By FAITH CHILUBE MUTALE –
Trade and investment plays an integral role in the economic growth of any country.
This may be achieved through increased exports and promoting Foreign Direct Investment (FDI).
Developing countries, such as Zambia, can increase their revenue base and create employment through such trade and investment activities.
Being a landlocked country sharing borders with eight neighbours, Zambia is well placed to boost trade and earn the much needed revenue.
In line with Government’s agenda of transforming the economy, trade and investment is one of the ways of reviving, growing and sustaining the economy for the benefit of all Zambians.
In line with this, the Government has been exploring ways of enhancing trade and investment with neighbouring countries as well as others in the region.
Recently, Commerce, Trade and Industry Minister Chipoka Mulenga was in Luanda, Angola, where he signed an Addendum with Angolan Minister of Industry and Commerce Victor Fernandez to remove impediments that halted the effective implementation of the Bilateral Trade Agreement (BTA) signed in 2016.
The agreement was meant to enhance trade and economic relations between the two neighbouring countries.
In a joint communique, the two ministers highlighted the need for Zambia and Angola to strengthen their trade relations through redefining the existing policy and legal framework for bilateral trade engagements.
The current trade between the two countries is estimated at about US$5 million, a figure that is significantly low when compared to both countries’ trade potential.
This is also in spite of the fact that the two countries are natural allies due to their geographical proximity.
The two ministers are optimistic that the consensus attained on Article VI of the 2016 BTA, which dealt with market liberalization, will unlock trade opportunities.
The two countries have listed about 150 products which could be exported duty free to both countries, covering extractive, agro-processing, and manufacturing, among other sectors.
The ministers encouraged the business communities in both countries to intensify efforts aimed at creating mutually beneficial commercial and investment partnerships and encouraged them to begin focusing their efforts towards creating and exploiting value chains between Zambia and Angola.
Mr Chipoka is optimistic that the trade between the two countries will improve.
“The low trade performance between Zambia and Angola over the years can be attributed to the non-implementation of key trade instruments such as the bilateral agreement,” he said.
The Commerce, Trade and Industry minister said economic trade relations anchored on productive coexistence among private sector players is a vehicle through which poverty eradication and economic growth can be attained.
Mr Mulenga noted the need to use the natural resources and geographical proximity of Zambia and Angola as a vehicle through deeper bilateral economic and trade relations.
Mr Fernandez said trade and bilateral cooperation are essential for the sustainable growth of countries.
He said his government recognized the role that the private sector plays in national and economic development.
The Angolan Industry and Commerce minister said his government is ready to improve the trade deficit that exists between Zambia and his country.
He said there is need to enhance trade exchange between both countries and maximise the benefits.
“Even if Angola and Zambia are neighbours, they do not engage in trade that much. There is great potential for the two countries to collaborate and enhance trade for the benefit of the two countries,” he said.
Mr Fernandez called on the business communities of both countries to take advantage of the conducive environment that his country has put in place and see how best they can invest in various sectors of the economy for the benefit of the people of Zambia as well as the people of Angola.
Speaking on behalf of the Zambian business community, SEEDCO Managing Director Guntila Muleya pledged to work towards enhancement of commerce, trade and industry between the two countries.
“There are numerous opportunities that exist between the two countries that need to be exploited to contribute to national and economic growth,” Mr Muleya said.
Speaking at the end of his visit to Angola, Mr Mulenga said the objective of the visit had been achieved.
He said going forward, if the agreement is implemented, there would be enhanced trade between Zambia and Angola.
Mr Mulenga said for the past six years, nothing has moved since the bilateral agreement was signed in 2016.
“From the time we came into power, the President gave a directive that we need to increase our bilateral engagements with our neighbours and this should be premised on trade and investment, and Angola remains to be a very strategic partner in that facet,” Mr Mulenga said.
He said Zambia imports both refined and crude oil from the Middle East, as well as other countries, and yet Angola has oil, including LPG gas and others related products.
“We are looking at Angola, which has always been importing products such as beef, maize, pork and chickens from Europe,” he said.
Mr Mulenga said time has come for Zambia to change the way business is done.
The Commerce, Trade and Industry minister said President Hichilema and his Angolan counterpart President Joao Lourenco have the same kind of pan-African attitude where they share the vision of enhancing trade and investment in the region.
“My colleague here Victor Fernandez and I have been talking for the past three months to see how we can meet and revise the 2016 agreement and add a few other things to it. We have added fuel to the list of products we wish to import. However, we need to develop infrastructure, roads, set up pipelines to make this a reality. But the most important thing is to start talking and put this in motion,” Mr Mulenga said.
He commended Mr Hichilema for giving him the opportunity to visit Angola as the visit has not only been government to government but also private sector business to business.
“We are pushing so that this can be done fast to enable the people from the two countries to benefit from trade and investment,” he said.
The Zambian Government is looking for ways to reduce the cost of doing business.
One the one hand, Zambia has been importing daily goods from across the world when the same goods are available in neighbouring countries such as Angola.
On the other hand, Angola is importing goods that Zambia has when the two countries are only three hours apart.
“A time should come when our Government should stop complaining about effects of the global challenges because Zambia, right now, is producing enough wheat for local consumption. All we need to do to sustain imports to other countries is to increase production,” Mr Mulenga said.
He said the Government has made a pledge not to close borders to supplying goods to other countries but enhance production because through that, the country earns forex.
“We are not going to say because there is war in Europe therefore wheat is not coming, but we need to produce more. This year, a challenge is there, but after next year, we will be prepared as we will increase production of many products,” he said.
Angola is setting up oil refineries in which it is inviting Zambians to invest.
The country is able to refine oil even for its own use as well as extension of the service to countries such as Zambia.
The New Dawn Government is focused on not only increasing trade within the region, but also on reducing the cost of doing business.
Zambian Ambassador to Angola Lawrence Chalungamana said the Zambia-Angola relations have now shifted to economic development to promote trade and investment.
He Mr Mulenga visit to that country is one of the practical steps being taken in placing Zambia on the right trajectory so that the Angolan market is exploited.
“We signed a trade agreement in 2016 but failed to implement it because there was a disagreement with article 6, which Zambia was pushing to have a mandatory regime instead of leaving room or to be discretionary. So we managed to unlock that and this will enhance business between the two countries involving products that enjoy preferential treatment from Zambia and Angola,” he said.
Mr Chalungamana said the visit by Mr Mulenga is a major takeaway and an important achievement as development towards the implementation of the BTA has been made that will benefit all Zambians.
A business forum was held on the sidelines of the bilateral ministerial meeting that attracted several Zambian companies that include SEEDCO, Saro Agro, Trade Kings, Zambia Development Agency (ZDA), the Patent and Company Registration Agency (PACRA), the Zambia Revenue Authority (ZRA), AFRI Seed Zambia, among others. – ZANIS