Lusaka – China had offered Zambia tariff-free market access for its products and would allow its citizens to borrow investment capital from the Bank of China, finance minister Ng’andu Magande said yesterday.
Chinese firms had started feasibility studies on how $800 million (R6 billion) in investments pledged by Beijing would be spent, he added.
President Levy Mwanawasa announced the cash pledge on Saturday after talks with his Chinese counterpart, Hu Jintao, who was on a three-day state visit.
Magande said: “It is exciting that China has opened up its market to 452 Zambian products from the previous 192 products, and the best thing is that Zambians can now borrow money from the Bank of China to manufacture goods required to export to that market.”
Relations between China and Zambia have been cordial for decades.
China has invested to help build a major railway line and develop copper mines in the country, which has consistently supported a one-China policy.
The Bank of China has a Zambian branch, which previously provided services only to Chinese investors.
Magande said the $800 million would roll into the country of 11.5 million people over the next three years, starting this year.
He said the investments would include a $250 million copper smelter at Chambishi, which would process 150 000 tons of finished copper starting next year.
Chinese firms investing in Zambia after the creation of a special economic zone in Chambishi would be exempt from paying 25 percent import duty for equipment, while the 17.5 percent value-added tax would be deferred until they began to make a profit, he said.
State media hailed Hu’s visit as the best way to “conduct world politics”.
Magande agreed: “If everyone [in the world] was behaving like this, then there would be more development.”
Chinese President Hu Jintao on Saturday offered Zambia a multimillion dollar investment package aimed at boosting ties. Facing mounting accusations of Chinese exploitation of African labor and resources _ an issue during last year’s Zambian presidential elections Hu Jintao stressed that Beijing was motivated by partnership rather than purely profit.
Zambia is poised to have a maize surplus this season but it is still unlikely that the food will reach many of the 58 percent of Zambians that are classified as extremely poor. The ministry of agriculture recently released a national food balance sheet showing that the country will have a surplus of 160,000 metric tonnes of maize during the 2006/07. In the 2005/06 season the output was 63 percent above the previous season and 54 percent above the five-year average.
Zambia’s anti-corruption drive is failing because the government has been concentrating its resources on investigating the corrupt practices of the previous regime, allowing present graft in the public service to flourish, a corruption watchdog said in its latest report. Transparency International’s Corruption Perception Indices [CPI] has consistently ranked Zambia as one of the most corrupt countries since 2001.