A pivotal time for Zambia’s economic future

 WORDS BY: Derrick Silimina IMAGES BY February 7, 2020

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Zambia is facing a number of macro-economic challenges but has set itself on a path back to economic stability and growth.

The depreciation of the kwacha which triggered inflationary pressures, sluggish credit growth, decreased agriculture output arising from the poor rainfall, and debt servicing burdens negatively affected the overall performance of the economy.

On the global front, mounting geopolitical tensions between the US and China and the rise in oil prices have also contributed to Zambia’s economic slowdown.

It is for these reasons that the 2019 National Budget theme, dubbed “Delivering Fiscal Consolidation for Sustainable and Inclusive Growth” was clearly aimed at stimulating Zambia’s declining economic performance through domestic resources mobilization.

2019 Economic Performance

Initially projected at around 4 percent, economic growth in 2019 slowed down to around 2 percent, compared with 3.7 percent growth in 2018.

In his maiden budget speech, Minister of Finance Dr. Bwalya Ng’andu highlighted that although revenues and grants exceeded targets by 9.1 percent in the period from January 2019 to August 2019, expenditure exceeded targets by 3.4 percent.

Dr. Ng’andu noted that this was mainly due to depreciation of the kwacha and under-subscription of government securities resulting in increased debt service costs which left an overall budget deficit of 6.5 percent of GDP on a cash basis.

According to the Bank of Zambia, inflation remained broadly in line with the 6 to 8 percent target range in the earlier part of 2019. In the second quarter, inflationary pressures built up, resulting in inflation breaching the upper bound of the target range in May 2019 at 8.1 percent. By the end of August 2019, inflation rose further to 9.3 percent. This was largely on account of higher food prices and the pass-through effects from the depreciation of the kwacha against the US dollar.

To counter inflationary pressures, the Bank of Zambia adjusted the policy rate upwards to 10.25 percent in May 2019 from 9.75 percent in December 2018.

Growth has further been adversely affected as commodity prices had generally been lower over the first eight months of 2019 due to a fall in global demand. Copper prices averaged US$ 6,091 per metric tonne compared to US$ 6,723 per metric tonne over the corresponding period in 2018. Over the same period, crude oil prices averaged US$ 63 per barrel compared to US$71 per barrel.

In addition, tight liquidity conditions mainly attributed to external debt servicing and as reflected in the accumulation of domestic arrears, have contributed to slower economic growth.

Notwithstanding the general slowdown in the economy, the service sector has however performed favorably, especially wholesale and retail trade, information and communication technology, and financial services.

Non-traditional export earnings increased by 17.2 percent to US$ 1.1 billion from US$ 911 million over the first half of 2018. This outturn was attributed to higher exports of gemstones, cement, lime, sulphuric acid, and sugar.

But in terms of debt position, the external debt stock at end of June 2019 increased to US$10.23 billion from US$ 10.05 billion at the close of 2018. This was mainly on account of disbursements on existing loans. The rate of debt accumulation at 1.9 percent was lower than the 7.6 percent recorded in the corresponding period in 2018.

2020 Economic Outlook

The 2020 national budget, under the theme ‘Focusing national priorities towards stimulating the domestic economy,’ is clearly aimed at dealing with the economic challenges the country is currently facing.

In a bid to achieve more with less, the tight fiscal space for 2020 requires refocusing resources on priority areas of economic diversification and job creation.

“We are confident that economic diversification and job creation can be attained with continued public and private investments in the agriculture, tourism, mining, energy and manufacturing sectors,” Dr. Ng’andu stated during his 2020 budget presentation.

Policy Monitoring and Research Centre Executive Director Bernadette Deka Zulu shared recently in response to the 2020 national budget reveal: “With relation to agriculture, we call for scaling up of the Farmer Input Support Program with more priority being given to the E-voucher as opposed to Direct Input Supply (DIS) so as to promote agriculture diversification.”

With decreased electricity output over the years, which has negatively affected the economy, the government has plans in place to upgrade its power plants and increase output. Power projects such as Bangweulu and Ngonye Solar Power plants generating a combined total of 90 megawatts have been completed and are operational. Further, the construction of the 750 megawatts Kafue Gorge Lower Hydropower Station Project and upgrading of Lusiwasi Upper Hydropower Station to 15 megawatts are expected to be completed in 2020. The upgrading of Chishimba Falls Power Station from 6 megawatts to 15 megawatts will commence in 2020. In addition, the developer of the 2,400 megawatts Batoka Hydropower Plant between Zambia and Zimbabwe has been identified.

