CHINA – The bright star in Zambia’s sky
By Nawa Mutumweno – Dubbed the Asian ‘tiger’, China has made serious inroads into Africa, Zambia included. One shining example of this economic intervention is the China-Africa Development Fund which invests in infrastructure and construction projects.
In the few years of its existence, financing from this organisation has virtually changed the face of Africa. The fund was launched (under the auspices of the China Development Bank) with a $5 billion funding provision.
The business scope of the fund mainly includes equity and quasi—equity investment, fund investments, fund management, investment management and consulting services, with the money being ploughed into African countries’ agriculture, manufacturing, energy transport, telecommunications, urban infrastructure, resource exploration and the development of Chinese enterprises in Africa.
Zambia and China have come a long way, having established diplomatic ties on October 29, 1964, five days after Zambia’s independence from Britain. From President Kaunda to Chiluba to Mwanawasa to Banda, Sino-Zambian ties have flourished to impressive levels. Even the incumbent President Michael Sata, who threw arrows of criticism at Chinese investors for their ‘’poor working conditions for the locals’’, has embraced them, wining and dining with them in the genesis of his rule. In recent times, the Human Rights Watch (HRW) published a report critical of Chinese management in Zambia. In 2010, there was a nasty incident in southern Zambia at a coal mine where Chinese management officials shot at Zambian workers which resulted at many a Zambian expressing displeasure with the Chinese management style. However, the tempers have more or less been cooled.
Chinese investment permeates various sectors of Zambia’s emerging economy – from telecoms, mining, construction, manufacturing, banking, agriculture, tourism, energy, education and health. There are around 300 Chinese companies operating in Zambia, representing over $3 billion investment. Trade between the two countries has grown from $100 million in 2000 to $2.8 million in 2010.
Talking about Chinese-Zambia relations would be incomplete without mentioning that engineering masterpiece, the Tanzania Zambia Railways Authority (TAZARA) which clocked 36 years on July 1, 2012. The ‘’Uhuru’’ (meaning ‘’freedom’’) railway line recently received some funding from the Chinese government to help revamp the operations of the firm, which is headquartered in Dar es Salaam. This financing went towards improving engines, wagons and rollers in addition to staff development.
The Chinese are also involved in the implementation of the $350 million Lusaka East Multi-Facility Economic Zone (MFEZ). The $1 billion Chambishi MFEZ is now operational. Chambishi MFEZ, China’s first overseas economic and trade facility, is being developed by the Chinese government under the Zambia-China Economic and Trade Cooperation Zone (ZCCZ). This MFEZ is expected to be fully developed in 2012. It will house at least 50 enterprises including its already operating anchor company, Chambishi Copper Smelter, Sino Metal Leach Company Limited and Sino Acid Limited.
The Lusaka East MFEZ is situated near the Kenneth Kaunda International Airport. It is designated for hotel and conference facilities and light manufacturing industries which include an international trade centre, various wholesale markets for building materials and commodities, food processing , a shopping mall and home appliance assembly.
MFEZs are a plus for Zambia’s economic development as they introduce the much-needed diversification which is being vigorously embarked on to wean the country off the copper ‘spoon’. The main objectives of the MFEZs, which Zambia started implementing in 2007 is to stimulate manufacturing in Zambia in order to add value to the numerous natural and agricultural raw materials which were hitherto exported in raw form without value addition,
China’s major investment in Zambia is in mining under the auspices of the China Non-Ferropus Mining Corporation Limited. This conglomerate ecompasses the following companies: ZCCZ, NFC Africa Mining Limited, Chambishi Copper Smelter, CNMC Luanshya CopperMines and Sino-Metal Leach Company Limited. In June China Non-Ferrous Mining Corporation Limited listed on the Hong Kong Stock Exchange, a move which elated the Zambian government.
Zambian Minister of Finance, Alexander Chikwanda had this to say on this momentous occasion: ‘’We hope the company will be encouraged by the successful listing on the Hong Kong Stock Exchange and list on the Lusaka Stock Exchange (LuSE). In the same breath, we urge all other mining houses, banks and information technology (IT) companies to list on the LuSE not only to widen Zambian participation in the economy but to tap the hidden and latent capital.’’
Recently, China Copper Mines submitted an Environmental Impact Assessment (EIA) to construct a $100 million copper leach plant in Chingola. Zhonghui Mining Group of China is also constructing the $690 million Ichimpe Mine in Kalulushi on the Copperbelt set to create over 3 000 jobs. The entire deal signed with the Zambian government is to invest $3.6 billion in various mining projects on the Copperbelt and North-Western provinces.
On the energy front, the national power utility firm, ZESCO, is undertaking a $334 million programme to extend the 330kV power line from Pensulo in Serenje to increase capacity to the northern regions. The programme is expected to shorten the distance for the implementation of the Zambia-Tanzania-Kenya interconnection project. This funding has been facilitated by the TBEA and the Industrial and Commercial Bank of China. The Export and Import Bank of China (EXIM) is also involved in the extension works of the Kariba North Bank power station set for completion this year.
Chinese finesse has brought pleasure to the soccer-crazy country following the completion of the ultra-modern Levy Mwanawasa Stadium in Ndola which was commissioned recently. Soccer fans celebrated in euphoria when Zambia, the current African champions, dimmed the Black Stars of Ghana, one of the top teams on the continent, in a World Cup qualifier. The Chinese are also constructing and rehabilitating the new Lusaka and Independence stadiums respectively at a cost of $94 million.
To show how much Zambia values Chinese friendship, President Sata in November 2011 sent First Republican President Kenneth Kaunda to Beijing as an ambassador of goodwill. In February 2010, former President Rupiah Banda visited China where he met President Hu Jintao. In October 2011, Chinese Vice Minister of Commerce Li Jinzao visited Zambia and signed various bilateral agreements, including grants for technical cooperation in different sectors of the Zambian economy.
The increasing number of Zambians flying to the economic power in the Orient to order goods and exhibit at trade fairs indicates how ‘’receptive’’ China has become. The Zambia-China Business Association has been formed as a private sector initiative to increase trade and promote partnerships between the two countries.
The economic collaboration with China seems to be a win-win situation that is sustainable. Indeed there is a bright star in the Zambian sky!
