Zambia’s challenges

ZAMBIA HAS STARTED developing farm blocks in order to diversify the economy away from mining. The now subsiding global economic crisis has exposed Zambia’s overdependence on mining sector which suffers from external shocks.

Copper prices plummeted to US$2,811 per metric tonne in December 2008 on the international market from the all-time high of US$8,985 per metric tonne in July 2008. About 8,500 workers lost their jobs in the mining sector as investors suspended some development projects or put mines on maintenance and care. To counter the effects on the mining sector, Zambia has started developing farm blocks.

Early this year, government allocated K 42bn (US$9013mn) to develop the Nansanga Farm Block in Serenje, Central Province. Once developed, Nansanga would incorporate both large-scale and smallholder farming methods. Presenting the 2010 budget on October 9, 2009, Finance and National Planning Minister Situmbeko Musokotwane said: “To this end, all the budgeted resources of K 42bn to the farm block for access roads, electricity lines and water development, have been released in 2009…In 2010, government will complete remaining works in the farm block, particularly relating to the construction of additional roads and bridges.”

Another K 2bn (US$429mn) has been allocated to Nansanga Farm Block in the 2010 budget, on top of K3bn (US$644) for the construction of dams. After works are completed, government intends to advertise the farm block to investors who are expected to carry out large-scale farming. Apart from Nansanga, Zambia intends to develop the Luena Farm Block in Luapula Province in Kawamba district on the border with the Democratic Republic of Congo (DRC). The area has abundant water and suitable soils to support cultivation of sugar canes. In the past sugar was produced for the export market.

Sugar produced from Zambia is of high quality, having penetrated markets in developed countries including those in the European Union and within the SADC region. In the past, businesses established in Luapula Province had high transportation costs because a longer route through Central Province was used to the major market on the Copperbelt. Now a Chinese company has constructed a bridge across the Luapula River, which forms a boundary between Zambia and the DRC, making transportation between Luapula and the Copperbelt less costly. Previous feasibility studies at Luena indicated that ethanol can be produced from that area.

This venture is viable in that now there is a shift to cleaner forms of energy such as biofuels, which emit fewer greenhouse gases. It is believed that greenhouse gases are partly responsible for climate change, resulting in droughts or flooding in some parts of the world. Encouraging value-addition to cash crops Cash crops that can be grown in Zambia in farm blocks include coffee, tea, rice, sorghum, maize, flowers, fruits and vegetables. But beyond mere cultivation of the cash crops, there is a need to encourage value-addition within Zambia since agriculture is capable of providing more jobs and lifting many people out of poverty faster than mining. In the past, pineapples were processed into drinks in the Mwinilunga district in North Western Province, but the enterprise has since collapsed.

While farm blocks are a way of diversifying the economy, this is a capital-intensive strategy, which should be buttressed by good roads, railways, dams, lengthy power lines and reliable water supply. In terms of the provision of electricity, there is too much reliance on large power stations. For instance, the country needs about US$1.5bn to develop the Kafue Gorge Lower Power Station to increase the generation capacity. Mini-hydro power stations One way of providing electricity for agricultural purposes is through the construction of mini-hydro power stations which can be done at minimal cost.

By definition, mini hydro power stations produce above 100KW, but below 1MW. These can be stand alone, especially in remote areas, or they can be connected to the larger network where the national grid is not far away. The other aspect that is cardinal to the agriculture sector is transport infrastructure and efficient operations. Zambia had a maize bumper harvest in the 2008/2009 farming season, but excess produce could not be exported to Kenya and Tanzania due to lack of motive power and locomotives by the Tanzania-Zambia Railway Authority (TAZARA).

The reason given by government for failing to export maize to these countries that experienced shortages was that Zambia’s transportation cost would have been higher than that of far-away South Africa. TAZARA on whose corridor Nansanga Farm Block is being developed should have efficient and effective operations. This railway line leads to the port of Dar-es-Salaam in Tanzania.

To this end, the governments of Zambia and Tanzania are negotiating to have the TAZARA concessioned to the Chinese who built the railway line in the 1970s. With increased demand for cereals for food and the production of biofuels, TAZARA can be used to export produce from farm blocks in Zambia to East Africa and far-away markets such as those of the emerging economies of China and India. An estimated 400mn have been lifted out of poverty in China.

This means that there will be pressure on the Chinese government to provide food for its citizens, especially meat. Many people’s purchasing power in that emerging economy has increased, which African countries with abundant tracks of land can take advantage of. Potential cultivation of pineapples Besides, there is need to extend the Zambia Railways line from the Copperbelt to join that of Angola’s Benguela Railway through Zambia’s North Western Province.

The Benguela Railway leads to the port of Lobito. That is the shortest route to markets in the US and Europe and some farm blocks can be developed on this envisaged railway link. It is in Zambia’s North Western Province that there is potential for the cultivation of pineapples, which can be exported to Europe and the US. Viability of the railway line into Angola is that there are also investments including Lumwana at US$1bn which would soon be producing about 150,000 tonnes of copper concentrates per annum. It is a good strategy that Zambia has started developing farm blocks to diversify the economy such as Nansanga Farm Block on the TAZARA Corridor.

Some of the produce from that corridor can be exported to the emerging economies of India and China. Farm blocks can be used to produce cereals, which are now being used for food and production of biofuels in developed economies. And in order to start exporting beef, the Zambian government has established a separate livestock ministry to contain some diseases. Zambia intends to follow its neighbour Botswana in the production of beef since over-reliance on mining is subject to the external economic environment as has been experienced during the current recession.

Alain Charles Publishing, University House, 11-13 Lower Grosvenor Place, London, SW1W 0EX, UK
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