Export board promotes non-traditional exports

THE EXPORT Board of Zambia (EBZ) is a Statutory Government Agency created under the Export Development Act of 1985 whose objective is to develop, promote and encourage the growth of non-traditional exports (NTEs), defined as goods and services other than copper, cobalt and other base metals that constitute Zambia¡¯s traditional exports. EBZ executive director, Glynne Michela, outlined its objectives in this exclusive interview with FTW. What is the present focus of the EBZ¡¯s export drive? The basic premise of the Export Development Act was to reduce Zambia¡¯s dependence on base metals that are not only wasting assets but their prices are subject to external shocks and have generally been on the decline since the 1970s. Therefore, the principal focus for our export drive is the non-traditional export sector which we have subdivided into into about 21 sub-sectors. Consequently, the sectors that have been targeted to foster economic and NTE growth are our main focuses and include the following, in order of importance: ¡ñ Primary agricultural commodities (especially cotton, coffee, soya beans, sorghum and tobacco) ¡ñ Fresh flowers and vegetables ¡ñ Textiles and garments (especially cotton based) ¡ñ Processed foods (including sugar, stock feed, fruit juices and chunks) ¡ñ Gemstones ¡ñ Value-added wood products ¡ñ Leather products ¡ñ High value crops The growth in export earnings over the past few years was based mainly on primary agricultural products (cotton, coffee and tobacco), horticultural products (mainly fresh vegetables), gemstones (primarily emerald and amethyst) and processed foods (with sugar dominant), as a result of increased production. Agriculture in Zambia has the potential to enhance economic growth and reduce poverty. It remains by far the main opportunity for income generation and employment for women who comprise 65% of the rural population. The agriculture sector in Zambia therefore offers the greatest potential for growth of NTEs, employment creation through vertical linkages, and poverty reduction especially in rural areas. FTW: Where does that place copper in your planning? As observed before, copper does not fall within the purview of our mandate and so we do not base our projection on copper prices when looking at the growth of the NTE sector. However, Zambia¡¯s goal and that of EBZ as identified in our Medium Term Strategy is to maintain the growth rate of merchandise non-traditional exports at above 15% per annum while at the same time ensure that merchandise exports reach the US$600 million mark by the year 2005. FTW: Zambia¡¯s attainment of HIPC status and the Export Drive Zambia¡¯s attainment of the Highly Indebted Poor Countries (HIPC) completion point holds a lot of promise for the country¡¯s acceleration of its non-traditional export (NTE) drive. This is chiefly because the nation is now faced with the challenge of diversifying its economy to reduce its dependence on traditional export products like copper which are subject to external shocks in terms of pricing. Declining copper prices in the 1970s threw the country¡¯s economy into disarray and eventually into heavy indebtedness. Actually one of the premises of the HIPC debt sustainability criteria is to achieve export-oriented economic growth. With more resources resulting from debt relief being available, these should be channelled not only to the social sectors but also to those economic sectors that directly or indirectly promote exports. Increased exports will mean that Zambia may address the perennial problem of trade deficits and achieve a positive Balance of Payments (BoP). The Government of the Republic of Zambia has promised to channel savings from the attainment of the HIPC completion point to capital projects and improving public infrastructure such as roads and the general improvement of the people¡¯s livelihoods. The private sector has called for freed resources to be channelled into poverty reduction programmes through job creation. As far as the Export Board of Zambia (EBZ) is concerned, we believe that economic growth can be achieved through the promotion of exports which earns the county the much needed foreign exchange. FTW: Is COMESA serving its purpose? The Common Market for Eastern and Southern Africa (COMESA) presents unique opportunities and advantages for trade for Zambian exports, not only now but also in the past and in the future. Most COMESA countries are Zambia¡¯s traditional markets and/or trading partners and trade between these countries and Zambia is augmented by the cultural affinity that they share. This demonstrates that COMESA and other regional countries will for a long time constitute Zambia¡¯s major destination for its NTEs. NTEs to COMESA represent 30.13% of our total NTE in 2003 and the trend is expected to continue for some time. The future of COMESA vis-¨¤-vis Zambian NTEs looks good with the Free Trade Area (FTA) membership increasing from 9 to 11 countries to account for 54% of the region¡¯s population. The envisaged establishment of the COMESA Customs Union also presents new challenges and opportunities for Zambian NTEs. Be that as it may, the limited number of participating countries in the FTA and difficulties encountered in securing convergence on products to be given differentiated treatment under the Common External Tariff (CET) still cast shadows over speedy reaping of the benefits of these initiatives