Struggling Zambia’s copper economy: The need to diversify

The turbulence copper, Zambia’s foreign exchange earner, has found itself in, sounds an alarm for the urgent need for the country to enhance policies and programmes that will help to move away from this metal   economic over reliance.

Those born before independence in 1964 and shortly after will never forget what copper did to this country and its people. Smarting from a bitter struggle for political liberation, UNIP (united National Independence Party) built schools, hospitals, roads and other infrastructure from copper revenues.

The government set up industries, remember the likes of Indeco (Industrial Development Corporation), ZIMCO (Zambia Industrial and Mining Corporation). Authorities also built the University of Zambia, TAZARA (Tanzania Zambia Railway Authority) and many others creating employment and along the way setting up more new districts and improving those taken over at independence.

Also born from the flourishing copper revenues were a   myriad of colleges both at craft and diploma level dotted through out the country. Education was boosted by massive establishment of teacher training colleges along with medical training institutions that Zambia became an exporter of doctors, teachers and nurses not   only to neighbouring countries but even the United Kingdom.

Fifty years later what can we say about the economy? Unemployment keeps rising as educational institutions keep discharging an army of graduates with no where to go. Yet more universities are getting erected minus proportional growth of industries. Crime is on the rise as no new companies   are being created, except on the streets where anything can be sold while   the number of those buying is shrinking too.

Key infrastructure   like hospitals, roads schools and other public building keep falling because of neglect and lack of maintenance. The mining Industry is squeezed and not providing adequate fall back revenues for the government and the people.

The reason is simply that the copper bowl is empty. Today the country has witnessed   the tragic fall, in years, of the Kwacha against the United States Dollar and other convertible currencies, that even the reduction of the price or fuel and mealie meal a major component of the main meal among many families, seem a mockery.

New Bank of Zambia Dr Denny Kalyalya, at his maiden press conference in Lusaka recently   attributed the weakening of the Kwacha to a drop in the fall of copper prices at the international market and sagging of non traditional exports.

“We will continue to regulate the amount of Kwacha in circulation to try and control the activities. In the current circumstance, where there is high demand and less supply of dollars, we will try to tighten the liquidity,” Dr Kalyalya told a media briefing.

It has also been argued that the broad based countrywide road rehabilitation programme, good as it may sound or indeed look, was perhaps a bite more than we can chew. The venture has also sucked in the meager foreign exchange resources as a lager component of road materials are imported and require foreign currency.

At the height of the campaigns for the January 20 presidential by-elections, Green party leader Peter Sinkamba drew laughter when he told a gathering at Mulungushi International Conference Centre in Lusaka that once elected president he would abandon the copper economy by introducing legislation to promote growing of medicinal marijuana.

Sinkamba argued, and still does, copper was a wasting asset and had failed to develop the country in the last fifty years hence the need to legalise the drug to bring in huge foreign exchange earnings. More laughter bellowed in the conference hall.

The suggestion may have been radically far-fetched but the principle was valid. There is an imperative   to look for other sources of foreign exchange in Zambia, though not through Sinkamba’s frightening and complex solution.

Perhaps the message was that at the peril of ignoring to develop agriculture and other industries, the country has been depending too much on copper where today, we can no longer raise even an ngwee to afford a cup of milk.

Sinkamba was not alone in the call for diversification, Forum for Democracy and Development (FDD) leader Edith Nawakwi also during a campaign television interview before the by-elections said, “Someone at independence woke up and thought growing maize was agriculture that is where we went wrong.”

According to Nawakwi, the country needed to promote growing other crops such as millet, cassava, sorghum, beans, ground nuts and other cash crops not only to fight hunger but also to export and bring in the much needed foreign exchange.

Today,  maize growing is not only scandalous but it has  been tangled in a web of overhead costs, frustrating and  expensive to grow, sold cheaply while at every aspect highly politicised thus failing the test for a copper substitute Zambia badly needs as an alternative foreign exchange earner..

Even when villagers grow maize under very difficult circumstances, the grain ends up either rotting as it can not be bought. Or better still purchased and not collected, so it gets soaked and feasted on by rodents.

Over the years, maize marketing has been to say the least an embarrassment. Shortly after Independence there was an attempt on a resemblance of crop marketing but with the advent of democracy in 1991, the new leaders not only destroyed agriculture but appeared not to know what agriculture was or what fortunes it could rake in into a country’s economy. Sadly the story has not changed with subsequent governments as farmers year after year have to weep over non payment for their hard-earned yield, or the crop went to waste for lack of buyers.

Even in bigger economies such as that of the United States of America, agriculture plays a pivotal role in the country’s economy.

So what ever measures the Bank of Zambia may take to stabilise the Kwacha, such efforts may yield temporary results, again at one point the currency will slide and sink deep.

Therefore, there is an urgent need for a major shift from the copper economy to that of non traditional exports. It may not happen now, but there is an imperative for a firm and decisive step in the way of policies that will support and strengthen diversification.

For now the country may continue to grope in real darkness for a solution over the copper economy which will never come as the mineral is not only a wasting asset, but its price will always be dictated by outsiders as the case is now.

This lowest fall of the Kwacha is not only historic but a wake up call for every Zambian. If not careful things are bound to get even worse. There is no better time than now in which to begin a serious search for more foreign exchange sources other than copper.

The country needs to promote none traditional exports immediately if the nation is too survive and free itself from the anvil of manipulators disguised as investors. It is not too late to make amends.

Check Also

Chamber of Mines applaud govt’s revived passion for mining

The mining sector is witnessing revived growth spurring renewed interest from local and international investors …