It’s also encouraging to note that under the National Industrial Policy, the government aims to promote export-oriented industrialization as progress is being recorded in the export of products such as cement, honey, and detergents. In line with the National Local Content Strategy, these products are being manufactured from local raw materials.

Economic priorities for 2020 include creating a foundation for improved economic management, sustainable power generation, and safeguarding people’s welfare through consistent public investments in education, health, and agriculture. These all fall in line with the country’s aspirations outlined in the Seventh National Development Plan (7NDP).

JICA Plays Significant Role in Zambia’s Development

 AUG 25, 2020

by DERRICK SILIMINAin INTERNATIONAL

SNA (Lusaka) — Japan has become a formidable pillar in Zambia’s development, and its influence is felt in the fields of business investment, training, and technology. Some have argued, however, that the criteria for accepting trainees and awarding grants need further clarification.

Japan’s official development assistance to Zambia is delivered mainly through the Japan International Cooperation Agency (JICA). Since it began its activities in 1968, it has been an extraordinary success story that effectively triggered the transformation of the Zambian economy.

JICA’s training programs have enabled many Zambians to go to Japan and participate in training courses. Each year, about 100 to 150 Zambians are trained in the Asian country, and about 3,000 more Zambians receive some form of training inside their home country. JICA’s investments in Zambia have been worth about US$2 billion since its operations began.

“Since the purpose of our cooperation is to help Zambia achieve its Sustainable Development Goals,” Japanese Ambassador to Zambia Ryuta Mizuuchi said recently in Lusaka, “I think we have to take it seriously.”

He added, “One thing that I clearly heard from Republican President Edgar Lungu himself, possibly in this context, was about Zambia’s quest to strengthen the agricultural sector with a view to diversifying the economic structure, and rectifying the overdependence on mining.”

Zambia, Africa’s second-largest producer of copper, is highly dependent on mining as its major productive industry. Mining contributes 78.4% of total export value, and 31.4% of government revenues, according to the latest data from the Extractive Industries Transparency Initiative (EITI).

The Japanese envoy also expressed interest in exploring the potential to achieve a sustainable human resource development chain within Zambia. “Personally, I wish to see a ‘strategic thrust’ in our cooperation with Zambia, in such a way that, for instance, a schoolgirl with excellent talent would be efficiently supported by a JICA scheme in the field of gender, and promoted further to receive Japanese language studies at the University of Zambia, which is already assisted by volunteers who teach Japanese.”

JICA Zambia Office Chief Representative Kazuhiko Tokuhashi affirmed that the agency has been the bridge linking Japan and developing countries. “The actions that drive us as JICA are commitment, working together with the people, thinking and acting together strategically with broad and long term perspective, bringing together diverse wisdom, resources, and innovation that will bring about unprecedented impact,” he asserted.

With more than 4,000 trainees now having been sent to Japan through JICA’s training programs, the ultimate aim is to realize the Vision 2030, making Zambia a prosperous middle-income country by that year.

The Zambian government has commended Japan for being an “all-weather friend” in providing assistance in various economic sectors of the country.

Director of Vocational Education and Training Alex Simumba recently stated, “We will continue to engage in partnerships aimed at empowering our people; we cannot develop the country alone without the support of our partners. Since the launch of the Seventh National Development Plan, our role as government is to scout for partnerships.”

The Zambia JICA Fellowship Association (ZAJIFA), an alumni organization, has been developed as a way to maintain personal relationships between ex-participants and to ensure continued knowledge sharing among various key organizations within the private and public sectors.

ZAJIFA President Joseph Mulenga said that the association plans to shake things up and to get more members involved in projects, as well as to become more visible by having additional collaborations with Japanese counterparts.

Some ZAJIFA members recently made presentations on human resources development and the succession plan in an organization. One of the proposed plans is the development of floating photovoltaic technology on Lake Kariba, and a solid waste management improvement plan.

Although Zambia is endowed with natural water resources that offer significant opportunities to supply fish, the growth in aquaculture and fisheries have not matched the ever-increasing demand.

Current fish production is about 100,000 metric tons per annum, against the demand of over 180,000 metric tons, according to the Zambia Aquaculture Enterprise Development Project.

“Being accepted to attend a five-week course in Kyushu, Japan, in May 2017 was an opportunity of a lifetime,” stated Roster Kawala, a ZAJIFA member who recently attended a course on capacity building for entrepreneurs. “Upon my return, I have promoted aquaculture and encouraged the business community to participate by providing a market, cold storage facilities, and refrigerated transportation, among other things.”

