Despite political rhetoric, Zambia’s trade with South Africa is a shameful joke. And, the elephant in the room is not Government but the private sector. It cannot always be Government. Government is not a trader. It is a facilitator. Even in countries where Government has not been the best facilitator, the private sector has never been as naïve and low-thinking as the one we have in Zambia. Zambia’s private sector has a culture of thinking too low and that is precisely why it doesn’t grow. It is not regionally and globally competitive and never even thinks in those terms. Unless this culture changes, the country will continue to rely on small things as influencers of economic development.
It is inexplicable that while citizens who are not privileged to statistical information listen to leaders and perceive Zambia’s economic relationship with South Africa perhaps more highly than it really is, the reality on the ground is disappointing. Of course, citizens will think with a lot of hope when they read in newspapers that Zambia and South Africa had a business forum meeting when the Head of State from that country visited Zambia recently. Listening to the business people discussing with their South African counterparts in the business forum, they probably hold the view that for instance trade between the two countries is doing well for Zambia. The truth is that the Zambian business sector has disappointed us. Despite the long and good political relationship between the two countries, the fact that our country was host to many leaders from South Africa during the struggle and even beyond, the Zambian business men and women have lamentably failed to take advantage of the biggest economy in the continent in terms of business opportunities. Every serious business man and woman in other countries wants to trade with South Africa and is perhaps already doing that. While they do that, our business people spend all their time either complaining or still discussing how to exploit the potential export market.
Let us explore three main points. First, Zambia’s ranking in African countries’ exports of goods to South Africa, second, understand the eroding importance of the South African market for Zambia’s exports and third, the limited number of Zambia’s non-traditional products that are being exported to South Africa.
First, Zambia’s ranking in African countries’ exports of goods to South Africa is low.
For how else does one explain the fact that in 2006, Zambia ranked number 5 in African countries’ exports of goods to South Africa although even then, the value of exports were only a small $473 million compared to Mali’s $747million as Table 1 shows yet, in 2016 it was overtaken by four to five countries to backslide to position 10? This is simply a joke. There are so many Zambian business men and women always going to South Africa on the so-called business trip but export figures are not showing corresponding rise making one wonder that these trips are really for. Don’t tell me that there are other business deals that Zambians are engaged in with South Africans because I will still tell you that trade is the simplest thing that we can do with them. We have more control over trade than attracting foreign direct investment from South Africa.
Meanwhile, Zambia’s imports from South Africa totaled about $2.3 billion in 2016 leading to a trade deficit of about $ 2 billion, meaning we are importing more than we are exporting.
Table 1: Zambia’s exports of goods to South Africa in $ Millions
| 2006 | 2016 | |||
|---|---|---|---|---|
| 0 | Africa | 6,101 | Africa | 9,653 |
| 1 | Nigeria | 1,337 | Nigeria | 1,876 |
| 2 | Mali | 747 | Zimbabwe | 1,216 |
| 3 | Angola | 511 | Angola | 905 |
| 4 | Namibia | 487 | Swaziland | 715 |
| 5 | Zambia | 473 | Côte d’Ivoire | 710 |
| 6 | Botswana | 651 | ||
| 7 | Namibia | 617 | ||
| 8 | Mozambique | 472 | ||
| 9 | Ghana | 382 | ||
| 10 | Zambia | 371 |
Second, the importance of South Africa, as Zambia’s export market is declining.
South Africa is just one of a few export markets for Zambia. There is potential for Zambia to make it one of its main markets for exports of non-traditional products especially given its proximity and several other favorable factors. There is simply no excuse why the Zambian business community has not exploited this country’s potential. Although it is important for Zambia to diversify its export market, which it has done largely through China and Switzerland, save this is mainly copper. But to lose South Africa as Zambia’s export market is the last thing that any thinking business community can do. The best that is expected is to expand the market. Yet, the unfortunate thing is that Zambia’s exports to South Africa as a percentage of total to the world has eroded, meaning that the importance of South Africa as Zambia’s export market is in fact fading as Figure 1 below shows. The share went down from 17% in 2002 to 6% (over half) in 2016. This image below is not only disappointing but worrisome. And it is the fault of business that is failing to expand its exports to that market.
