IMF forecasts $10bn in exports for Zambia

IMF, forecasts, $10bn, exports, Zambia, economy, africa, china, investments, importsZambian Commerce, Trade, and Industry Minister Felix Mutati

Zambia is one of the world's fastest growing economies, with the International Monetary Fund projecting $10.4bn in exports over the next 10 years, placing it among Africa's top performers and giving it a credit rating that rivals Kenya, Ghana, and Angola

 

Record-high copper prices have Canada's First Quantum investing $1bn at the Trident mine and Brazil's Vale investing $400mn at Konkola North in a deal with African Rainbow Minerals.

Mining still accounts for about 80 per cent of foreign currency earnings, but non-metal exports including cement and sugar last year topped $1bn as part of an aggressive diversification program that saw the Zambia Development Agency win the U.N.n Conference on Trade and Development award for attracting renewable energy investors.

 

Private sector

“The private sector, civil society, and other economic players can help change the face of Africa from gloom to boom,” says Zambian Commerce, Trade, and Industry Minister Felix Mutati. “Our role as politicians is to ensure the environment is ripe and conducive for private-sector-led business to flourish.”

Nowhere is the enthusiasm for Zambian investment greater than in the newly-launched American Chamber of Commerce and Industry. Founding president Greg Marchand chose Zambia over six other African countries after comparing political and fiscal policies.

“A business school is a safe environment. So I look at Zambia as a business school,” Marchand says. “It allows you to learn how to do business in Africa in a country that has no civil unrest. It's English-speaking. It's a banking centre. It's a regional centre for business in the southern African region outside of South Africa.”

 

Graduates

Marchand is recruiting graduate business student interns from the University of Chicago, Northwestern University, and the University of Virginia to focus on projects that will attract further American investment.

“How does America do business in Africa? When you go talk to people in America, they really don't have a concept of how to do business here,” Marchand says. “So what we are trying to do is actually develop the model. You don't start a process or a project without a work plan. And you don't do that without a model of how you are going to be successful.”

Helping to launch the chamber of commerce, U.S. Secretary of State Hillary Clinton said 11 consecutive years of economic growth is testimony to Zambia's economic reforms.

“Business can't do it without a supportive government policy framework and governments can't do it without entrepreneurs and business people who are really going to take advantage of all of these opportunities,” Clinton says.

 

Licences cut

Trade minister Mutati says Lusaka has eliminated 92 business licenses, cutting the time it takes to register a business from 21 days to two hours.

“We have a market-driven policy framework where we have a liberal exchange rate. Bring in your money. You can take your money out,” Mutati says. “We protect your property and remain consistent on the commitments that we make to the investor. We think this is key to competitiveness.”

Zambezi Portland Cement is building another factor in Lusaka Chilanga to meet demand that exceeds the 1,200 tons of cement it is producing each day in Ndola.

Wise Power Systems is building a solar power equipment plant to serve towns that are off the national grid and are currently using thermal power.

Zambian food processor Freshpikit has a $42mn joint venture with PS International to can tomatoes for local and international consumption that is expected to create over 2,000 jobs.

First Quantum's Kansanshi Mine has established an electrical, metal fabrication, welding, and mining apprenticeship for 180 students over the next two years to “not only address the much needed technological capacity, but also broaden Zambia's capacity to create jobs,” says First Quantum Director of Operations Matt Pascall.

 

Lowering unemployment

Ministry of Science, Technology, and Vocational Training Permanent Secretary Chriticles Mwansa says it is a part of Zambia's pragmatic approach to lowering unemployment.

“The apprenticeship offers tailor-made skills that can easily be absorbed into the growing economy in sectors such as mining and construction,” Mwansa says.

Profits for small-scale dairy farmers are rising with Parmalat Zambia exporting yoghurt, butter, and UHT milk to the Democratic Republic of Congo, Malawi and Zimbabwe.

“We recognize the significant role that smallholder farmers play in the dairy sector, and we want to ensure that they grow with us,” says Parmalat Managing Director Piet Theron. “We promote the use of local milk in our products because we believe that as a business we need to grow with other stakeholders.”

 

Investments

Zambia has $2bn in investments from 13 firms in the China Economic Cooperation Zone near Kitwe and a 600MW hydroelectric station due at Kafue Gorge through a $1bn loan from the China Development Bank.

Zambia has $3bn of Indian investments including Bharti Airtel, a joint venture linking state-owned utility ZESO with Tata to produce 120MW at the Itezhi-Tezhi dam, and Nava Bharat Venture's 65 percent stake in Maamba Collieries to invest $600mn in coal-processing and a 300MW coal-fired thermal plant.

Hitachi is investing $15mn in a manufacturing plant to service mining machinery in the region in a move that Ambassador Akio Egawa says demonstrates Japan's commitment to honor promises made at the Tokyo International Conference on African Development.

Zambian President Rupiah Banda says it is further proof of the progress made by his government to lower the cost of doing business in Zambia through commercial reforms.

 

Farming and construction

“With this development, I am certain that Zambia shall become the frontrunner for earth moving equipment in the region,” President Banda says.

U.S-based Advanced African Solutions is looking to build $100mn worth of grain silos to meet the demands of a second consecutive record maize harvest of more than three million tonnes.

The Banda government is working with farmers to expand production in livestock, fish farming, and honey to graduate from an input support programme that distributes fertiliser.

“Farmers have to change attitudes toward farming by treating it as a serious business in order to achieve sustainable food security and increased income,” says Kapiri Mposhi District Commissioner Kunda Mwila.

The Economics Association of Zambia says duty-free trade preferences under the African Growth and Opportunity act will continue to help boost exports, especially in areas where Zambia has a competitive advantage including gemstones, cut flowers, and vegetables such as baby corn, asparagus, and carrots.

Trade Minister Mutati says the strength of American business in Zambia attracts more outside investment.

“If the American brand is present in Zambia, then the conditions for investment are good,” Mutati says. “The whole framework of governance and institutions are taken for granted because if Citi says 'I'm there,' if General Electric says 'I'm there,' you don't need to explain to anybody what your business environment is. They are the ones who are going to talk for you. They will tell the story.”

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