Over the past years, Zambia has faced challenges and opportunities in exporting locally produced goods. The Zambia Statistical Agency lists Switzerland, China, Singapore, South Africa, and the Democratic Republic of Congo (DRC) as the country’s major export destinations, primarily exporting copper and copper articles. According to the International Trade Administration, in 2022, Zambia’s exports to the United States accounted for only 0.46% of total exports and consisted of refined copper, precious stones, and coffee. This indicates a significant amount of untapped potential that, if explored, could substantially boost Zambia’s economy. However, logistical hurdles and high transportation costs have constrained Zambia from fully realizing this potential.
The Lobito Corridor, a significant infrastructure project to enhance regional connectivity, promises to be a transformative force for local manufacturers in Zambia. The Lobito Corridor stretches from the port city of Lobito in Angola through the Democratic Republic of Congo (DRC) and into Zambia. The corridor includes the rehabilitated Benguela Railway, facilitating efficient goods transportation. Once operational, the corridor will significantly reduce transit times and costs for manufacturers, opening up new markets and streamlining supply chains.
A vital interest of the Lobito Corridor is to use it to transport minerals and materials from the DRC and Zambia to the European Union (EU) and the United States (US). This focus has led to several Memorandums of Understanding (MoUs) and agreements that emphasize the corridor’s role in transporting strategic minerals, critical raw materials (CRMs), and electric vehicle (EV) battery value chain products to these major markets. However, as momentum builds for this ambitious project, it presents a unique opportunity for manufacturers to prepare and position themselves to reap its full benefits. Local manufacturers can ensure they are ready to capitalize on the enhanced trade routes and economic opportunities the corridor will provide by perfecting their craft.
If the manufacturing industry is well positioned, the corridor will provide Zambian manufacturers with direct access to international markets via the Atlantic port of Lobito. This access is crucial for exporting products to Europe and beyond, allowing local businesses to expand their customer base and increase their competitiveness on a global scale. The enhanced railway infrastructure will lower the cost of raw materials and finished goods. This reduction in logistics costs can improve profit margins for manufacturers and make Zambian products more price-competitive in regional and international markets.
Moreover, manufacturers can streamline their supply chains with reliable and efficient transport links. Timely delivery of raw materials and products will reduce lead times and inventory costs, allowing businesses to operate more efficiently and respond quickly to market demands. Furthermore, the Lobito Corridor Transit Transport Facilitation Agency Agreement (LCTTFA), signed by the governments of Angola, the DRC, and Zambia, aims to accelerate domestic and cross-border trade along the corridor. This agreement will foster the participation of small and medium enterprises (SMEs) in value chains, providing new opportunities for the locals and would-be manufacturers.
Local manufacturers must take proactive steps to fully prepare to leverage the opportunities the Lobito Corridor presents. First, they must invest in skill development and training. Manufacturers should focus on upskilling their workforce to enhance productivity and ensure high-quality production standards. Training programs in advanced manufacturing techniques, quality control, and logistics management can provide a competitive edge.
Manufacturers should also aim to perfect their craft by focusing on product innovation and quality improvement. Developing unique, high-quality products that meet international standards will enhance their appeal in global markets. Continuous improvement processes and adherence to quality certifications can build trust and reputation. Manufacturers should also aim to obtain the Proudly Zambian logo on their products as it is a quality assurance mark that makes products more competitive locally and internationally.
Conducting thorough market research to understand the demands and preferences of international markets is critical. Manufacturers should identify target markets, assess competitive landscapes, and tailor their products accordingly. Additionally, ensuring compliance with export regulations and standards will facilitate smoother market entry.
The Zambian government also has a critical role in supporting local manufacturers in taking full advantage of the Lobito Corridor. The government should simplify regulatory processes and reduce bureaucratic hurdles to facilitate more accessible access to markets and resources for manufacturers, for example, through the establishment of a one-stop shop for business regulatory requirements similar to Kenya’s Huduma Centres, which are one-stop shops for government services, including business registration and licensing. These centres have significantly reduced the time and effort required for businesses to comply with regulatory requirements. Implementing similar centres in Zambia can streamline regulatory processes and enhance the ease of access to government services, especially for struggling SMEs.
In conclusion, The Lobito Corridor is a game-changing opportunity for local manufacturers in Zambia. But it’s not just about the corridor; it’s about what manufacturers do with this opportunity. Manufacturers can fully exploit the benefits of this infrastructural development by taking proactive steps to perfect their craft, hone their skills, and prepare strategically. Embracing innovation, enhancing quality, and building strong partnerships will be vital to thriving in the new trade environment created by the Lobito Corridor. This is not a passive opportunity; it’s a call to action. The future is in your hands, and the potential for growth and success is limitless.
The Author is Membership and Business Development Specialist- North at the Zambia Association of Manufacturers
