Despite political rhetoric, Zambia’s trade with South Africa is a shameful joke. And, the elephant in the room is not Government but the private sector. It cannot always be Government. Government is not a trader. It is a facilitator. Even in countries where Government has not been the best facilitator, the private sector has never been as naïve and low-thinking as the one we have in Zambia. Zambia’s private sector has a culture of thinking too low and that is precisely why it doesn’t grow. It is not regionally and globally competitive and never even thinks in those terms. Unless this culture changes, the country will continue to rely on small things as influencers of economic development.
It is inexplicable that while citizens who are not privileged to statistical information listen to leaders and perceive Zambia’s economic relationship with South Africa perhaps more highly than it really is, the reality on the ground is disappointing. Of course, citizens will think with a lot of hope when they read in newspapers that Zambia and South Africa had a business forum meeting when the Head of State from that country visited Zambia recently. Listening to the business people discussing with their South African counterparts in the business forum, they probably hold the view that for instance trade between the two countries is doing well for Zambia. The truth is that the Zambian business sector has disappointed us. Despite the long and good political relationship between the two countries, the fact that our country was host to many leaders from South Africa during the struggle and even beyond, the Zambian business men and women have lamentably failed to take advantage of the biggest economy in the continent in terms of business opportunities. Every serious business man and woman in other countries wants to trade with South Africa and is perhaps already doing that. While they do that, our business people spend all their time either complaining or still discussing how to exploit the potential export market.
Let us explore three main points. First, Zambia’s ranking in African countries’ exports of goods to South Africa, second, understand the eroding importance of the South African market for Zambia’s exports and third, the limited number of Zambia’s non-traditional products that are being exported to South Africa.
First, Zambia’s ranking in African countries’ exports of goods to South Africa is low.
For how else does one explain the fact that in 2006, Zambia ranked number 5 in African countries’ exports of goods to South Africa although even then, the value of exports were only a small $473 million compared to Mali’s $747million as Table 1 shows yet, in 2016 it was overtaken by four to five countries to backslide to position 10? This is simply a joke. There are so many Zambian business men and women always going to South Africa on the so-called business trip but export figures are not showing corresponding rise making one wonder that these trips are really for. Don’t tell me that there are other business deals that Zambians are engaged in with South Africans because I will still tell you that trade is the simplest thing that we can do with them. We have more control over trade than attracting foreign direct investment from South Africa.
Meanwhile, Zambia’s imports from South Africa totaled about $2.3 billion in 2016 leading to a trade deficit of about $ 2 billion, meaning we are importing more than we are exporting.
Table 1: Zambia’s exports of goods to South Africa in $ Millions
Second, the importance of South Africa, as Zambia’s export market is declining.
South Africa is just one of a few export markets for Zambia. There is potential for Zambia to make it one of its main markets for exports of non-traditional products especially given its proximity and several other favorable factors. There is simply no excuse why the Zambian business community has not exploited this country’s potential. Although it is important for Zambia to diversify its export market, which it has done largely through China and Switzerland, save this is mainly copper. But to lose South Africa as Zambia’s export market is the last thing that any thinking business community can do. The best that is expected is to expand the market. Yet, the unfortunate thing is that Zambia’s exports to South Africa as a percentage of total to the world has eroded, meaning that the importance of South Africa as Zambia’s export market is in fact fading as Figure 1 below shows. The share went down from 17% in 2002 to 6% (over half) in 2016. This image below is not only disappointing but worrisome. And it is the fault of business that is failing to expand its exports to that market.
Third, Zambia is exporting limited range of products to South Africa.
Besides copper and other mineral related products, Zambia exports to South Africa other products or the so-called non-traditional products (NTPs). In one single year, according to statistics, Zambia exports to South Africa about 200 different products out of which 13 countries account for about 90%, meaning most of the products, about 187 accounts for only 10%. The top NTPs include sugar and cotton See Table 2) but whose values are miserably low – only $22 and 17 million each. That is a scandal given that these products are things that you only get because of simply standing in a field and throwing seeds in the ground to grow on their own. Why are we sending to such an important market sugar, cotton and other irrelevant products of low value when Mauritius in Table 3 is exporting things that make more sense in business?
Table 2: Zambia’s main export products to South Africa in $ Thousands
|[TOTAL] Total all products||370,937|
| Gold, non-monetary (excluding gold ores and concentrates)||86,171|
| Equipment for distributing electricity, n.e.s.||22,605|
| Sugar, molasses and honey||22,297|
| Inorganic chemical elements, oxides & halogen salts||13,106|
| Manufactures of base metal, n.e.s.||13,067|
| Civil engineering & contractors’ plant & equipment||12,653|
| Motor vehic. for transport of goods, special purpo.||8,425|
| Hides and skins (except furskins), raw||7,219|
| Feeding stuff for animals (no unmilled cereals)||6,433|
| Iron & steel bars, rods, angles, shapes & sections||5,719|
| Alcoholic beverages||4,938|
Table 3: Mauritius exports to South Africa in $ Millions
|[TOTAL] Total all products||179|
| Articles of apparel, of textile fabrics, n.e.s.||47|
| Men’s clothing of textile fabrics, not knitted||47|
| Women’s clothing, of textile fabrics||11|
| Men’s or boy’s clothing, of textile, knitted, croche.||10|
| Textile yarn||10|
| Printed matter||9|
Even if Government is not a trader, Mr. Ambassadors, please do something about this joke. How can you be smiling in good suits talking about trade when your country’s trade figures are an embarrassment? You are supposed to be bouncing when walking and looking up but you cannot do that when trade figures are so low. Like others, you will perhaps be quick to argue that you are doing more than trade in South Africa. But what foreign investment are found in Zambia other than supermarkets? Maybe there is something that I am not aware of. But since South Africa gained independence from while rule, part of which was due to our own sweat, there has not been any significant investment from that country. Yet, it is a hub of manufacturing. You should study figures carefully after which you will see that there is more work that needs to be done at your Embassy than simply making pronouncements. According to statistics, you were sworn in on 4 May 2015 and posted same year to South Africa. In 2014 prior to your posting, Zambia’s exports of NTPs shown in Table 4 were $560.7 million. In 2016 they declined to $367.6 million and no explanation has been given to Zambians. If it is not your fault, explain whose it is. At least we need to know how trade is behaving.
Table 4: Zambia’s exports of NTPs to South Africa in $ Thousands
|[TOTAL] Total all products||560,888||378,023||370,937|
| Copper ores and concentrates; copper mattes, cemen||186||96||3,343|
By Economic. Governance