The Long awaited Free Trade Area (FTA) for Southern African Development Community (SADC) was officially launched, Sunday.
New SADC chairman South Africa’s president Thabo Mbeki urged SADC countries to utilise the FTA to achieve economic growth and integration in the region.
Mbeki also called on SADC countries to become active players in the global economic arena which he said was dominated by countries such as China, India and the Americas, among others.
Premised on the gradual remova of barriers to trade, the SADC FTA is a culmination of an eight year process that started with signing of the SADC Trade Protocol by member states in 1996 which came in effect in 2000.
In addition to the Trade Protocol, = SADC member states have also adopted the Regional Indicative Strategic Development Plan, RISDP, which outlines the roadmap for further and deeper regional integration.
Principally, the FTA will allow goods originating from SADC member states to enter each others markets free of customs duty.
ZANIS/MM/BMK/ENDS
It is now time the Zambian govt invests heavily in its manufacturing base. The barriers have been eliminated. We must embark on an era of education and manufacturing.
We have everything we need within member states to make something out of the natural resources we have. Let us show that the SADC region is not just a region where you can get natural resources but a region where we turn those natural resources into finished goods and semi-finished goods.
Great news! This has been a long time comming. Looking at the EU and ASEAN etc, one is able to envision how powerful these FTAs can be. Countries can now reduce costs, expand without borders and trade indiscriminately, definately something we’ve needed for a long time. #1 Spot on, but lets not forget how our western counterparts deem our finished or semi-finished goods as ‘Sub-standard’. It surely is a spit in the face, but hopefully with the FTA we can break that barrier.
We hope that SADC is not dominated by monopolised conmpanies that will only benefit the SA nation at the expense of its neighbours.
EU currency is the euro for most countrieswhat will be the SADC currency-AFRO?
Bravo, lets home our emerging industries (if at all there are any) can benefit from this….
Phew finally we can export Boom and Bullet to South Africa! Duh… We shall be flooded with even cheaper South African goods and our industries will have a hard time competing.
Very encouraging. Free trade is what the forerunners of true African independence like Nkrumah had always been struggling to achieve. Their audacious plans were cunningly thwarted by western imperialists, who will still do anything to prevent a powerful Africa today. This is no time to relax but keep our eyes open and protect our necks from ill-wishers.
Yeah I agree with #1 its about time we started a proper manufacturing industry. And I agree with #3 & #5 the Zambia needs to start competing with south africa so that we arent flooded with their goods and companies.
May somebody enlighten me on the individual/small scale importers.how will they stand to benefit from this FTA.lets say can I buy a vehicle from SA and be exempted from Taxes?Just what is this FTA.
(Different careers mudala you know,Know clue about economics).
#8 “Principally, the FTA will allow goods originating from SADC member states to enter each others markets free of customs duty” meaning you could be exempted if you buy a car made in SA and not imported from Japan. But am sure there will be rules to follow on which goods to exempt and which goods not to. Otherwise Zambia will be flooded with SA goods and our industries will be affected negatively.
Thanks Pastor J.Gods guidance and blessings rain down on you.
Regards
It was interesting reading the comments posted so far than the article itself. However, I wonder what measures the government of Zambia has in place to replace the match needed income that will be lost from duty previously paid by importers, what areas will be affected and what measures are in place to curb inferior goods and sub-standard products that are made within the SADC region form reaching our households. I know after following its activities that the Zambia Bureau of Standards is a ‘toothless’ organization and how are we going to keep ourselves safe from these products? What tracing mechanism is in place to identify goods produced in the SADC member state? Re-packing is possible!
#3. Hola
Countries already trade in US DOLLAR. That’ll probably be used. No need for a new currency.
The US dollar or Euro can be used.
The best part about this is oil from Angola can be imported duty free. That’ll mean even lower oil prices once they connect a pipeline from Angola to Zambia.
On the industry part, manufacturers have to now invest heavily on the quality of goods they produce. The market is now huge. SADC has about 15 African states, that is a huge market. People, it is time to get busy.
#11 your concerns are timely. However, note that member countries can only choose this kind of agreement if their economies are complimentary. Since this is not the case for SADC, I’m certain that technocrats from member states have not eliminated tariffs and quotas on all goods. However, since these guys are talking of a Customs Union by 2010, Common Market by 2015 and Monetary Union by 2016, it’s high time that Zambia braced itself for challenging times ahead. Otherwise our copper country may end up like Poland and Romania in the European Union (i.e dumping ground and source of cheap labour for other member states)
By the way #13, I hear Angolan oil can not be refined at Indeni. I hear the kind of oil from Angola is very expensive to refine and require specialized machinery. Please correct me if I’m misinformed.
On Angolan oil, I meant #12 instead of #13.
I can assure you guys that in the meantime, Zambia will be flooded with South african goods considering that their industry is already thriving.
We as Zambias have to put cards on the table and see where we are going to start from. At the moment, i can’t even think about what industry we have that is able to immediately compete in the SADC region.
Therefore, we still have a long way to go trying to lay a foundation from which to start.
I am new to the site. But napapata Zambian people you have to see this www thecitizensdemocraticparty.com I am not a symapathizer for them don’t misundertand me but just read their analysis on the salary increment. You have to be a “chikopo” not to see sense in what they are saying. I challenge anyone to not see the sense….I don’t know them that’s why I cant support their party- but nevertheless someone has to pay attention.
A
The Citizens Democratic Party, having monitored and appreciated our citizens’ outcry, is at loss with the
reaction of the MMD Cabinet, and the majority of our Members of Parliament. In the same breath, we wish to
applaud the few Members of Parliament, and the civil society organizations which have protested the
proposed salary hikes. CDP likewise condemns in the strongest of terms, the idea of Zambians, the majority
of whom do not have the basic needs, continue to support an excessive lifestyle of “leaders”. As we have
stated before, the current compensation is evidently more than enough, and the MMD Government and its
supporting MEMBERS OF PARLIAMENT should not continue to
#14. Tonga Bull – UK
You are right. Angolan oil needs a cracker to refine it which Indeni does not have but govt is currently investing in. That is why I said Angolan oil can be imported duty free. I wouldn’t have made that comment if the Zambian govt was not investing in a cracker which will be able to refine Angolan oil.
