BUSINESS FOCUS WITH BALEWA ZYUULU

MAKE MAIZE ZAMBIA’S NEW COPPER

THE recent story of smugglers hiding corn meal among crushed stones, sand and coffins to cash in on the lucrative market in the Democratic Republic of Congo although it was markedly unusual, calls for serious introspection among Zambians especially those in leadership.

According to the Zambia Revenue Authority (ZRA), smuggling is any introduction or importation or exportation of goods with intent to defraud the Government. In this week’s Business Focus, we shall define smuggling as being part of an informal economy that is not recorded in official statistics and it is aimed at profit making by individual “illegal smugglers.”

Although it is not a new phenomenon, smuggling of goods across borders has emerged as a major threat to global economic growth in countries like Zambia where it has reached unprecedented levels.

Due to various factors affecting the region such as climate change and conflicts in some countries, nations within the regional bloc are looking to Zambia to provide the highly sought after commodity-maize or mealie meal.

One of the key anchors of Zambia’s 8^th National Development Plan is to diversify the economy as it was designed with a focus of unlocking the country’s immense potential in all sectors of the economy for sustainable, holistic and inclusive national development with the aim of achieving the country’s 2030 vision of becoming a prosperous middle income country nation.

Is farming really a business?

A business involves the exchange of goods or services for money with the goal of making a profit on the transaction. Businesses are a major source of economic growth, which stems predominantly from an increase in productivity.

If it is a business, then those involved in that kind of business (farmers) must earn profits, right? Maize occupies a central position in Zambia’s agricultural political economy as both the national staple food and primary smallholder crop. However, Zambia continues to grapple with low agricultural productivity. As a result, policy makers are forced to restrict its export to other countries.

Jacob Makambwe, the Secretary General for Southern Africa Cross Border Traders Association, says Zambia must never at any time go back to maize bans.

“We will not support any ban of maize under the pretext of food insecurity. This is because we have all it takes to produce more to meet the demand. Why are we not utilizing the Farming Blocks to address the low productivity? The Government must therefore, be at the centre of promoting the sale of excess maize to needy countries,” Mr. Makambwe said.

Mr. Makambwe feels calling farmers exporting maize as smugglers is wrong as they pay tax.

“To us the people you call smugglers are cross border traders and must be supported by formalising their trade so that they can contribute to economic growth,” he said.

Our aim in this edition is not to support smuggling but to send a wake-up call to all of us that the real problem lies in our inadequacy to produce a surplus to meet the demand for maize.

Since the current maize system has remained unresponsive to policy change despite numerous policy recommendations, to change the system, the main actors must take serious practical measures. It calls for the review of the current economic, political and geographic challenges of fighting smuggling and currency exchange. It is also critical to reform the economic structure as farmers should not be bundled in the same wagon as smugglers.

Since independence, copper has remained Zambia’s major export earner despite the “over-sang hymn” of economic diversification. This brings us back to the story of exporting corn meal in coffins to DR Congo. The ordeal should be an eye-opener for us to realise that there is a problem and this problem has not been addressed for many years.

So, what is the problem? The answer lies in the failure to adapt to the change happening within the region. As an alternative to warding off the soaring corn demand in the region from countries in East and Southern Africa, we have an opportunity to make “maize the new copper.” This means maize can be the country’s new major export earner.

The disruption that came along with the Covid 19 pandemic should have taught Zambia a lesson to adapt to change. Instead of waiting for China to come and buy our precious mineral – Copper, we can instead focus on adding value to it. Better still, focus on growing more maize to meet the region’s demand. Value must also be added to the maize to avoid exporting everything in its raw form.

Restricting maize exports is not the solution

During the Eminent Persons Forum organized by the Zambia Institute of Analysis and Research (ZIPAR), former Bank of Zambia Governor, Dr Caleb Fundanga shared his thoughts on what Zambia can do to address high demand of the commodity in the region.

Dr Fundanga questioned why a country like Zambia would restrict the highly sought after commodity instead of increasing its production.

“In my view we should be producing more than limiting export of the commodity. The time when I was in Zimbabwe, the people were fighting to have access to Zambian maize. We are very privileged as a country to have such a huge market and time is now for us to up our game and meet the demand.” Dr Fundanga said.

Further, Dr Fundanga shared that we (Zambians) should not be crying that people are smuggling maize, [but] we should be celebrating that we have a huge market.

“We must just double our efforts and produce more. In order that we can feed our neighbouring countries” he added.

Since Zambia has an advantage of producing more corn compared to other countries, more resources and energy must be channelled towards maize production. Instead of waiting for rain-fed maize production, we can start producing all-year-round through irrigation.

Why should we continue to depend on Russia and Ukraine to feed Africa?

The fact is, the population in the region is growing and the demand for maize is not about to stop, hence the need for new practical strategies that will change the narrative. If we meet the region’s demand; we can still export to Europe and American markets.

Should Africa continue depending on Russia and Ukraine for food?

It is common knowledge that since the Russia- Ukraine war started, a food crisis hit the global market. With the latest development where Russia has withdrawn from the Black Sea grain deal, the situation may be dire for Africa and Zambia is not excluded from the pressure.

Commenting on this, UN Secretary-General António Guterres said the decision would send hundreds of millions worldwide facing hunger and spiraling food costs.

“Almost 33 million metric tons of Ukrainian grain exported under the deal went to low- and middle-income countries mostly in Africa, helping keep food affordable and available in the midst of a global cost-of-living crisis and rising fuel prices.” he said.

Although Russian President Vladimir Putin has assured that Africa will not starve because the grain deal was nothing but a selfish arrangement that he could replace because Russia was expecting a bumper harvest, Zambia must not wait for Putin to be the “saviour” but plan ahead of time and rise to the occasion.

Although Zambia may be food sufficient, its neighbours are most likely hungry and when your neighbours are hungry, you are as hungry as they are because they demand more supply from you.

It is wrong to wait until you’re in a crisis to come up with a crisis plan. It is always wise never to let a serious crisis go to waste, because every crisis presents an opportunity to look inside oneself, and re-examine your policies and practices.

Zambia should look within and plan for the long term on how best to address the food crisis in the region. Time is now to do what could not be done before.

The Author is an Economist and a Multiple Award Winning and certified Financial Journalist.

Email:Zyuulu90@gmail.com.