The picture of Zambia’s new Ambassador in Washington, Dr. Ngosa Simbyakula shown in front of the Lusaka Times of Zambia of Thursday 30 November 2017 was littered with a bright smile and sense of duty. Welcome to Washington Mr. Ambassadors. While you will be dealing with several bilateral issues, let me discuss trade with you, and, this will not surprise you since in your presentation of letters of credence at White House, you partially referred to it when you said, “Zambia is grateful for the opportunity created by the Africa Growth and Opportunity Act (AGOA) to facilitate trade with the United States.”
Yes, to facilitate trade. I am sure Zambia is one of the many African countries that always pushes the USA to continue to provide AGOA. As you may be aware, the USA has been pushing for an end to this trade preference tool that allows African countries including Zambia to export to the USA goods at almost free import price. I say almost because there are obstacles like rules of origin that impede increased use. But market access is largely free in the USA for Zambia although this may come to an end soon as the USA seems unready to extend it. Like others, Zambia is likely to fight for its continuation.
Yet, trade between Zambia and the USA is a joke. I am reading from the website of the Office of the United States Trade Representative and here is what it says.
“Zambia is currently our 156th largest goods trading partner with $131 million in total (two way), goods trade during 2015. Goods exports totaled $84 million, goods imports totaled $47million. The USA goods trade surplus with Zambia was $37 million in 2015.
“Zambia was the United States’ 149th largest goods export market in 2015. US goods export to Zambia in 2015 were $84 million, down 26% ($30million) from 2014 but u 189% from 2005. The top export categories were machinery ($35million), rubber ($8million), special other (low value estimates) ($7million,) vehicles ($7million), and electrical machinery ($7million).”
“Zambia was the United States’ 144th largest supplier of goods imports in 2015. US goods imports from Zambia totaled $47million in 2015, down 15% ($9million) from 2014 but up 49% from 2005. The top import categories were precious metal and stone (emeralds) ($35million), other base metals (cobalt) ($8million), iron and steel ($3million).”
“The US goods trade surplus with Zambia was $37million in 2015, a 36.6% decrease ($21million) over 2014.”
Excellency, I don’t mean to criticize you because you have just arrived. But you need to sit down and prepare a plan for expanding Zambia’s exports to the USA, at least before AGOA ceases to exist. But even in the post AGOA period. The revelation by the biggest export market in the world that it imported goods from Zambia worth only $47 million is a great shame not necessarily for Government but the private sector. You are not an exporter but a public facilitator. In 2016, Zambia’s exports of goods to the USA has not changed from figure given by the USA for 2015. Therefore, you will need to play your role to promote trade and take it from the current embarrassing level to something that Zambians will, for a long time to come appreciate your presence in Washington. The private sector needs to take advantage of the AGOA market access that Government is obtaining from the US. If Government had not provided this facility, they would have been the first to complain. Now that it is available, they don’t use it.
Regional competitiveness in exports of goods to the USA
Excellency, you will need to appeal to the Zambian private sector to explain to the people of Zambia why it trades so little with the largest export market on earth. Compared to other African countries, Zambia’s trade with the USA is depressingly marginal. Table 1 shows USA’s imports of goods from Africa and look where our country is. It is ranked number 31 among African countries’ exports to the USA. That simply means that the Zambian private sector hardly knows about this market. It is rather disheartening that the biggest export market in the world gives you an opportunity to expand your trade and all you export are natural things given to you by God like precious stones and not manufactured goods which give more value and are more sustainable.
Table 1: USA’ imports of goods from Africa in $Millions
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Ask the Zambian private sector to stop inflating the importance of exports to the USA
Excellency, if only we could do more than we talk. The other day, I read in this same newspaper, “Zambia’s emerald described as the best gemstone in the world.” And, “The Jewel of Africa has described Zambia’s trade agreement with the United States of America under the African Growth and Opportunity Act (AGOA) as a success story for the country’s gemstone industry.”
Yet, truth on the ground is that Zambia’s total exports of precious stones, including emeralds to the world was only $160 million and to the USA only about $20 million according to data imports in unctadstat as shown in Figure 1. Good that imports by the world shows a rise but in absolute values this is only $150million. It begs the question, “Where do Zambia’s precious stones go for exports? One answer is that some of these exports are not recorded. They are sold at black market. Excellency, it is your duty to track these products and bring them back into the normal export system so that they are recorded.
In conclusion, it will make little sense for you to sit with your US trading partners to ask them to prolong AGOA if you are not expanding exports to that country. How can you be crying for milk which you don’t drink? There is need for an urgent and stronger public-private dialogue to find out the solution to this problem. I don’t have the answer but at least I can bring the problem to light. For instance, I don’t think many Zambians knew before these statistics the size of trade between Zambia and the US. But for sure, one way is to increase US foreign direct investment to Zambia. That is how Viet Nam overtook Africa in exports of manufactured goods. One other way is for Zambia to increase its partnership with the Chinese so that they can revive the Mulungushi textiles industry for exports of textiles and clothing. Since the expiry of the quotas in WTO in 2005 and the opening of the market for all countries, trade in this sector has become competitive especially because of China’s free participation. But, this is one area in which China can play an important role to boost supply capacity. I am not sure about the Zambia-China bilateral partnership on this matter but this is the sector that has made most successful countries enter the global value chains and networks.
Thank you Excellency
By Economic. Governance