Zambia Railways and TAZARA Face Mounting Losses, Modernisation Plans Signal Hope for Regional Rail
The financial health of Zambia Railways Limited (ZRL) and the Tanzania-Zambia Railway Authority (TAZARA) has come under renewed scrutiny, with both entities grappling with persistent losses and operational hurdles that threaten the reliability and competitiveness of rail transport across Southern and East Africa. For industry professionals in sub-Saharan Africa, these developments underscore the urgent need for strategic investment and innovation in the region’s rail infrastructure.
According to the latest review by the Auditor General, ZRL recorded recurring operating losses in both 2023 and 2024, a trend largely attributed to high operating costs, an ageing locomotive fleet, and ongoing liquidity constraints. The company’s operating losses stood at K177.8 million in 2023 and K137.6 million in 2024, with expenses outpacing revenue by a significant margin—115% of total revenue in 2023, rising to 128% in 2024. This financial imbalance has been exacerbated by the lack of investment in new locomotives, with the current fleet averaging 40 years old, well beyond the manufacturer’s recommended lifespan. As a result, maintenance and repair costs for rolling stock and rail trucks doubled over the period, surging from K32.9 million in 2023 to K65.7 million in 2024.
Liquidity remains a pressing concern for ZRL, with negative working capital of K1.18 billion in 2023 and K1.17 billion in 2024, severely limiting the company’s ability to meet its financial obligations. The situation is further complicated by the failure to insure rolling stock valued at K447.5 million, a breach of public finance regulations that exposes the company to additional risk. These challenges highlight the broader issue of underinvestment in critical infrastructure, a theme that resonates across many African rail operators.
Meanwhile, TAZARA’s financial and operational struggles have also come to the fore. Over the three-year period ending June 2024, TAZARA had budgeted to generate K2.63 billion in income from freight, passenger services, rentals, and other sources. However, actual income reached only K1.07 billion, representing just 41% of the target and leaving a shortfall of K1.56 billion. Operational disruptions, including accidents that led to the closure of the main railway line for more than 6,600 hours, resulted in maintenance costs of approximately US\$7.04 million and an estimated revenue loss of US\$3.3 million.
Despite these setbacks, there are signs of optimism on the horizon. In November of the previous year, Zambia, Tanzania, and China announced a landmark agreement for the modernisation of the TAZARA railway at a cost of US\$1.4 billion. The ambitious project will see the rehabilitation of stations, tracks, tunnels, bridges, and the construction of new infrastructure along the 1,860 km corridor from Kapiri Mposhi in Zambia to the port of Dar-es-Salaam in Tanzania. The upgrade is expected to boost freight volumes on the line from the current 100,000 tonnes to an impressive 2.4 million tonnes annually.
For Africa’s tourism and logistics sectors, the revitalisation of these rail corridors is more than a matter of operational efficiency—it is a strategic imperative. Reliable and modern rail infrastructure is essential for supporting the movement of goods and people, enhancing regional connectivity, and unlocking new opportunities for trade and tourism. The planned investments in TAZARA, in particular, could transform the corridor into a vital artery for both domestic and international travel, linking inland markets with global shipping routes via the Indian Ocean.
As the region looks to the future, the experiences of ZRL and TAZARA serve as a powerful reminder of the importance of sustained investment, robust maintenance regimes, and sound financial management. For industry stakeholders, the coming years will demand a proactive approach to infrastructure renewal, innovative financing models, and a commitment to building resilient transport networks that can support Africa’s economic ambitions. The anticipated modernisation of TAZARA stands as a beacon of what is possible when governments and international partners align their efforts, offering a blueprint for the transformation of rail transport across the continent.
