The global economy has seen striking changes over time with some Asian countries becoming some of the best performing economies in the world. Export led industrialisation has been identified as the bedrock of the unprecedented economic growth in the Asian countries, and therefore they have become a point of reference for developing and least developed countries.
Since the operationalisation of the Southern Africa Development Community (SADC) and the Common Market for Eastern and Southern Africa (COMESA), Zambia’s most stelar exports to SADC and COMESA happened in 2013 when the country recorded exports worth US$ 3.1 billion and US$ 1.8 billion, respectively. Notably, the two regional economic communities (RECs) have been key to Zambia’s diversification of exports and increase in Non-Traditional Exports (NTEs).
Exports from Zambia to both SADC and COMESA have been dwindling post the 2013 export boom. Questions are thereby raised on Zambia’s utilisation of its regional export markets, especially that trade statistics show that Zambia only accounted for 4.7% and 17.2% of aggregated intra SADC and COMESA exports respectively in 2020. Given the preferential tariffs, what are some of the factors that have constricted Zambia’s exports in the existing REC’s affecting Zambia’s ability to effectively benefit from the two regional blocs.
The first observation is that critical trade corridors necessary for regional trade remain undeveloped or dilapidated within Zambia, leading to an increase in the cost of transportation in Zambia, as a result the risk of breakdowns and number of days spent on the road has increased. For instance, while Angola remains a lucrative market for Zambian products, the lack of connectivity makes trade between the two countries almost impossible. Therefore, connectivity to markets is important because even though a country might be far apart trade will be aided by good connectivity.
In order to fully harness the benefits of regional trade, Zambia has to therefore prioritise investment in transport infrastructure. More especially the trunk economic roads that lead to Zambia’s neighbours such as the Great North Road, Kazungula-Sesheke Road and the Kasumbalesa Road to mention but a few. As well as rail routes that would connect through Zambia’s neighbours with seaports such as Beira and Walvis Bay. Such infrastructure would help reduce the export costs despite the distant geographical locations. Nonetheless, Zambia, just like its neighbouring countries, is currently lacking the adequate transport infrastructure to facilitate efficient regional trade and further inhibits exports.
The exporting process is usually marred by complexities in the export processes due to lack of trade related information, which is often only concentrated amongst few firms and individuals. Despite the Zambian Government’s efforts in disseminating trade related information through online Zambia Trade Information Portal (ZTIP), where the information can be obtained, awareness and usage of this platform has remained relatively low. Additionally, trade related information for trade partners in is scarce and relatively unknown, and often hinders exports because some trading partners might be operating an import licencing system or require specific conformity assessments to be undertaken.
Aside from exports, the existence of non-tariff barriers (NTBs) have hindered Zambia’s exports into the region. An example of a NTB is an export licensing system implemented in importing member states, in a bid to limit certain imports. Exports end up spending more time at the border in obtaining import licences or in some circumstances are denied entry. Zambia has reported a historic cumulative of 48 cases of NTBs that have been implemented by regional trading partners on the NTB online platform for Africa. In reality, more unresolved NTBs exist in the RECs than reported, but awareness on how to report, monitor and eliminate them is low in Zambia.
Lastly, the importance of a common language when undertaking trade may seem quite trivial but language cannot be overemphasised as a major tenet of trade. Clearly, export marketing is more effective and relatable if it is conducted in common language. Common language is evidenced in Zambia’s own scenario where higher regional trade has been recorded with regional trading partners who are Anglophone and have adopted English as an official language. Common language can be observed amongst Zambia’s top 5 export markets which are all Anglophone, with the only exception being the Democratic Republic of Congo.
Therefore, in order for Zambia to restore its eroded regional export markets, measures have to be put in place to address the barriers which seem to be hindering Zambia’s NTEs. The Government needs to ensure that a good transport network that ensures good connectivity in the region and ultimately facilitate trade is built. Furthermore, the Government and the private sector can collaborate on improving awareness of the ZTIP, enhancing the capacity of exporters to identify NTBs and improving awareness on existing channels to report, monitor and eliminate NTBs. Additionally, the ZTIP should also contain links to other countries online platforms for trade related information in order to raise awareness on the trading partners importation procedures. Lastly, it is also important that trade attachés in Zambian embassies that are domiciled in non-Anglophone countries must be trained in the language of the country hosting them, so as to effectively communicate trade related information and undertake export marketing.
