Zambia, Japan Fostering Economic Ties

SHIFTING diplomatic relations from mere political or military diplomacy to economic co-oporation is proving to be the best approach to get sustainable economic benefits from bilateral relationships.

The major challenges being faced by most of the least developed countries are more economic than political and otherwise hence the need to adjust the approach.

That is why it is encouraging that Zambia is slowly modifying her approach towards economic co-operation and investment relations with

old and new allies in its quest to attract the much-needed investments in critical sectors of the economy.

To keep close economic relations will help the country woo more Foreign Direct Investment (FDIs), knowledge and technological transfer.

Japan’s development cooperation with Zambia started with the dispatch of Japan Overseas Cooperation Volunteers (JOCV) in 1970, followed by a loan in 1972 and a grant in 1980, totalling US$2.1 billion.

This support has been contributing to Zambia’s development policy, focusing on sustaining the country’s macro-economy and equity through diversifying Zambia’s economy.

Other benefits are in the areas of improving productivity, creating job opportunities, keeping healthy national finance and increasing the investments for basic economic infrastructure.

Recently Japan supported Zambia with US$48 million on increased access to electricity, technical cooperation grant aid for poverty reduction

involving US$8 million and the financing of the Kazungula Bridge at the cost of US$35.6 million.

Other project funding assistances include the US$34.5 million towards the Lusaka Ring Road and the US$27 million on the Kitwe Ring Road.

However, the bilateral trade is still low which call for measures to increase the volume of trade between the two countries.

For instance, in 2012 Zambia’s export to Zambia was US$33.2 million while imports averaged US$97.4 million.

The continued engagements between the two countries’ business community, however, is likely to increase trade and investment between the two countries.

Recently the Japanese Chamber of Commerce and Industry South Africa (JCCI-SA) led by chairpersonYoshiki Takizawa undertook a business

mission in Zambia to explore business opportunities.

At the business forum held in Lusaka Japanese ambassador to Zambia Kiyoshi Koinum pledged continued support to Zambia in its quest

to develop a wide range of infrastructure.

He says to boost African development through promotion of public-private investment, the Government of Japan would continue supporting the wide range of infrastructure.

“The Japanese Government will continue supporting the wide range of infrastructure developments including the Nacara Corridor as well North South Corridor,” Mr Koinum says.

Zambia’s economic development rate has been maintained at six per cent with growth sectors mainly the mining sector pushing the Zambian economy hence for more investments in other sectors of the economy.

At the last African Union (AU) Summit, President Edgar Lungu told Japanese deputy foreign minister that Zambia was willing to attract investors from Japan especially in the energy, agriculture and mining sectors.

These were the sectors that Japanese companies should take great interest in as well as other sectors with similar potentiality.

Mr Koinum observes that the Zambian market is expanding and developing, but that there are many greenfields which Japanese investors should explore.

“I believe that Japanese companies here today can get valuable information and expand their network with Zambian companies,” he says.

During Fifth Tokyo International Conference on Africa (TICAD V) Japan promised to support Africa’s development by private-public partnership

amounting to US$ 32 billion for five years from 2013.

Mr Koinum further says his Government will continue offering its unwavering support to Zambia to take positive strides in the country’s

economic element.

Commerce, Trade and Industry deputy minister Miles Sampa says his government is keen on enhancing private sector led growth by creating

an enabling environment for business to attract more investments.

Last year, the Government enacted the Business and Regulatory Act of 2014 to create a cost effective and business framework in the country.

Mr Sampa implores Japanese entrepreneurs to take advantage of the prevailing business environment and invest in various priority

sectors.

“I would like to urge the Japanese business delegation to draw comfort from the fact that Zambia is a host of large Japanese multinational corporations such as Hitachi, Sony Corporation, Toyota Zambia and Toyota Tsusho among others to invest in various sectors,” he says

He is encouraged that Japan has continued promoting Small and Medium (SME) development in the country through One Village On Product(OVOP)

and other support that encourages the creation of value added products and services for rural entrepreneurs.

For Mr Takizawa the role of CCIJ is to promote Japanese culture and business to assist to grow the economies of Southern African countries.

“I believe that Japanese companies are willing and able to enhance the mining, infrastructure, automotive, agriculture and consumer related

business within the region,” he says.

The event attracted about 122 Japanese firms doing business in Southern Africa of which 64 are registered with CCIJ in South Africa.

President Edgar Lungu reiterates his Government’s call for Japanese investors to consider venturing into partnerships with Zambians who have vast understanding of the country.

President Lungu says Zambians have a clear understanding of the local environment and cultural norms hence partnerships will give the Japanese investors a better head start.

Mr Lungu told the Japanese delegation that the country has adequate incentives to attract investors to invest in various sectors of the economy.

He says his government is open for dialogue whenever investors feel dissatisfied with the incentives.

The mission if well utilised by both investors from the two countries can be vital for strengthening economic ties between the two countries.

There is need to promote trade between Zambia and Japan besides the development assistance Japan is providing for the country to derive more sustainable and economic benefits.

The most promising sectors for investment in the country are in the area of energy, agriculture and mining among other.

Consequently, shifting diplomatic ties from mere political to trade and economical ties has long-term benefits to the sustenance of the economy.