Sorry I decided to post the whole thing for you people but lusakatimes ss not allowing me.
CDP
I support # 17. 1st comment here and I am putting CDP First…impressed.
Ba CDP say your names otherwise we’ll abandon you. You talk sense but we want to know you.
So CDP must have some sort of “heavyweights” trickery. I saw how Patrick Chisanga dodged the question when asked about it in the Post Newspaper. Chisanga is definetly involved and possibly Clive Chirwa. I never post here but read here- was surpised CDP came up. Does anyone else have more info on CDP?- I respect the story here but CDP is part of what’s happening in these lusaka times. FYI a connection in NGOs has told me CDP has just received some major dollars because of their cause…
forgot to ask is CDP conneceted to MDC (Zimababwe)- coz NGO told me somthing like that.
You characters supporting CDP stop it- we;re here for the news item- Atase….I hve even been forced to comment.
@ #26-Hater
I agrre with #16 (Chibale, I dont think Zambia will benefit from this FTA. We may end up closing all our infant industries because of cheap material which will flood the country. Look at what happens with ‘ROPE cooking Oil’, Tarino, Kwench to mention but a few. SA is almost doing mass-production. In order to prevent there people from loosing employment, they will simply dump there heavily subsidised products to Zambia at a very cheap price. While Consumers may benefit on one hand, we are likely to see closures of certain industries. once industries are folded up, our own people will start loosing employment and eventually the standard of living for our people will go down.
Gentlemen the issue at hand is FTA and not CDP,Zambia surely stands to benefit from it,all those tools,blockmaking machines concrete mixers,out there in RSA will help us reconstruct our country as we wait for the next govt.we need good leaders to make good us of this development.it has taken 12years to evaluate this process.it sure is a good move.
As much as we appreciate the idea, we must as well think twice for nations which do not have Manufacturing Sectors, Zambia being one of them.
Policies need to be developed in order to protect our own industries. Furthermore, the GRZ needs to provide conducive atmosphere for manufacturing industries to be set up and not just exporting Sugar.
Infact the GRZ must encourage Banks to lend money to those willing to enter into Manufacturing industries at a soft interst and not just chicken manufacturing as is the case today.
good the rally with the HH,SATAs,and the rest was a success.You should have been there to see the population(attendance).we really had a great time.The zambians are sure coming of age.There was a lot of patriotism there.I see a leader in HH.I didnt know he is such a balanced gentleman.He really can continue with what King Levy has started.
FTA and SACU – Is there any major difference, besides that FTA is an enlarged SACU? Isn’t this South Africa’s machinations to swallow smaller economies in the SADC Region? Enlighten me pipo.
#28. Most
How do you see it that Zambia is not going to benefit. Are you saying Zambia is just going to be importing and not exporting???
There are 15 countries in SADC. Zambia is a neighbour to about 8 or 9 of those countries. The Market is huge. What we should address is the issue of monetary and fiscal policy.
Banks have to bear themselves because with this FTA, industries are going to be carrying out mass expansion projects and those foreign investors (who most Zambians where ridiculing) will find a huge market for the goods they’ll manufacture in Zambia e.g the Malaysian mobile plant, Toyota’s assembly plant, etc.
People, it’s time to think outside the box.
Gentlemen this week is Kusefya pa Ng’wena ceremony i hope i will see alot of you there.You are all kindly invited.Iam proceeding there Weds.Lets see what my tribes men feel of the Leaders salary increaments from the ground.
Well FTA has its advantages and disadvantages. The disadvantages being that it tends to favour stronger nations like South Africa and Angola. Zambia definitely can’t trade with South Africa…but then we have to start. Also theres Revenue at stake…FTA means loss of revenue in customs duty. As for the Oil feed stock from Angola, its true that our Indeni cant handle that type…The solution for our economy to grow is to establish a concrete manufacturing base and henceforth increase the NET EXPORTS which will push up the growth rate…
I kind og like this discussion, I have learnt a lot just reading the posts than I learnt researching about FTAs. Anyhow, the questions still remains, has zambia positioned itself to benefit from this expanded market. In terms of manufacture of finished products I am not confident that we have, in terms of raw products such as agriculture products, flowers etc, I think we have positioned ourselves. And this is where the problem, starts, if we are not careful our industries will be swallowed, by well oiled manufacturing industries of South Africa even Zimbabwe.
Good to see#3 is now in the office how was your weekend?True ur observations are valid.I like your frank stance man.
In all honesty, the countries which will benefit the most from this FTA are Zimbabwe and South Africa. Angola is an economy that is based on oil and Diamonds. They have no manufacturing base.
Zimbabwe though in an economic slump still has high quality products whereas South Africa, well we all know. Zambia on the other hand has got policies that are in favour of foreign investors and is neighbour to DRC which is experiencing a lot of shortages. What I see is a relocation process. South Africa has got a high crime rate and Zimbabwe has got uncontrolled inflation, companies might relocate to other SADC states like Zambia because of Zambia’s economic policies that favour foreign investors.
Zimbabwe has a very strong manufacturing base. We can’t compare it with Zambia’s. And just to agree with what Mwiinga is saying, Zambia hasn’t positioned itself strategically so as to benefit from the benefits of this FTA. Yes, for traders their cost of doing business will come down, but will it aid our growth rate which is at 3.8%???
[cont]
The problem is Zambia has got very poor infrastructure. If that is not controlled, companies will relocate to Malawi or even Botswana.
The thing that puts Zambia in a good position in this whole FTA is its central location. You have TAZARA that connects Zambia to DRC and Tanzania. A railway line (still in construction) that’ll connect Zambia to Malawi and Mozambique and also a railway line (still in construction) that’ll connect Zambia to Angola. All Zambia has to do is play its cards right and it will benefit greatly from this. Mostly because of its central location and also the fact that it is also a member state of COMESA.
No 38 watch out for Angola…It will give aid to Zambia in not more than 10 years to come.Their industrial base is coming up so fast…Not just Oil and Diamonds!!!
#39. Lt. Gen
“but will it aid our growth rate which is at 3.8%???”
That figure is an exaggerated figure. Last time I checked it was 6% [/ / indexmundi . com / zambia / gdp _ real _ growth _ rate . html]
I would like to see your sources.
correction #36
#41. Lt. Gen
Angola was in a civil war. It suffered what you call a brain drain. Though the oil prices are keeping the economy growing at 19-20%, their manufacturing base is week and majority of the people still live in poverty.
