ZAMBIA ON A TRADE PILGRIMAGE TO USA

By Ben Kangwa

Minister of Commerce, Trade and Industry Robert Sichinga will lead a high powered delegation of government and private sector delegation on a five city trade mission to the United States of America in June around the AGOA Forum period. The goal is to introduce Zambian investment opportunities to the US private sector.

The delegation will visit Washington DC, Cincinnati, Houston, Atlanta and Boston and will focus on energy, infrastructure, agriculture, mining and manufacturing.

Recently during a tele-conference that attracted over 50 business people from the United States of America, US Ambassador to Zambia Mark Storella first observed that, “ Zambia is a country whose time has come and American companies who seek to enter Zambia will push on an open door.” The conference was held on 31^st May, 2012.

On the same platform,  Zambia’s Ambassador to the United States, Mrs. Sheila Siwela reinforced Ambassador Storella’s message that Zambia is open for business and that Zambian companies were keen to partner with American business.

She encouraged American businesses to reach out to the Zambian Embassy in Washington DC to further explore opportunities for trade and investment in Zambia.

Ambassador Storella then noted that Commercial Diplomacy was front and center of the US global engagement.

He went on to spell out Zambia’s economic history to his audience as a “democratic, peaceful and stable country.”

“It is blessed with natural resources, abundant fertile land, and friendly and engaging people. In many respects, it is the positive aspects of Zambia, its democracy and its economic results that keep the country off the news and under the radar of Americans and American businesses,” he added

Ambassador Storella further told his audience that for 12 straight years, Zambia has had a positive economic growth including six per cent average growth over the past eight years and that more than seven per cent was expected for 2012.

Other issues covered during the conference included the role of the Zambia Development Agency in attracting investment to Zambia, information on mining, agriculture and tourism.

In his closing remarks, the American Ambassador said he looked forward to continued strong economic ties in both trade and investment between the USA and Zambia.

He said the USA was committed to spurring economic growth and creating jobs by promoting trade and investment opportunities in Zambia to American businesses.

“US-Zambia bilateral trade more than doubled last year, and we are on the crusp of exciting potential American investments in and transactions with Zambia,” he added.

He was also pleased to note that Zambia will be included in a two country trade mission with South Africa led by US Under Secretary of Commerce Francisco Sanchez planned for November 2012.

The Question and Answer portion of the tele-conference included questions , among others, related to Wireless Telecoms development in the rural areas.

Political-Economic Chief Tim Smith, Economic-Commercial Officer Phil Nerving, Commercial Officer Srini Seetharahm and Commercial Specialist Vedruna Santana were at hand to provide support answers to Ambassador Storella.

The US Embassy team noted that the urban- rural divide in Zambia means that poverty levels in rural areas remain high, but that wireless penetration in rural areas could help to change that by providing a platform for information sharing, financial transactions and other services where they do not currently exist.

American businessmen also wanted to know more about Tax Benefits For Renewable Energy Technologies.

While the US Embassy team was unaware of specific tax breaks associated with the import of renewable energy technologies, they noted that the Zambian government was currently developing policy instruments to promote and support the development of non hydro renewable energy technologies and that members of the trade delegation to the United States would be interested in meeting companies involved in renewable energy.

The team also noted that Zambia had identified more than 5,000 MW of hydro potential and that Zambia could become a regional electricity provider with increased generation and transmission capacity.

 ZESCO, the team said, “ is currently developing the 750 MW Kafue Lower project with SinoHydro.”

In 2011 China’s SinoHydro started building a US$2 billion 750 mega watts Kafue Gorge Lower Hydro power station which is expected to boost power security in Zambia and the region once it is completed in 2017.

The team further stated that the US$250 million Itezhi Tezhi Hydro electricity project is expected to produce  140 mega watts of electricity.

The project is implemented under the private public partnership between ZESCO and Tata Africa Corporation of India.

The development of this hydro power station is also critical as it would reduce the current electricity deficit experienced in Zambia.

 In addition, the team said the Copperbelt Energy Corporation  (CEC) and Tata Africa Holdings  is developing a 40 mega watts project in the Kabompo Gorge.

The US$140 million hydro power station is expected to be completed in 2014. Once completed, the power dependence would shift from Kariba to Kafue Gorge.

Once the Kafue Gorge was functional, the 40 mega watts produced would be connected to the main CEC power grid which supplies power to the mines on the Copperbelt.

The team stated that rural electrification and existing grid expansion and improvements provide opportunities for transmission and distribution work. The team further noted that Zambia was looking to expand beyond hydro-power in its renewable portfolio, opening up opportunities for solar and wind power.

Regarding Opportunities for Aircraft, Airport Security and Ground Handling Equipment Sales in Zambia, the team explained that the Zambian government was currently exploring financing options for the expansion of four International Airports namely the Kenneth Kaunda, Harry Mwaanga Nkumbula, Simon Kapwepwe and Mfuwe International Airports.

The team said the next step would be to tender for the expansion of those airports in Lusaka, Livingstone, Ndola and Mfuwe. The expansion plans are based on an airports master plan that was funded by the US Trade and Development Agency (USTDA)

Answering a question on Opportunities in the Housing Sector, the team explained  that the National Housing Authority (NHA) had announced that Zambia’s housing deficit had reached 2 million units and that this deficit included military and national police personnel and a more general burgeoning middle class in urban areas that was increasing demand for quality housing with utility services.

 Additionally, the mining sector was resulting in the need for new housing development at the mine sites. Against this background, affordable housing solutions would find a market in Zambia.

There was a question on the Impact of the Deregistration of the opposition Movement for Multi Party Democracy (MMD) on the Commercial and Political Outlook of Zambia of which the team noted that while the Registrar of Societies had deregistered the Movement for Multi Party Democracy (MMD) for failure to pay fees statutory fees, a court had stayed the order and the MMD was still active and vocal opposition party who had, in-fact, just elected a new president of the party on May 25^th 2012.

The team also discussed general Political Risk Coverage that is offered by OPIC and MIGA and that this had been successfully used in Zambia in the past and noted EXIM guarantees for trade finance and other financial transactions.

Later Citibank Zambia Limited Managing Director Joyce-Ann Wainaina  added Citibank’s point of view on the use of political risk coverage for transactions in Zambia.

Listening to the whole tele-conference while in Lusaka left me with the thought that Ambassador Storella, Ambassador Siwela, Tim Smith, Phil Nerving really marketed Zambia to the best of their abilities to the more than 50 American businessmen who wanted to learn more on what Zambia has to offer as an investment destination.

It is for this reason that the Trade Mission to Washington DC, Cincinnati, Houston, Atlanta, Boston including Los Angeles will certainly prove worth-while.

The writer is Deputy Chief of Mission at the Embassy of the Republic of Zambia in Washington DC.