Monday, June 24, 2024

President Hichilema must do more than his predecessors to reverse the sinking trade partnership with the UK.

Share

By Edward Chisanga

Background

When I listened to the news informing Zambians that our President is heading to the United Kingdom (UK) to attend the coronation of “Their Majesties King Charles III and Queen Consort Camilla, on 6 May 2023, my mind twisted to the famous repeated statement of our leaders, “Our Foreign Policy is changing towards economic diplomacy. We want to promote trade with the rest of the world.”

In November 2021 when he signed the UK-Zambia Cooperation Agreement. Minister of Foreign Affairs and International Cooperation, Stanley Kakubo stated, “We are looking for jobs as a major statistic in our economic development, and key to this, of course, is the trade and investment that will happen between your government and the Zambian Government.”

I know little about UK’s Foreign Direct Investment (FDI) to Zambia as the statistics that I often use from UNCTADstat contain only global aggregate FDI figures between Zambia and the world, and nothing on between Zambia and individual countries like the UK.
So, in this paper, I share only statistics on trade between Africa and the UK and Zambia and the UK. As former colonies of the UK, many Africans and Zambians have a perception that the UK must be one of their key trading partners. But it’s not, or hasn’t been, at least in the last two-three decades. In past political leadership of Africa and Zambia, there has been more pious talk than action about the trade partnership between the two.

Africa’s exports to the UK

Look at Figure 1 below, and you’ll be little impressed that Africa’s total exports of all products to its former colonial master today (2021) stands at only US$20 billion, a drop from about US$30 billion in 2013. On the other hand, Africa’s total imports from the UK stand at only US$19 billion. Remember, Africa has 55 countries, in total exporting only US$20 billion to the UK.
When these exports of US$20 billion are divided by Africa’s total population of about 1, 392, 394,000 people, it means each African citizen’s benefits of the continent’s exports to the UK is only US$14 each year. Yes, each year or in every twelve months. If that’s not a joke, then tell me what it is.

According to statistics, the main beneficiaries of Africa’s exports to the UK are South Africa with a share in total of 50%; Algeria 13%; Libya 7%; Nigeria 5%; Morocco 3%; Kenya 2%; Cote D’Ivoire 2% and Tunisia 1%. I put alongside the UK as Africa’s trading partner, China to show comparisons and partial reason why Africa’s exports to the UK are so low. One main reason is that Africa has diversified its export markets to Asia, largely China which has overtaken the UK as Africa’s main export market.

But the main reason is that African countries have not correspondingly diversified or added value to their exports in the last almost 60 years since independence to benefit from the free market access in the UK. Under the EU, the UK when member provided unbridled free market access which Africa failed to take advantage of up to now. I think it still does.

Zambia’s exports to the UK

In Figure 2 below, I show exports in thousands, in this case meaning that Zambia’s total exports to the UK were only about US$ 70 million in 2021. One reason is that China has outraced and replaced the UK by magnificent degree as shown in in the Figure.
The gulf between China and the UK in the context of Zambia’s exports to both partners is so huge that it will require significant effort by the new Zambian leaders to narrow. The new leadership must know that in their predecessors’ time, there was almost no trade between Zambia and the UK. The challenge is for the new Zambian leaders to create trade which matches their vision of value addition with the UK, if they can, although the possibilities are not easy.

Zambian leaders must know that creating export value addition is not a responsibility of the UK but that of Zambia. While the UK can play a role, such as its private sector investing their foreign direct investment in Zambia, on condition that the environment is clean for investment, that must be seen as a complementary role.

Often, there’s confusion among Zambians that rich countries like the UK must bring investment. Governments don’t bring investment. Private sectors do and in the case of the UK, Zambia must cajole the UK’s private sector to invest in Zambia. So far, since independence, records show that UK private sectors’ investment in the country has not helped to create the value addition the country needs.

It’s Zambia’s responsibility to create the enabling environment that leads to creation of robust value addition. The enabling environment is not created by sweet speeches of self-approbation. Ask Viet Nam, Morocco or Mauritius and you will soon know how FDI is created. The three countries given here use humility as an integral part of the overall strategy.

So, for Zambia’s President, our Foreign Minister, and others, who want to vigorously raise trade with the UK, these numbers show an important basis from which to begin. They must understand that currently, there’s almost no trade between the two, in the context of Zambia’s exports to its former colonial master.

BR.EXIT creates an opportunity for bouncing back.

Under BREXIT, the UK seems to be determined to reposition itself towards Africa, including Zambia. According to sources, “On 22 February 2019, the British minister of state for Africa, Harriet Baldwin, and the Chairperson of the African Union Commission, Moussa Faki Mahamat, signed a Memorandum of Understanding concerning a partnership be-tween the AU and the UK. This strategic part-nership aims at strengthening the engagement between the continent and the UK government, mobilising investments for Africa’s sustaina-ble transformation, including the promotion of UK-Africa trade and investment, the AfCT-FA and initiatives to harness the demograph-ic dividend.”