Angola may come up with a strong manufacturing base in some years to come but as of right now with its lack of technocrats, it is stuck relying on Oil and Diamond exports.
The countries you should be counting are South Africa, Zimbabwe, Mauritius, Namibia and Tanzania. These are countries which have a manufacturing base that can bring most countries to its knees.
NO ba Free-Market-Capitalist, location will never advantage us in anyway. As we have already said and hopefully agreed by everyone, what will increase the benefits is the strengthening of the manufacturing base.If you remember your economics (if you did a course in economics), what will impact on the growth rate is “NX” which is simply net exports.
#45. Lt. Gen
Location does play a part. Like I said, SA has a high crime rate and Zimbabwe has got high inflation. The location of Zambia is in a central location. If Cadbury figured it can export more chocolates if it was located in Zambia rather than South Africa, it would do so. Zambia has got 8 to 9 neighbours all which are member states of SADC. That means Zambia has got about 8 to 9 markets.
You just cant set up a mall in Lusaka west and expect to get the traffic needed to keep the mall going, you would have to set it up in an area which most people visit and a good area would be along GREAT EAST ROAD. If companies relocate to Zambia, that will be a plus on the NX.
If you say that location will indirectly affect the “NX” in the growth equation, i am very much in agreement with you ba Free-Market-Capitalist. Keep it up for a very intelligent discussion…
Bwalya #43 thanks, Lt Gen #45, let me agree with the Free Market Capitalist to some extent, this is what will advantage us, as long as we remain in Comesa and SADC the development of infrastructure and the peace that we enjoy. Because once we are linked through the Nacala Corridor using the Teta-Katete road we would have developed an axis, our centrality will also advantage us because almost everyone will be able to terminate in Zambia and connect to the any country in southern and central africa. There are countries that have done that and Malaysia is one of them, when they were constructing the mega airport which is now serving as a busy terminal in Asia, everyone though Dr Mahatir …
… contd 48 Muhamad was mad, and US was one of the loud mouths as usual, but they have been meant to swallow their words because this has become one of the major airports in the region, this could be Zambia’s lifeline. infrastructure, dry potrts etc. Manufacturing? I am not sure.
Now, we have to up our game, if we are going to benefit from FTA, we need infrastructure, manufacturing sector, and not the importation sector will grow and choke our manufacturing.
Another point, we have to work on reducing the cost of doing business which when exposed to this open markets we will lose out big time.Lets give incentive to indegionus owned manufacturing so that we can own some trade and not being used as a conduit.
Economist’s, tell me something, does it mean that if i buy a south african vehicle manufactured in south africa,i don’t need to pay any tax,. since it’s duty free. can someone out there propaund on this issue.
Guys enlight me on the FTA do we have any benefits? what is it that other countries can buy from us? i suspect our economy will be swallowed. we have nothing to sell in the SADC but Europe ( fresh roses) SA will benefit more. when it comes to cars assembled in SA, hell no they are not for our roads, are computerised and expensive to service. Malawi refused to sign the FTA and said better do business with comesa coz they export tobaco to Europe…how do we hope to benefit from FTA apart from us importing from SADC countries? do we xport copper to SADC countries
PTA – is spot on but what we need now is ensure that we embrace TOTAL QUALITY MANAGEMENT in our businesses for us to compete on the globe market.
i hope this wont benefit the pipo with tuntemba coz e.g if building materials will be duty free then chilanga cement will be affected big time SA cement is cheaper than ours talk of other material like ceiling boards, tabs, gysers and steel. visa vie we will only xport timber to RSA and they want it raw so they can use the by product for other things.
#51 i do not think cars manufactured in RSA will be duty free coz they are sold on a 5 yr loan (hire purchase) so they can have a profit. if they sell them for cash then no profit.
What advantages does Zambia have apart from its central location to benefit from this FTA?
The Manufacturing base is almost nil and this is a serious handcap. The huge imbalances in currency rates between Zambia and other FTA member countries is another set back. The current set up makes export from Zambia overtly expensive and yet conducive for importation of goods from these countries.
Yet depending on how strategic our planners and policy framers are, we could benefit greatly from this set up.
One question that bothers me though is this- how will our Manufacturig base grow more so when exposed to major competitors in S.A and Zimbabwe?
Internal Tax regime is another set back.
The whole idea of FTA is challenging especially to a country whose politicians are sleeping. What FTA will do is to allow certain goods manufactured in the SADC region to be exported within the region free of duty.What it means is for countries with good policies on manufacturing will benefit from a bigger market share. Now for our beloved Zambia with no Manufacturing base will end up being a market from small things like kana pin to toilet paper. The govt needs to wake up now and encourage manufacturing now so that by the time this FTA is in full speed Zambia will not just be a market but an exporter
#51. Cars attract 25% customs duty, 20% excise duty and of course consumption tax at 16% now. So what it means, when you buy a car manufactured in South Africa (this is to be determined by whats called rules of origin), then you just pay the local taxes being excise duty and consumption tax. So this means, the cost will come down yes…
Free-Market, Lt Gen and Tonga Bull. Good contributions, i came online late. Why dont you draft a PROPOSAL basing on the facts and ideals which you have alluded to ? Include my contribution.
As a nation, we have embarked on several Strategic economic projects in the region but we have always forgoten about NETWORK SYSTEMS. I mean how are we linked to all our neibouring countries in terms of Transportation by Air, Road, Railway e.t.c ?
The advantages accruing to S.A in this FTA are immense. A number previously restricted export Products from their bounyant Manufacturing sector will find open market.
The few manufactured goods in Zambia will now face direct competition from within the FTA.
Zambia bureau of standards is innert to handle the tasks at hand.
Credit access from local Banks and finacial institutions is terrible to say the least- red tape, abnormal prerequisites, high interest rates and so on and so forth makes our country susceptible to bullish exploitation.
