Analysis: FELIX TEMBO
IN THE last one month my eyes had been focused on international media such as CNN, BBC and others to learn of what was going to come out of the referendum in the United Kingdom. I was of the view that they were not going to decide to leave the largest market bloc in the world â€“ the European Union (EU).
Fortunately, the people decided otherwise and Britain is going it alone. Some other members may soon decide to leave, too! Does this decision made by the Britons have any bearing on countries like Zambia?
Indeed, this is a great opportunity for countries with so much raw materials like Zambia. We have market opportunities to explore in agriculture, mining and service provision. Firstly, we know that the EU provides huge agricultural subsidies to its member countries which make their products attain a competitive edge against those from poor developing countries like Zambia.
As individual countries, they might try to continue with the same programmes.
I would not be wrong to insinuate that they might suggest embracing genetics such as the genetically modified organisms (GMO) to match demand for certain products.
Those that might not want to go that route might just turn to Africa for supplies of agricultural produce if the latter can become a bit more efficient in its production. I have a feeling that if we can up our productivity, we might just make a breakthrough into this market because pointers are all falling in place.
For instance, we have seen an influx of multinational input supply companies investing in Zambia; this will definitely create competition. Once we stabilize our economy and put in place predictable financial policies, we might see input prices stabilizing and becoming affordable.
When you talk of the giant world multinational companies, they are all in Zambia, such as those in seed supply (Monsanto, DuPont, Syngenta), fertilisers (Yara, Omnia and a third one is almost setting up base), agrochemicals (Bayer, Syngenta, BASF), and implement suppliers (AGCO, John Deere).
As developing countries, we would like to see more member states leave this gigantic market bloc.
If that happens we stand a better chance of developing concrete bilateral trade agreements which can benefit our inefficient industries as they endeavour to gain the competitive edge.
We know that there are a lot of people from the EU that work in Britain, for instance, but with the current happenings, there will be a lot of restrictions in terms of mobility and Britain might turn to third world countries as labour from the EU might just become too dear.
In the mining industry, we sell our copper through the London Metal Exchange (LME) and the fact that Britain is about to exit the EU, they might just decide to establish another metal exchange with the remaining EU member countries.
This may work to our advantage as it might enhance our negotiating capacity due to improved competition. However, we all know that an opportunity becomes only one if you are doing something to improve the competitive advantage.
For instance, we have been singing about improving capacity in irrigation for a very long time.
We have not explored the potential we have in irrigation.
Assuming we had invested massively in irrigation as a country, we could have benefited from the market opportunities that have availed themselves this year.
Imagine if we had produced even as little as 40 percent of the potential in maize subsector, we could not have been complaining about the fluctuating currency because maize would have earned us adequate forex to stabilize our currency.
All it takes is putting the right investments in place way ahead of the opportunity. It is good that we can sniff the opportunity which might avail itself in the EU community once this bloc collapses.
What we need to do is that we need to prepare ourselves now. Potential is just polemics if we are not doing anything to invest in productivity.
We need to position ourselves now so that once that opportunity matures, we shall not say â€˜had weâ€™ or sembe as chipolopolo pundits would put it.
The disintegrating EU is a great opportunity for us. Just watch this space! Africa is the next business frontier.
This author is an agribusiness practitioner. email@example.com
Analysis: FELIX TEMBO