As FDI Inflow Increases......Youth Unemployment Levels are Going Higher..........Where have we Missed the Equations?

Widening FDI Promotion Spectrum
“Only when all contribute their firewood can they build a strong fire,” states a Chinese proverb. With the high competitiveness for foreign direct investment (FDI) globally, the promotion of investment in the country requires everyone’s efforts to realise meaningful FDI inflows and their net economic benefits. Missions abroad, government officials and Zambia development Agency, all need to do their bits to bolster FDI inflow.
In May 2008, government’s passion to add its firewood to the investment promotion bonfire into untapped areas sprouted when a government delegation headed by President Levy Mwanawasa visited Japan, a country that hitherto never considered Zambia as an investment destination. The visit was under the Tokyo International Conference on African Development (TICAD) initiative. The Zambian delegation was among the 51 representatives from Africa, including 40 Heads of State and Government, who joined the then Prime Minister Yasuo Fukuda of Japan, to create a blueprint for a “century of African growth” at the Fourth TICAD Summit.
At the three day Summit, Japan outlined and re-emphasised its determination to contribute substantially to the development of Africa. Addressing delegates to the Summit, Japanese Prime Minister Yasuo Fukuda said Japan’s commitment to African development was demonstrated in launching the TICAD process and shifting the international community’s attention back to Africa in the 1990s, after the end of the Cold War, which appeared to focus global interest elsewhere. He pledged serious Japanese involvement in the development of Africa for the continent to meet challenges of the 21st century especially in technology and value addition to the continent’s raw materials which were mostly exported in less-value-raw form.
The 2008 TICAD process spurred a wave of innovative activities in the framework of the priority areas, one of which was boosting economic growth in Africa through FDI and other co-operational agreements. The TICAD commitments in bolstering FDI in Zambia were furthered by the Triangle of Hope initiative under the Japan International Cooperation Agency (JICA). The net benefits of all such initiatives became reality last month when a Japanese business delegation visited Zambia to explore business opportunities in various sectors of the economy.
The Japanese delegation comprised 50 representatives from the private sector as well as the Ministry of Foreign Affairs, Ministry of Economy, Trade and Industries and Japan External Trade Operation. Among the fifty, 40 were representatives of 12 Japanese companies with different business prospects in Zambia. The main focus of the 12 companies included mineral resources exploration, infrastructure development, energy, information, communication technologies (ICTs), rural development and agriculture.

While in the country, the companies identified various investment prospects in the mining, energy, information communication technologies sectors, among others. One of the companies, Hitachi Construction Machinery Company Ltd committed itself to establish an automobile plant in Lusaka worth US$10 million in the second half of this year. Company general manager for the African Department of Sales and Market, Mr. Hidemi Murata said Zambia offered substantial business opportunities that Hitachi wanted to utilise to enhance the economic status of citizens of both countries and share the much needed technology for productivity in the 21st century.

The establishment of an automobile plant by Hitachi in Zambia offers numerous economic and technological opportunities that Zambians can convert to reality. Japan has driven its economy mainly through technological advancement. The country fostered successful technological advances in its national development policies, which enabled it ascend through the economic development ladder to where it is today. There are many lessons Zambia can learn and blend in its policies to bridge gaps caused by low technological advancements in the economy.

The commitment Japan has shown to participate in the Zambian economy by establishing a plant to produce spare parts and other automobile components as well as investing in the mining, agriculture machinery and ICT sectors will greatly improve Zambia’s business environment and drastically improve efficiency in production. The country thus needs to blend the Japanese culture of using technology as a tool for making marketable products appropriately and use Hitachi as an example to attract other reluctant Japanese investors to entrust their money into the Zambian economy.

Being a preserve of several natural resources, whose economic potential has remained underutilised for decades, Zambia can tap knowledge and technological etiquettes from Japanese firms investing in the land and make production technology central in the economy. With high-tech integrated in the economy, what used to be economic potential will be translated into economic growth reality. The country will be able to produce and export value added products. Serious agro-processing of raw materials the agriculture sector is blessed with will become endemic for the manufacturing sector, thereby adding value to Zambia’s primary produce. The country’s export earning value will hence increase. Thus, more jobs will be created and the country’s Vision 2030 of becoming a middle income nation will be enhanced and become reality.

The manufacturing sector’s untapped potential can be boosted by borrowing and implementing the Japanese technological models through technological sharing benefits that accompany FDI. Incorporating the technological lessons from industrial giants like Japan, into national policies can be a clear force in developing Zambia’s competitive advantage of having numerous natural resources. Being an interconnected landlocked country, Zambia can be a hub of technological advancement. Its diversification of the industrial base and the expansion of non-traditional exports will become authentic, thus increasing the country’s competitiveness as an FDI destination.

With economic diversification at the epicentre of Zambia’s development agenda, Japan is a strategic manner especially in enhancing value addition, increasing efficiency in the manufacturing sector and bridging the technological gaps in the ICT sector, among other areas. Strategic policies like the PPP policy and the MFEZ initiative can help in the assimilation of private capital inflows to make Zambia an industrial hub in the region and Africa. In that way, Zambia may become industrious together with Japan.