Right #55. SA and Zimbabwe are the instant benefactors from this FTA.If we do not regulate ourselves smartly, which I doubt will happen, we will import pins, toilet paper, sugar, etc.And becoz our cost of doing business is high, we will sell alot of raw materials to SA and Zim, then import finished goods.I’m yet to read the blueprint, which I’m looking for at the moment, to understand the finer details.SA has pushed this as a counter to chinese business which has threaten their dominance in SADC. Most SADC has reduced reliance on SA in terms of finished goods as china floods the markets with cheaper goods.My other conspiracy, by the way.
SACU and FTA, what is the difference. This is good news for South Africa whose economy wants to swallow weak ones, like Zambia’s and the rest in the Region. Smell a dead rotten rat. Empowering xenophobists.
bla bla bla
“SACU” means the Southern African Customs Union of which the members are the Republic of Botswana, the Kingdom of Lesotho, the Republic of Namibia, the Republic of South Africa and the Kingdom of Swaziland;
“MMTZ” means the Republic of Malawi, the Republic of Mozambique, the United Republic of Tanzania and the Republic of Zambia;
“FTA” means Free Trade Areas, above bodies become part of FTA.
The citizen democratic party website is quite modern but lacks content. On the FTA i think if Zambia does not play it right we are suck. I hope this FTA will not be adopted in full now. We have a lot to do with our economy by way of safeguarding some of our interests or else will become the dumping site of the region. We cant even make two ply tissue and we expect to benefit from FTA, are we nuts?
Hypothetically put if Zambia does not export anything within SADC how will it benefit? If you talk about cars, An average South African car will cost $10,000.00 uncleared where as an import from Japan will cost almost the same but will be cleared. We will get things cheaply but where will the Govt get the revenue? 1- jobs will be lost, so no income tax. 2- Customs duty will be lost so no revenue from there. Are we sure we need this FTA. Lets not be excited without thinking over this. Can we have an extensive consultation and planning before we put ink to this FTA.I dont see us getting much from FTA
Are alcoholic beverages also exempt from customs duty?
I think we should view this as an opportunity for us to compete rather than a threat. This will force us to work harder and be competitive. We can’t sit around and whine about how negatively we will be affected. Rather we should look at ways in which we can increase our competitive edge. We should not be apologists for our own lack of a spirit of competition. We fail to do small things like good packaging. I can bet my bottom dollar that we do have great products like Rivonia (ketchup) which can compete very favourably, but we ought to promote our own prodcuts. To date, I have not tasted sauce as good as Rivonia, and it is Zambian!
#65 actually this is a self inflicted wound if you like, we were charing SADC until saturday and we even pride ourselves to have been the ones to bring this into being. When Mutati was asked how zambia benefits these were his words and I quote “Zambia is the largest exporter of maheu, groundnuts and beef” now tell me how much in terms of labour and export revennue does the Government get from the export of groundnuts for instance that are half the time exported illegally. This we have to be very strategi in the way we think about it, this thing has happened and we have two options, to withdraw from SADC or to re-strategise. I go with the latter.
#64. Sayitlikeitis
Stop being negative without facts. There is a company in Zambia (I cannot remember the name but it’s a new company) that makes 2 ply tissue.
Zambia is not as negative as you want it to be. If you want to criticize Zambia, do it with facts that can be proven and provided sources otherwise shut up.
I must say this has been one of the most enlightening discussions on this blog; a discussion that reveals that people have thought out issues and is focused on issues.
Gentlemen,it is important to see the whole blogg from start when you join.You will notice there was very intelligent discussion on this subject till the late comers joined in.Chaps are repeating same points brought out earlier.Lets put up objective points lads.We need progressive discussions,not chuff please gents and ladies i beg…..
#66 with Botswana’s Ian Khama increasing the taxes by 70% on Alcohol, I think these are on the “non excempted items” list
#68. Mwiinga, Lusaka, Zambia
I think you and other Zambians have got very short memories. Here is how Zambia can benefit. Last time there was a post about Toyota setting up an assembly plant in Ndola, there was also another post of a Malaysian mobile phone manufacturing plant, there was also another post of a Turkish Fabric plant (something like that, I cant really remember) and another post of a Chinese owned earth mover (something like that) plant.
I will start with Toyota. Toyota will be making fairly less expensive cars in Zambia (I base this on the amount of investment it is making). Now in the SADC region, most of the member states are poor. If Toyota starts making less expensive…
Guys educate me, i thought Zambia is a signatory to the COMESA FTA , and a country can only belong to one FTA Block? Has Zambia signed to the SADC FTA?
#66
Assume that this will be the case, and what it will mean is that there will be sudden surge of importation of alcoholic beverages with its ever strong demand.
Local brews will be drowned further unless otherwise partly if the market could be influenced by Patriotic sentiments for local brews. Athough this could be wishful thinking and dependant on historic and cultural habits of the Zambian reveller and brewer.
[cont]
cars and exports them to the consumers it is aiming at (consumers that will buy less expensive cars), the market Toyota will find will be huge because only a few people can afford the expensive cars from South Africa, they’ll be buying the less expensive cars from Zambia.
Malaysian Mobile phone plant. The mobile phone plant will obviously be making good phones since mobile phones are on high demand in the SADC region due to poor service from the govt owned monopolies. The Malaysian Mobile Phone plant will (I think) be a very big company in Zambia.
The Turkish owned company speaks for itself.
The Chinese owned company that’ll provide earth moving equipment couldn’t have come at a…
[cont]
better time. China is investing billions and I mean billions of top dollars in the DRC in terms of infrastructure development and in the mining sector. With this investment, the closest place to get top quality cement is from South Africa or Zambia (I know it is hard to believe but Zimbabwean cement is low quality compared to Zambian), also China has invested a lot in the copper mines in the Katanga region in DRC, they’ll need mining equipment and the Chinese firm that’ll based in Zambia will provide that equipment, also the Zimbabwean explosives plant which will be in Ndola will provide DRC with the explosives they need in their mining sector.
Lets not also forget India’s huge…
73 i guess even if Zambia has signed to the SADC FTA there are conditions. It does not mean that every product attracts the Zero tarrif rate. There is what is called Certificate of Origin. Assembling a Vehicles in Africa may have that vehicle attracting the tarrifs coz 80% to 90% of the parts are brought in from Europe.
The composition of the material matters.Read on certificate of origin.
