Zambia starts flexing economic muscle

After nearly 50 years of independence from Britain, Zambia is starting to flex its economic muscle, and move beyond being a commoditiesreliant economy. At the peak of copper production in the mid-1970s, Zambian per capita incomes were four times higher than per capita income of Malawi, Tanzania and Zaire. At that time, Zambia was the largest producer of copper in the developing world and the third largest in the world. Production dropped from the high of 700 000 tons in 1976 to 249 100 tons in 2000, when the government decided to privatise the industry. There has been steady investment over the past 10 years, affected by cyclical falls in the copper price. Production this year is expected to exceed 800 000 tons, according to the Zambian Central Bank. Zambia is adding value to its raw materials through the export of copper in the form of cathodes or blisters rather than concentrate. An example is the Chineseowned Chambishi Copper Smelter, which is investing US$250 million to double its blister production capacity of 150 000 tons a year. Chambishi Copper Smelter deputy chief executive officer Fan Wei told Steel Guru that the increase in its annual production capacity to about 300 000 tons of blisters and 340 000 tons of sulphuric acid was expected to satisfy rising demand. Chambishi is using “state of the art ISA technology” from Australia, and expects to achieve a copper recovery rate of 98%. The revival of the copper industry is having a knockon effect on agriculture, manufacturing and real estate. Logistics, shipping and clearing companies attracted by the glitter of copper have started looking for new business, and are working with farmers and their associations to open up new markets. Where trade lanes are opened, business begins to flow. So much so that Zambia is positioning itself as the “hub” for Central African trade. One disappointment so far has been the revival of the Central and East African trading bloc. Significant investment is needed in the manufacturing sector of the region before it can start trading with itself. A start is being made in Zambia, with much excitement and pride in the capital Luanda about the opening of a US$15-million earth moving equipment assembly plant by Hitachi. Situated on the main road from the airport into town, it makes a statement about new business and opportunities. The plant will supply the region, and is the first investment into the Zambian manufacturing sector by a Japanese company. Speaking at the ground-breaking ceremony, Japan’s ambassador to Zambia, Akio Egawa, said his government was encouraging investment in the country. “We have stepped up our efforts to encourage Japanese businesses to do business and invest in Zambia.” Vehicle assembly is also set to return to Zambia, with China’s top bus manufacturing company Higer announcing that it is to build a plant to serve the Southern African region. High-tech investment has come in the form of the country’s first mobile phone assembly plant, which is a US$10-million investment by MMobile, a member of the Melcome Group. There is also a continuing construction boom in the country, with new malls, offices and hotels being built. Liberty Properties, together with the Zambia National Pension Scheme Authority, is creating the largest mixed-use development of its kind in Zambia. Phase 1 of the US$ 200-million Levy Park mixed-use development is expected to be completed in October this year. The 30 000sq m retail precinct is Zambia’s first fully enclosed mall. A 150-room Stay Easy Hotel is a key feature of the new development, while a five-floor office component is billed to become Zambia’s most desirable corporate address. This will be followed by future retail (Phase 2) and a residential element (Phase 3).