However, some community members feel that, as much as JICA has been doing through its skills development and capacity building, a lot more still needs to be done in terms of publicizing its criteria for accepting trainees and awarding grants to deserving recipients.

“Some of us are still blank about JICA’s capacity building program, despite having belonged to cooperatives,” stated Amos Chanda, a social worker based in the Kafue district. “The JICA programs ought to be inclusive and embrace many, especially in rural areas.”

Farmer Jane Simate echoed Chanda’s concerns: “The recent Market Oriented Rice Development Project by JICA has so far been selective. The project has only captured a few rice farmers to equip them with skills on how they will become productive. What about other rice producers like myself who need the knowledge?”

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Tagged with: Africa, Alex Simumba, Amos Chanda, Asia, Edgar Lungu, Extractive Industries Transparency Initiative (EITI), Jane Simate, Japan International Cooperation Agency (JICA), Japanese (language), Joseph Mulenga, Kafue (Zambia), Kazuhiko Tokuhashi, Kyushu, Lake Kariba, Lusaka (Zambia), Market-Oriented Rice Development Project (Zambia), Roster Kawala, Ryuta Mizuuchi, Seventh National Development Plan (Zambia), Sustainable Development Goals (SDGs), University of Zambia, Vision 2030 (Zambia), Zambia, Zambia Aquaculture Enterprise Development Project, Zambia JICA Fellowship Association (ZAJIFA)

Powered by the Sun

At first glance, all is well. Zambia’s immense water bodies are propelling major hydropower plants to meet the nation’s electricity needs in a clean and renewable way. For many years, the country's electrical energy has been generated thanks to water flows from the mighty Zambezi, Kafue, Luangwa, and Chambishi Rivers.

However, the southern African country is now reconsidering its long-time dependence on hydropower, as chronic droughts cut production at its massive hydro dams. These droughts - caused by climate change - have in recent years lowered water levels, severely curtailing power production. Zambia has as a result seen electricity shortages estimated at around one-third of its total installed hydroelectric capacity. In 2019, water levels in the Kariba dam - one of the country’s key manmade dams - plunged to their lowest yet, falling to 10% of usable storage since 1996.

“This is probably the worst drought that has hit Zambia since independence in 1964,” Energy Minister Matthew Nkhuwa recently told parliament.

Chronic electricity shortages have affected everyone, from individuals to small businesses and huge corporations.

In addition to unpredictable weather patterns, a lack of investment in hydro projects has also caused complications. Even if rain does fall, power supply simply cannot keep up with demand from the mining, manufacturing, and agriculture sectors.

Zambia’s over-dependence on hydropower is unsustainable. Energy experts have argued that as droughts lead to prolonged blackouts, the country ought to be developing other renewable fuel sources, such as solar and wind energy.

The Zambezi River.

In an effort to diversify its energy sources, Zambia is entering agreements with corporations looking to invest in its energy sector. Recently, the country signed an agreement with the IFC to develop two large-scale solar projects. Only a few weeks ago, Zambia’s state-owned electricity provider signed a contract with Power China to develop three solar power plants to feed into its national grid.

Less attention has been paid to wind energy, but several promising projects are underway. Construction of a 200MW wind power project in Katete, Eastern Province is expected to start in 2021. This is the first phase of the larger Unika 1 wind project and will be financed by private investors.

These impending improvements are good news for Zambia’s citizens. Chronic electricity shortages have affected everyone, from individuals to small businesses and huge corporations.

“These projects are badly needed and long overdue. Look! For me to make it in this sector, I need electricity to refrigerate my milk products and the rolling power blackouts have wrecked Zambia’s already fragile economy,” says Pamela Kabwe, a dairy farmer based in the Chisamba area.

The hope is that solar energy will contribute not just to a climate-resilient Zambia, but to a low-carbon continent.

“My business is down due to lack of electricity,” says Christine Chembe, the operator of a hair salon in the capital city of Lusaka. “The government should prepare adequately to invest in other renewable energies instead of always depending on hydropower from the Kariba dam, year in and year out.”

Local markets, shops, and chain stores are flooded with various solar appliances – from water pumps and radio sets to phone chargers and lights – as people try to take the problem of blackouts into their own hands. For David Chibuye, an entrepreneur at Kamwala market in Lusaka, business is booming. Ever since the power blackouts started, he tells me, he has been selling more solar-powered equipment. “I never used to have clients like these days. Nowadays, the demand for solar-related products has gone up here and, given more capital, I will make more money.”