[cont]
investment in Sugar in Mazabuka and also Nakambala Sugar estate’s expansion program, that’ll provide lots of sugar that’ll be more than enough for export if you also include Kafue Sugar (i’m pretty sure Kafue sugar will also carry out expansion programs).
These are some of the examples but in order for us to truly benefit, we need to think outside the box. The door has been opened, all we have to do is walk through it.
Thats just my 2 cents on that. Sorry for the long post
#78. Ndife
That is good information but at the time I read the news on Toyota, they also said they’ll be making car parts. So I am not sure where the parts will come from.
Either they’ll be shipped from Japan to Zambia or they’ll be made right here in Zambia.
We’ll see.
Good presentation Free-market #79,at UNZA you certainly would get an A for that well laid out argument.What about the COMESA question what do you say?
I hope this FTA has a provision for gradual implementation over some years and I hope there are some exceptions on the road of orderly adjustment in countries like Zambia otherwise our manufaturing industry will be dead and buried.
Free Market Capitalist,
I love your intervention, especially that I am so in the dark when it coems to technical economic matters. Please continue educating us
For those too worried about cars from SA, I don’t think the FTA covers goods/machinery assembled in the region, coz as far as I know (and stand to be corrected), SA has car assembling plants. What the FTA will cover, I think (and still stand to be corrected) are goods that originate from the member countries, i.e from raw materials, processing into the final exportable product. Like most people have already said, this will only benefit us once we develop our manufacturing base, start adding value to our raw materials before we export. e.g, export mealie meal instead of maize, flour instead of wheat, heat exchangera and wires instead of copper plates etc…Our central position will only help
I forgot to add one thing. Kafue is going to have a steel plant.
Do you know how much construction is going on in Angola and DRC. That is more market for the steel plant that’ll be in Kafue
#81. Bwalya & #83. Kambole
Thanks. And on the COMESA issue, I still have to read on that but the EU was telling Zambia to embrace a SADC-COMESA FTA thing since it is a member of both organs. I don’t know if it can be part of both FTA’s, I am not that very informed on the issue.
And brand our products trully Zambian…Buy malawian build Malawi…Matswana for Botswana and poudly south African. Mosi for xport only….. duty free…. When is the FTA starting?
#84 contd…if we activley invest in our communication system i.e telephone networks, road and railway infrastructure and all. As someone pointed out, 8 countries suround Zed therefore for most of our neighbours to access other markets, they have to go through us. What we will lose as income on duty could be recovered by charging economical toll fees, for primarily infrastructure maintenance and as well as contribution to the State’s coffers. Like every challenge, this could either be an opportunity for visionary leaders to make us rise, or we will fall flat on our faces…
Zambia is already a member of the COMESA FTA but not SACU member. Goods from all COMESA countries have been entering Zambia with duty exemption. However what matters as i pointed out earlier on is what is called “Rules of Origin”. It is required that up to 60% of the inputs into the final product be local. With that in place, a certificate of origin is issued. This rule covers all products including alcoholic beverages as long as the 60% rule is met…repeating the emphasis on how we will benefit, a stronger manufacturing base gentlemen is critical!!!
What measures have been put in to protect local industry in the advent of this FTA?
Zambia has already been victim of failed policies and I contend that it will be most prudent for us to critically analyze the details of the agreements with a gross bias towards benefiting ourselves first. It’s high time we became a little selfish as a country and not get ourselves another raw deal….
I can’t debate further seeing and am not familiar with the detail of the agreements! Thanks bloggers and enjoy the rest of the debate!
…and just to add on, a country can belong to as many trade blocks as it wants. Its really up to us as we strategise and weigh the options.
this seems very educative. i did know much about FTAs. thanks y’all bloggers
What are we going to benefit anyway?we’ve had this mess all these years!
THE Zambia Agricultural Commodities Exchange (ZAMACE) has recorded trades valued at over US$8.3 million involving 21,920 tonnes of various commodities.
The commodities were traded as at July 18, 2008 yielded US$ 8,311,230 with wheat and maize accounting for 44 and 37 per cent of the transactions respectively.
This is according to the, ‘The Zambian Farmer’ produced by the Zambia National Farmers Union.
The publication states that Zamace recorded its first trade last October at a time when commodities available for trade were at a low volume.
Lt. Gen …
Gleaning from your contribution I gather that we only stand to benefit more if we are producing… Now as it is Zambia produces what it does not consume and consumes what it does not produce. Our manufacturing industry is very nascent.
The way I see it only clever countries like Botswana and South Africa will benefit from this unless we miraculously spring our production in a day…. Which is highly unlikely!
In terms of tonnage maize transactions were the highest recording 11,360 tonnes while wheat accounted for 7,315 tonnes.
Other commodities that traded on the Zamace during the period include Soya, fertiliser, cement, maize barn, fuzzy cottonseed and kidney beans.
The publication says the agricultural commodity exchanges had brought more formality to trading methods, enhanced market transparency and increased the quantity and quality of commodities traded.
The report says this benefited the agricultural sector and the economy as a whole.
It says the agricultural commodities market in Zambia, like in many African countries, faced a multitude of market imperfections that stifle growth in the wider agricultural sector.
Among issues suppressing the sector were poor market information, inadequate reliable data on trade flows, poor communication and high transaction costs associated with quality variations among others.
Good call ‘free market capitalist’, valuable data indeed.
Its also time to put pen to paper in ensuring that our own local markets get the benefits of the FTA. Remember, SA is the powerhouse of the region and for it, this is only a matter of expandining its markets while countries like Zed still have to consolidate what they have to offer.
Looking outside Zed, conntries like Burundi have nothing and will become vying ground with goods from other member states. How will the FTA help the economies of such countries?
#89 I think to protect the local industries, policy makers shud look at things like imposition of import quotas and special incentives to manufacturers like subsidization of production so as to strengthen them if we can manage it!!!
Imwee banthu!
Wat does this mean in terms of beer prices?
Sorry, Connntries – meant countries
Zamace is an indigenous registered corporate entity, managed and self-regulated by the agricultural industry.
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Source: Dailymail Zambia
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Comment: Lets not be pessimistic on this issue as of yet. Let us analyse what the opportunities are and weigh them with the disadvantages and see which one outweighs the other. I look forward to Fudanga or HH comment on the issue since they know more about Economics than I do.
#94. Mingeli Palata
Please replace Botswana with Zimbabwe.
