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