But this is just the beginning. Zambia has an average of 2,000-3,000 hours of sunshine per year, waiting to be turned into energy. The International Renewable Energy Agency estimates that renewable energy capacity in Africa could reach 310GW by 2030, putting the continent at the forefront of renewable energy generation globally. When its larger solar energy projects are finished, both Zambia's natural environment and its citizens will benefit hugely.

Solar power looks set to be the answer.

As it stands, only 4% of Zambia’s rural population has access to electricity. Mable Katongo, a pupil at a rural school in the Kaoma district of Western Zambia, talks to me about the issues she has studying late at night without electricity. “With examinations around the corner, it hasn’t been easy to study using kerosene lamps. They produce toxic fumes that are a danger to one’s health. But what can I do?”

Solar and wind power plants will decentralize power; they can be connected to micro-grids and supply currently underserved communities, like Mable’s. The solar power systems in action already are a testament to just how big an impact this will have on these communities.

Dennis Kandala of Salanga in Zambia’s Mumbwa district cannot believe how much his life has improved. After years of unreliable electricity, his village invested in solar lighting equipment, solar-powered boreholes and other equally efficient agricultural equipment.

“Solar energy is indeed the way to go. Look! It has improved my life after enduring years of living without electricity at my farm,” says Dennis with a huge smile.

Zambia’s Rural Electrification Authority is working towards providing electricity infrastructure to all rural areas in Zambia. Quality of life will greatly improve with increased production of and access to electricity. So far, the Authority has built over 400 standalone systems. Its first Solar Mini-Grid, completed in 2013, provides electricity for nearly 500 households, a school, a health center, and a harbor. Many more are on their way.

The hope is that solar energy will contribute not just to a climate-resilient Zambia, but to a low-carbon continent. The possibilities for infrastructure, agriculture, and the management of natural resources are very promising indeed.

“I never thought this would happen during my lifetime, and that I could have electricity in my house,” says Dennis, “I assumed perhaps this was going to happen during my great-grandchildren’s time.”

Derrick Silimina is a multi-award-winning freelance journalist based in Lusaka, Zambia. He focuses on Zambian agriculture and sustainability issues. In 2018, he won ‘Best Newspaper Feature Story’ at the Agriculture and Commercial Society of Zambia Media Awards.

Ringing up sales

 14/09/2020 – by Derrick Silimina

Nowadays

© stepmap.de

Move over, Apple, Google, and Samsung: In Zambia, buyers of smartphones are flocking to buy the products of little-known Chinese competitors. The Chinese producers charge lower prices than the international giants and manufacture exclusively for export markets.

Along with gaining dominant market shares in Zambia, the Chinese firms – with brands such as Tecno, Itel, and Infinix – are also fostering the growth of Zambian smartphone retailers and accessories suppliers, thus helping to build the economy.

Across Zambia, city and town centers are full of brightly colored advertisements for Chinese smartphones. Scores of new retailers are springing up to meet the burgeoning demand.

“I started selling cell phones in 2016 with just a few handsets and a couple of accessories,” says retailer Obby Mbewe, owner of Mobile Tech, a shop in Lusaka’s sprawling town-center market. “Back then I struggled to sell a single handset in a day. But thanks to the arrival of so many Chinese smartphones with advanced features, things have changed.”

“Infinix phones are selling like hotcakes,” says retailer Teddy Kunda. “I sell more of these phones per week than any other brand.” A glimpse into Kunda’s shop on Lusaka’s Chachacha Road reveals a wide range of brands, most of them Chinese.

In Zambia, low internet access costs and mobile-telephony innovations are driving the demand for smartphones. The success of Chinese smartphones in particular shows how the right product at the right price can create a big market even in a country with limited purchasing power.

Shenzhen-based Transsion Holdings, whose brands include Infinix, Tecno, and Itel, is among the strongest Chinese contenders in the Zambian market. The firm sells phones only outside of China.

In Zambia, at least, Transsion is leaving global players like South Korea’s Samsung and the US giant Apple in the dust. According to International Data Corporation, the global provider of market intelligence for the IT industry, Transsion is among the top-selling mobile phone providers in Africa.

One clear success factor is the prices charged by Chinese manufacturers. While offering capabilities to rival those of international giants, Chinese smartphone brands such as Infinix Hot and Tecno Camon15 sell for between $ 50 and $ 200 depending on features.

Beyond modest prices, Chinese handset makers offer locally tailored features such as double-SIM card slots, which help users to avoid lapses in-network coverage; longer battery life, to compensate for power black-outs; and sharp camera technology calibrated to darker skin tones.