Botswana’s manufacturing sector is very weak.
I also think the economics of price come into play here… Because sooner than we think, the market will, be flooded by likely high quality and cheaper commodities against our local products. The consumers are most likely to go for the foreign products thus putting our manufactures out of play… they will have too much pressure to bear with one of which is cost of sell… When I think cost of sale of already thinking about fuel (Transport) and the resource material… Though controversial on of the ways Government can come in is discriminate tax reductions in specific industries… and increase in fuel subsidies …
In a nutshell what I am saying is make it easier to manufacture in Zambia?
As Free-Market-Capitalists report suggests, our tramp card could be agriculture…global food prices keep rising and our region has not been spared. Zed is endowed with vast land and water and with right policies, we could easily turn into net exporter of food products….key thing is weed need to add value to our exports. Standing toe-toe with SA and Zimbabwe (after Mugabe is gone) could be tricky. Infrastructurally, they are superior and it would take us years to reach where they are. Free – Market – Capitalist, what do you think?
Sorry, meant WE…not weed. Must have been thinking of Usain Bolt when typing…
Zimbabwe’s manufacturing industry continues to slump mainly owing to the failure by companies to cope up with the hyper-inflationary economic environment and the government’s lack of consistency in policy implementation.
These factors coupled with persistent foreign currency shortages, electricity supply interruptions and declining domestic demand have seen some companies closing down, while others have since scaled down operations.
According to the latest statistics from the Central Statistics Office (CSO), many constraints especially foreign currency shortages have forced companies to fail to acquire required imported inputs resulting in capacity utilisation in many industries falling to below 20 percent in 2007 from 30 percent in 2006 and 50 percent in 2004.
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Source: www . zimbabwegazette . com / the-news / business / zimbabwe%27s-manufacturing-sector-further-declines-20080112192 . html
comment: Let not this seem like Zimbabwe cannot compete. Though Zimbabwe’s manufacturing sector is dying due to price controls by govt and lack of foreign currency for inputs, it still has amazing infrastructure. It might just bounce back to having an amazing manufacturing base.
#99 ha ha ha ur worry
Bushe…
Its a vry important worry… I hope beers will now be cheaper…
#104. Uwakwisano
What I think is investing in infrastructure will be expensive and may possibly bring us back into debt.
Zambia may need to either carry out a (what I call) grow as you invest program or borrow a lot of money to invest heavily in infrastructure.
What I think however is Zambia should invest heavily in communication, air and rail transport and should have a state of the art banking system. It should also design a road and railway system that’ll make SADC member states dependent on Zambia. We must move from Diesel trains (oil prices are crazy and the things are slow) and think about Electric trains. But bloggers, we can make a contribution to this. I have always thought…
#104 Yes our tramp card could be agriculture which has since overtaken other industries in terms of contribution to our GDP. True, value addition to exports is paramount.And yes some countries stand to benefit more because of infrastructure,big economies etc.But with right policies to sectors like FDI and local also, we can catch up with South Africa and Zimbabwe no matter how long it will take. Political will and sacrifice by all is once again required…
[cont]
starting a distribution firm and this has pretty much opened up some of the markets. Basically a distribution firm is sort of like the middle man between the producer and the retailer.
The producer e.g Californian Beverages LTD may want me to distribute Apple Max for them. What I would do is see the product and research on it a little (who does this product appeal to the most). The product is colourful and something new. It is in a plastic bottle and label looks like it appeals more to teenagers and Kids. The best place to start distributing this product is in schools. From there you look to various shops that are close to schools, etc. After I have made the deals, I get a cut in..
Guys, there is no excuse for incompetence. The Zambian Manufacturing industries have always complained about either this or that. There is a lot of benefit for Zambia us well in FTA. Zambians just need to find it and utilize it without seating back and constantly blaming this and that for what? There are so many things that Zambia has got which South Africa hasn’t. example fruits like papaya(popo) guavas, avocado, etc do extremely well in the Zambian climate. You should see the sorry sight of the above mention fruits in S.A
Please lets not always give excuses for our laziness!!!
and beer?
[cont]
sales.
In this case, I will not be distributing Apple Max to schools in Harare. I will be distributing mealie meal to countries like DRC and Zimbabwe due to there shortages. I will also be distributing cement to Angola due to the construction works going on there.
That is pretty much what I have thought of. But I am doubting if I will ever execute such a plan. I don’t know
Hey guys, i must recommend everyone who has so far commented for demostrating this kind of maturity and knowledge, keep it up and lets build our selves and be positive.
#115 Ba kaponya what do you want to know about beer?? At the moment, lagers attract 25% customs duty, 70% excise duty and 16% general consumption tax: spirits same as lagers but 125% excise duty. If theres a FTA certificate of origin, ONLY DUTY will be exempted!!! I see only a small reduction in the final consumer price with regards to the FTA setup.
#111 I toally agree with you that Zambia needs to invest heavily on communication as a priority.One wonders how Mugabe has managed to maintain an airline while Zambia struggles to even strike a deal.One UK source has Placed Zambia among the top 10 tourist destination of the world.But we have a govt that is so short sighted that they cannot think or plan ahead.
We can have proper railway network linking most of the SADC countries as well as properly maintained motorways (Highways).As for the aviation industry SA and BAA continue to reap profits at the expence of the Zambians no wonder people think Vic Falls is is SA…
#119 Hola…..but South Africans think its in Zimbabwe alone and so is Kariba….
Hehee, ‘Free Trade Area?’ the bible says, “when you see these things begin to happen, look up for your redemption draweth nigh.” Does it ring a bell!!! Let us rejoice with our armours qirded. Soon it will be FTA for the whole world. From a European currency to a world currency.Signs of the times are everywhere so let us wake up from our slumber. God bless you all.
Ok zebigee ba Lt. Gen… but I am sure Heineken’s, na carlberg…windhoek…. and the others will be cheaper…
….another thing is “HONEY”! This product is expensive in South Africa and we have got a quality lot of it in Zambia…
#119 The huge tax revenue from windfall taxes and mineral royalty we are reaping shud be very very carefully used!!! Investing in infrastructure like roads, railways and general communication networks will go a long way.Let the policy formulators think of better ways to increase government expenditure so as to impact on the growth rate and not on salaries for constitutional office bearers which is unfortunately unproductive expenditure.
