Paving Prosperity – Roads Project Drives Zambia’s Farm-to-Market Compact

Sandwiched between tall, parched grass and miombo forest, dotted with mud, thatch, brick, and corrugated steel roofed structures, lies the M12 road from Chipata to Lundazi, in the Eastern Province of Zambia. Draped in dusty canvas, an overloaded truck with bricks and other building materials crawls up a short hill in a zig-zag pattern, from one road shoulder to the other, avoiding damaging potholes and kicking up clouds of dust. The truck perilously shares the road with pedestrians who walk alongside, as well as motorcycles and bicycles transporting both people and goods. The pot-hole ridden road steadily incurs more damage with each passing day and vehicle, making trips longer and more expensive, and the journey out of poverty longer for each road user.

The Zambia Farm-to-Market Compact aims to address key constraints within the country’s agriculture and agro-processing sectors. The compact includes four projects, including the Roads and Access Project with a budget of US$315 million. As MCC’s CEO Alice Albright stated, “This compact makes it easier for Zambia’s farmers and agriculture processors to sell their products and grow their businesses, an output critical to Zambia’s economic growth. MCC recognizes Zambia’s potential to not only become food secure, but also become a leading supplier of agriculture goods to the region and the world,” The Roads and Access project will fund the infrastructure, social interventions and policy reforms necessary to help realize this vision. More specifically, the project will reduce transportation costs and increase access to markets for men and women by improving about 210 miles (338km) of roads, improve access within agriculture corridors, and invest in policy, institutional reforms and capacity building within the road sector. The project currently includes planned investments on two road segments and buffer zones on each side which MCC and our partners in Zambia refer to as agricultural corridors.

Handros Zimba, a farmer in Lundazi district along the M12 road, told us “The main problem we have in Chasefu is taking the farm produce to markets. There is no road. So we really struggle to sell our crops to the intended audience. Chipata (185 km or 115 miles from Lundazi) has favorable prices for farmers, but the road is always a hinderance.”

In Zambia—land-linked and bordered by 8 other countries—you meet rugged terrain and miombo forest polka-dotted by a sparsely distributed population of almost 21 million people. The country is slightly larger in total area than Texas and more than four times the size of Missouri. More than 35% of the land is used for agriculture, though not to its full potential, and there are vast groundwater reserves. Most farmers, however, rely on rain rather than pumped drip irrigation, which drastically reduces agricultural outputs and economic production. The devastating effects of climate change have put Zambia in a precarious position of enduring its worst drought in over 40 years, and more than 6 million people at risk of hunger, malnutrition, and stunting, loss of about 40% of the corn harvest, and several hundred thousand livestock have died.

MCC is eager to realize the potential of our current partnership with the Government of the Republic of Zambia—a $491 million USD grant signed on October 17, 2024—to help transform the agriculture sector and significantly impact economic growth. Selected by MCC’s Board of Directors in 2021, teams of economic, environmental, social, and inclusion specialists analyzed Zambia’s most promising pathway to poverty reduction: investing in the roads, agriculture, agro-processing, and access to finance sectors. Studying these sectors showed that inadequate agricultural inputs and policies, poor road infrastructure, and inefficient institutions constrained Zambia’s growth, leading to persistent low farming yields, distortive policies, and stagnant sectoral growth limiting private investment.

Mercy Ngandu, a retired teacher and small-scale farmer in Mumbwa district, employs more than four permanent workers, and supports other women with her land. “Our road, it actually adds a lot to our cost of production. If, for example, I have a lot of products that need a whole truckload, I will need to call someone from Lusaka. For someone to reach this place, with the condition of this road, it costs a lot,” said Mercy. “If this road is to be worked on, it’s something that is going to benefit a lot of farmers.”

“We grow watermelons, tomatoes, and other crops and vegetables,” said Emily Mukoma in Chibombo District. “We use Mumbwa road when taking the farm produce to urban area markets. The challenge we have is that the road is in a bad state. So, when you want to hire a truck from town, they decline because of the state of the road. Those that do manage to come, they charge us more because of wear and tear. So, mostly all of the sales just go to transport, instead of making a good profit.” Mercy’s and Emily’s views are shared by participants in focus groups discussions and consultations in communities near M20 and M12. Women also face the added complication of having less access to more expensive—and larger volume—means of transport such as trucks. Using motorcycles, bicycles, and hand-carrying while walking in roads that are in poor condition limits earnings and economic progress. Women also reported being attacked and robbed as they walk long distances to markets.

By improving both the physical infrastructure of roads in Handros’, Mercy’s, and Emily’s districts, and coupling investments in policy reform and institutional capacity building, MCC will help Zambia realize its agricultural productivity potential and help enable the government to grow its economy in more inclusive, sustainable, and resilient ways.

The Zambia Farm-to-Market Compact will be implemented by the Millennium Challenge Account (MCA)–Zambia II, a new entity created by the Government of Zambia specifically to lead implementation of this compact program.

The compact’s grant funding also includes three other projects to enable a thriving private sector, incentivize lending and financing, and help large infrastructure projects in the agricultural space get access to capital:

• The Agriculture Policy Reform and Institutional Strengthening Project seeks to increase private sector-driven agriculture and agro-processing and support broader efforts by the Government of Zambia to address key policy challenges constraining private sector production and trade in grain markets.
• The Asset Finance Project aims to increase investment in electricity, irrigation, logistics, and processing equipment and infrastructure such as grain and produce storage facilities for agriculture and agro-processing. The project will focus specifically on making the cost of financing these investments more affordable for borrowers and providing incentives for lenders.
• The American Catalyst Facility for Development Project aims to facilitate the U.S. Development Finance Corporation’s (DFC) investments in Zambia in sectors such as agriculture and enable projects to reach financial close.

Together, these transformative investments in Zambia’s agriculture and related sectors will unlock private investment in the agricultural space, enabling the sector to create more employment opportunities and set Zambia on the path to become a breadbasket for the region.