By Nawa Mutumweno
Of all Zambia’s economic sectors, agriculture holds more promise than any other in the country’s march to economic diversification.
Since mining, the country’s prime industry, is a wasting asset, it is important more than ever before, to explore sectors that are sustainable to wean the country from the copper spoon it was born with.
Zambia’s has 40 percent of the water resources of the entire southern African region. Of the 58 percent arable land, only 14 percent is currently cultivated. In real terms, this means that of 42 million hectares, only 1.5 million hectares is farmed each year.
The agricultural sector employs 85 percent of the population and makes up around 20 percent of overall gross domestic product (GDP).
Food processing represents an outstanding investment opportunity in Zambia due to vast natural resources, extensive arable land, ample water and investment incentives and many joint-venture options.
The Zambia Association of Manufacturing (ZAM), says despite its strong performance, the country’s food-processing industry has achieved only around one-quarter of its capacity and potential so far.
‘’There are vast opportunities for more investments in most sub-sectors of Zambia’s food-processing industry, for both small-scale and large-scale projects,’’ ZAM says.
High potential sub-sectors encompass growing and processing oil seeds; downstream processing of meat and dairy products; producing palm oil; manufacturing soy-based food products; million wheat, rice and maize to produce flour; producing juices, carbonated drinks, beer and other beverages; processing groundnuts; producing ketchup and other tomato-based products; roasting and grinding coffee beans; processing cassava, pineapple, mangoes and sugar cane; producing dried fruit and processing fish to exploit Zambia’s vast fish resources.
Other investment opportunities include producing tinned foods, confectionery, bread products, honey and cheese.
One example of potential food –processing projects in Zambia is COMESA’s Regional Investment Agency (RIA) promotion of a greenfield project to build pineapple –canning factories in the north-western part of the country
Mwinilunga district in the province has been ranked as Zambia’s best location for pineapple production. In the 1990s, a pineapple processing facility in the area produced around 11,368 tonnes
from 1,421 hectares of pineapple plantations. The facility was later closed down. The planned new plant is expected to produce about 12,000 tonnes of processed pineapple per annum.
In diversification away from maize, one of the sub-sectors which is being promoted is aquaculture. In August 2015, the Government launched a $10 million privately-owned fish farm, Yalelo. The firm, located on the shores of Lake Kariba in southern Zambia, already produces 6,000kg of tilapia daily.
In a deliberate effort to increase domestic fish production, the Government is encouraging private investment.
The Common Market for Eastern and Southern Africa (COMESA) recently received $400,000 to support the growth of the leather sub-sector in Zambia and three other member countries.
Zambia has the potential to grow its leather value chain to half a billion dollars a year if all hides are transformed into finished products. The state has also agreed to waive taxes on leather production machines and equipment to further enhance growth.
Farm Block Development
In a bid to grow the agriculture sector, Government is developing the Farm Block Development Programme with vast opportunities for investors. Ten farming blocks have been identified (one in each province).
‘’The Nansanga Farming Block in Serenje, central Zambia, is the most advanced, with roads constructed and power connected. We have already allocated pieces of land to small-scale and commercial farmers. We are in the process of awarding 10 000 hectares of land to what is referred to as a core venture,’’ Minister of Agriculture, Given Lubinda said.
Zambia’s future indeed lies in agriculture and President Lungu’s administration has emphasized its determination to pursue an agriculture-led economy through the rolling out of irrigation schemes and other innovations throughout the country.
Speaking during the launch of the construction of the $28 million Mwomboshi Irrigation Dam in Chisamba, central Zambia recently, President Lungu reiterated his commitment to diversifying the agricultural sector.
‘’The construction of this dam gives a practical expression of my Government’s resolve to put agriculture at the centre of our economy. Irrigation farming is an act of diversifying the sector away from rain-fed agriculture, President Lungu said.
Currently, the construction of dams is underway in Lusitu (Chirundu) and Musakashi in Mufulira district.
‘’We aim to have over 75,000 hectares by 2030. To achieve this, Government will ensure adequate funds for irrigation development annually. Currently, K56.7 million has been set aside for irrigation in the 2016 national budget,’’ he pointed out.
Key players in Zambian agribusiness
These include, inter alia, Zambeef Products, Zambia Sugar and the Zambia Breweries Group, a subsidiary of South African giant SABMiller, one of the world’s largest beer manufacturers.
Zambia must take action to invest in industrialization in order to be competitive and take advantage of the business opportunities in the region, Zambeef Joint Chief Executive Officer Dr Carl Irwin told delegates at the fifth Zambian International Investment Forum (ZIIF) this week.
“Zambeef strongly believes in Zambia’s potential to feed itself and the region given its abundant resources; good soils, climate, readily available as well as the ability to produce most crops given the right investment. But only in adding value to our produce can we fully realise the sector’s full potential,” said Dr Irwin, who was speaking at the opening of the high-level conference, which was officially launched by H.E. the President, on. Edgar Chagwa Lungu and attended by Minister of Commerce, Trade and Industry Hon. Margaret Mwanakatwe.
Dr Irwin highlighted some of the benefits of focusing on value adding operations and the opportunities presented for the national economy; increased national food security, social development in rural areas, job creation, and tax and duty generated as result.
Zambeef alone has generated US$220 million in revenue for the financial year 2015 and US$38 million of foreign exchange income for the nation; invested more than US$150 million in the last eight years; employed more than 6,000 staff and contributed US$18 million in tax and duty paid to the Zambian government
Margins in both the regional and EU export markets are expected to remain under pressure from surplus sugar stocks on the world market. Realization in these markets will continue to be influenced by exchange rate movements.
Zambian Breweries and National Breweries are among the largest buyers of maize, barley, cassava and sorghum in the country.
The group purchases a significant quantity of raw materials locally. A total of 40,000 tonnes of maize is bought from small-scale farmers for use in the production of opaque and clear beer.
The group has engaged close to commercial farmers in the growing of barley, with a planned annual uptake of 12,,000 tonnes. In 2015, two small-scale barley outgrower pilot programmes have been introduce with a view to further expansion
More than 10,000 tonnes of sugar were consumed towards the manufacture of non-alcoholic drinks.
A further 1,750 tonnes of sorghum was used in the production of its affordable Eagle lager, with a direct impact on 3,500 households in the year to March 31, 2015.
From 2015, the company introduced cassava into its Eagle lager formula. It is now developing an end-to-end supply chain supporting small-scale farmers in Northern and Luapula provinces, and with innovative technology will deliver a high quality, affordable clear beer that will grow to become a leading brand within the company’s portfolio.
Zambia’s agriculture is on the rise and is changing many lives in various corners of the country.
As the Ministry of Agriculture rightfully acknowledged: ‘’Agriculture is the only sector that assuredly alleviates poverty in the country. The focus is to grow this industry that is the future of the country.’’