FTA Good news.Fellow boglers thanks for being issue based objective.No name calling and insults.They say if you don’t agree with one’s idea,reject the idea and not a person.
At list we may start buying cement at a cheap price than the current K80,K70,000.Now whats this other issue of more Zambians applying 4 new passports? what gurantee is there to think that they will not be forged?We keep on changing passports,is it not just govt way of sourcing money from the General public?Twanaka mwe.
#119, Hola hai, I like the optimist expressed on this forum, at the end of the day, Government can do whatever it takes to prop the manufacturing industry, but I think what we should focus on are products that are not present in some countries. African Politics says honey, believe me SA will always protect its industries and they can quickly pass a law that makes your goods more expensive than our products. Secondly, we should ask why our honey is cheap, using basic economics that I did in school tells me that demand will usually determine the price of a commodity, should SADC provide that market the price of honey will go up immediately, and before long we shall become an expensive source..
contd.. 116 but like I said we have a long way to go in terms of the quality of products I mean just compare the crisps packed by amigos and those packed by doritos. Compare Kawambwa tea with five roses? These are the things we are talking about that if we were smart as a country we would have bought time, wait until we have sorted out our backyards.I submit to the august house.
Cont’d 126 not 116
#127 Right Mwiinga, value addition is what we lack!!!
Hi Mwiinga, on the packaging I agree. The inside products could be bad but as long as the packaging is good it will attract customers on the other hand,
Honey is just one of the many products that “could” do well in S.A and regarding your basic economics, does that mean we seat back and accept defeat even before the war starts? “Where these a will, these a way” my friend.
Gentlemen i dont understand the excitement, this FTA is just another white elephant which will not take off anytime soon or if ever.
#127
Parliament in Cyber space! It could be better if this was in reality and not merely virtue.
Better still if this blog was broadcast to our parliament as part of the submissions,or even broadcast to the general public.
Hot issues should be debated beyond the yawning, dozing and sleeping that takes place in our real parliament.
#132 Cont’d
Except for the ‘insults’ and issues relating to ‘copy write’ matters
125 Is Zim still selling its cement? and what about the Question i posed are we in the COMESA or SADC FTA or can we be signatories to Both?
I forsee them bringin their products in but at slightly more expensive but might be a way forward in bringing the prices down. Sad to say operational costs in Zambia are very high, our fuel is double that of SA and we expect to sell products cheaper than SA or any other sadc country???
The mind set of this current govt leaders esp Magande is answerable to the huge price of fuel. For me fuel is a source of uttermost concern if we are to compete.
How do u explain the difference with that of Malawi or Zim let alone botswana. We r told its abotK1500
About K1500 for fuel in Angola, K4600 in Bost, K5000 in SA K5200 and abot 5600 in Zim us its K10,000
To look at issues from laymans point of view, what is the motivation beyond the FTA? Free movement of goods and unrestricted movement of people.
FTA is about taking strategic advantage of bigger market of the greater region. It is not about ‘starting’, it is about acting out.
One of the reasons that Aparthied went down was the obvious restriction of local Market by the major industrial players.
The other concerns addressed need not to be ignored! the issue of quality is what kills the Zambian Product. We could have good products but even the pakaging causes one to start asking questions. We need good products to compete favourably.
#131 Zambian in Tshwane
be optimistic for once. thats exactly what you said when i was carrying you child: that i was just bloated and nothing would come out it. yet, triplets came out!
Timber is another product we can do good, as long as we stop flogging it very cheap and raw.We can add value as suggested earlier, lets sell planks, rail sleepers, etc.Zambia has abundat timber being sold at low prices to south african companies who just come and cut it and load it into trucks for processing in SA.Its these little fixes we need before we open ourselves to exploitation by our neighbors.
Good discussion , keep it up.
#137, I fully agree with you that we should not sit back and just watch by, we might as well make more now before the economies of scale start faviouring our neighbours. Miyoba #139, my point precisely, value addition like #129 said, I took a tour of Monarch when they used to make geysers. And they said they imported copper from Japan the one they use to make geysers, for me that sounded very funny, and they explained and said the coppwer produced out of the elecrolysis process as Nchanga needs further processing for it not to be brittle. This is what I meant, I am actually saying, today it FTA at regional level, the next will be FTA at africa level, next global FTA, it can be in 100 years..
Time is of essence, how long will it take to ‘up’ our manufacturing base when upto now it is almost non existant.
What major changes on the ground have resulted in positive outlook for the manufacturing industry.
Basic example, a southafrican lager company produces let say 10,000 lts of beer pay day and will now compete with a local brewer who only manages 100 lts per day.
The less the quality of local lager , the better for the competitor as market opportunity avails on a silver platter.
I bet Agriculture is our only hope, southafrica ,I doubt has sufficient arable lands to produce enough for the local or regional market.
contd 140… but the bottom line is that we have to sort out our domestic market first before we can take this leap, which we might have to do under very strenous circumstance now that the body gates and fully open
#141, more the reason why instead of being all over the place, let us see what we have a competitive age and for sure Agriculture could be our lifeline in the interim.
Every Jim and jack I bet is thinking of the import business right now in Zambia.
What is there to be optimistic about for a local shoe producer who has insufficient finance and machinery to compete against a southafrican shoemaker who has access beyond the local market.
His best bet would be to become a local distributer of the S.A manufacturer.
To a large extent that’s what happened to most of the privatised industrial companies in Zambia.
Remember, national oil, Dunlop, so on and so forth.
Citizens Democratic Party is Front. Its only there to filter IP-addresses. As may know ,LT is not based in Zambia,therefore GRZ has no contriol of it.
Given the massive source of knowledge on the site one wonders how our implementers are going to deal with our concerns(GOVT). The kind of govt and people in leadership determine the extent of growth in the country.
Wheras the Value of the Kwacha has stabilised, the fluctuation of the oil prices has a direct impact on the final product. Another question that we could address in the people we put in leadership.
WITH the FTA comes the domination of stronger economies over the weak ones , what more of the projected CUSTOMS Union? Are we going to be safe!!!!
But I must be quick to point out that there are obvious advantages to be gained from this FTA but only if the right strategies are employed poliy wise.
