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Infrastructure projects should never wait

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NOT FULLY UTILISED—Railway network

By Tresor Mzanga

President Lazarus Chakwera’s first year in office was – for lack of a better word – lukewarm in terms of development projects.

The slowness in rolling out infrastructure projects was, according to government, a result of realigned priorities towards the fight against the Covid pandemic but, to citizens, it was due to lack of direction by the new administration.

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The optics around his presidency were not encouraging for a man many thought was going to immediately mirror John Pombe Magufuli’s type of leadership.

However, the tide seems to have turned already, if what we are seeing around is anything to go by.

There are several projects underway nationwide following the passing of the 2021-22 National Budget a couple of months ago.

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From his sentiments via media interviews and speeches in various fora, Chakwera has stamped his commitment in ensuring that the country gets on a rapid trajectory to get projects done, well and timely.

The development portfolio has projects that are carried over from the previous administration. Most of these stalled due to contractual and/or logistical anomalies.

Then there are those whose construction is commencing just now regardless of whether they were designed before the Tonse Administration came to power.

Financing

Where Chakwera seems to have found his magic wand is on financing of the projects he wants done.

To overcome funding challenges, his administration has devised a plan to source funds locally for some of the projects. Others will still be funded by development partners.

Government intends to raise K1 trillion through an infrastructure bond to finance 15 projects across the country.

The first 10-year infrastructure bond that was floated by the Reserve Bank of Malawi recently yielded about K20 billion. It is expected that government will be issuing these bonds quarterly for the next five years.

Some road projects to be financed under these primary bonds are the M5 from Balaka to Nkhata Bay, Rumphi-Nyika- Chitipa Road, Dzaleka-Ntchisi- Mpalo-Malomo, Jenda-Edingeni- Engalaweni-Manyamula Road and Ntcheu-Tsangano-Neno- Mwanza Road.

Also in the offing is the rehabilitation of the M1 Road from Kamuzu International Airport junction to Mzimba Turnoff and from Kacheche to Chiweta.

There have been contrasting sentiments from economic and development experts on the rationale of raising funds through a special development bond.

Those against the bond say it only stresses the economy by increasing government domestic borrowing. The country’s accumulated debt stock stands at over K4.76 trillion, of which K2.72 trillion is domestic.

However, proponents see the move as a solution to create more jobs, stimulate economic activity and empower local contractors and suppliers via a mandatory 30 percent local representation set by government in projects won by foreign contractors.

On top of everything, once the projects are completed they will transform the infrastructure footprint and improve the aesthetics of the country.

University of Malawi Professor of Economics Ben Kalua has since lauded government for introducing such long instruments to fund infrastructure projects.

Finance Minister Felix Mlusu believes that this bond will incentivise Malawians, including those in the diaspora, to participate in nation building through infrastructure financing.

Chakwera seems to understand the balance between accumulating debt on one hand and creating value to lives of Malawians on the other. He argues that every time Malawi borrows, it must be for productive spending such as development, not consumption.

This explains why his government has increased the development budget by 26 percent in the K2.2 trillion 2021-2022 national budget.

It is no coincidence that this administration is taking a paradigm shift towards more development than consumption.

Some economists believe that this upward trajectory in development estimates is necessary considering that the 2021-2022 budget is the first to incorporate Malawi’s newly-adopted national development plan, Malawi (Mw) 2063.

It is by default also the last budget to implement the previous development blueprint, Malawi Growth and Development Strategy.

Other government agencies are also separately issuing own bonds to finance some of the projects driven by the government.

For instance, a consortium of Old Mutual Investment Group and Standard Bank plc is behind the bond issues by Roads Fund Administration to finance the K19 billion Kenyatta Drive expansion project in Lilongwe.

The Kenyatta Drive project will improve the stretch from Parliament Building Round-about to National Bank in Old Town from two to six lanes and a partial Cloverleaf Interchange at Kamuzu Central Hospital Roundabout.

The second phase of the project will involve another six-lane road on Mzimba Drive from Crossroads Roundabout to Central Medical Stores Trust via the same cloverleaf interchange.

The new local financing model has cut a lot of red tape associated with projects that involve foreign stakeholders. This is probably why there is an infrastructure blitz across the country within a short time.

Other notable road projects in the pipeline between now and 2025 include expansion to dual carriageway of the M1 Road from Crossroads Round-about to Kanengo, expected to cost $25 million, expansion to dual carriageway of the M1 section between Lilongwe CCAP to Crossroads via Lilongwe Hotel and rehabilitation of the Nsipe- Liwonde stretch.

There is also a lot of activity in city councils where key roads are being upgraded such as the Kapeni Road in Blantyre and Area 23 Road in Lilongwe.

During the last election campaign, Chakwera promised to transform Malawi through a vibrant rail system that, in the coming years, will replace overreliance on road system when transporting exports and imports.

There is a revamp and construction of a rail system that will connect Malawi to regional ports and markets.

When he commissioned the Shire North railway bridge, Chakwera labelled the railway system as the only pragmatic precept for land-linked Malawi to have adequate trade opportunities.

“The dawn of our democracy saw the rise of new generational leaders who failed to appreciate the ingenuity and pragmatism of a robust railway system.

“As a result, we are a country heavily dependent on more expensive modes of transport. This means Malawians pay three or four times more than people in neighbouring countries for the same imported goods,” he said.

Late last year the President signed a pact with his Mozambican counterpart Filipe Nyusi to reconnect Malawi and Mozambique with a vibrant railway line as a way of boosting trade between the two countries.

Months later, Mozambique ventured into a $30 million rehabilitation project of its railway system to connect to Malawi.

Malawi will soon commence reconstruction of the 72-kilometre Marka-Bangula railway line as part of revamping the railway line that connects Malawi to the ports of Beira and Nacala.

It is sad that the project is being derailed; but also necessary that all suspicion is cleared as soon as possible.

Managing the politics

In a country whose body politic thrives on flaunting of projects to increase political capital, rhetoric around who is doing what has been the order of the day.

It is important that projects that are flowing from the previous administration are being given the ultimate attention. At the end, they are all meant to improve the welfare of Malawians regardless of their political leanings.

The National Planning Commission, the coordinating agency of the country’s Mw2063, has put it bluntly that, going forward, all political parties must tie their manifestos to the vision.

With the new approach, national projects will not have to be shuffled around at the discretion of those who hold political power.

In the same vein, the backlog of projects that stalled is being cleared.

At the end of it all, these projects will remain, standing generations after this one is gone. It is national interest that supersedes everything.

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