THE Industrial Development Corporation (IDC) of South Africa has signed a US$20 million Line of Credit (LoC) with the Development Bank of Zambia (DBZ) which will be used to support emerging enterprises in Zambia.
This was disclosed by IDC Senior Business Development Manager in charge of Rest of Africa Support, Mr. Ashley Petersen at the ‘Invest in Zambia Business Forum’ held at Sandton Convention Centre in Johannesburg on Thursday.
The LoC, which will be processed through DBZ is meant to support small and medium enterprises and is expected to trigger economic activity and consequently help create employment in Zambia.
Mr. Petersen made the disclosure during a panel discussion which was looking at the various sectors of the Zambian economy which included agriculture, energy, manufacturing, construction, financing, tourism and mining.
Zambia’s High Commissioner to South Africa, Mr. Emmanuel Mwamba welcomed the gesture saying: “We are happy that strong and direct financial support to small and medium enterprises has received a strong boost with this line of credit.”
A line of credit, abbreviated (LOC), is an arrangement between a financial institution, usually a bank, and a customer that establishes a maximum loan balance that the lender permits the borrower to access or maintain.
And the ‘Invest in Zambia Business Forum’ has been described as a ‘momentous success’.
Mr. Mwamba, has said that the event was over-subscribed with an unexpected turn-out of over 300 business executives.
“This was an initiative of the Zambia-South Africa Business Council (ZSABC) and the Zambian High Commission to South Africa. Turn-out was beyond expectation, with over 300 investors, representatives from various financial institutions, individuals and firms that have invested in Zambia or are prospecting to,” Mr. Mwamba said.
The Guest of Honour and Key Speaker at the event was Minister of National Development Planning, Mr. Lucky Mulusa, who commended the Zambian High Commission in Pretoria for taking up such an initiative and urged other Zambian Missions to adopt the concept.
Mr. Mwamba has said that the success of the event has shown that it was imperative that Forums such as this were held as they contributed to helping the country achieve its objectives.
He has, however, expressed concern over the trade imbalance and existence of trade barriers between Zambia and South Africa.
“South Africa is Zambia’s biggest trading partner with annual trade volumes amounting to over $3.8 billion”. It is sad that Zambia’s contribution to this trade is only 10%. Further Zambia has some concerns regarding non-tariff barriers, and the imbalance in trade, and labour issues regarding casualisation of labour and high volume of South African products.”
Mr. Mwamba is hopeful that a forum such as the ZSABC would help address these concerns and those which South African businesses might have so that the continued good and sound bilateral relations that exist between the two countries were not harmed.
“There are also concerns relating to issues of how easy it is to do business in Zambia vis-a-vis corruption and bureaucratic processes regarding work permits for expatriate staff. It is hoped that the Business Council, which was created as a not-for-profit organisation, will act as a chamber of commerce, as a vehicle to encourage business and investment between the two countries and further help resolve these and any outstanding issues,” the High Commissioner said.
Mr. Mwamba tabulated the successes that have been achieved in the last one year noting that; “We found that Zambia’s honey, which is considered as one of the best in the world and 100 per cent organic, was banned and could not enter South Africa by a non-trade tariff. The seven-year ban has since been lifted and Zambia is now struggling to fulfill its export commitments that we have arranged.”
He said it had also been learnt that some products in the Zambian poultry industry, such as Quails, were not allowed into South Africa and that engagement processes with the relevant South African authorities have begun to ensure that the ban was lifted.
Mr. Mwamba said there were over 200 South African companies registered in Zambia out of which about 120 were active.
He cited Massmart Holdings, the retail giant that owns Game Stores and Builders Warehouse, operating in Zambia, as one entity about which good stories could be told.
Massmart Holdings Board Chairperson, Kuseni Dlamini announced during the ‘Invest in Zambia Business Forum’ that his organisation was already attending to some of the concerns that Zambia has had.
Mr. Dlamini said his companies had continued to source stock from local companies for their Builders Warehouse outlet.
Mr. Mwamba also said that the High Commission has been persuading large commercial farmers so that their investment should incorporate support and growth to small and medium farmers and establish out-grower farming schemes.
He assured that concerns over malfeasance and corruption were being attended to from the highest level as evidenced by President Edgar Lungu who has taken a strong stance against the vices and committed to fighting them.
“On the concerns regarding acts of corruption and abuse of office, we are happy that the President, His Excellency Mr. Edgar Lungu has recently spoken strongly against the vices and has committed to dismissing anyone engaged in acts of corruption and abuse of office or resources”.
“He has also encouraged law enforcement agencies to pursue these vices as provided for by the Constitution and statutes. Clearly this serious political commitment and will at the top is encouraging for businesses and investors,” Mr. Mwamba said.
And Zambia Energy Forum Chairperson, Mr. Johnstone Chikwanda assured the investor community that a number of interventions were in place and underway in Zambia and as such load shedding will diminish and ultimately wiped out. Mr. Chikwanda encouraged investors to consider focusing on quick to deploy generation facilities such as waste to energy and portable hydroelectric power plants which could be off grid systems and co-located with end users without pestering ZESCO for a power purchase agreement (PPA).
He told the audience that the Zambian Government has identified blocks with interesting potential for oil and gas and that these were available to interested investors.
Mr. Chikwanda praised President Lungu for his relentless call for the diversification of the energy mix in Zambia saying? “We have never had a Zambian president who has pushed so hard to diversify the energy mix the way President Lungu has done.”