What has been the impact of Aid-For-Trade in the private sector in Zambia over the last one year? How have businesses, the public sector that support private sector development, and the general citizenry benefited from the Aid-For-Trade initiative? What has been the private sector target group for Aid-For-Trade in Zambia? Who are the Aid-For-Trade beneficiaries?
These are some of the questions that are often asked in the local chamber of commerce meetings and other business development association gatherings. Very few answers are given and if so, they are at best ambiguous and unconvincing to the majority of Zambians.
There are many collaborating partner funded projects running in Zambia focusing on both public sector service delivery systems, as well as private sector production capacity building. It is not unusual for collaborating partner project managers who are usually not experts in any particular sector that is relevant to the Zambian scenario, to muscle their own ideas and perceptions into the project program. This is formalized by amending Development Agreements with the relevant Government Ministries. This is easily achieved due to the apparent desperation to receive foreign assistance that Government officers are prepared to sign any document that will keep the project alive and funded. The technocrats at a lower level see the deviation from the national development agenda but have no voice to either caution, criticize, or question the amendments.
In addition, many collaborating development projects are challenged with procurement bottlenecks that need funding partner approvals and sign offs which can be unduly delayed. Furthermore, many programs have an implementation time line that is seldom met because of bureaucracy and red tape. At the end of the project period the unspent finance is reclaimed by the funder and we are branded as an incompetent and lethargic partner.
In the local recipient network, several heads of projects are influential personalities who run the public institutions as if they owned them and create a personal relationship with collaborating partners to entrench themselves even further. This creates apathy in the institutions and generates a high turnover of public sector staff thereby destroying institutional capacity, memory, and continuity.
The top civil servants namely Permanent Secretaries are often subdued by collaborating partner demands that are channeled through the Minister or Cabinet Office. Permanent Secretaries are confronted with decision making situations that may result in their jobs being terminated if they upset either the political machinery, or the collaborating partner representatives. In many cases Permanent Secretaries tend to look after their own interests at the expense of national development for fear of being ejected onto the streets.
In the last decade the collaborating partner group in Zambia has attempted to find mechanisms to co-ordinate their support to avoid duplication of projects and overlaps that are not complementary. This effort does not seem to have worked well and the number of development initiatives that have been duplicated is rampant.
The majority of collaborating partner projects in the private sector emphasize on developing export capacities and expansion of existing enterprises. This focus eliminates 83% of local Zambian businesses and eventually only targets the few well established companies, or enterprises that are owned by foreign investors. As a result, there is widespread criticism of foreign investment and a general feeling by Zambians of the lack of equity in the developing economy. This growing sentiment is affecting political decisions on policy such that we now have a Citizens Economic Empowerment Act which is no doubt discriminatory in favour of Zambian citizens. The questions of efficiency, professionalism, quality, and consistency are likely to be replaced by the option of a ‘Citizens Rights’ which may not support the development of business activity at a globally competitive level.
Zambia has seen several non tariff barriers to trade with the EU and North America as is evidenced by the slow and inefficient Sanitary and Phytosanitary Services to allow agriculture produce to enter these markets. At present, after six years of the African Growth and Opportunity Act (AGOA) being implemented, only three products out of a possible thirty can be exported to the United States of America.
Zambia is a country that hinges its economic program on the basis of food for all her people. Currently, many of our collaborating partners are disinterested in our Food Security program and tend to distract our local agenda towards some theoretically interesting regional economic development program that requires a dozen countries to collaborate efficiently for this to become a reality.
In our current development discussions with the EU Zambia and other developing countries are looking at the Change of Tariff Headings as a way to accelerate economic activity but the EU prefers to focus on Value Addition in the negotiations on the Rules of Origin. The discussions seem to have come to a deadlock with no progress expected in the near future.
The Zambian experience has been to see dozens of foreign experts, consultants, researchers and advisors that are paid for by the Zambian tax payer or our collaborating partners in an effort to support the country plot some economic development policy. Many of these experts have had no experience in Zambia or the region and tend to spend a very short time doing their on the ground research work. As a consequence, many collaborating partner funded programs result in poorly implemented initiatives at best.
The current level of collaborating partner supported programs include Export Development, Immigration Department operations, Tax collection, Anti Corruption interventions, Land Title processing, Company registration, Non Traditional Mining expansion, Market Access, Trade Enhancement, Central Bank operations, Regional Integration, Health Systems development, Zambia Development Agency implementation, Education Sector support, Customs procedures and processes, Agriculture development and Agribusiness promotion, HIV/AIDS mitigation and management, and Human Resource Capacity building.
In the last few years Zambia unapologetically refused to accept Genetically Modified Organisms (GMO) maize into the economy and into the agriculture system. This position resulted in the USA taking a very aggressive stance against Zambia. The USA then dispatched many Congressmen and women and a handful of scientists to Zambia to convince the nation and its leaders that GMO’s were unreservedly safe because ‘they say so’.
In recent months the European Union (EU) had some experts on Economic Partnership Agreements (EPA’s) come to Zambia to convince us to sign a trade agreement with the EU. At the end of the effort when the experts were asked why we had to sign any new agreements when we have ‘Anything But Arms’ (EBA), the experts said that we needed to think about it.
Is Aid-For-Trade working for Zambia? Not very much. The experience in Zambia seems to be much more of ‘Aid-To-Be-Played’ for the benefit of the Aid Donor.
Who has benefited from Aid-For-Trade? It seems the beneficiaries are the elite 17% of economic activity consisting of large companies, foreign investors, and multinational companies.
Who is the target group for Aid-For-Trade? It appears that the target groups are the businesses that are already established and fairly strong in the private sector, the Government public workers that can never have enough ‘capacity building training’, and the poor HIV/AIDS victims that lie in hospitals around the country. Very little focus is
given to eradicating Malaria which is a much bigger killer than HIV/AIDS, skills development in technical colleges and other institutions of learning, and to the Micro, Small and Medium (MSME’s) sized businesses that constitute the majority of private sector economic activity in Zambia.
What has been the impact of Aid-For-Trade? It has made many local development programs go on hold while the collaborating partner programs have taken centre stage. Furthermore, our Zambia Development Agency Act that regulates all investment in the country has been misunderstood, misrepresented, and misinterpreted to the detriment of investment into Zambia. Zambia is still battling with the Rollback Malaria program that is collaborating partner supported. This is an ill conceived program that endeavours to ‘control’ Malaria by the widespread use of Insecticide Treated Mosquito nets, Chemical Insect Sprays, and Drug based prophylactics and treatments against the disease. How can this program hope to succeed in a country where the World Bank and International Monetary Fund conclude that 70% of the population lives on less than one US dollar a day? Is it any surprise that villagers and the poor sell the mosquito nets, insecticides and drugs to traders so that they can buy food for the day?
The results of last years Presidential and General Elections speak for themselves. 44% of the voters wanted the Government of the day to stay in office. 32% wanted to replace the current Government with a Government that would break all the trade agreements and protect domestic indigenous businesses. 24% wanted a Government that would represent the interests of a particular province of the country.
One obvious conclusion can be extracted from these results. 56% of the voters wanted a Government that would concentrate on local domestic demands at the expense of regional and global integration. This may be the most important indicator of the impact of Aid-For-Trade in Zambia.
Published 24 May 2007