The success of Chinese smartphones in Zambia provides an important lesson for local suppliers and retailers, says Lusaka-based financial analyst Maambo Hamaundu. “You can be a giant today and a small boy will overtake you tomorrow and become a giant,” he says. “Chinese firms are successful because they understand the market and can satisfy the needs of the market. Our local entrepreneurs should also seize every opportunity.”

Derrick Silimina is a freelance journalist based in Lusaka. He focuses on Zambian agriculture and sustainability issues.
derricksilimina@gmail.com

Keeping It Local

 

Tile manufacturing company gives Zambian entrepreneurs a boost

By Derrick Silimina | VOL.11 August ·2019-08-14

Clement Daka, 40, is a happy man now that a new tile manufacturing plant has been built in Zambia's capital Lusaka. This, said the hardware store manager, will make it easier for his business as he will no longer need to import tiles and other building supplies from China each month.

Chinese company Marco Polo Group, which was commissioned by Zambian President Edgar Chagwa Lungu, recently invested $30 million in a porcelain tile manu­facturing plant - Marco Polo Tiles Co. Ltd. - which was registered three years ago, as a subsidiary of the Wonderful Group of Companies in Zambia.

Shipping imported goods, such as building materials from China to Zambia, takes two to three months, a situation Daka describes as nerve-wracking and cumbersome. The new local tile manufacturing plant established in Lusaka's industrial area has now reduced the cost of doing business for retailers dealing with construction materials.

Lower operating costs

Daka, who is the proprietor of Let's Build Hardware stores situated in Lusaka's Central Business District, told ChinAfrica that ever since the Marco Polo Tiles manufacturing plant was established, his costs have been reduced tremendously.

"Bringing Marco Polo Tiles manufacturing plant to Zambia is a great idea and this move has really scaled up my working capital because instead of spending more on excise duty and customs for porcelain tiles from China, I just order from the local plant. This has really helped me save almost 50 percent of what I would pay in import costs as well as on-time," said Daka. The two stores Daka manages employ 10 staff.

Like Daka, Janet Kumwenda is a porcelain tile entrepreneur supplying Marco Polo tiles to small hardware stores. She believes that only if Zambia can set up more industries will there be an increase in the number of entrepreneurs as this will help drive Zambia's economy.

"What led me into this business of supplying building materials, such as porcelain tile, to local businesses, was the building of the Marco Polo Tiles manufacturing plant. Not long ago, I used to spend more on importing the materials from China, but now, with the plant just next door, I am able to supply my clientele every week. This has really scaled up my income to an extent where I have even opened my own hardware shop," said Kumwenda.

Kumwenda, a graduate in economics from Cavendish University in Lusaka, said she decided to start her own business of supplying construction materials after she identified the booming construction of various infrastructures coming up across the country.

Zambia is undergoing a construction boom and a number of Chinese construction companies are leading the way in this sector, according to Kumwenda. "The Chinese companies coming to Zambia with high technology and innovative ideas is something we should take advantage of if we are to grow our businesses and create employment," she added.

Clement Daka in one of his hardware shops in Lusaka (DERRICK SILIMINA)

Manufacturing growth

As Zambia promotes industrialization in both light and heavy-duty production sectors, the country has also experienced rapid growth in the manufacturing sector.

Marco Polo Tiles CEO Huang Yaochi said the company manufactures top-of-the-range porcelain tiles to service the region.

He said Marco Polo tiles are suitable for both interior and exterior use and high quality is guaranteed.

"We are extremely delighted to be part of the industrialization agenda of this country as this is the only way to grow and strengthen the economy regionally," said Huang.

Technologically, the new equipment being assembled in the plant in Zambia is the most advanced in efficiency and design. It has a state-of-the-art kiln with a capacity of producing 10,000 sheets of 60-square-cm porcelain tiles per eight-hour shift and a laboratory for top quality ceramic, porcelain, and marble production.

Job creation

Huang said currently, the company is offering training to Zambian workers and engineers on how to operate the equipment, like the latest polishing machines.

He explained that Zambia was picked to spearhead the regional hub.

"The new company has already set up sales points in the Democratic Republic of the Congo, Malawi, Botswana, Mozambique, Namibia, Tanzania, Zimbabwe, Angola, and South Africa, and all raw materials will be sourced from Kapiri Mposhi District, Central Province of Zambia. The company has also stockpiled numerous kaolin, feldspar, and talc raw materials, which are in the form of clay and sand.

"We are empowering local people in Kapiri Mposhi," said Huang.

