Zambia gains as Zimbabwe loses out

As one gapes in awe from the Zambian side at the mighty Zambezi River cascading over the Victoria Falls, roaring at a rate of about 900 cubic metres per second, it is not difficult to understand why the locals believe that the falls—regarded as one of the seven natural wonders of the world—embody the soul of a powerful deity whom they refer to as Nyaminyami.

And as one glances around at the growing number of foreign tourists—a veritable mini league of nations—also taking in this magnificent sight, one cannot help but wonder whether this great river god is perhaps not favouring the Zambians over their troubled Zimbabwean neighbours.

While the Zambian hotels and resorts fronting the river and falls—which form the border between the two countries once known as the Rhodesias—are teeming with tourists, it is relatively quiet on the other side of the river.

“Zimbabwe’s political and economic woes have benefited us tremendously,” explains one of the locals, adding that tourism has probably been the biggest benefactor.

“Because of all the problems there, people are just too scared to go to Zimbabwe these days, so they’re coming here to Zambia instead.

“Not that it’s really so bad in the tourist areas there. In fact, they’re relatively safe.
But the perception exists that it’s not a safe place to go to, so the tourists are coming here instead. As a result, tourism and the economy are really beginning to pick up here in Zambia,” he says.

Evidence of this is reflected in the ubiquitous foreign-exchange bureaux that dot the main streets of Livingstone and the growing number of tourist resorts springing up in and around the former capital, which is just a stone’s throw from the almost 2km-wide falls the locals refer to as Mosi-oa-Tunya—“the mighty smoke that thunders”, a reference to the smoke-like spray rising hundreds of metres above the falls, which can be seen from several kilometres away.

Not surprising, many of the tourist operators are Zimbabwean, many of whom still live on the Zimbabwean side of the river in the town of Victoria Falls, traversing the border back and forth at the start and end of each day. 

“It’s ironic. A few years ago, Zambians were pouring into Zimbabwe to look for work. Now it’s the other way around,” my self-appointed guide points out.

“And agriculturally, we have also benefited. We have opened our doors to many of the white Zimbabwean farmers who have been booted off their land and have even allowed them to bring their Zimbabwean work forces with them because we know that they will help boost our economy and create more jobs in the long run,” he adds.

Zambia’s tobacco production is expected to reach about 18-million kilograms this year compared with just seven million kilograms last year and only three million kilograms in 2002—thanks chiefly, analysts say, to the efforts of just 75 former Zimbabwean tobacco farmers, who were apparently given farms by the Zambian government as well as 10-year loans by a locally based foreign bank to buy farming equipment.

Zambia is also expecting a massive expansion in maize and wheat production.

The pick-up in tourism and the growth in agriculture after a severe drought in 2002, which resulted in food shortages, is good news for an economy that has long been overly dependent on mining.   

While the country remains heavily dependent on copper and cobalt mining—boosted by the recent surge in the copper price—and its efforts to diversify its production base towards a bigger manufacturing sector have not proved very successful, its economic growth is encouraging.

In 2002 Zambia’s economy grew by 3,3% and in 2003 by 4,2%. This year, it is expected to grow by 3,5% and next year by 4,5%.

Historically, Zambia has suffered from high inflation, which reached hyper-inflationary levels in the early 1990s. But, in recent years, it has fallen to more manageable levels, albeit—as one analyst points out—just above 20%.

Encouragingly, the International Monetary Fund expects consumer inflation to average 18,5% in 2004 and 17,5% in 2005. The Bank of Zambia, the country’s central banker, has set an ambitious year-end target of 15%.

On the negative side, the country has suffered a persistent deficit on the current account of the balance of payments. In 2003, the current account deficit exceeded $600-million, according to the central bank.

Despite a booming copper price, the country registered a negative trade balance of $242-million in 2003—essentially because of imports of machinery and capital equipment for the mining industry and high oil prices.

Zambian copper exports rose by 25,7% to $269,9-million in the second quarter from the first quarter of this year. Despite the increase, Zambia’s foreign trade deficit rose to $86,8-million from $71,4-million as the 11,4% rise in non-copper exports to $152,6-million failed to keep pace with the 20,4% increase in imports to $509,3-million. 

On the positive front, non-traditional exports, such as horticulture and floriculture products, have risen over the past decade and now represent an increasing share of the country’s merchandise exports.

And earnings from tourism, which received a boost from the solar eclipse in 2001, are expected to contribute strongly to future income—thanks in large measure to Zimbabwe and its economic woes.—I-Net Bridge

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