Rob Davies, during Zambia Business Opportunities and Investment
Conference
13 June 2006
Mr Vice President of the Republic of Zambia
Honourable Lupando Mwape
Honourable Ministers
Honourable Governor of the Bank of Zambia
Commissioner General of the Zambian Revenue Authority
Your Excellency the High Commissioner of the Republic of Zambia to South Africa
Colleagues
Ladies and gentlemen
It is a very great privilege and pleasure to offer a few remarks in opening
this Zambia Business Opportunities and Investment Conference. May I on behalf
of my Minister, Mandisi Mpahlwa, and on my own account wish this conference
every success in show casing investment opportunities that exist in Zambia and
sincerely hope that it results in concrete investment decisions that will
benefit the Zambian economy?
Minister Patel, may I say in passing, that those of us deployed to work on
the multi-lateral trade negotiations are very well acquainted with the sterling
work being done on behalf of Least Developed Countries by you. In the World
Trade Organisation (WTO) negotiations, our two countriesâ delegations have had
numerous opportunities to exchange views on issues we believe are critical to
ensuring a successful development outcome to the current Doha Round
negotiations. We very much value these interactions and exchanges, which we
trust will contribute to building a solid unity among developing countries as
the WTO process reaches a critical, make or break, moment.
Both our countries are also partners in the Southern African Development
Community, and we have signalled a need to begin to engage in a strategic
conversation on how best to advance the common endeavour of promoting
equitable, mutually beneficial and development-orientated cooperation and
integration in the Southern African region.
Beyond that, and building on our common endeavours at global and regional
level, it is evident that our two countries, South Africa and Zambia, need to
work much more intensively to strengthen our bilateral relationship into a
solid partnership based on principles of equity and mutual benefit. I say this
for a number of reasons.
Firstly, our people and the people of Zambia are bound together by solid
bonds forged in the struggle against colonialism and apartheid. Your country
and its people were at the forefront of those offering support to our people in
the struggle for our liberation from the bondage of apartheid. More
specifically because of the strong stand which your country took in supporting
the struggle against apartheid, Zambia steadfastly refused to be seduced by the
offerings of the then apartheid regime. As a result we did not inherit from
apartheid and colonialism a pre-existing pattern of preferential trade and
investment relations. That is one reason why I believe in South Africa we need
to work more intensively toward forging strong mutually beneficial and
equitable economic bilateral relations with Zambia. There is also a more direct
and immediate material interest. According to the preliminary trade data for
the first quarter of this year, Zambia overtook Zimbabwe and Mozambique to
become the largest market for South African exports in the Southern African
Development Community (SADC) area outside of the South African Customs Union
and the twelfth largest destination for our exports overall.
The picture with respect to imports is however much less encouraging. The
Republic of Zambia is only our forty fourth largest suppliers, and the ratio of
imports to exports remains very high at 5.4:1. This large imbalance in our
trading relationship highlights one of the critical challenges which we need to
address in enhancing our bilateral relationship, a challenge to which a
conference like this could be useful in addressing.
You see chairperson, one of the ways in which we could work to overcome
trade imbalances is to encourage and promote investment. Investment provides a
flow of resources that can at least partly counter balance a negative resource
flow resulting from a deficit in the trade balance. More significantly,
investments can enhance the productive capacity of countries of destination and
thereby strengthen the capacity to export. In the period since 1994, South
Africa has emerged as one of the largest sources of foreign investment of the
African continent. According to our information, investments by South African
companies in Zambia increased from a low $3,4 million in 2004, to $ 10,1
million in 2005 â a figure which we are sure has potential to increase further
still. Investment is of course, to a very large extent the product of decisions
taken by private sector players. But, while increasing South African investment
in Zambia will thus critically depend on convincing South African-based private
sector firms that this is worthwhile, please be assured that our government
stands ready to play a facilitating role.
Since 1994, our democratic government has taken the view that it is
important to become actively involved in encouraging and facilitating
investment by South African concerns on the African continent. We have also
sought to use our influence to promote quality investments guided by principles
and partnership, local empowerment, local sourcing; investment in other words
that can genuinely contribute to developing the productive forces in countries
of destination.
To this end, South African parastatals, like the Industrial Development
Corporation and the Export Credit Agency have provided facilities and services
that have made key strategic investments in neighbouring countries a
reality.
We have also strongly championed cross-border Spatial Development
Initiatives. The SDI methodology, which is now also employed by SADC, aims to
enhance the attractiveness of specific geographic regions for investment by
using transport infrastructure programmes to âcrowd inâ other investment
opportunities. Current SDIâs involving Zambia include the Mtwara Development
Corridor and the Nacala Corridor
Our Department of Trade and Industry also offers a range of facilitation
services to assist investors to expand their operations on the continent.
Through our International Trade and Development division (ITED) we organise
inward and outward business missions, disseminate information regarding
business opportunities in neighbouring countries, provide country briefs, and
assist in the formation of bilateral business forums and the holding of
numerous conferences, seminars and round tables. Hence we are delighted to be
associated with the organization of todayâs event.
We are aware, however, Minister, that we still have important work to
complete at governmental level. The SACU-MMTZ arrangement operating under the
SADC Trade Protocol, which provides duty free access to South African Customs
Union (SACU) subject to quotas in some sectors, is due to expire at the end of
next month. We need urgently to agree on a replacement as well as conclude our
negotiations on a Reciprocal Investment Protection Agreement, and an Economic
Cooperation Memorandum of Understanding (MoU). A delegation from our department
will visit Zambia later in the year, and we trust that these matters will be
resolved expeditiously.
May I also reiterate that our government and our department remain committed
to exploring any other proposals to move our bilateral relationship forward and
in the direction as I indicated in the beginning, of a solid bilateral
relationship based on principles of equity and mutual benefit?
In conclusion, on behalf of our ministry, I wish this conference every
success. We are convinced that there are many opportunities for investment in
Zambia. Your mining sector is well known and is experiencing significant
growth. Your country has significant agricultural and agro-processing
potential. Export oriented crops like tobacco, cotton, coffee, paprika and
other products offer many opportunities. You have a burgeoning tourism sector
and a significant manufacturing sector. May I express the hope that this
conference results in concrete business deals that will carry our relationship
a further step forward.
I thank you.
Issued by: Department of Trade and Industry
13 June 2006
Source: Department of Trade and Industry (http://www.thedti.gov.za)
