By Cecilia Chiluba/Zambia/Lusaka
An Economist has hailed Zambia’s move to recapitalize the rail sector, saying it has potential to lower the cost of doing business, strengthen trade competitiveness and support sustainable economic growth if properly aligned with reforms and corridor-based planning.
Kelvin Chisanga howver, said the success of rail recapitalization will largely depend on governance reforms, commercial discipline and operational efficiency, warning that capital injection alone will not deliver the desired results.
Mr. Chisanga stated that rail investment should be viewed as a cost-containment and asset-preservation strategy rather than a pure expenditure item.
He cautioned that without strong management, transparent procurement systems and clear performance-based targets, new investment risks becoming another stranded public asset.
“Private sector participation, structured through credible public-private partnerships, is therefore essential to transfer operational risk and embed efficiency,” he said.
Mr. Chisanga stressed that rail sector recapitalization represents a strategic economic intervention with the potential to reshape Zambia’s cost structure and long-term growth trajectory.
“For decades, under-investment in rail infrastructure and rolling stock has forced the economy to rely heavily on road transport, raising logistics costs, accelerating road damage and weakening export competitiveness. Addressing this imbalance is both an economic and fiscal imperative,” Mr. Chisanga added.
He observed that from a productivity standpoint, rail transport offers significant economies of scale, particularly for bulk cargo such as minerals, agricultural produce, fuel and industrial inputs.
Mr. Chisanga’s comment follows Government’s decision to allocate K100 million towards the recapitalization of Zambia Railways Limited (ZRL).
“Recapitalizing Zambia Railways can and will reduce transport costs, improve reliability, and enhance supply chain efficiency across mining, agriculture and manufacturing. These efficiencies translate into improved margins for producers and stronger foreign exchange earnings for the country,” Mr. Chisanga stressed.
“Fiscal considerations are equally important. While recapitalization requires upfront capital, the long-term savings from reduced road maintenance and lower congestion are substantial.”
“Rail sector recapitalization is economically justified and strategically necessary for Zambia. If poorly executed, it risks adding fiscal pressure without delivering economic returns,” he said.
Meanwhile, Minister of Finance and National Planning Dr. Situmbeko Musokotwane recently emphasized that modernizing Zambia’s rail infrastructure is critical to reducing transport costs, protecting overburdened road networks and improving the country’s competitiveness as a land-linked economy.
“Rail is the most efficient and cost-effective way to move bulk cargo, and for a land-linked economy like Zambia, a dependable rail network is essential to lowering logistics costs, protecting highways, and improving competitiveness across mining, agriculture and manufacturing,” Dr. Musokotwane stated.
This national priority gained renewed momentum in November 2025 when the Government and the European Union signed a €50 million grant dedicated exclusively to ZRL. The Government policy places ZRL at the centre of long-term economic transformation.
As rehabilitation efforts progress, Zambia is rebuilding a key national asset, positioning itself as a more efficient and competitive link within regional trade and logistics systems.
