Trade is critical for generating economic growth and reducing poverty. Without good quality infrastructure roads, rail, and ports the cost of trade and transport rises. In Southern Africa transport costs are 73% higher than in the EU and US, limiting the ability of the region to trade competitively. Landlocked countries such as Zambia are especially affected, facing transport costs around 50% higher than coastal countries. As a consequence their trade volume is some 60% smaller .
On the 6th April, DFID announced £100 million for the implementation of an innovative and comprehensive transport and cross-border trade reform programme along the North-South Corridor combined with a broader package of regional trade-related reforms. The initiative is also supported by other donors and will transform Southern and East African trading opportunities.
The North South Corridor will involve upgrading 4000 km of road, rehabilitating 600 km of rail track and help to accelerate the generation of 35 Giga Watts of new power capacity through the Southern African Power Pool (SAPP, and to enable a better system for power transmission power across the region by 2015. Improvements on the NS Corridor could lead to transport cost savings to African based businesses in the order of US$50 million per year.