Zambia is hosting a two-day business summit in Lusaka this week to try to attract American investors to the country.
Zambian officials say they want to diversify the economy and decrease dependence on extractive industries such as copper, which account for most of the country’s exports. Zambia’s Commerce Minister Chipoka Mulenga said the U.S. should be a key partner in that effort.
“But our focus right now is to see how best we can create jobs and revive our economic fortunes by value addition,” said Mulenga. “We want to take advantage of the new energy system that the world is migrating to from fossil fuels into clean and green energy. And we are trying to take advantage of the minerals that we have and bring a consortium of developed players that have the technology already to see how we can develop our copper from exporting concentrates in its raw form into developing it into finished products for the green energy system that we want to go into.”
Zambia is Africa’s second-largest producer of copper – after the Democratic Republic of Congo – and an important source of other critical minerals like manganese, nickel, and cobalt.
But economists say Zambia’s dependence on minerals means it has not taken advantage of being a member in the Common Market for Eastern and Southern Africa (COMESA) or the Southern African Development Community (SADC).
“This is one of the challenges that Zambia has not really harnessed despite being in regional bodies such as COMESA and SADC,” said Boyd Muleya of the think tank Zambia Trade and Policy Dialogue. ”But going forward the engagement with the U.S. is very critical. We need to change the narrative because what we have seen in the past is mostly, we focus on aid that comes from the U.S., approximately about $500 million United States dollars annually.”
Government figures show Zambia-U.S. annual, bilateral trade was only $182 million in 2019.
Speaking at the business summit Wednesday, U.S. Ambassador to Zambia Michael Gonzales said he sees great potential in the country’s economy.
“The United States stands ready to partner with Zambia to ensure that this great country seizes the energy to become the Zambian renaissance and achieves that extraordinary potential,” he said. “They are going to do this by leveraging on American technological know how to meet growing demand from ICT in every sector from health care all the way down.”
But economists such as Boyd Muleya with the think tank Zambia Trade and Policy Dialogue says another challenge for Zambia is attracting investment after becoming the first African country to default on its debt during the COVID era in 2020.
“One of the issues has been the uncertainty in terms of how Zambia’s debt will pan out. We have managed to get IMF executive approval in terms of a package, but we still are to conclude on the actual debt restructuring with respect to the terms put across in the comparability of treatment under the G-20 common framework.”
Zambia’s government is working on a debt restructuring deal with the International Monetary Fund that is expected to be concluded by the end of the year.
Despite the uncertainty, the two-day Zambia-U.S. Business Summit attracted hundreds of local and American investors from sectors including mining, technology, and healthcare.