Wednesday, October 30, 2024

Zambia’s economy is controlled by foreigners

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By Aaron Ng’ambi

The story of Zambia after 59 years of independence is a sad tale, though not unique to this landlocked country; it’s similar to that of many post-independence African states.

Zambia, which has great potential, is surrounded by eight countries. Unfortunately, the mineral wealth, water resources and the arable land does not in any way benefit the people directly. The problem for Zambia, like that of most of the continent, is the problem of ownership of the means of production. Strategic sectors of this country’s economy are not in the hands of Zambians.

The Republic of Zambia, which came into being on 24 October 1968, promised innovation and adequate resource mobilisation, including state ownership of all relevant sectors of the economy, with research and development being at the heart of nation building. The future of Zambia was as bright as a rising star. The kwacha was on par with the British pound and competed with other major currencies for the best years of post-independence.

But a few years later the performance of the currency became unstable, with a negative trajectory of other economic indicators such as inflation and unemployment. And in light of this observation, Zambia is worse off now after more than five decades of self-rule simply because the masses do not control economic activities that contribute to the GDP.

Zambian leaders’ lack of patriotism is shocking. Nation building does not only require sacrifice by the people. For almost six decades Zambians have been complacent when it comes to what matters the most in terms of fundamental change. Forget about the “today here gone tomorrow” politicians and their promises. Zambians should wake up to the reality that collectively they do not own anything in this country which is their birthright. These people have had the privilege of changing governments a few times, something which is unattainable in other African countries. Despite Zambia being a democracy and a great example for peace in the region, many people still wallow in poverty.

Here are a few things Zambians should consider to bring about the kind of change they need. They must recognise the problems for what they are — that the economy is predominantly in the hands of foreign investors. Government policies since the early 1990s are more favourable for foreign direct investment at the expense of local entrepreneurs and innovators.

For example, many industries are heavily controlled if not owned by non-Zambian corporations. Let us consider the construction sector; all road works and other government contracts or tender, are mostly in the hands of the Chinese. There is nothing wrong with having foreign investors as equal partners in development as a nation but what we are faced with is not an equal partnership, because none of the monies obtained go to the Zambian treasury. Another example is the mining sector. Not one operational and profitable mine is owned by a Zambian individual or corporation. Today the leading mining companies such as First Quantum Minerals, Vedanta and GlenCore are all foreign companies enjoying huge tax holidays from the Zambian government, while making exponential profits year in and year out. Truth be told, Zambia needs a serious leadership that will fix this problem once and for all.

We should consider another vital sector of the economy, the retail industry, which has been taken over by the likes of Shoprite, Pep and Pick n Pay which are in all the major cities and towns in Zambia. These powerful retail chain stores are all South African companies, and no Zambian company comes close. This means all the profits and paid dividends quietly escape Zambia into the hands of the owners. Again, none of such monies goes to the Zambian treasury, because some of these companies have tax breaks from the Zambian government for a certain period of time.

All banks in Zambia are foreign owned, with the exception of the Zambia National Commercial Bank (Zanaco) and Invest Trust Bank. But these two banks are not the major players in this sector, because Absa, FNB, Standard Chartered, Citi Bank, Stanbic and others dominate the industry.

Zambia needs a government that will boost local direct investment and champion the spirit of entrepreneurship among the people. This should be done in practice rather than in rhetoric, by awarding road works and other construction contracts to local engineers and contractors who in return partners with foreign experts. In simple terms, Zambians should be the owners of this industry. Instead of building shopping malls countrywide, the government of Zambia must invest money in building factories and agriculture facilities that will create lasting jobs. Goods produced in these factories can be exported, thereby earning forex for the country, and improving the currency.

A cashier at Pick n Pay makes K4 380 (about R3 838) a month. This is pathetic by any standards, because these people deserve a decent living wage for them to pay for housing or rent, put food on the table and take their children to school.

After 59 years of independence Zambia needs real change. But to achieve meaningful change, Zambia will have to answer the question of ownership and control of its means of production. Taking back the economy from the hands of foreigners and investing in the people is the only option to keep the money in terms of profits in the country and so contribute to the GDP growth. There is no major country in the world that has attained the status of a fully developed or industrialised nation with an economy dominated by foreign ownership.

