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Dec 03, 2010

SA aims to expand trade with Zambia by $250m in 2011

South African President Jacob Zuma and Zambian President Rupiah Banda speaks about opportunities of trade between the two countries and within the Sadc region. Camerawork: Nicholas Boyd, Editing: Darlene Creamer.
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Bilateral trade between Africa’s largest economy, South Africa, and one of the continent’s rising economic stars, Zambia, dropped significantly in the last year, from a high of $1,5-billion to just under $1-billion – though the trade balance remained in favour of South Africa.

But South Africa’s Department of Trade and Industry indicated at the weekend that efforts were being made to recoup the losses and expand trade relations further.

Acting deputy director-general Riaan le Roux said that a target had been set to grow bilateral trade by about 25%, or $250-million, in 2011.

South Africa remained Zambia’s principal trading partner in the Southern Africa Development Community (SADC), while Zambia is South Africa’s third-largest trading partner in the region.

Speaking at a Zambia-South Africa business forum in Johannesburg, Business Unity South Africa CEO Jerry Vilakazi lamented the fact that intra-African trade remained low at around 10% of total trade. This, owing to insufficient intraregional infrastructure, which remained a major obstacle for trade between African countries.

President Jacob Zuma concurred, saying that it had been decided by the African Union to develop the so-called ‘North-South corridor’, which, together with regional integration efforts, would facilitate trade and physical connectivity between countries.

His Zambian counterpart Rupiah Banda emphasised the progress being made in that country to reduce the burden on businesses.

Zambia was recently identified in a World Bank survey as one of the ‘top ten reformers’ in easing the business environment for investors. Currently, a business can be registered in one day, compared with South Africa where it still takes seven days.

Zambia was also delivering growth rates that were above the continent's average. The copper-rich country was expected to expand by 6,6% this year, and by 6,4% in 2011.

However, Banda said that this was still not high enough, and that Zambia hoped to boost its growth rate to between 8% and 10% between 2011 and 2030.

“By 2030, Zambia wants to be a middle-income country, and we have been putting all the necessary policies and incentives in place to achieve this.”

The country, which still generates most of its income from the mining industry, would also be pursuing diversification programmes.

Commerce, Trade and Industry Minister Felix Mutati said that a strong focus would be given to value-added mining, and in diversifying the country’s economy into sectors such as energy, tourism, agroprocessing, manufacturing, and information and communication technology.

The centrally located country is also host to almost 40% of surface and underground water resources in the SADC region, which created significant opportunity for the development of hydroelectricity capacity.

Mutati noted that this could be a key area for collaboration between the two countries, particularly give the power shortages in the region.

Meanwhile, South Africa’s Trade and Industry Deputy Minister Elizabeth Thabethe said that nurturing and stimulating small and medium-sized enterprise (SME) trade would also be key to improving bilateral trade relations.

She noted that South Africa companies were among Zambia’s biggest investors, having invested $1,4-billion in the country between 1991 and 2010, mostly in the resources environment.

But she added that SMEs still had a significant role to play in the “intertwined” destinies of the two countries.

Edited by: Mariaan Webb
Creamer Media Senior Researcher and Deputy Editor Online
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