With the high deficit of housing in Zambia, the need to establish more factories like Marco Polo Tiles will surely meet the demands of building materials in the country. Huang said his company is keen to contribute to the development and industrialization of Zambia in a significant manner.

Belt and Road Initiative

The Belt and Road Initiative and the Forum on China-Africa Cooperation (FOCAC) are now becoming the focus of global attention. Both platforms are anticipated to bolster China-Africa and China-Zambia's practical cooperation.

It is envisaged that China's Belt and Road Initiative and FOCAC platforms will help create synergies with Africa's Agenda 2063 projects, such as the high-speed train set to connect major cities and commercial centers across Africa.

President Lungu recently said the Beijing Declaration, the 2019-21 FOCAC Beijing Action Plan, and the eight FOCAC initiatives announced by Chinese President Xi Jinping are designed for win-win cooperation.

"I am therefore pleased to announce that Zambia signed the memorandum of understanding (MoU) on the Belt and Road Initiative with China last year. We look forward to the full implementation of this MoU through increased Chinese investment and the implementation of developmental projects," said President Lungu in remarks at the official opening of the Africa-China Think Tank Forum held on May 23-24, 2019, in Lusaka.

"In Zambia, we are encouraging more diversification, value addition and employment from China in line with our Seventh National Development Plan," he added. The forum was themed Africa-China Economic Development Agenda – Opportunities for the Belt and Road Initiative and FOCAC and was co-hosted by the Chinese Embassy in Lusaka along with the Policy Monitoring and Research Center.

President Lungu acknowledged that while China has invested significantly in Africa and is one of Africa's major trading partners, there is room for more investments considering the existing trade and investment opportunities in Africa. Marco Polo Tiles Co. Ltd. is located in Lusaka's industrial hub. Global trends show that industrialization is the engine that propels economic development of any country and it is therefore the preferred path to genuine development.

The conviction that industrialization will transform the African economies from subsistence, agriculture-based economies to more prosperous and modern economies will help African states achieve their macroeconomic objectives of job creation, increased incomes, and a higher standard of living, self-reliance, and balance of payment stability.

(Reporting from Zambia)

Turning Trash Into Treasure

 

A Chinese recycling plant in Zambia is creating jobs while protecting the environment

By Derrick Silimina | VOL.11 September ·2019-09-12

Workers sort out various plastic wares in Hongsen recycling plant (DERRICK SILIMINA)

Monica Banda wakes up every morning and leaves her house in Makeni Villa Township to travel to Chunga dumpsite in Zambia's capital Lusaka. There, she joins several other jobless women who sieve through piles of garbage to collect plastic bottles for sale.

Faced with increasing amounts of waste in Zambia, these women, and others like them across the country, have been allowed to collect plastic litter materials to eke out a living.

Plastic doesn't just devastate habitat, it also has a detrimental effect on the health of humans as drinking water may get contaminated.

According to plasticpollution.org, plastic takes around 400 years before it starts to decompose, all the while clogging up the available area on the earth and harming living organisms. For instance, animals can die after ingesting littered plastic as the garbage can obstruct their digestive systems.

Experts say once plastic bags are discarded into the natural environment, they do last up to 400 years without being decomposed by sunlight and/or microorganisms since they are non-biodegradable.

For Banda and her fellow business-minded persons, where an ordinary eye sees trash, as entrepreneurs, they see treasure.

Sales outlet

Thanks to Hongsen Investment Ltd., a Chinese firm that recently established a manufacturing plant in Makeni, Banda and her peers have an outlet to sell their pickings.

Hongsen's manufacturing plant recycles plastic bottles into finished plastic wares such as cups, brooms, and buckets among others.

"My friends introduced me to this business of plastic collection three months ago. Now we supply plastic materials to Hongsen for recycling into finished plastic wares. I had no money to start any form of business; but now, I am able to provide for my family because we get instant cash on delivery of these raw materials," said Banda.

She said that a bundle of plastics fetches around $2, while a sack of plastic bottles sells for just under $1.

Hongsen's plant, a part of Zambia's plan to attract foreign direct investment into the Southern African country, not only creates employment among women and youth of Lusaka's Makeni Villa Township where it is based, but it is also eco-friendly.

Jackson Mwansa is a young man from Makeni who also supplies used plastic bottles to Hongsen on a part-time basis.

"Long before this company came here, we had a lot of litter in the form of plastic bottles; but now, nearly all of them have been cleared for recycling purposes. Not only is this company creating employment for our community, but it is also helping keep our environment clean and healthy," said Mwansa.

