The Good, The Bad And The Ugly: 10 Years Of PF Trade

Foreign trade accounts for 69% of the country’s GDP, with its main customer being Switzerland and its main supplier South Africa. 

In 2013 the country’s position weakened largely due to fast rising imports against moderate gains for exports. 

What does Zambia export and import?

The top exports of Zambia are copper, gold, precious stones and sulfuric acid. In 2019 it was the world’s biggest exporter of raw copper. 

Since 2011 exports have decreased from $9.4bn to $8.3bn in 2019. Subsequently, the government have lost over $1bn in potential trade over the last 10 years. Such a loss will have had a dramatic impact on the economy, causing a loss of up to $100 million every year from the country’s GDP. 

The top imports into the country are refined petroleum, crude petroleum, delivery trucks, gold and nitrogenous fertilizers.  

Since 2011 imports have also decreased from $8.715bn to $8.481bn in 2019. 

What has happened with Copper Mining in recent years?

High dependence on copper, making up over 90% of the country’s exports, has resulted in an overreliance on the natural resource to provide jobs as well as add to the country’s GDP. 

However, the governments management, or lack thereof, of these mines is less than desirable.  

On March 31st 2021, Glencore sold its 73% stake in Mopani Copper Mines, one of Zambia’s largest copper mines, to Zambia’s state-controlled mining investment vehicle ZCCM Investment Holdings. While the transaction is regarded by analysts as positive for Glencore, it has caused reputational damage for the government, which has lost a major investor in the country – where fears of resource nationalism exist. 

Not only did the sale of the mine to ZCCM raise questions, it was facilitated by  a $1.5billion loan. As the country’s debts already surpass its national GDP, an additional loan only adds to the governments’ financial woes, with no clear route of re-payment. 

Consultant Ron Smit said that “these actions by government that look like they are unilateral are never, never good in any country.” 

The government have also recently liquidated Konkola Copper Mines which was previously majority-held by Vedanta Resources. The move will likely cause issues at the mine, which previously had funds pumped into it by Vedanta. As the government struggles to stay on top of national debt, questions have arisen as to how miners will be paid and how the crumbling mine will be maintained. 

What was trade like before the PF? 

From the late 1970’s, Zambian governments successfully slowly increased exports from the country. From 2003 to 2011 export figures increased exponentially from $1.2 billion to $9.4 billion.