Aaron Ng’ambi is a geopolitical analyst and newspaper columnist, leadership instructor and a social entrepreneur.

Source:Mail and Guardian

20 COMMENTS

  1. First task is to make sure that Zambian owned companies adhere to standards which attracts repeat business. While doing building works, I gave priority to Zambian firms in purchasing building blocks. Unfortunately the blocks were of poor quality. I ended up buying blocks from foreign owned block making firms. Zambian owned firms should realise that there are no shortcuts if you want to compete in business. So there may be other reasons why high value business chains are mostly run by foreigners. Running viable shopping malls requires that you have reliable stocks of products in your shops and my hope is that we can have reliable Zambian owned shopping malls. I will be buying from these Zambian owned shopping malls.

  2. “Zambia, which has great potential, is surrounded by eight countries. Unfortunately, the mineral wealth, water resources and the arable land does not in any way benefit the people directly.”

    That’s not ‘since independence’, that is the since neoliberal surrender of the economy to the former colonial powers, in 1994.

    This is the result of neoliberalism and following the IMF/World Bank ‘structural adjustment programs’.

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  3. THE FOREIGNERS DID NOT GRAB THE ECONOMY AT GUN POINT LIKE THE COLONIALISTS DID TO OUR LAND.
    WE HANDED OVER THE ECONOMY TO THEM AND WE ARE BUSY STILL DOING IT IN THE YEAR 2023!
    WHEN WE WERE RUNNING THE ECONOMY UNDER KAUNDA OUR MANAGERS OF PARASTATALS WERE BUSY LOOTING OR SOME OF THEM WERE MARRYING FROM MBALA TO LIVINGSTONE!
    WE NEED TO BE RE-BORN IN TERMS OF PATRIOTISM AND MORAL FIBRE!
    WE NEED NOT LOSE HOPE AND REGAIN THE REINS OF THE ECONOMY

  4. Zambians are lazy, corrupt, dishonest, envious, always trying to get something for nothing, looking for ways to bring other Zambians down and highly superstitious believing in the mumbo jumbo of when someone has wealth it’s because of witchcraft.
    Take the example of HH, he saw the opportunities that existed and took them, but he lauded for by most Zambians, off course he wasn’t, he was accused of all sort of things by fellow Zambians.
    Off course foreigners sees the opportunities’ and take them while the poverty minded Zambian complains about foreigners.

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  5. He sold all companies and made very good money for himself. He’s now giving contracts to his foreign friends without following tender procedures. He’s failed to give Zambians mining licenses

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  6. Zambia’s economy is controlled by foreigners. so what are your solutions?
    We all know that. The economy has been run by foreigners for centuries and FTJ, Mwanawasa, Sata, Rupiah, Chagwa HH all knew that but they are all helpless.
    Asia is not like us in Africa

  7. This has only happened since August 2021 when that f00Iish cow took over. Alipena ulya hh. When he see musungu he go wild in his pants

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  8. Zambians are enduring hunger under Hunger Hinde. This is to be expected when you’re burdened by IMF debt, which is the modern slavery. One can either seek escape like the brave slaves of old did into free states or face the prospect of perishing in this Zambian farm, with Hunger Hinde as the supervisor or farm manager for the slave masters. The sooner you realize this, the better.

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  9. U should learn to appreciate that the foreign investors have contributed to our economy and employment. Talkig is easy but achieving great things is hard work. Ar u an enteprenuer yosef or u ar just an empty tin..

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  10. The days of expecting the Government to protect lazy, corrupt, dishonest and superstitious Zambian owned companies are long gone. Those who keep complaining about foreign owned companies without addressing the self-inflicted causes of the downfall of Zambian owned firms will die complaining while the world moves on!!

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  11. Investors are always entitled to a return on their investment. Investment includes detail scientific process knowledge, technical discipline, financial discipline and money. Return on investment (long term) is what creates wealth. You cannot take back the economy from foreigners until you earn the scientific process knowledge, technical discipline, financial discipline and money to do it. Over and above, it requires a highly educated leadership capable of going head to head with international corporate leadership to negotiate mutually beneficial contracts.

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