He said many young people like him have been able to start their own business ventures using funds from selling plastic trash.

"I recently raised enough money to buy equipment and now I have opened a car washing business in my community. This work is obviously not for the faint-hearted, but you need to know what your goals are," Mwansa said.

Green vision

The Zambia Environmental Management Agency (ZEMA), an independent environmental regulator, recently proposed the phasing out of the use of plastic bags in the country.

This is in line with the extended producer responsibility (EPR), a global practice that places significant obligations on producers to support recycling.

"This would force manufacturers of packaging products to take on the responsibility to prevent waste such as plastic at the source," ZEMA Public Relations Officer Irene Chipili said in a statement.

One of the aims of EPR is to give producers incentives to change product design in environmentally benign ways. This includes making it easier to reuse and recycle products.

Yan Qingguo, Director of Hongsen, told ChinAfrica that the idea of setting up the recycling plant in Zambia emerged after their research found that there was no such business in place.

Some of the finished products made by Hongsen Investment (DERRICK SILIMINA)

Advanced technology

Asked how the company manufactures plastic wares without damaging the environment through air pollution or spillage of toxic chemicals in the production process, Hongsen Administrative Officer Thandiwe Chaaba stated that the firm adheres to the environmental standards and practices as outlined by environmental agencies.

"The company has invested in state-of-the-art equipment, meaning it uses advanced technology that helps it comply with environmental regulations. Of course, we are in business to make money, but our priority is to also contribute to the sustainability of the environment in which we operate," Chaaba said.

In addition, Chaaba said her company is creating value out of plastic waste material, and thereby, contributing to job creation in the country.

She said that after the waste plastic materials are received from the pickers, they are washed and crushed into particles, which are then converted into hard plastic or polythene particles, for later molding into household items.

Chaaba, who is also a Chinese translator, emphasized that the local community benefits a great deal from the recycling plant as they are not only employed directly, but their environment is also kept clean.

"I am glad to tell you that a lot of people who are living around here have been empowered because they are able to get work in the factory," said Chaaba.

As a pioneer in the recycling industry in Zambia, the company started with six employees. That figure has grown to over 150 direct workers, in addition to all the suppliers of the raw plastic.

While the waste collection is a good foundation for building community entrepreneurship and an important part of the waste management value chain, environmentalist Robert Chimambo said the process needs to be regulated with regard to access to dumpsites and the safety of the people involved.

"In the case of dumpsites, there is a need for a proper regulatory framework in terms of access to the site and the collection of waste for recycling to help sustain our environment," said Chimambo.

As the government works out modalities on how to lessen the impact of plastic waste on the environment such as a ban on the use of plastic bags and disposable bottles, and promotion of reusable bags or woven shopping baskets, in a bid to safeguard Zambia's environment, there is also a need to emulate Hongsen Investment Ltd. by setting up more companies that recycle plastic waste material, according to experts.

In 2007, the Lusaka City Council started a campaign dubbed Keep Zambia Clean, to educate Lusaka residents on the health hazards posed by throwing garbage on the streets, but little has been done under the noble campaign. As the local authorities countrywide strive to find better ways of waste management, entrepreneurs like Banda will continue to make a living from the plastic recycling process.

(Reporting from Zambia)

Ease of Business

 

Streamlined freight service helps goods flow for Zambian startups

By Derrick Silimina | VOL.11 November ·2019-11-06

A staff member checks containers with goods for export at a Chinese port (HELLORF)

There's a constant buzz about China's large population always being on the move. Martin Mweenda wants to be part of that buzz as he predicts China to become a booming market for Zambia's emerging entrepreneurs.

It is a tale of two businesspeople with different aspirations - one is a Zambian entrepreneur who needs to grow his business but lacks an efficient way of importing goods from the industrialized world. The other is a Chinese manufacturer and supplier of goods who are looking for new markets.

However, each of the two investors spends sleepless nights thinking of how best their ambitions could be achieved, yet each has the potential to provide solutions to the other's business objectives. All they need is to link up and cut a deal.

Luckily help is at hand. China Katundu Shipping Co., one of the Chinese freight companies based in the Zambian capital of Lusaka, provides its core business shipping and air transportation services to its clientele from China direct to Zambia.

Benefit to local entrepreneurs

Mweenda, 40, is a budding entrepreneur based in Lusaka's sprawling Town Center Market, specializing in mobile phone and telephone accessory retail business for the past five years.