Source: Unctadstat
Third, Zambia is exporting limited range of products to South Africa.
Besides copper and other mineral related products, Zambia exports to South Africa other products or the so-called non-traditional products (NTPs). In one single year, according to statistics, Zambia exports to South Africa about 200 different products out of which 13 countries account for about 90%, meaning most of the products, about 187 accounts for only 10%. The top NTPs include sugar and cotton See Table 2) but whose values are miserably low – only $22 and 17 million each. That is a scandal given that these products are things that you only get because of simply standing in a field and throwing seeds in the ground to grow on their own. Why are we sending to such an important market sugar, cotton and other irrelevant products of low value when Mauritius in Table 3 is exporting things that make more sense in business?
Table 2: Zambia’s main export products to South Africa in $ Thousands
| 2016 | |
|---|---|
| [TOTAL] Total all products | 370,937 |
| [682] Copper | 88,227 |
| [971] Gold, non-monetary (excluding gold ores and concentrates) | 86,171 |
| [773] Equipment for distributing electricity, n.e.s. | 22,605 |
| [061] Sugar, molasses and honey | 22,297 |
| [263] Cotton | 16,794 |
| [522] Inorganic chemical elements, oxides & halogen salts | 13,106 |
| [699] Manufactures of base metal, n.e.s. | 13,067 |
| [723] Civil engineering & contractors’ plant & equipment | 12,653 |
| [782] Motor vehic. for transport of goods, special purpo. | 8,425 |
| [211] Hides and skins (except furskins), raw | 7,219 |
| [081] Feeding stuff for animals (no unmilled cereals) | 6,433 |
| [676] Iron & steel bars, rods, angles, shapes & sections | 5,719 |
| [685] Lead | 5,335 |
| [112] Alcoholic beverages | 4,938 |
Source: Unctadstat
Table 3: Mauritius exports to South Africa in $ Millions
| 2016 | |
|---|---|
| [TOTAL] Total all products | 179 |
| [845] Articles of apparel, of textile fabrics, n.e.s. | 47 |
| [841] Men’s clothing of textile fabrics, not knitted | 47 |
| [842] Women’s clothing, of textile fabrics | 11 |
| [843] Men’s or boy’s clothing, of textile, knitted, croche. | 10 |
| [651] Textile yarn | 10 |
| [892] Printed matter | 9 |
Source: Unctadstat
Even if Government is not a trader, Mr. Ambassadors, please do something about this joke. How can you be smiling in good suits talking about trade when your country’s trade figures are an embarrassment? You are supposed to be bouncing when walking and looking up but you cannot do that when trade figures are so low. Like others, you will perhaps be quick to argue that you are doing more than trade in South Africa. But what foreign investment are found in Zambia other than supermarkets? Maybe there is something that I am not aware of. But since South Africa gained independence from while rule, part of which was due to our own sweat, there has not been any significant investment from that country. Yet, it is a hub of manufacturing. You should study figures carefully after which you will see that there is more work that needs to be done at your Embassy than simply making pronouncements. According to statistics, you were sworn in on 4 May 2015 and posted same year to South Africa. In 2014 prior to your posting, Zambia’s exports of NTPs shown in Table 4 were $560.7 million. In 2016 they declined to $367.6 million and no explanation has been given to Zambians. If it is not your fault, explain whose it is. At least we need to know how trade is behaving.
Table 4: Zambia’s exports of NTPs to South Africa in $ Thousands
| 2014 | 2015 | 2016 | |
|---|---|---|---|
| [TOTAL] Total all products | 560,888 | 378,023 | 370,937 |
| [283] Copper ores and concentrates; copper mattes, cemen | 186 | 96 | 3,343 |
| NTPs | 560,702 | 377,927 | 367,594 |
Source: Unctadstat
By Economic. Governance
This makes sad reading indeed, Zambians are a docile people with corrupt weak leadership…how can you expect growth when you have a visionless President who is more interested in flying around.
