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Zambia eyeing big investments from India

By Aziz Haider

Owing to its strategic location in the center of three Free Trade Agreements (FTAs) that Zambia is a member of – COMESA, SADC and Tripartite FTAs which eliminates custom duties and quotas on goods and services in the region, Zambia is eyeing big investments from Indian companies.

This is something that Judith KK Kan goma-Kapijampanga, former MP and Minister in the Zambia Government and present High Commissioner of the Republic of Zambia is focusing on as part of her role in New Delhi.

Several Indian companies have in recent years invested in Zambia with total investments standing presently at about USD 3 billion. With more Indian companies expressing interest to invest in building multi-specialty hospitals, building roads, railways, metros, air services and setting up satellites for economic use, the High Commissioner estimates that the amount of investment is expected to have an additional increase of USD 8.8 billion, so as to reach a total investment of USD 11.8 billion. This has been due to Zambia s competitive advantage as one of the best investment destinations in the world says the High Commissioner.

Several Indian companies have in recent years found Zambia as safe investment grounds in Africa. Prasad Seeds, one of India s major seed provider, has signed an MoU with Zambia Government for production of seed. Konkola Copper Mines, a subsidiary of the Vedanta Resources Group have invested USD2.2 billion in Konkola Beep Water Copper Mining Project, Sulphuric Acid plant and a new smelter.

RJ Corporation, an Indian firm trading as Varun Beverages have invested in the Pepsi plant while Nava Bharat Singapore Ltd., a subsidiary of Nava Bharat Ventures Ltd., has purchased 65% equity shares in Mamba Collieries Ltd. Nava Bharat has also embarked upon a USD 750 million project to develop a coal-fired power plant with a minimum generating capacity of 270 MW. Tarun Manganese Ltd, one of the group companies of Dharni Sampada Pvt. Ltd. In India, has invested in manganese mining and plants to invest another USD 300 mn in construction of a manganese processing plant.

Other success stories include Bharti Airtel, which runs Airtel Zambia and has invested in network expansion to provide low tariffs and roll out deep in rural areas with an aim to bridge the digital divide between urban and rural population. Indo-Zambia Bank too is a successful JV between three Indian public sector banks viz. Bank of India, Bank of Baroda and Central Bank of India holding 60% equity and the Zambian government holding 40%. Tata International too is greatly entrenched through its vehicle and bicycle assembly plant, tannery, and hospitality businesses. Tata is also involved in developing two power projects in the country and Tata Consultancy Engineering (TCE) is providing consultancy services to ZESCO for the Kariba North Power Plant and Zambia Revenue Authority for the development of an integrated tax system.

India has played the role of big brother to Zambia in various fields, and this is something that the High Commissioner doesn t fail to acknowledge and elaborate upon. Other than the technical cooperation extended to Zambia for training its defense and civilian personnel through Indian Technical and Economic Cooperation Program, India has also deputed armed forces personnel to Zambia to help train the Zambian armed forces.

In recent years, India has embarked upon a program to support Zambia in the development of its infrastructure, trade, and commerce. Exim Bank of India is financing a project aimed at decongestion of Lusaka roads, wherein flyover bridges and dedicated lanes for public buses will be built, so as to decongest the roads of the Capital. Exim Bank has also provided USD 5 million credit to Indo-Zambia Bank, to be utilized for import and export of goods between the two countries. Exim Bank has also provided a Line of Credit (LoC) of USD 50 million to Government of Zambia for the Itezhi-Tezhi power project and has a 20% equity, after debt settlement agreement, in Development Bank of Zambia (DBZ).

The results are forthcoming, resulting in a trade between the two countries reaching USD 1billion. While Indian imports from Zambia include copper & articles; natural or cultured pearls; semi-precious stones; imitation jewellery; lead; cotton; raw hides & skin; whereas India s exports to Zambia include pharmaceuticals; plastics & articles; nuclear reactors; boilers; machinery & mechanical appliances and parts; electrical machinery and parts; sound recorders & reproducers & vehicles. Copper is the major import that shifts the trade balance in favour of Zambia.

Some other areas of investment Zambia may be looking forward to include confectionery, tannery, solar energy, and tourism.

Dr. Kenneth Kaunda, the first President of Zambia who served as head of the country from 1964 for a long period of 27 years, ending 1991, and played a vital role in the country s freedom struggle used to acknowledge he took inspiration from Mahatma Gandhi and the freedom struggle that he built.

The relationship between Indian and Zambia from the time of Kenneth Kaunda and even before our Independence got a lot of inspiration from Late Mahatma Gandhi. We have built upon what President Kaunda left including whichever Government comes into place. Zambia has recognized and still recognizes India as a big brother. Out of about 16-17 million people in Zambia, 10% of that is of Indian origin, who are contributing to different aspects of Zambia s economy. That goes to show that our relationship is evolving and getting better all the time, tells the High Commissioner.

(The writer is an independent analyst writing on trade and bilateral relations. Views expressed are personal.)