Events of the past few months have shown beyond doubt that Zambia will always feel the fullest impact of reduced copper prices on the international market and that its future can only be guaranteed by a well-developed agriculture sector.
Perusing my archival records this week I came across a report which serves to confirm once more that Zambia’s dependence on a mono-economy based on copper mining will always pose major challenges.
Headlined ‘Record maize harvest puts Zambia among SADC best performers in 2010’, the insightful report said:
As the year draws to a close, indications are that Zambia will be one of the Southern African Development Community (SADC) states set to achieve most of their economic targets for the year under review.
The country’s targeted overall gross domestic product (GDP) growth of 6.6 per cent will be attained. Inflation at 7.3 per cent in October is already below the year-end target of eight per cent, and gross international reserves at US$2 billion, equivalent to four months of import cover, are at their highest in recent years.
Foreign Direct Investment (FDI) is already above the target figure of $3 billion and the Zambia Development Agency (ZDA) recently disclosed that the figure may reach the $4 billion mark by the end of the year.
A record maize harvest of 2.8 million tonnes not only saw to a 7.6 per cent growth in agriculture but has been a major driver of overall growth.
Tourism has seen a rebound; from a contraction of 13.4 per cent in 2009, it is projected to grow by 25 per cent in 2010.
Increased copper exports and price and the continuing boom in the construction industry are expected to spur further growth.
Further, due mainly to increased metal exports, Zambia has for most of 2010 recorded a trade surplus.
It was K639 billion last month and was at its highest in March when it stood at K1.1 trillion.
There has also been a surge in non-mineral exports which are expected to be worth $1 billion by the year end. The exchange rate has been stable and the local currency is projected to firm up further as the US dollar depreciates.
Current mineral exploration by some of the world’s biggest players is expected to drive increased mineral production.
Copper production, for instance, is expected to exceed the 2009 figure of 720,000 tonnes and touch the one-million mark within the next three years.
There is consensus that economic performance is on the upswing and that the positive trend will continue for the next 36 months driven by a projected increase in demand and production of copper, cobalt, coal and nickel.
Going forward, low inflation is expected to offset the adverse effects of any rises in the price of crude oil at least in the short-term and the political uncertainty associated with the forthcoming 2011 elections is not expected to dampen long-term growth.  The projection is of robust growth of the order of at least six to eight per cent yearly for the next three years.
Thus the targeted GDP growth of 6.4 per cent for 2011 premised on the revival of manufacturing, transport and communication sectors and continued growth in mining, construction and tourism is widely considered to be well within reach.
The International Monetary Fund (IMF) commended Zambia for sound management of the economy which has resulted in achieving set targets.
The IMF Mission chief for Zambia, George Tsibouris was effusive in his praise when he spoke in Lusaka on November 3 and observed that the country was on course for more growth in 2011.
Still, even with these positive results Zambia’s economy is not seen to be growing fast enough. Gains from the copper boom and higher export earnings are still not seen to have impacted the country positively.
For instance both unemployment and poverty remain high.
The social sectors of health and education still need to perform better. Hence, analysts insist that the country still needs to boost spending on capital projects to address the structural problems of the economy.
For the long-term, however, economic analysts are agreed that the current level of growth will be difficult to sustain and stifled unless structural constraints are overcome quickly.
It is pointed out that there has still been little progress in addressing the structural constraints that stall economic growth.
The danger is perceived to be that once global demand and growth picks up, structural problems that are now masked by the downturn will quickly come back into play and wreak havoc on further progress.
Among these are poor roads, poor railway links and insufficient electricity-generation.
These are receiving attention but the problems they pose are far from being resolved.
The biggest structural problem with Zambia’s economy is, of course, the historical one: over-reliance on copper and mining in general.
Once the demand and price collapses, the country is rendered comatose and as happens that is when the urgency of diversification of the economy takes centre stage.
Despite the incessant shuffling of feet for years now, diversification has not proceeded far or fast enough.