@ JAY JAY
Your hatred for ECL blinds you
South Africa imposes all sorts of TARRIFS (visible and invisible).
OUR industrial base was killed off by Chiluba
OUR agricultural efficiencies are hampered by LOW industrial base (we import most inputs). That makes us uncompetitive.
ZAMBIANS because of inferiority complex prefer imported goods.
ECL ONLY CAME INTO POWER YESTERDAY, PLEASE. YET HE HAS DONE MORE THAN jay jay WILL DO IN 50 YEARS.
@ FOR ZAMBIA, numbers don’t lie. How can Zimbabwe, Namibia and Angola be exporting more to SA? Truth be said the last 6 years of PF in power has been a progressive disaster with Lungu being worse than Sata.
Look at you sighting tarriffs yet their goods enter at will even polish..go to their Malls in Lusaka. Who’s to blame? The sleeping govt of course….
They have simpl milked the nation and now are looking elsewhere. Its like colonial times.
How come the table for Zambia’s exports and those of Mauritius are the same?????
Smart observation! The author must be frastrated with what is obtaining in terms of Zambia’s terrible trade patterns with SA; hence loosing his mind and ending up duplicating information.
AT A DISTANCE – Or the author is publishing lies.
@ Abilima: That’s a strong posibility
Is this true…..exports to S.A. include
723] Civil engineering & contractors’ plant & equipment12,653[782] Motor vehic. for transport of goods, special purpo.
What machinery does Zambia exports to S.A.
Sometimes these comparisons are misleading. How do you compare a country with a GDP of around $700bn to a country with a paltry GDP of about $20bn. I thinks an off the cuff correlation explains why there is trade imbalance. Please compare Zambia with countries with the same GDP range. I find the article scientifically unrealistic.
Chicken & egg silly argument-which comes 1st ? …our small GDP is the result of our small thinking.
Your thinking is at best grade 1. How then does Zimbabwe with half the GDP of Zambia export more to South Africa is you base analysis is GDP???
Now that South Africa has started investing in Zambia, there is reason to improve trade exchange between the two countries. Government of Zambia working in collaboration with ZACCI (or rather ZACCI working in collaboration with Government of Zambia) is well placed to fund consultations forums and capacitation forums. Similarly, the Government of South Africa working in collaboration with the Government of Zambia could build trade structures that are favorable to both sides in a win-win outcome.
No way table 2 and 3 could be exactly the same for different countries (Zambia and Mauritius). BTW the case of Zambia. It is all about garbage in garbage out. Honestly, there is no way you could expect a non-goal focused, overly expensive education system, completely corrupt civil service and below par ministers and diplomats led by a clueless president to be able to deliver meaningful development. Generally Zambians have no ambition beyond buying second hand cars and building houses using stolen money and sleeping around. remember all success happens first in the mind and secondly in practice. In Zambia we have misplaced priorities and a huge mindset and attitude issues. I have not seen personal and collective responsibility in Zambia.
@6 Citizen, EXCELLENT COMMENT!! While the article has not been well articulate to bring out real issues, I agree with your observation and that of the author! WE ARE TOO SIMPLISTIC AND LIMITED IN THE HORIZONS OF OUR EXPECTATIONS, HENCE AS A NATION WE ARE LOW ACHIEVERS! A country with a poor natural resource base which was ravaged by war and genocide, RWANDA is DOING A LOT BETTER THAN US WHO HAVE BEEN AT PEACE FOR 53 YEARS, WITH HUGE NATURAL RESOURCE BASE because OUR PERSONAL MINDSETS WHICH TRANSLATES TO ALL LEVELS OF LEADERSHIP has held us back!!
This is so perfect!!
“Zambia’s private sector has a culture of thinking too low and that is precisely why it doesn’t grow”
CAN YOU BLAME THE GOVERNMENT FOR THIS….???? WE ARE COUNTRY OF BIG MOUTHS LIKE CHIPENZI NOTHING TO SHOW !!
THERE ARE FAR TOO MANY MALLS WITH SOUTH AFRICAN GOODS.
