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Hon. Margaret Mwanakatwe: Zambia’s Minister of Commerce, Trade and Industry

Interview - April 10, 2016

Is bringing her extensive experience in the financial sector to bear in her current position, while also championing the role of women as an integral element of Zambia’s economic empowerment


You have previously worked in the banking sector in Ghana, here in Zambia and in Nigeria: How does your previous experience in the private sector differentiate from the position you hold now?
They are very different because you are working for the country. My ministry is tasked with economic development. My stakeholders are the whole country, which presents more of a challenge because you are looking after 14.4 million people and 715,000 square kilometers of land. I can relate that to a bank in the sense that you are the “Managing Director” of a country. In a bank you have maybe 2,000 employees and you are in charge of recruiting the people you are going to work with. Whereas 14.4 million people, of which 70% are living in poverty, is a huge challenge by any stretch of the imagination.

I can relate both experiences to the fact that I am at the apex of a banking institution. I am actually at the apex of economic development in looking after a ministry such as mine. That is the best comparison that I can make.

Why is it different? It is different because civil service is civil service and I don’t employ the people that I work with. I am at the mercy of somebody else when employing them. As such, sometimes you may not have a meeting of minds; sometimes you may be running it at a 100 kilometers per hour, while somebody else is running it at 20 kilometers per hour. The challenge is to bring everybody on that page where you can run together. It is not easy. It is very challenging. However, it is coming together.

The 2016 budget has just been finalized. From there it is noted that there has been a reduction in the amount of additional exports in recent years. How can you increase exports in your time here?
If you look at exports in 2010, the figure was about 9%. When you look at 2014 it had gone up to 22%, although we have witnessed a reduction in 2015. I think that this is due to the general downturn of not just our economy, but globally.

The long-shedding that we are experiencing now has had an impact on industry as well. Moving forward, I see this downturn as a short-term one.

In the medium term I see things improving mainly because of what we’re concentrating on as a government. In my ministry in particular, traditional exports will grow. Some of the things that we’re doing to enhance them is strengthening our relations with our immediate neighbors like DRC for example. Congo is in the Southern African Development Community (SADC) and the Common Market for Eastern and Southern Africa (COMESA) but they have not yet reached a stage where they can fully liberalize for us to trade freely.

When we trade with Congo we don’t trade on any professional terms. I’m happy to say that very recently I was able to sign, after much negotiation, a bilateral agreement that allows us to export to Congo on a duty-free basis. This, I believe, will spur exports; non-traditional exports, like cement or sugar, and many others that are likely to grow more due to this market in our backyard.

We should be signing another bilateral agreement with Angola, a country that hasn’t definitively entered COMESA yet. Trade between our countries is once more a normal tariff. When we sign this agreement we will be able to ensure that our industry here will have an export market. That bilateral agreement puts Zambia at an advantage because we can’t get our products into that market on a duty-free basis at the moment. Angola doesn’t produce much, and they want everything from Zambia: rice, sugar, fruits, vegetables and they also want chickens and eggs. They want everything, and here we are. If we can build up the capacity within our industries, we are able to use Angola as a market.

Then of course when you look at the COMESA, the second region now moving into the Tripartite trading block, which has close to 750 million people, you realize that this is a fantastic opportunity for Zambia to position ourselves properly for the entry of the Tripartite Free Trade Area. What are we doing as a Ministry? We are encouraging business. Recently, I had 35 businessmen from South Africa looking at Zambia and how we can work together. My challenge to them was to come here and don’t look on Zambia as somewhere where they’re just going to take their goods. “Look at Zambia as somewhere you can also get goods into South Africa” I said. And I’m happy to say that now Zambian honey has finally entered the South African market. The things that we’re trying to do to support industries such as honey, pineapples, cassava, are oriented to strengthen the value chain and to be able to produce for non-traditional exports. Within this context, the Tripartite is key.

“Encouraging people to become employers is one of the key elements to the growth of the private sector and the fostering of the entrepreneurial spirit”

Despite growth over the last 10 years, Zambia is facing some challenges, such as the devaluation of the kwacha, low prices on copper and power shortages. How does your ministry aim to overcome these challenges?
Let me start with the first point. The kwacha has devalued. It was trading at something like 7.0 about six months ago. It’s now at just below 12. It’s a significant devaluation by any stretch of the imagination.

We are suffering because of reduced copper prices, so very little can be done about that. When you look at the fundamentals of the economy, we’re an economy that imports too much. We’re dependent on imports and, at the same time, we’re dependent on the export of copper, which is the main export that supports the kwacha, as copper account for its strength quite extensively.

Meanwhile, we have to import. We still have to find the dollars to pay for imports. That in itself is a pressure. Now, when you look at the list of the things that we are importing, and this is something that we’re doing, it’s curious that when you’re in a crisis you start thinking in a less diversified way. We should be breathing diversification every day. We shouldn’t think about it just when we are in a crisis like now. When copper was $11,000 a metric ton... Why didn’t we think of diversifying then? Look at it now, at $5,100, and we’re still talking about diversification. It’s got to be real. We’ve got to do it. That’s the only way we’re going to stem the devaluation of the kwacha. If we’re able to diversify and bring about industry that is going to bring in foreign exchange for the country, that is going to be something that we can rely on as sustainable sustenance of the kwacha.

To develop different sectors a strong entrepreneurial spirit is needed...
That spirit is there and coming through, and we need more of it. We need a lot more of it because the natural inclination of most of us Zambians is to look for a job once we’ve finished college or university. Encouraging people to become employers is one of the key elements to the growth of the private sector and the fostering of the entrepreneurial spirit. That is why we have developed special programs to develop SMEs. We promote these programs through the Zambian Development Agency and also the Citizen’s Economic Empowerment Commission, which sits under my ministry. They provide training for people, and especially for young people, on how to run a business, how to manage a bank account, how to reduce costs, how to be efficient, and all the other related subjects.

We have some cooperating partners that are supporting us in this. The Swedes have been very helpful. The United Nations Industrial Development Organization and FADE have also been very helpful, particularly in the SMEs development area, by making sure that we had the right skill-set for SMEs to flourish. I must say that the Zambians are becoming a lot more entrepreneurial I believe.

You’re working towards gender equality. In which activities specifically are you engaged toward promoting gender equality in the country?
Well to start with, if you look at my Citizen’s Economic Empowerment Commission, 40% of all the funds go to women. We make that a deliberate policy. I really believe that economic emancipation through women is something that can turn this country around. In so doing, I do like to bring them on-board and expose them to investors, to markets, to accessing financing...

We are publishing within The Global African Investment Summit that is taking place in London in December. What’s your main strategy toward investors at these summits?
What I’m trying to do is to move away from generic investment promotion. I have 750,000 square kilometers of land. I have 40% of the water resources in sub-Saharan Africa. I need to be marketing projects. I need to package and market project specifics. You need to make people be keen to say: ‘Oh, that’s exactly what I’m looking for. I’m willing to bet my dollar on that. Hey, I’m willing to invest $2 billion, $3 billion, $5 billion for that project.’ That’s the way I’d like to take investment promotion into Zambia.

If you take the railway for example -- and we’re going big into railway all over the country -- you need to define the distance, the cost per kilometer, the cargo and the type of cargo that you can have passing along the link. We need to make it so much easier for someone to make that decision quickly, rather than allowing them to come here and travel all over the place and coming back with, ‘Oh, maybe I’ll come back. I need this. I need that...’ We have to present easy packages. I need targeted investment promotion going forward. •