Real Estate, Infrastructure, and Construction (RIFC)
At Reagan Blankfein Gates Legal Practitioners (RBGLP), we are dedicated to providing our clients with comprehensive insights into the Real Estate, Infrastructure, and Construction (RIFC) sectors in Zambia. The year 2024 has been marked by significant developments in these areas, presenting both opportunities and challenges for investors, developers, and stakeholders.
Construction Industry Growth
The Zambian construction industry is projected to grow by 3.6% in real terms in 2024, supported by increased investments in industrial, energy, and transport infrastructure projects. This growth is further bolstered by improved access to loans for construction activities.
Key Infrastructure Projects
- Lusaka-Ndola Dual Carriageway:
- Project Overview: The Lusaka-Ndola dual carriageway is a significant infrastructure project aimed at enhancing connectivity between Zambia’s capital, Lusaka, and the industrial hub of Ndola. The project involves upgrading the existing road to a dual carriageway to improve traffic flow and safety.
- Funding and Implementation: In March 2024, the National Pension Scheme Authority (NAPSA) signed a US$650 million agreement to fund the project, with construction expected to be completed within 36 months.
- TAZARA Railway Revitalisation:
- Project Overview: The Tanzania-Zambia Railway Authority (TAZARA) railway, a crucial cargo transport route from Zambia’s copper and cobalt mines to Tanzania’s coast, is set for rehabilitation to enhance the rail-sea transport network in East Africa.
- International Collaboration: In September 2024, China, Tanzania, and Zambia signed a memorandum of understanding to revitalize the aging railway, reflecting a commitment to improving regional infrastructure.
Government Initiatives and Budget Allocations
The Zambian government’s 2024 budget emphasizes infrastructure development as a catalyst for economic growth. Key allocations include:
- Transport and Logistics: ZMW 700 million allocated for the rehabilitation and upgrade of airports in Mansa, Mbala, Mongu, and Solwezi, creating opportunities in warehousing, residential accommodation, and office spaces for ancillary services.
- Road Infrastructure: ZMW 8.3 billion dedicated to road infrastructure works, aiming to improve connectivity and support economic activities across the country.
- Energy Sector: ZMW 598.4 million allocated for the electrification of farming blocks, including the construction of 200 km of power lines, promoting rural development and investment opportunities.
Real Estate Market Implications
The government’s focus on sectors such as agriculture, mining, education, and tourism is expected to stimulate demand in the real estate market. Opportunities include:
- Residential Housing: Increased demand for housing in emergent areas due to infrastructure development and sectoral growth.
- Commercial Properties: Opportunities in developing warehousing, retail, and office spaces to support expanding industries.
- Tourism Infrastructure: Investments in accommodation facilities, such as lodges and eco-tourism centres, in response to tourism sector enhancements.
Challenges and Considerations
Despite the positive outlook, challenges persist, including:
- High Interest Rates: In February 2024, the Bank of Zambia increased its interest rate to 12.5%, potentially affecting borrowing costs for construction projects.
- Inflationary Pressures: Rising inflation may impact construction costs and overall project feasibility.
RBGLP’s Commitment
At RBGLP, we offer specialised legal services to navigate the complexities of the RIFC sectors, including:
- Regulatory Compliance: Ensuring adherence to zoning laws, building codes, and environmental regulations.
- Contract Negotiation: Assisting in drafting and negotiating contracts to safeguard client interests.
- Dispute Resolution: Providing effective solutions for resolving construction and real estate disputes.
Conclusion
The RIFC sectors in Zambia are poised for growth, driven by substantial investments and government initiatives. Staying informed and compliant with the evolving legal and regulatory landscape is crucial for success. RBGLP is here to provide the expertise and support necessary to navigate these dynamic sectors.
For personalised legal assistance or more information on developments in the RIFC sectors, please contact our team at RBGLP.