Though stable and blessed with considerable mineral wealth, Zambia is steeped in contradictions: the national GDP has doubled since independence in 1964, but per capita income is currently only at two thirds of independence-year levels. Policies focused on reducing inflation and developing infrastructure have enabled the economy to maintain steady growth for more than six years. Yet, lingering institutional shortcomings mean that overall progress in long-term development is lagging. To journalist Nikiwe, it was clear that, on her latest Africa Connected journey, she needed to consult economic and business experts to figure out where Zambia really stands in terms of growth:
The copper-mining sector is central to Zambia’s prospects, covering more than 80% of its exports. Concern exists that the economy is not diversified enough to cope with a drop in international copper prices following a dramatic demand drop in 2015 that saw the Zambian kwacha become one of that year’s worst performing currencies.
Less than two years later, however, things are looking up. According to government reports, copper output may reach a record 800 000 tonnes as prices rebound. Minister of Mines and Mineral Development Christopher Yaluma concurs, saying that Zambia is the “most wanted” mining country for foreign investors.
Though she agrees that there is interest from overseas, Stanbic Zambia’s Head of Business Banking Mwensa Mutati says that most business expansion is from southern Africa, particularly South Africa. Apparently, Stanbic has seen “very significant growth” (predominantly in trade and sales), which has been powered by southern-African investors. This may be due to the fact that starting a business is comparatively easy in Zambia, as the necessary advice is readily available.
CEO of Pangaea Securities Limited Ceasr Siwale believes that Zambia’s growing middle-income group prefers to be associated with international brands, rather than “home-grown” ones. As the CEO of the company that introduced Mugg & Bean and Pizza Hut to the country, he is well-placed to offer such assessments.
While travelling through the capital of Lusaka, Nikiwe noted that many shopping malls are mostly occupied by South African retail chains, such as Pick ‘n Pay. Though the Zambian government requires a certain level of national ownership, this observation confirms Mr Siwale’s claim that Zambian’s prefer international brands.
One of the major challenges faced by foreign businesses is Zambia’s poor infrastructure. While interviewing Trudie van Rooyen, Co-founder of Go Vino, Nikiwe learned that the wine import company’s trucks can take up to 15 days to reach Lusaka from SA due to the country’s crumbling roads.
The infrastructure challenge also means that Zambia’s full tourism potential (and possible new tourist spots) cannot be reached; besides Victoria Falls, the country offers a number of stunning attractions, but they remain unexplored and unknown.
As one of the fastest growing countries in Africa bursting with resources, Zambia should be attracting foreign investors in droves. One way this fledgling economy can realise its true potential is to invest heavily in its unrefined infrastructure.