But suffice to say, it appears that government , has no real ideas as what and why they have been corparated into this scheme.
I believe they have had little or no option but to be part of it. For how do you explain the fact that we are joining before parity of trade is factored in.You cant compete realiStically if your competitors goods are far less expensive than yours.
Chi #66 atase, vimoba!!!
#147 CONT’D
Are they just planning to make our prices competitive? What would obviously suppose so but this is doing things in reverse.
By the time our goods become competitive price wise, so much will have been undone, I bet 3 months would be even an over estimation.
I find it extremely odd that Government dont realise that the Kwacha is too strong. May be someone can help me on this score?
Zambia has an opportunity to make a fresh start i.e. ‘opportunities’ to focus on manufacturing industry development. If strategically approached, all the issues concerning FTA could be handled through some form of regulation to put limitations on what comes in the country. While the geographical location gives us an advantage, the reality is that Zambia will eventually get flooded with finished goods from SA. What can we get and drop from FTA? Educate me guys.
#121 MIMI. FYI, Currently we already have World Trade Organisation , which is an international integration & Zambia is a member. But that aside, FTA is not really a new development in Zambia. We have had the Preferential Trade Area which was signed in 1981 which later graduated into COMESA, which is considered to be closer to the African Economic Community. Zambia has so far benefited from these regional Integration but as at now, we will only fully benefit if we can broaden the export base via industrialisation, move away from just exporting just primary products and start manufacturing high income yielding products, and reducing heavy reliance on traditional exports like copper & maize.
cont#151. Otherwise, in a nutshell, no matter how much regional integrations come into force with further reduced taxes, these trade cooperations will not benefit us much as long as we dont put our house in order. Further we may end up just being a mopping cloth for other countries in the cooperations with us.
Free Market Capitalist
You brought out vital ‘potentail’ investors and Projects. Dont you think the timing is all crucial.
If the Steel plant was already there it would have had available local market. But it is not there yet meaning that by the time it is up and running how many business opportunities will be there for it?
Worse still, it will have to compete with larger still factories in Southafrica competing for the same market.
‘steel’ and not ‘still’ yaba chizungu chi vuta.
no matter how many good ideas you smart pipo come up with… the govt is more concerned about increasing their salaries…. 3rd reading hehehehehe
Dont expect the smaller fish to survive or do the unbelievable and swallow the bigger fish.
The smaller fish if only they were sufficient in numbers could at least manage to fend off complete dormination by the bigger fish.
The farmer who has realised that he does not have sufficient land to achieve desired yields if he discovers that his neighbour though small but suffient for the shortfall will try first buy off his land. He can use any other means possible if the neighbour is unwilling to sell.
#155
I fear you are right. Very sad indeed.
## 154 you crazy!!
#134 sorry, My ‘IT’ man disturbed my pc 4 a while. Zim still selling cement most it is produced at SINO in Gweru.I hope you want to build a masion like Dr Kaunda one which costed K7.4 Billion,Good luck. Membership you can be both that goes with signatory.
#158
Yap, not far yourself. But I take as a compiment. Thank you sir.
After reading all 119 bloggers, you have good and bad points to make , buy will your gov listen and take any action. All the best!!!!!!!!!!!!!
#159 ‘costed’. Yaba icingeleshi bwafya sana.
There is a lot brainiacs here. If you guys were apart og govt. ‘Z’ will be lekker!!
If we are not careful the Free Trade Area will do more harm than good. Most of the countries in the region have better infrastructure than us. The Government should have prepared the country by investing massively in communication,education, Technology etc so that our comparative advantage could be maximised. I remember a Minister from Malawi commenting that “African Governments are rushing into Globalisation and signing agreements when most of them cant even guarantee clean water to the majority of their people.”
## i60 check out ## 162 looks like another trend has began!
The Duke….what you are saying is our Govt needs to plan and act before we enter into such agreements. I must tell you that Zambia being a stakeholder in both SADC and COMESA knows very well the strategic goals for the regional blockings. What we luck in the case of Zambia is implementation to safeguard ourselves before we sign such protocals. But to say we need to wait may unfortunetly disadvantage us….can u imagine we dont sign any to the economic blockings? The EPAs (Economic Partnership Agreements ) forinstance will give giudlines and terms in which African states will trade with Europe , Zambia on its own can not partner with EU . Our Economy is too small…If we pull out of the EPAs
166 we pull out of EPAs Zambian products may attract high tarrifs as they enter the European market . Similarly if we avoid the SADC FTA our products may also attract an favourable tarrif rates in SADC, we dont have much of a choice.
What products are you refering to?
#Hi Mwiinga how are you doing?Must say I have enjoyed the contributions on this blog -very educative.
From my observation,membership into the EU has benefited a lot of its members.Consider Spain or Ireland before it joined the EU the countries were very poor such that its citizens were treated as second class citizens in the UK.In fact there was fear of mass immigration to the UK But now they are having the last laugh because every Briton wants to live in Spain!Most countries from the former Soviet have also benefited from the EU membership.
Maybe by SA being a key player the world esp the West will not have the right to interfere in th SADC as they have always done.
Membership to the EU among countries from the Eastern Block is that of dependency and the Western Block is that of inter-dependency. Correct me if wrong. The situatio in our zone is slightly different in that the biggest benefactor will be SA. However, Zambia will be benefit in a small way apart from being used for transit. But then again would this not help Zambia in establishing the required manufacturing industries to take advantage of the FTA? Can someone please enlighten me on this issue please?
FTA is essentially expanding the market in the region, when seen from an Investors perspective. Instead of a market size of 10million people (Zed), you potentially have a market size of 150 – 200 million people, since on paper you can sell in any country in SADC with no extra costs. Now, the trick is which country do you set up your manufacturing base? Zed has added advantage in that it is more central with borders with most of SADC members, however infrastrature needs a looking into….and our policies need to encourage FDI to expand our manufacturing base and also develop cottage industries into entities that could produce world class exportable products..e.g honey from NW province, etc..
This nothing but THE NEW WORLD ORDER.
The Goals are
1. the abolition of all ordered Goverment
2. the abolition of private property
3. the abolition of inheritance
4. the abolition of patriotism
5. the abolition of the family(i.e. of marriage and all
morality)
6. the abolition of all religion
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