"I started this business from scratch in 2011 by selling second-hand phones along Katondo Street and then after raising enough capital, I switched to cross border trading. Back then, I used to get phone accessories from South Africa and Tanzania," said Mweenda. But he later realized that using one of the Chinese couriers would allow him to import stock from China without having to go there.

"If I decide not to travel, the shipping company will do all the paperwork for me, thereby reducing costs I previously used to incur," he said.

From his humble beginnings at the bustling Katondo Street located in the heart of Lusaka metropolitan area, Mweenda, who is popularly known as "Huawei" among his peers due to his long time dealing in the Chinese mobile phone brands, now prefers to import his goods direct from China.

Christabel Muchindu, another upcoming entrepreneur who deals in second-hand clothing based at COMESA market, southwest of Lusaka, told ChinAfrica that the Zambia-China bilateral trade relations are hugely positive as it is helping grow local entrepreneurs.

Asked to elaborate more on the viability and sustainability of the trade relations, Muchindu said that after three years in business, the services of the Chinese shipping and air freight company importing her goods has allowed her to realize more profit than before.

"For instance, if I use a groupage loading service from Guangzhou (in south China) to Lusaka, the cost is $260 per cubic meter, duty inclusive. Through China Katundu, I and other traders will be allowed to share container space and this is quite cost-effective. This allows more small scale businesspersons to import their goods at lower duty, which is a bonus to some of us emerging entrepreneurs," said Muchindu.

Considerate service

In a bid to provide a hassle-free trading environment for the majority of Zambian entrepreneurs like Muchindu and Mweenda, China Katundu has risen to the occasion.

With more than a decade of operational experience, the company now offers a considerate service for goods shipped on a loose cargo container from Guangzhou direct to Zambia, an incentive that attracts many small scale traders in Zambia.

"This means we sell space in our company container to individuals who have got goods to ship. The container comes under our company name and is cleared as such, thereby exempting clients whose cargo is on board from paying duty by themselves," China Katundu Marketing Spokesperson Diana Chimy told ChinAfrica.

This commercial idea not only reduces the amount of inconvenience faced by many traders when it comes to dealing with customs issues, but the services are also efficient.

Through its representative based in Guangzhou, Chimy explained, the company has also managed to invest in secure warehousing both in China and Zambia, as well as facilitate the process of Chinese visas and provide free airport pickups for any business person who intends to travel to China.

Statistics from the Global Entrepreneurship Index of 2017 show that Zambia is ranked 10th in Africa and 96th worldwide in terms of entrepreneurship.

Recently, Chinese Ambassador to Zambia Li Jie said the bilateral trade volume between China and Zambia has increased dramatically from $2.36 billion in 2017 to $5.07 billion in 2018.

Li also said China's focus in its economic cooperation with Zambia now promotes direct private sector investments that will not require any sovereign guarantees from the Zambian Government.

Li attributes the positive situation to the strength of the two country's economic partnerships.

Top investment destination

With over 1,000 Chinese enterprises investing more than $4 billion in Zambia, this is evidence that Zambia has become one of the top 10 destinations among all African countries for Chinese investors.

Chimy said her firm is known for its unique products and services that include visa arrangements to China (free if one considers loading a 40-foot container), free pickup from the airport upon arrival, warehousing of goods, group loading, sea/air/road freight, and sourcing of goods, among others.

Asked whether or not the company is violating any tax laws, Chimy said that on the contrary, the company has enough space at some shipping organizations and a wide-enough network with viable agents back in China, that helps speed up the process of cargo clearance.

Recently, the Bank of China in Zambia, in partnership with the Bank of China in the industrial city of Zhengzhou in central China's Henan Province, organized the Henan International Investment and Trade Fair, aimed at spurring cross border investment and trade projects, as well as strengthening domestic and overseas business cooperation.

The bank hosted over 400 small- and medium-sized entrepreneurs and other stakeholders from Zambia and across the globe in Zhengzhou. The region has gained momentum in economic growth and industrial restructuring over the past years in a bid to link investors to potential business destinations.

Mweenda has since implored fellow local entrepreneurs to double up their efforts because their Chinese counterparts have not grown their economy through appeasement.

"They have done so through shrewd business and sustainable deals underscored by hard work. Where others have been seeing challenges, they have been seeing opportunities, which they have gladly taken around the world. This is a strength that Zambians should collectively acquire instead of constantly wallowing in self-pity," he said.

China is indeed a global economic powerhouse, which has the muscle to influence world trade more than any other country, according to Mweenda. It is therefore not surprising that many Chinese companies seek opportunities to expand their investment ties with Africa where countries like Zambia will remain a preferred economic destination.

(Reporting from Zambia)