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Building A Better Market – Zambia

BIOGRAPHY

The Hon. Margaret Mwanakatwe has been serving as the Zambian Minister of Commerce, Trade, and Industry since her appointment in 2015. Prior to her entry into politics, she occupied several executive positions with Barclays Bank in Zambia, Ghana, Nigeria, and Uganda. She was the first Zambian and first female to serve as CEO at Barclays Zambia, and the first woman CEO in all of Barclays Bank’s African subsidiaries at the time. She later joined United Bank for Africa (UBA) as the Director of Business Development. She has a degree in business administration from the University of Zambia and is a certified chartered accountant.

What is your assessment of the meetings in Egypt recently regarding the Tripartite FTA (TFTA)?

The launch and signing of the TFTA agreement signify an important political milestone toward the establishment and operation of a fully fledged free trade area. It represents free movement of goods and services from the Cape to Cairo, bringing together a market of over 625 million people, living in one of the highest growth areas of the world with a booming middle class in 26 countries and a combined GDP of USD1.3 trillion, about 60% of the African continent’s GDP. For Zambia, the TFTA represents a significant market for Zambian goods and services once effectively exploited. Total merchandise exports by TFTA members was USD145 billion and merchandise imports of USD211 billion as of 2014. This is a massive market for our finished and semi-processed goods and gives us the market access to our producers, which are struggling to secure a share in developed markets due to non-tariff barriers. The establishment of the TFTA will undoubtedly boost trade among the participating countries as a result of market expansion and contribute to the African Union Agenda of boosting intra-Africa Trade.

What is the status of the 11 bills presented to parliament to consolidate private-sector participation?

The 11 bills represent my ministry’s aggressive agenda to reform the business environment. The bills relate to strengthening intellectual property rights, trade facilitation, re-engineering of the national quality infrastructure; aligning company law to international best practices and expanding access to finance for micro, small, and medium enterprises. The bills are at different stages in the legislative process. Most of these bills have been approved by the cabinet and are now undergoing legislative drafting.

How do you expect international trade to evolve in Zambia in the next five years?

The evolution of Zambia’s trade in the next five years will be dictated by regional integration. The phase II negotiations under the Tripartite FTA framework and the Continental Free Trade Area negotiations will change the trade arena in Africa. Zambia needs to position herself to capitalize on this expanded market. If we do not position our industry to become a key regional player, we will be faced with high levels of imports into our country, which can lead to the death of local industry. We are confident that our experiences with COMESA and SADC FTA’s have made us stronger. At the international level, the Economic Partnership Agreements with the EU and the implementation of the trade facilitation agreement present new challenges we must be prepared for even as we consolidate ourselves as a middle-income country.

What are the comparative advantages of Zambia over neighboring countries and why should an investor choose Zambia?

Zambia’s comparative advantages lie primarily in its abundant resources. It has vast land, 752,614sqkm, with a population of approximately 15 million people, with over 70% of the population below the age of 40. We have vast natural resources in terms of minerals, tourist sites, water, and land for agriculture. The country has had a stable economy with growth averaging 6% over the last decade, stable inflation averaging 7% over the last five years, as well as a stable political and social environment since the country gained independence in 1964. In terms of doing business, we are ranked fifth in Sub Saharan Africa and third among the SADC countries, fourth in COMESA, and eighth in the whole of Africa, pointing to the conduciveness of our business environment over most of our neighbors. We share borders with eight countries, making us land-linked. The country’s central location in the region gives it a competitive market. Zambia has no controls on prices, interest rates, or foreign exchange transactions, free repatriation of earnings and repayments, as well as security and guarantees of full and fair compensation for investors.