Public Lecture: Potential of Non-Traditional Exports in Zambia

Past Event Lusaka, Zambia 24 Jun 2012 Firms

On Monday 25th June the IGC held a well-attended public discussion on the Potential for Non-Traditional Exports in Employment Creation, Income Generation and Wealth Distribution organized by the IGC Country Team. The discussion was attended by various stakeholders including representatives from the Bank of Zambia, Ministry of Finance, Ministry of Agriculture and Livestock, Zambia Revenue Authority, Zambia National Farmers Union, Dunavant Zambia, Zambia Coffee Growers Association and other private sector representatives. Dr. Thomson Kalinda and Dr. Claudia Manning, the team contracted under ECIAfrica to conduct the study were the main presenters. Alan Hirsch presented background on IGC and Bob Liebenthal chaired the discussion.

The aim of the discussion was to present and discuss the potential of Cotton, Coffee and Sugar Cane potential in wealth creation, income generation and employment creation in Zambia. It was also envisaged that the discussions of the workshop participants will help to shape policy the debate in the pursuit of the government’s continued search for options to create more employment opportunities in the country.
The discussion started with Dr. Kalinda and Dr. Manning’s presentations, whose presentations was divided into the three sub-crops: Cotton, Coffee and Sugar Cane. The study highlights that the contribution of sugar cane production to exports is already large, and has the greatest employment and income generation potential. However, sugar is largely an estate crop, dominated by a single producer, Zambia Sugar, and even the large contribution from out grower schemes is not yet widespread. It also draws attention to the intensive use of land and water in the main producing area, Mazabuka, and the potential for conflict that this gives rise to. The paper calls for a national sugar policy.

Likewise, the potential for cotton is also large, with the difference that it currently employs a substantial number of small farmers. However, production and exports have fluctuated substantially in response to price and exchange rate volatility. As a result, the marketing and pricing of cotton is subject to a lot of uncertainty. In discussion, some participants complained that the impact of the recently announced Statutory Instrument, SI 33 (which requires local transactions to be designated in Kwacha), was giving rise to a lot of uncertainty among agricultural sector players.

The coffee sector was the lowest contributor of the three crops to employment creation and income distribution owing to its large investment costs and long maturity period to harvest. The study drew attention to the high quality of Zambian Arabica and argued that there was potential to develop a niche market internationally, provided that the scale of production could be increased. In this context, the recent revival of Northern Province coffee production was a hopeful sign. Zambia also has above-average productivity globally.

A general conclusion from all three studies was that a more supportive policy environment, especially with regard to pricing and marketing (in the case of cotton and coffee) would have a substantial impact on production, exports and employment. A second important conclusion was that term and seasonal financing for small farmers was a major gap.