Black Affairs, Africa and Development
Why smart businesspeople are looking at the Zambia-DRC border area
Solwezi, situated in Zambia’s Northwestern Province bordering the Democratic Republic of Congo (DRC), has been described as a modern day African boom town. Many new companies have set up shop in the town, and there has been a significant influx of people.
About 200km east of Solwezi is Chililabombwe, an important hub for traders travelling between Zambia and the DRC buying and selling everything from fresh produce to soap and detergents.
These towns along the Zambia-DRC border have seen increased economic activity in recent times, presenting businesspeople with new opportunities.
Nomsa Mumba, country manager of DHL Express in Zambia, says her company has witnessed a rise in shipments to and from the area.
Companies such as banks and insurers are also moving in. “Financial institutions are now seeing the opportunities in the region. They see there is a lot of cash that is untapped that they can control,” says Mumba.
South African retailer Fruit & Veg City last year indicated that it sees potential for wholesale outlets on the border between Zambia and the DRC that will focus on selling food products in bulk to traders.
Much of the growth in Solwezi is fuelled by new mining projects. First Quantum Minerals owns the largest copper mine in Africa situated just 10km north of Solwezi and the company is also busy developing additional copper and nickel projects about 150km west of the town.
First Quantum plans to construct an entire new town in Kalumbila where these new mines are situated. There is reportedly significant investor interest in the new town. “That phone has not stopped ringing. We have a Belgium-based company that wants to set up a US$100m truck assembly plant. We also have huge retailers, banks, agro processing firms and others queuing up to be part of the investment opportunity Kalumbila offers,” a First Quantum representative told the Times of Zambia.
“Solwezi is a great example of a modern day African boom town,” says Brett Abrahamse, director of property development company Terrace Africa. “Growth is being driven by new copper mine investments and its strategic location in the Northwestern Province. We believe there are opportunities being created in the retail and residential property sector in Solwezi as well as other towns on the Copperbelt. We have heard of land tenure issues holding up developers but we believe these will soon be overcome. Overall we see Solwezi as an exciting investment destination in a stable country.”
Mumba also identified the town of Chipata, situated in the east of the country on the border with Malawi, as another potential high-growth area. The economy of Chipata is agriculture-based with maize, cotton and tobacco being the major cash crops. The government has also embarked on an initiative to improve infrastructure to cater for the growing economic activity.
“We have many cotton farmers in Chipata. Cross-border trade is also increasing with traders coming in from Mozambique and Malawi. Chipata has great potential for ourselves as DHL in terms of growth.”
Understand the environment
Zambia has seen robust economic growth in recent years, with the economy expanding by 7.3% in 2012 from 6.8% in 2011, according to the African Economic Outlook report.
However, Mumba says businesspeople shouldn’t come to Zambia with any preconceived ideas and should familiarise themselves with the realities on the ground.
One of the mistakes often made by foreigners is not taking the time to understand the local culture. “Sometimes Zambian people will seem to be laid back, when they are not really laid back. Because we are sometimes quiet, foreigners sometimes get the wrong impressions.”
She says foreign investors shouldn’t underestimate local Zambian companies. “We have become a very competitive nation in terms of businesses. So the local firms are also fighting to sustain themselves and are extremely competitive in the various sectors.”
Overall Mumba believes that Zambia’s economy is heading in the right direction but says more needs to be done to ensure that economic gains trickle down to the average man on the street and reduce poverty levels.