A recent 1,900-mile journey from mines in Congo and Zambia shows how, a century after commercial mining began here, the worlds hunger for copper is again reshaping the region. Photographer: Zinyange Auntony/Bloomberg via Getty Images
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 1964, 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.