PART 1
By Ben Kangwa
Minister of Commerce, Trade
and Industry Robert Sichinga recently led a high powered delegation of government
and private sector to the United States of America on a six city trade mission around the AGOA
Forum period in June, 2012. The goal was to introduce Zambian investment
opportunities to the US private sector.
The delegation
visited Los Angeles, Washington
DC, Cincinnati, Houston, Atlanta and Boston to market Zambia in sectors such as
energy, infrastructure, agriculture, mining and manufacturing.
Earlier towards the end of
May, 2012, a tele-conference between Lusaka and the USA had attracted over
50 business people from the United States of America. During the conference
call, US Ambassador to Zambia Mark Storella had first observed as follows, “Zambia
is a country whose time has come and American companies who seek to enter
Zambia will push on an open door.”
Ambassador Storella had then
noted that Commercial Diplomacy was front and center of the US global
engagement.
He had spelt 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 had added
Ambassador Storella had further
told his audience that for 12 straight years, Zambia had 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 had said he looked forward to continued strong economic
ties in both trade and investment between the USA and Zambia.
He had 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 and transactions
with Zambia,” he added.
He had also been pleased to
note that Zambia would be included in a two country trade mission with South
Africa led by US Under Secretary of Commerce Francisco Sanchez planned for
November 2012.
Later, 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 had noted
that the urban- rural divide in Zambia meant that poverty levels in rural areas
remained 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 did 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 had 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 had 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 had 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 had further stated
that the US$250 million Itezhi Tezhi Hydro electricity project was 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 had said the Copperbelt
Energy Corporation (CEC) and Tata Africa
Holdings were developing a 40 mega watts
project in the Kabompo Gorge.
The US$140 million hydro
power station was 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 had stated that
rural electrification and existing grid expansion and improvements provide opportunities
for transmission and distribution work. The team had 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 had 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 had said the next
step would be to tender for the expansion of those airports in Lusaka,
Livingstone, Ndola and Mfuwe. The expansion plans, they had said would be 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 had 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 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 had 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 opposition party who
had, in-fact, just elected a new president of the party on May 25th
2012.
The team had 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 had noted EXIM guarantees
for trade finance and other financial transactions.
Later CitiBank Zambia
Limited Managing Director Joyce-Ann Wainaina
had 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 had 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 was for this reason that
the Trade Mission to Los Angeles, Washington DC, Cincinnati, Houston, Boston
and Atlanta was to prove worth-while.
I had accompanied the delegation and through
the stated cities I recorded the following:
LOS ANGELES
It all started in Los
Angeles. The two and half day trip from June 10 – 12 and was full of meetings
to the brim for Minister of Commerce, Trade and Industry, Robert Sichinga and
his delegation – first, with California Senator Curren Price who has extensive
experience in International Trade and most of all has a very strong passion for
Africa.
He is the Chair of the
Business Professionals and Economic Development Committee of the Senate
Day two was dedicated for a
general session at the Los Angeles Chamber of Commerce where the Zambian
delegation show-cased Zambia’s potential in Business and Trade.
They then proceeded to have
a meeting with the President of the Los Angeles Chamber of Commerce at which
they reiterated Zambia’s commitment to wanting to partner with Los Angeles.
There was also a private meeting planned with Zev
Yaroslavsky, the Los Angeles County Board Supervisor Chairman before a tour of
the City of Riverside public utilities – one of the most innovative cities in
water and power supply.
The last appointment in Los
Angeles saw the delegation meet with Bobby Hines, the US Department of Commerce
and International Trade Specialist. Discussions centered on bilateral trade
relationship between Los Angeles and Zambia.
The delegation heard that
the Los Angeles County is the entertainment, manufacturing and international
Trade capital of America. With a US$500 billion output, the delegation was
informed that Los Angeles County ranks among the world’s largest economies.
In his response to the
opening remarks by Bobby Hines, Minister Sichinga stated that Zambia was
Africa’s number one copper producer and that the country ranks high up in the
top 10 of the world’s copper producers and that the country was currently among
the top 10 fastest growing economies in the world.
He also added,” For the last
decade, Zambia has averaged a 6.5 per cent annual GDP growth, hitting 7.4 per
cent in 2011. It is estimated that Zambia will hit 8 per cent in 2012.”
He was quick to reiterate
that against this backdrop it was imperative for Los Angeles and Zambia to
partner, more so that Los Angeles and Lusaka were declared twin sister cities
44 years ago in 1968.
“I would like to encourage
both cities to maximize this old relationship,” he concluded his remarks.
CCA INFRASTRUCTURE
CONFERENCE IN WASHINGTON DC
It appeared to me that from
Los Angeles to Atlanta, the message by Commerce Minister Robert Sichinga and
his delegation was consistent. He made
it abundantly clear in each city that Zambia “is open for business” and will
not sit and wait for any power block to decide whether ‘it is safe’ to invest in Zambia or indeed in Africa.
He continuously stated,”
Zambia is ready to do business with anyone who comes first. In the race to
investment finish lines on the fields of Africa, the captains of the industry
in the West and the tigers of Asia should always remember that no preferential treatment
will be meted out to anyone, but those ready to take requisite risk.”
He made the statement
at the close of the Corporate Council on Africa (CCA) Infrastructure
Conference themed, “ Foundations For Economic Growth.”
The purpose of the Conference
had been to highlight investment opportunities in Africa in energy ,
transportation and infrastructure.
He said Zambia, as a
“land-linked” rather than “land-locked” country, presented an opportunity for
investment considering its proximity with other SADC countries in the sub
region.
Mr. Sichinga said Zambia’s
major areas with investment opportunities included transport, energy, housing, health, education,
water and sanitation, agriculture, fisheries, mining, tourism, manufacturing,
science and technology innovation, information and communication and natural
resources.,
Speaking at the same Forum,
President of the Corporate Council on Africa (CCA) Steve Hayes had noted that infrastructure was probably the
single most important need for Africa to develop.
He had urged American
companies to invest in Africa in order to secure a long term position on the
continent.
“Strong infrastructure is
the key to economic development and is the time for the United States firms to
act in order to secure a long term position in Africa, “ he had said.
The CCA Infrastructure
Conference had been held along the sidelines of the 11 African
Growth and Opportunity Act (AGOA) held in Washington DC for two days from June
14-15, 2012 and later the Business Conference had moved to Cincinnati, Ohio
from 21st June to 22nd
June, 2012.
MEETING WITH MILLENNIUM
CHALLENGE CORPORATION (MCC) - WASHINGTON DC
Minister Sichinga also participated in a discussion on Zambia’s
Millennium Challenge Corporation Compact . The Zambia Compact amounting
to US$354.8 million signed in
Lusaka in May 2012
A brief overview of the
Zambia Compact had been first articulated by the MCC Managing Director, Kyeh
Kim who had stated that the Compact was aimed at addressing one of Zambia’s
most binding constraints to economic growth through infrastructure investment
in Lusaka.
She had said the Compact
would invest in water supply, sanitation and drainage infrastructure with the
goal of decreasing the incidence and prevalence of water related disease,
productive days lost due to disease and time to collect water, cost of water
and new sanitation, business and residential flood losses.
Ms. Kyeh Kim had also stated
that the Compact would support the Government of Zambia’s ongoing water sector
reform efforts by strengthening partner institutions. More than one million
people are expected to benefit from the compact in the surrounding areas of
Lusaka.
(Part 2 will be published on the next page)
(Part 2 will be published on the next page)
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