Finally, let’s note that in past engagements with the UK, in terms of funding from the former colonial master, the UK has not helped Zambia in export value addition. The UK announced “A funding package of £30 million for prosperity and security projects across Africa. More recently, on 20 January 2020, the UK prime minister Boris Johnson hosted the UK-Africa Investment Summit which aims to lay ‘the foundations for new partnerships be-tween the UK and African nations based on trade, investment, shared values and mutu-al interest.’1 In the lead-up to this Summit, £6.5 billion of commercial deals have already been signed by British companies to deliv-er jobs.”

Although these amounts of money given to Zambia sound big, Zambians have never seen tangible value addition results. And I doubt they will this time around. In other words, thanks to the UK government’s gesture, but Zambians must remember that the route to manufacturing in the country will come from Zambians.

19 COMMENTS

  1. It has been, it’s and it will always be a slave and master partnership. Don’t cheat yourself of the opposite.

    • It works well for the master because the slave is willing to serve him out of his inferiority complex. The inferiority complex tells the slave that everything belongs to the master and I am his servant forever

    • Hakiande thinks he is running his family company or farm…trust the Tories at your own peril, the UK Politicans you are there drinking tea and biscuits with are pushing for more investment from China. Chinese companies backed by the state are investing heavily in real estate and commerical infrastructure in cities around Europe. You are there when you have access to China already open for you but doesnt want to annoy his masters.

  2. Why should we beg for love that is always conditional with strings attached? Zambia is better off without these people. Define your own destiny and stop dreaming because the UK is in a much bigger mess than you.

  3. Haha kikia remember that hh worships muzungu. He is obsessed with those colonialist. They brainwashed him when he was studying there so that he Hates his own people

    1
    2
  4. This article is outdated. Get fresh information and be current. Do not be in a hurry to impress, otherwise you are wasting the reader’s time.

    2
    2
  5. I keep posting about our slave mentality which some mental slaves defend strongly here on LT. This slave mentality encompasses all our lives from idolising King Charles, thinking Manchester United is ours, giving our children English names, wearing European dress and thinking master Britain will save us from our poverty.
    African countries cant diversify because they are still acting like they are colonies who produce single products to sell to their colonial masters. Remember Britain came to Zambia for copper, Ghana for gold, in short Africa was a source of raw minerals

  6. Africans still have that colonised mentality and want to pursue single product trade with the colonial master. Thats why “the main beneficiaries of Africa’s exports to the UK are South Africa with a share in total of 50%; Algeria 13%; Libya 7%….” What about promoting intra-africa trade and focusing on beneficiation thereby developing our manufacturing industry. How come China has done this in 90 years?

  7. How did the boers establish manufacturing industries right on this motherland and we cant? Why do we want to be economically shackled to Europe? Why not push South to South economic cooperation? Join BRICS and shake up snooty Europe! wake up Africans! You have only one life to live!

    • Good example… even here how did they build all towns equipped with up to date infrastructure… just using the copper from our mines.
      Kaunda established industry (which we’re now crying for from our masters). But clever people under the influence of the same IMF destroyed them without due diligence.

  8. If IDC and UPND had smart savvy people they would have dumped that airline called Zambian Airlines the moment HH formed govt. Can you imagine that Cargo aircraft have not been a priority in Africa so far which can explain the low volume of air cargo today.

    • However, one airline is doing well in this business segment: Ethiopian Airlines. It is the leading airline in Africa, including for cargo. Ethiopian Airlines exports the equivalent of $3 billion a year, mainly flowers, but imports five times that amount ($16 billion).
      Import commodities into Africa by air freight are in majority manufactured goods, spare parts, electronics, pharmaceuticals, and foodstuff. Exported commodities from Africa by airfreight are in vast majority fruit and vegetables, fish, and flowers. 2/3 of air cargo flows from Africa to the northern hemisphere are indeed perishable and fresh products (source, africa-container-shipping 2022).

    • However, one airline is doing well in this business segment: Ethiopian Airlines. It is the leading airline in Africa, including for cargo. Ethiopian Airlines exports the equivalent of $3 billion a year, mainly flowers, but imports five times that amount ($16 billion).

    • Import commodities into Africa by air freight are in majority manufactured goods, spare parts, electronics, pharmaceuticals, and foodstuff. Exported commodities from Africa by airfreight are in vast majority fruit and vegetables, fish, and flowers. 2/3 of air cargo flows from Africa to the northern hemisphere are indeed perishable and fresh products (source, africa-container-shipping 2022).

    • Import commodities into Africa by air freight are in majority manufactured goods, spare parts, electronics, pharmaceuticals, and foodstuff. Exported commodities from Africa by airfreight are in vast majority fruit and vegetables, fish, and flowers. 2/3 of air cargo flows from Africa to the northern hemisphere are indeed perishable and fresh products (source, africa-container-shipping).

    • The point I am driving at is that its more profitable to invest in cargo freight company than the competitive passenger and that shiny overpriced airport at KKIA does not feature on the top 15 air cargo airports in Africa.

  9. Desomond Tutu Said
    the missionaries arrived gave us the bible and told us to close our eyes and pray
    when we opened our eyes we had the bible and they had the land
    those with a brain will know whats going to happen here in the future.. that is a cert

    1
    1

Comments are closed.

Read more

Local News

Discover more from Lusaka Times-Zambia's Leading Online News Site - LusakaTimes.com

Subscribe now to keep reading and get access to the full archive.

Continue reading