Why An­gola and DRC should be top on Zam­bia’s diplo­matic ef­forts…

Zambian Business Times - - FRONT PAGE -

Africa’s sec­ond largest cop­per pro­ducer Zam­bia, is said to be land-linked di­rectly to eight coun­tries.

Africa’s sec­ond largest cop­per pro­ducer Zam­bia, is said to be land-linked di­rectly to eight coun­tries. The South­ern African na­tion is in­di­rectly linked to the en­tire cen­tral, east­ern and south­ern African cor­ri­dor. For those that got ed­u­cated in the old and colo­nial in­flu­enced for­mal ed­u­ca­tion syl­labus from in­de­pen­dence in 1964 to as late as the 1990’s, this strate­gic lo­ca­tion was looked at as rather ‘land locked’, with a streak of disadvantages cited.

The rea­son for this rather neg­a­tive view of the coun­try’ lo­ca­tion an­chored on eco­nomic fo­cus of im­port­ing op­por­tu­ni­ties rather than ex­port ca­pa­bil­i­ties the na­tion would lever­age off. Hav­ing eight (8) neigh­bour­ing de­vel­op­ing coun­tries with less so­phis­ti­cated prod­uct and ser­vice re­quire­ments makes a bet­ter busi­ness case to widen the ex­port base for lo­cally en­dowed nat­u­ral and hu­man re­sources.

Due to rather his­tor­i­cal rea­sons, Zam­bia has fo­cused both its eco­nomic and so­cial diplo­matic ef­forts at nur­tur­ing re­la­tion­ships with its more south­ern neigh­bours such as South Africa, Zim­babwe and Namibia, with Botswana re­cently be­ing the new­est. Re­cently it was re­vealed that Zam­bia and Botswana are jointly con­struct­ing a USD240mil­lion Kazun­gula bridge which will see max­imi­sa­tion of trade op­por­tu­ni­ties in the SADC cor­ri­dor dubbed the busiest in South­ern Africa.

Al­ready es­tab­lished re­la­tion­ships should not be aban­doned, but eco­nomic data anal­y­sis is al­ways key for strate­gic plan­ning pur­poses. Neigh­bourly re­la­tions should not only be de­fined by lan­guage bar­ri­ers that were his­tor­i­cally im­posed on our peo­ples and coun­tries by im­pe­rial in­ter­ests.

The po­ten­tial for ex­ports of lo­cally ( Zam­bian) man­u­fac­tured goods, grown agro pro­duce and other ser­vices is very high. An­gola and the Demo­cratic Repub­lic of the Congo – DRC rank very high on coun­tries would po­ten­tially give lo­cal Zam­bian busi­nesses an ex­tended mar­ket. An­gola is en­dowed with oil and di­a­monds but an­nual trade data shows that trade be­tween the two coun­tries is shy of USD8mil­lion.

The DRC has a wealth of nat­u­ral min­eral wealth yet cur­rent trade sta­tis­tics are just a drop in the ocean of the po­ten­tial vol­umes that could be achieved be­tween the two coun­tries. Clearly there is un­tapped trade op­por­tu­ni­ties be­tween the na­tions cited with Zam­bia.

Be­cause of their rel­a­tively richer min­eral wealth, the two coun­tries – DRC and An­gola - of­fer a ready mar­ket for agro pro­duce, be it crops or live­stock. The higher value min­ing ca­pac­ity pro­vides an op­por­tu­nity for lux­ury spend­ing to en­able them im­port food and other man­u­fac­tured prod­ucts which Zam­bia can cap­i­talise on to fos­ter its eco­nomic and diplo­matic ef­forts on.

How a pipe line from An­gola to Zam­bia would nar­row pe­tro­leum im­port bill

An­gola and DRC can also ben­e­fit from lower prices as well as other cost sav­ings from other in­dus­trial prod­ucts to their cit­i­zens which they would ideally be im­port­ing from Europe but will now be get­ting from Zam­bia. Im­port­ing from Zam­bia will not only be cost ef­fec­tive, but will lead to greater ‘in­tra-Africa’ trade and over­all spread de­vel­op­ment to the re­gion. The con­clu­sion of the oil and gas deal for es­tab­lish­ment of a pipe­line be­tween Zam­bia and An­gola would not only re­sult in com­pres­sion of the cop­per pro­duc­ers ‘pe­tro­leum im­port bill’, but will also in­crease An­gola ex­ports to Zam­bia.