AS TRUMP WOULD SAY: SAD
I don’t think the figures are true what can Zambia export to South Africa ? I can’t see even kapente in South African stores. Sad me a for Zambia
If you package Kapenta properly…it will be there!!
IT IS ABSOLUTELY, A SERIOUSLY, REAL JOKE AND I TOTALLY AGREE WITH THE WRITE. AFRICANS IN GENERAL AND ZAMBIA IN PARTICULAR BLAME OF CHINA EXPLOITING THEM. BUT THE REAL EXPLOITERS OF AFRICANS APART FROM THE WESTERN EMPERIALISTS ARE AFRICANS THEMSELVES. SOUTH AFRICA IS JUST EXPLOITING ZAMBIA MORE THAN CHINA IS CLAIMED TO BE EXPLOITING ZAMBIA. THE TRADE BETWEEN CHINA AND ZAMBIA IS A WIN-WIN SITUATION. THE TRADE BETWEEN ZAMBIA AND SOUTH AFRICA IS EXPLOITATION OF ZAMBIA BY SOUTH AFRICA. ZAMBIA HAS EVEN GIVEN SOUTH AFRICA ITS GOD-GIVEN EIGHT-BORDER MARKETS IN THE NAME OF SETTING UP CAPITAL GOOD HUB. NANGU TULO TWALILALA BUSHE TWAMUYAYA? WHERE ARE OUR ECONOMISTS TO PROPERLY ADVISE THE GOVERNMENT?
The problem with Zambians is UKULILAPO without any work!! This attitude needs to change.
Can we have the data on TRADE WITH CHINA, EU, Japan, Middle-East and East Africa.
If these are good, then we are OKAY.
Forget about SA, Nigeria, USA and BRAZIL.
HOW IS OUR BREAD BUTTERED? CHAPWA . . . PF REMAIN FOCUSED.
CAN YOU EVEN REQUIRE THE DATA OF TRADE BETWEEN CHINA AND ZAMBIA. CHINA PRODUCES ANYTHING AND EVERYTHING TO FEED THE WHOLE WORLD.
When writing your analysis Please do not be an “Angel” Care to give workable solutions than discredting us!
@ The Zambian:
Check this out…..
http://atlas.media.mit.edu/en/profile/country/zmb/
You can do all sorts of analysis from that link.
Some clever dude doing a dry run of his thesis project expecting input through seemingly unsolicited critiqueis. Goodluck you are on your own buddy!
Well! Zambia is joke
It’s historical. It’s sad we haven’t done anything to change the situation. I remember when all nurses came from either South Africa or Southern Rhodesia. One of their qualifications was “light skinned ” which made us believe that all people from the south were light skinned. Even the mobile cinemas owned by Lever Brothers came from down south.
We need to plan better as a country. This approach where few chaps appointed through political patronage are the ones making decisions based on half-baked research by politicized civil service can not bear much fruit. This is why instead of building our industries like NCZ, we kill it so that our leaders get busy falling over each other to compete for contracts to supply fertilizer to our impoverished peasants. Lack of quality leadership is the worst enemy of our people. We should have identified our niches in the South African market by now where we can make an impact & progress. With our people having NO access to funds (exorbitant interest rates for Zambians but a Chinese walks into Bank of China right here and gets funds at 0% interest) planning and thinking outside the standard box…
as painful as it might sound the truth is that we have shops and outlets full of goods from south African and China!
You do no manufacture anything!
Even the maize is grown by south African and Zimbabwean farmers!!!
The problem is simple really. The writer is approaching his complaint from the wrong angle.
First, ask, is there a strong and capable Private Sector in Zambia?
Is the sector investing in product research sufficiently to produce unique competitive goods for the SA markets and is there demand for Zambian goods?
The Zambian Private sector faces stiff competition from more ‘advanced,’ world producers. Comparing the goods Maurituis produces to what Zambian Private sector offers the SA Markets is the real joke. We need the Private sector to be competitive and that only happens if you can produce something the buyer market wants. Diversifying and looking into innovation and researching our Products for export is the serious side to your complaint. Is Zambia’s Private able?