ESTHER MSETEKA, Lusaka
IT IS very difficult for any country to develop in the absence of interventions such as regional integration, investment promotion, agricultural development and industrialisation.
As such, Zambia like any other country, requires a solid industrial base to start adding value to agricultural produce and other natural resources to create wealth and employment.
Thus, Government has a task to ensure that it promotes investment and trade to achieve economic development through regional integration, which comes with competition. Therefore, a competitive market is an ingredient for economic growth and enables countries to adjust to changes and become more innovative.
Zambia has realised these integral factors by subscribing to various economic blocs that have played a positive role in the development of global trade resulting in economic integration.
Common Market for Eastern and Southern Africa (COMESA), which has its secretariat in Lusaka, is such a regional economic community (REC) which Zambia is affiliated to that helps to ease trade by improving the business climate and harmonising investment policies, procedures and regulations between member states.
Explaining the importance of regional integration and its impact on socio-economic benefits, COMESA director investment promotion and private sector development Thierry Kalonji notes that investments that have the potential to empower local people with jobs and opportunities to expand their businesses need to be prioritised.
“Government should pay attention to investments that empower the local people with jobs, and wealth creation.
“[It should also] concentrate on critical investments that will sustain Zambia’s currency and the economy as they are key in attracting investors and foreign director investment [FDIs],” Dr Kalonji said during the COMESA-Zambia media forum interaction in Siavonga recently.
In COMESA, investment promotion and facilitation is implemented within a framework
of the Common Investment Area which guides member states on the standards for treatment of investors and their investments in various sectors.
However, economic growth in the COMESA region requires a range of related development issues to be addressed comprising legislation, institutions, infrastructure, sectoral and human resource development, energy, transportation, standards and intellectual property.
These aspects generally need to be considered in relation to national, regional and international trends and developments in line with environmental and gender issues.
Dr Kalonji said although economic growth is influenced by a wide range of factors, the procedures and costs related to business start-ups within the individual COMESA countries are key.
Amidst challenges in regional trade, there are still opportunities that Zambia can harness to achieve socio-economic benefits from improved FDIs inflows and upgrade its stance.
In 2016, Zambia ranked number seven raking in US$409 million from FDIs in COMESA.
Data shows that in 2015, COMESA inward FDIs accounted for about US$19.28 billion while in 2016, over US$17.70 billion was recorded, representing a decrease of eight percent compared to the previous year.
The top five recipients of FDIs in COMESA for 2016 included Egypt recording US$8.1billion, Ethiopia with about US$3.20 billion while Democratic Republic of Congo and Sudan were at over US$1.2 billion and US$1 billion respectively.
Both Madagascar and Uganda recorded US$ 541 million each with Zambia trailing in the seventh position with US$409 million.
Despite not being among the top five performers, Zambia should not lose focus in its industrialisation and diversification drive to attain economic inclusiveness for all by engaging all players in formulating innovative ideas that can lead to the creation of new industries.
COMESA director for trade customs and monetary affairs Francis Mangeni advised Government not to relent on engaging various stakeholders to help market Zambia’s developmental, trade and economic agenda to the world.
Dr Mangeni believes Zambia is on the right track and calls for the creation of an enabling business environment that is appealing to investors as well as concerted efforts from all stakeholders including COMESA.
On the other hand, the Zambia Development Agency (ZDA) and Ministry of Commerce, Trade and Industry need to devise effective ways of publicising trade opportunities to lure more investors into the various sectors of the economy.
Dr Mangeni says private sector support helps to promote the diversification programme being spearheaded by Government.
“The diversification plan that Government is implementing is very important and should be done consistently by empowering
people with skills, providing trainings and also supporting institutions that are offering teachings on how to run businesses,” he says.
Of importance is the need for harmonisation of national and regional laws such as the COMESA Treaty to foster stronger economic integration.
Minister of Commerce, Trade and Industry Margaret Mwanakatwe has always emphasised the need to address the inconsistent domestic rules among member states.
Mrs Mwanakatwe notes that inconsistent domestic rules have increased uncertainties and imposed additional transaction, and compliance costs for international businesses.
“Regional integration will only be successful when businesses, consumers and governments become fully aware of the benefits, opportunities and being part of the global supply chain,” she says.
Importantly, Zambia needs to continue on its path of regional integration and to also move ahead with its commitment to fully participating in COMESA to reduce the cost of doing business and, ultimately, ease trade.