Zambia is working with a relatively new trade initiative referred to as the Enhanced Integrated Framework (EIF). This program was initiated in 1997 as an Integrated Framework (IF) mechanism to provide better coordinated and more effective Trade Related Technical Assistance to Least Developed Countries (LDC) such as Zambia. In 2005 at the Hong Kong WTO Conference, the idea was further developed to an Enhanced Integrated Framework because of the urgent need to make the framework more effective and timely in an effort to assist to deliver social economic development to the LDC’s. The goal of the EIF is to facilitate and fast track the integration of LDC’s into the global economy.
Several multilateral development organisations have spearheaded the development of the EIF and these include the IMF, ITC, UNCTAD, UNDP, The World Bank, and the WTO.
The mechanism for determining the support and assistance for each participating country is a Diagnostic Trade Integration Study (DTIS) at country level. This was done for Zambia in 2005 and the results are now influencing the implementation of the EIF process.
What are the current bottlenecks that are retarding the effective implementation of the EIF in Zambia?
The fundamental issue is the quality of the DTIS that was carried out in 2005. This study was undertaken by a foreign consultant who had very little hands on experiences of Zambia in both data collection and social-cultural understanding. As a result, the DTIS is a very weak document to be used as a guide for EIF implementation. Subsequent public workshops have been held on the Copperbelt and in Lusaka to review the content of the DTIS and there has been an overwhelming conclusion that the DTIS must be reviewed, enhanced and corrected to reflect the true status on the ground in Zambia.
The outcry by the public was that in the future such studies should be carried out by local consultants who understand the country that they live in and can easily contextualise the various trade and commerce related issues to the various groups on the ground in the domestic economy. Too often, foreign consultants spend too little time in the country, collect data from biased official reports in their own countries, and do not use effective local counterparts to enhance their research work.
Many Zambian contributions to the EIF process focussed on issues of Market Access initially within the domestic economy, and then in the region’s economic groupings such as SADC and COMESA. Issues of trade infrastructure such as warehousing at popular trading border posts were raised. Key examples of where warehousing is desperately needed are at Kasumbalesa, Nakonde, Chirundu and Kasungula.
A request was made for a gender analysis in trade with emphasis on cross border trade. It is expected that women engage in cross border trade more frequently than men, and yet there is very little provision made to facilitate women in trade at border crossings.
The public requested that more useful Monitoring and Evaluation processes need to be introduced in the EIF process to constantly assess the effectiveness of the program, and where necessary, to investment more resources to ensure good results.
Some businesses appreciated the necessity for domestic and regional standards in enhancing trade opportunities. To this end, the role of the Zambia Bureau of Standards, the Zambia Weights and Measures Agency and the Food and Drugs Authorities need to be embraced as integral players in the trading regime.
There was general outcry for public information on trade and trade related activities to be disseminated across the country in an effort to empower all levels of businesses with knowledge that will impact on their businesses.
On the Copperbelt the challenging issues were to open up avenues for diversification of the economy away from mining, in order to strengthen the sustainability of the domestic economy in the province.
Some key working points were brought out which will need to be tackled for the EIF process to receive full support and commitment.
A baseline study needs to be undertaken to identify the opportunities for social and economic development in each district. This study will look at comparative and competitive advantages as well as the markets and viability of the opportunities. The previous DTIS outlined coffee as a focussed crop for production in Zambia and at the moment coffee farms have closed down and others have been forced into liquidation. The DTIS rationale seemed to be, to grow crops that can be exported to the west without alternate markets. This mono market focus has now resulted in difficult times for coffee growers due to the economic slump in the west. Coffee cannot be eaten so it does not add to Zambia’s food security concerns.
It has been identified that middlemen, consolidators and out grower schemes are all value chain elements that must be encouraged in order to enhance productivity and trade in the country. As such, more emphasis must be put towards developing the value chain in trade and commerce so as to reduce the pressure on each individual value addition link in the value chain.
It is important to constitute a liaison committee for integrating new trade initiatives into the EIF process as the economy evolves. One such example is the new advent of Economic Zones that may be left out of the EIF process if not deliberately incorporated through a deliberate integration process.
Zambia is signatory to many trade protocols, agreements, and policies. In addition Zambia has her own development plans that are devised every five or six years. The EIF process requires that all these instruments need to be harmonised so that there are very few clash points.
The overarching concern by Zambians in respect to trade and commerce is that Zambians and their companies need to be accepted as investors in the domestic economy. As such Zambians must be in the forefront of being invited to participate in the new Economic Zones currently being developed in Lusaka and the Copperbelt. Zambians must be in the forefront of investing in the new tourism initiatives in Kasaba Bay and the Livingstone Tourism Zone. Zambians must be the first to be linked to any foreign investment that requires supporting goods and services to roll out any huge investment in the country.
This process has been practiced by the Asian Tigers during the period when they were building their economies. The Japanese economy comprises of over 80 percent SME’s to support the under 20 percent large corporations. The case for supporting and facilitating trade and commerce in the domestic economy is very compelling. Local businesses are here to stay, and they will eventually become the back bone of the economy of tomorrow, if only Zambia makes a deliberate effort to develop them through the EIF process.
Published 3rd March, 2009
It makes interesting reading about the local consultants being mentioned in the article. I am not an economist but I have a bit of common sense on economic issues.
ReplyDelete“The outcry by the public was that in the future such studies should be carried out by local consultants who understand the country that they live in and can easily contextualise the various trade and commerce related issues to the various groups on the ground in the domestic economy”. How long ahve these consultants been in Zambia for them not to have undertaken the sort of consultancy as DTIS?
I am not sure whether it was the “public” who made the outcry. What I think is that the outcry must have come from local consultants who have not contributed to the development of Zambia in any positive way. The-so-called consultants have not sat down to assess and advise government on the the way forward in many areas because they cry just about anything and they do not offer solutions. And usually, they just appear to be awakened on a number of issues such issues as the DTIS then react therefater by crying that they should have been the ones to have done it.
What are they doing to help people like BOZ Governor who think agriculture is the answer for Zambia? (Sunday Mail, 5 April,2009). If you look at what the world picture is about agriculture’s contribution to world GDP, you would otherwise not agree with Dr. Fundanga; https://www.cia.gov/library/publications/the-world-factbook/fields/2012.html. In fact, countries whose economies depend on agriculture are among the poorest. Emerging economies are more concentrating on the service industry and manufacturing than on agriculture. At least there are people who agree with my line of thought: http://www.deeshaa.org/2007/04/07/the-importance-of-agriculture-in-gdp/ .
What is worse for Zambia is that our consultants do not even see how innovations in commerce could curb wastage through programmes like FSP and may be the entire agriculture industry. We are wasting opportunities and resources. For example, instead of removing activities like grading of feeder roads, maintenance of agro-produce storage facilities or even provision of irrigation equipment from MACO, we have just kept on losing resources. These activities if left to companies contracted by each local authority (municipal or city council) would create jobs for rural populations.
Another area where our consultants do not see an opportunity is on how government could increase its tax base. Imagine a situation where the entire fast-moving-goods industry like for groceries was targeted to have electronic transactions. Such a measure would legitimise a lot of transactions and we could collect a lot of revenue by way of bank charges, but also bearing in mind that we also have to work at how we can reduce misuse of the collected revenue. That is just one area.
So, rather than waiting to prey on other people’s effort and ideas the consultants have to wake and be proactive.