In com­par­i­son, Zam­bia runs a widen trade deficit with South Africa such that its diplo­matic ef­forts to get some tan­gi­ble deals for Zam­bian ex­ports to that coun­try have yielded lim­ited to no re­sults. Vis­its at pres­i­den­tial level with busi­ness coun­cils es­tab­lished be­tween Zam­bia and South Africa just lead to more and more forex flows in one con­stant net di­rec­tion, to South Africa. This sit­u­a­tion is sim­i­lar with most of the south­ern neigh­bours of Zam­bia who are more im­port part­ners than any­thing else.

Neg­a­tive trade deficits at ex­pense of the right diplo­matic ef­forts cause of cur­rency pres­sure

For ac­cu­mu­la­tion of wealth, at its most sim­plis­tic and ba­sic level, Zam­bian ex­ports have to ex­ceed im­ports. The coun­try has to fo­cus more on lo­cal man­u­fac­tur­ing and ex­port­ing ca­pa­bil­i­ties of its sur­plus. Per­sis­tent net deficit trade po­si­tions at the ex­pense of weigh­ing in diplo­matic ef­forts to cor­rect such anom­alies are key causers of cur­rency pres­sure Zam­bia ex­pe­ri­ences rel­a­tive to ma­jor con­vert­ible cur­ren­cies.

Sol­wezi -Jimbe road, North West­ern Rail­way and Air trans­port other trade agree­ments

The re­cent counter vis­its at pres­i­den­tial and min­is­te­rial lev­els be­tween Zam­bian Leader Edgar Lungu and newly elected An­gola leader Joao Lourenco should be fol­lowed through with prac­ti­cal mea­sures such as open­ing up and com­ple­tion of in­ter­con­nect­ing road trans­port board­ers such as the Sol­wezi-Jimbe road, com­mis­sion­ing and com­ple­tion of the North West­ern Rail­ways with con­nec­tiv­ity to the Benguela rail in An­gola as well as air trans­port agree­ments to fa­cil­i­tate the move­ment of both peo­ple and goods by air be­tween both coun­tries.

The sign­ing of the five deals though no spe­cific val­ues were an­nounced be­tween Zam­bia and An­gola in­cluded an agree­ment for the visa ex­emp­tion for or­di­nary pass­port hold­ers to al­low tourist and busi­ness peo­ple from the two coun­tries to visit and trade freely, with a re­cip­ro­cal visa ex­emp­tion on diplo­matic and of­fi­cial pass­ports.

The third agree­ment is for es­tab­lish­ing co­op­er­a­tion of se­cu­rity and pub­lic or­der to fight crimes, ter­ror­ism and money laun­der­ing. The turf deal in­volves an agree­ment to pro­vide mu­tual as­sis­tance in cus­toms ad­min­is­tra­tion in or­der to pre­vent, in­ves­ti­gate and sup­press cus­toms of­fenses. The fourth agree­ment was es­tab­lish­ment of a pro­to­col for co­op­er­a­tion aimed at es­tab­lish­ing and strength­en­ing bi­lat­eral re­la­tions in the agri­cul­tural sec­tor be­tween the two coun­tries.

The fifth agree­ment which seeks to en­hance co­op­er­a­tion in agro pro­duc­tion, agro re­search, and farm block de­vel­op­ment, re­search in live­stock pro­duc­tion, an­i­mal health and trans boarder dis­eases con­trol.

The fact that DRC and An­gola use French and Por­tuguese re­spec­tively as their adopted of­fi­cial lan­guages should not de­ter Zam­bia’s eco­nomic di­plo­macy ef­forts. We have peo­ple who in­habit these bor­der ar­eas that speak the same lo­cal lan­guages and in some in­stances share tra­di­tion lead­er­ship (Chiefs). In busi­ness and in­deed in the ground­ings of the prin­ci­ples of wealth of na­tions, it is of rec­og­nized im­por­tance to have good sup­plier ( im­port coun­tries) re­la­tions. It is even more im­por­tant to en­hance and deepen cus­tomers (ex­port coun­tries) re­la­tions to en­sure growth. One does not need to hold a doc­tor­ate in trade to de­ci­pher that it is bet­ter to im­port oil and gas from less dis­tant and friendly neigh­bour­ing coun­tries than the cur­rent mid­dle east sup­pli­ers who quote based on mar­ket prices re­gard­less of our his­tory as con­sis­tent cus­tomers.

Zam­bia’s Pres­i­dent Edgar Lungu speaks to his An­golan Coun­ter­part Pres­i­dent Joao Lourenco in Lusaka dur­ing a state visit to Zam­bia in Lusaka

Zim­babwe’s Pres­i­dent Em­mer­son Mnan­gagwa (left), Zam­bia’s Pres­i­dent Edgar Lungu (mid­dle) and Botswana’s for­mer Pres­i­dent Ian Khama in­spect­ing the Kazun­gula bridge in March 2018.

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