There does not in fact seem to be any real strategy to achieve it within a time-frame or level that is absolutely required for the country to insulate itself from further global economic shocks.
The bulk of FDIs, for instance, are still in mining-related activities.
Agriculture and manufacturing, which have immense potential and are generally agreed to be the more  reliable engines of growth, remain in the doldrums, attracting comparatively little investment though there is now growing interest in large-scale cultivation of such plants as Jatropha (crop) for bio-fuels – an area which promises to attract increased foreign investment.
Agriculture with its potential to spawn food exports and agro-processing industries remains shackled to the vagaries of the weather with no appreciable irrigation capacity.
Hence, its performance is unpredictable from year to year depending on weather conditions.
Adverse weather conditions in the 2010/2011 season could result in under-performance with telling consequences on overall GDP growth in the New Year.
The report made reference to then MMD finance minister Situmbeko Musokotwane’s reflection on the need to diversify the country’s economy, which, it must be emphasissed, is also on top of the new Patriotic Front (PF) administration’s agenda.
According to the report, Dr Situmbeko was forthright, saying: “Improvements in metal export earnings will not deter government from its goal to promote the diversification of our economy and export base…our future prosperity depends less on our copper but more on our wildlife, electricity and beef.”
That notwithstanding, the report observed, there was little on the ground little to show for this stated resolve and the Achilles’ heel of the ‘Zambian economy remains its reliance on copper over whose price the country has virtually no say’.
So, despite the impressive results for 2010 that weakness combined with other structural ones may still return to haunt and ensure that the country does not remain in the race with regional economic giants South Africa and Botswana’.
From the above scenario, it is evident that for the next 50 years Zambia will need to reassess its strategy and develop the agricultural sector by making full use of its abundant natural resources, especially water.
Zambia is the only country in the 15-nation SADC economic bloc that is endowed with a number of lakes and perennial rivers.
These include Lake Bangweulu, Lake Mweru and Mweru Wantipa(Luapula Province), Lake Tanganyika (Northern Province) and Lake Kariba (Southern Province).
Perennial rivers include Chambeshi (Northern), Luapula, Kafue, which meanders its way through the Copperbelt, Central, Lusaka and Southern provinces), Luangwa (Lusaka, Eastern provinces)and the Zambezi(North-western, Western and Southern provinces).
In the light of the present problems, including electricity shortages that have seriously affected productivity, I believe the time is ripe for Zambia to think of constructing a North-South Water-Carrier Pipeline (from the Great Lakes Region (GLR) to ensure all-year round water supplies for enhanced agricultural production as well as for human and livestock consumption.
Zambia has a proven record in this regard.
Following the declaration of UDI (unilateral declaration of independence) in Rhodesia on November 11, 1965, Zambia and Tanzania teamed up to construct the Tazama Oil Pipeline from Tanzania’s capital city of Dar-es-Salaam, on the Indian Ocean coastline, inland to Ndola’s Indeni Oil Refinery, thus enabling the landlocked country to process its own fuel.
Zambia is also endowed with much underground water.
History shows that some mines like Kansanshi (which has since been revived) had to be close down at some stage because they were flooded by underground water.
The former Broken Hill mine in Kabwe was similarly abandoned due to flooding.
Surely such water could be harnessed for irrigation and other commercial and industrial purposes.
Or is Zambia waiting for another French Professor Rene Dumont (False Start in Africa) to come and ‘advise’ us on what to do with what is – by every account – the obvious alternative to the current crisis?
A North-South Water Carrier (similar to that Botswana, a semi-arid country, has constructed between Francistown, the country’s northern city, and Lobatse, the headquarters of the Botswana Meat Commission (BMC) which is located next to the border with South Africa) will open Zambia up to further investment and help accelerate rural development.
Its multiplier effects on the country’s economy in the long-term can be said to be limitless. So let us adapt, be imaginative, innovative or perish. Zambian engineers where are you? The ball is surely in your court.
Comments: alfredmulenga777@gmail.com