Nine pointers for policy makers to rethink road infrastructure in Zambia.
This Assessment has come up with a number of findings and conclusions that, taken together, raise fundamental issues regarding how best the country can proceed with maximising the benefits from road infrastructure development, on the one hand, and, on the other, minimising the potential dangers that come with inadequate design and planning for investments in this important sector of the economy. Looking closely at resource allocative patterns within the road infrastructure sector; reviewing the institutional, regulatory and legislative environment within which road investment decisions are made and implemented; examining the policy environment that facilitates interventions in the sector; and critically assessing the actual performance on the ground thus far particularly with respect to intra-sector prioritisa-
This Assessment has come up with a number of findings and conclusions that, taken together, raise fundamental issues regarding how best the country can proceed with maximising the benefits from road infrastructure development, on the one hand, and, on the other, minimising the potential dangers that come with inadequate design and planning for investments in this important sector of the economy. Looking closely at resource allocative patterns within the road infrastructure sector; reviewing the institutional, regulatory and legislative environment within which road investment decisions are made and implemented; examining the policy environment that facilitates interventions in the sector; and critically assessing the actual performance on the ground thus far particularly with respect to intra-sector prioritisation vis-à-vis the different roles played by various actors-cum-stakeholders, a number of messages have emerged and several recommendations tendered.
Below are the nine Core Messages that could help policy makers as they take a re-look at how best to proceed towards making the road infrastructure sector more pro-growth and responsive to the developmental needs of Zambia. Spending on Zambian roads has over the years remained significant but positive progress has been subdued due to investment prioritization challenges.
While it is clear that large investments in the roads infrastructure sector are desirable for economic growth and social transformation and, thus, ought to be given priority, more attention is still required to ensure that these resources, sourced mainly from external borrowing, are not unduly acting as a drain on the limited public finances. The debt threat is real and its effects on the larger economy should not be underplayed, hence the need to prudentially apply resources in the sector. Yields on Zambia’s Eurobonds have risen significantly, which has worsened the pain for holders. With losses of 11 percent this year (2018), the country’s dollar securities are the worst-performing in the Emerging Markets US$ Sovereign Bond Index that includes more than 70 countries. As prospects for concluding a US$1.3 billion bailout deal with the IMF remain unassured, the on-going questioning of the true size of Zambia’s external debt stock has not helped much in calming the market in spite of assurances from the Government regarding the correctness of what it has officially report, currently at US$8.7 billion. In the light of this, investments in roads infrastructure should not be handled in a manner that begins to seriously exacerbate the country’s high risk of debt distress. Rather, road infrastructure development prioritization in the sector should reflect a clear desire towards positive returns on investments. Yet the road infrastructure sector’s characteristic under- achieving of its own set targets has brought little hope towards making the sector contribute more progressively towards national developmental goals. Having an eye on reducing the comparatively high road construction costs must be part of the solution to making the roads sector contribute more positively to the country’s development Zambia is a high-cost country in the area of road construction relative to regional comparator countries. The high construction costs are caused by, inter alia, the onerous procurement processes and the fact the Government has quite often floated bids for road infrastructure projects without prior designs and plans that should provide indicative estimation of cost. Given the evident non-availability in a number of cases of detailed engineering road designs (which should include pavement and geometric designs, environmental management, drawings and estimated construction costs) before tendering and construction, opportunities for cost escalation have remained pervasive. Yet, contrary to this requirement, many road projects in Zambia are procured and commenced without detailed designs. This has resulted in bidders generally determining the cost independently of Government, a state of affairs that has triggered significant cost escalation, which, in turn, has opened opportunities for arbitrariness and corruption in price determination. Furthermore, guidance from the Attorney General provides that all price variations should not exceed 25 percent of the contractual price. Yet the audit of RDA that covered the 2012-2015 period reported that excessive variations on some contracts have ranged from 50 percent to 400 percent. In addition to this, Zambia currently lacks adequate transaction advisory services, a state of affairs that could partially explains the higher costing of road construction in the country than the regional average. In the light of these considerations, the current approach to procuring road works in Zambia remains highly inefficient and is clearly contributing to the country’s mounting and unsustainable debt burden. Yet investments in roads should help minimize the debt distress instead of exacerbating it. The situation is worsened by the fact that, because roads with lower economic returns are also being constructed, the potential for good returns from such investment is seriously curtailed. Going forward, Government should work towards streamlining its road works procurement system by reducing on processes that result in cost escalation. The Focus on road construction at the expense of maintenance and rehabilitation has remained problematic over the years and Zambian road users have continued to bear the cost of poor road maintenance The underfunding of maintenance activities has remained a characteristic aspect of roads development in Zambia. While it may seem politically popular in the short term to allocate more resources to road construction and, in the process, neglect road maintenance, the adverse effects of this have been troubling and have tended to derail the larger Government goal that aims to promote sustainable economic development through efficient road and cost-effective investments. It is noteworthy that, for every dollar that is ‘saved’ by not undertaking road maintenance, $3 is being spent by road users in increased Vehicle Operating Costs ( VOCs) resulting from the poor state of the roads that continue to cause frequent vehicles breakdowns and expensive repairs. Consequently, it is road users that have continued to shoulder the worst adverse effects of poor road maintenance in the form of increased VOCs. It is also a truism that the longer that road maintenance is delayed, the costlier it becomes to restore the road to good condition. The Road Development Agency (RDA) has, for example, reported that the repair costs can rise to six times maintenance costs after three years of neglect and to eighteen times after five years of neglect. In the light of these challenges, preventive road maintenance and road rehabilitation should be top priority in investment decisions.
Poorly maintained roads are simply bad for the larger economy
Poor road maintenance in Zambia has led to increased vehicle operating costs; longer travel-times; driver and passenger discomfort and worsening road traffic accidents for ordinary Zambians, which, collectively, have slowed down the country’s economic development. Under these conditions, to attribute the high traffic accident rate in Zambia primarily to bad driving and poor visibility at night ( hence the burning of passenger bus transport at night) seems to be a “blame-the-victim” superficial way of addressing a much more complex situation that calls for refocus on how best to diagnose the current multiple challenges in road transport, in general, and the roads investment pattern, in particular.
Institutional reforms on how decisions regarding investment choices are made matter and should be undertaken as a matter of urgency
A perennial problem in Zambia relates to poor investment targeting, which rarely secures reasonable economic returns. While the Assessment revealed that RDA has performed reasonably well, the Ministry of Housing and Infrastructure Development (MHID) appears to command an overbearing influence over the ultimate decisions regarding which road investment is pursued. It has been revealed that although RDA usually assesses and then submits to MHID for approval a list of priority road projects, political considerations that rarely considers value for money take precedence in the final decisions. While it is inevitable that the allocation of the roads budget will be influenced by political considerations to some extent, there should still be significant consideration of value for money and efficiency considerations in the application of public resources.
Roads development problems have been exacerbated by weak coordination among implementing agencies
The effectiveness of the various actors in the roads sector in meeting set goals has, over the years, been curtailed by weak coordination and duplicity among the main players. Quite often, roles and objectives of different actors are not well defined and, at times, conflictual, an aspect that has generally affected not only opportunities for more harmonised and coordinated road infrastructure development effort but also prospects for effective resource mobilization. Three different ministries as well as municipalities (under local government) have been responsible for different, albeit overlapping types of infrastructure but with little coordination and harmonisation of effort.
Mongu - Kalabo road in Zambia’s Western Province.