U$ 3bn Feasibility Complete (U$ 160m)-Rehab, refurb Exp.Com: 2008/2011 Feasibility Complete (U$ 20m)-Rehab Exp.Com: 2010 Uranium Mines Feasibility Complete (U$ 28m)-Rehab Exp.Com: 2009 Feasibility Complete (U$ 15m)-Rehab Exp.Com: 2008 Roads: ADB, WB,EU, KFW, DFID LNG Project –U$ 4bn (Angola

28. WAY FORWARD