Editor's Comment

Industrialisation key to boosting Zambia’s trade

ZAMBIA’S High Commissioner to South Africa Emmanuel Mwamba (left) during the South Africa Trade and Investment Mission to this country at Cresta Golf View Hotel in Lusaka. Looking on is South African High Commissioner to Zambia Sikose Mji. PICTURE: ROYD SIBAJENE/ZANIS

ZAMBIA has been challenged to ‘up its game’ to tap into the South African market if it is to fully benefit from trading with that country.

The challenge by South Africa’s High Commissioner to Zambia, Sikose Mji, comes in the wake of the continued trade imbalance between the two countries in favour of South Africa.
Zambia Development Agency estimates that in 2015 Zambia only exported goods worth US$534 million while South Africa exported goods worth US$2.6 billion.
The Central Statistical Office monthly bulletin also indicates that in May, Zambia’s exports to South Africa, which is the fifth main export destination, accounted for 5.5 percent of the total export earnings. The major export products were Bullion semi-manufactured forms, accounting for 23.3 percent.
On the other hand, South Africa was also Zambia’s major source of imports in the same month accounting for 31.1 percent.
It is also worth noting that in May 2017, Zambia recorded a trade deficit valued at K333.1 million from K1,166.6 million recorded in April 2017. This means that the country imported more than it exported in value terms.
As long as we continue to export less, we will not be able to rake in the much-needed foreign exchange in the country.
This also has a bearing on the strength and stability of our currency.
This is why we should take the challenge by South Africa’s High Commissioner to Zambia seriously to put in place measures that will help us tap into the South African market, which is one of our major trade partners as well as other countries across the globe.
The starting point for Zambia is to embrace President Lungu’s vision of industrialisation.
Since the PF government took office, it has been working to create a conducive environment for investment with a bias towards manufacturing.
The policy direction of the PF government has been to boost investments in the value addition to local primary materials with increased citizen participation.
In a bid to accelerate the industrialisation process, President Lungu has commissioned a number of projects such as the Zambia Sugar product alignment refinery plant in Mazabuka among others.
It is encouraging to note that the head of State acknowledges the importance of value addition in a bid to boost our export levels and subsequently grow the economy.
While we acknowledge the progress made so far, the reality is that as a country we still export more raw products as compared to finished ones.
However, this is not to say Zambia is not capable of adding value to its products.
We remember very well that before privatisation, Zambia was already adding value through Kafue and Mulungushi textiles, Kapiri Glass and Mansa Batteries among other viable industries.
Zambia therefore has potential to become a manufacturing hub for the region for a wide range of products and compete fairly with South Africa and other countries.
Zambia is endowed with vast natural resources such as abundant land, water, rich minerals, among others, as well as a competitive labour force.
Zambia should rise to the challenge and take advantage of investment opportunities in food processing, textiles and clothing, mineral processing, chemical products, engineering, leather products, electrical goods, pharmaceutical products and packaging materials.
For instance, there is need to go beyond growing oil seeds to processing.
There is also unexploited potential in the downstream processing of livestock products, especially in the beef and dairy industries, and fish-processing activities such as canning.
Zambia also needs to take advantage of the yawning market in the region by adding value to the maize thereby exporting maize products such as mealie-meal, cornflakes and many others instead of exporting the grain which will earn the country less foreign exchange.
Apart from boosting our exports and subsequently foreign exchange, industrialisation will help us reduce the amount of imports because we will be in a position to produce finished quality products for local consumption.
There are no two ways about it, industrialisation is critical to ensuring trade balance between Zambia and other countries, including South Africa.

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