Zim, Zambia ink industrial deal

TINASHE MAKICHI

The governments of Zimbabwe and Zambia have taken a big step towards the setting up of industrial joint ventures after the two neighbouring countries signed a Memorandum of Understanding (MoU) aimed at facilitating deeper industrialisation collaboration, Business Times can report.

Under the deal, the joint ventures will utilise complementarities of national resources, value-addition skills, technology and marketing, among other capabilities.

Priority sectors include agriculture and agro-processing, mining and mineral beneficiation, petrochemicals, fertilisers and pharmaceuticals, capital goods industries, textiles, forest and timber-based industries, building materials and knowledge economy, among others.

“So far, the governments of Zambia and Zimbabwe have signed a Memorandum of Understanding to form a Joint Industrialisation Cooperation Programme which will facilitate deeper collaboration by setting up joint ventures,” Industry and Commerce Minister, Sekai Nzenza told a virtual meeting for COMESA Committee of Ministers of Industry.

Under this MOU the two countries can develop and facilitate regional value chains based on their comparative advantages.

For example, copper can be smelted in Mhangura in Zimbabwe and cotton from Zimbabwe can be ginned at Mulungushi Textiles in Kabwe, Zambia.

Nzenza said such intra-regional trade could justify infrastructure projects such as the Lion’s Den to Kafue railway, right up to the Beira Corridor.

The intention is to establish common agro-industrial parks based on comparative advantage.

“Such an initiative requires a harmonized framework of managing Special Economic Zones and Industrial Parks at regional level,” Nzenza said.

Her remarks come after Ministers of Industry from the 21 COMESA member States have approved the implementation strategy of the regional local content policy framework and the management of the Special Economic Zones and Industrial Parks.

The COMESA Local Content Policy Framework is aimed at helping to transform the region’s low productivity economies, from overreliance on export of unprocessed primary commodities with either little or no value addition, to competitive economies that produce, and export value added products.

With the approval, Member States will formulate similar policies to maximise local benefits from industrialisation. Equally, the adopted framework of managing special economic zones (SEZ) and industrial parks will guide member States when domesticating SEZ strategies and industrial parks at the national level.

In their communiqué, the Ministers committed to ensure the harmonised regional frameworks and guidelines are implemented in their respective countries.

Nzenza said despite high growth potential in the region, poverty, unemployment, low investment levels, and depressed aggregate demand among others, are prevalent.

“This is attributed to depressed industrialisation in our region,” she stated, adding that industrial development was critical in addressing the productive constraints towards the realisation of inclusive and sustainable transformation of the region.

The approval of the frameworks will therefore enable the full implementation of the COMESA Industrialisation Strategy and Action, which was adopted by the Ministers in 2019, to guide structural economic transformation of the region.  Among its key components is the promotion of agriculture and value addition.

The COMESA industrialisation strategy is aligned with the Third Industrial Development Decade for Africa whose guiding principles include: government ownership and leadership of the initiative; strengthened enabling business environment; prioritised sectors with high potential for growth; and strong partnerships for financial and non-financial resource mobilisation at the multilateral, regional and bilateral levels.

“The initiatives will include supporting learning events and profiling some SEZ projects that could serve as regional centres of excellence.

“Besides, the Secretariat will promote the development of border economic zones and facilitate the needed technical assistance for their development, among others,” COMESA secretary general Chileshe Kapwepwe said.

During the meeting, ministers also approved the regional Guidelines on Increasing Sustainable and Inclusive Industrial Production during and after Covid 19.

This is in recognition of the negative impact that Covid-19 has had on industrial production by disrupting regional and global value chains.

Among others, the guidelines provide for enhancement of digital transformation such as e-commerce and e-trade to reduce and avoid physical contacts during transactions within and across Member States while at the same time cutting down on transaction costs.

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