By Jane Chanda
Economist Yusuf Dodia says Zambia can increase its Gross Domestic Product (GDP) by empowering domestic investors to add value to raw materials.
Last week during the Land Linked-Zambia Conference in Chongwe, President Hakainde Hichilema expressed his ambition to more than double Zambia’s GDP, emphasising the need for swift action to achieve this goal and benefit the Zambian people.
In an interview with Daily Revelation yesterday, Dodia said the quick way to double Zambia’s GDP would be to encourage large mining companies to expand their operations, which could lead to exponential GDP growth within two years.
“We may be able to do it with copper immediately in a very significant way, but we can (also) do it with a lot of agricultural produce instead of exporting raw agriculture produce we can add value by refining it, by processing it and selling and exporting the processed food product that brings more value into the country for the Zambian people, and improves the quality of the economy as well as the livelihoods of the Zambian people,” Dodia said. “But the question is, what benefit is this to the livelihoods, to the welfare, and to the well-being of the Zambian citizens?”
The economist noted that this shortcut approach had been seen in other countries, including Angola’s oil production, where the benefits largely bypassed the local economy and citizens.
Dodia said countries like Namibia and Botswana, which relied heavily on diamond mining, have limited control over the industry due to private investors declaring minimal information about their operations.
He said that instead of relying on foreign investors, the country should focus on empowering domestic investors to add value to its raw materials, including copper and agricultural produce, to improve the economy and livelihoods of Zambians.
Dodia added that by doing so, Zambia could significantly benefit from value addition in the copper mining industry, similar to how other countries had done with their natural resources.
He said zambia’s current approach had seen little value addition in the copper industry, with only one major company, Metal Fabricators of Zambia Plc, producing copper cables since the 1970s, despite the establishment of economic zones like the Lusaka South Multi-Facility Economic Zone, the Chambishi Multi-Facility Economic Zone on the Copperbelt, and the recent launch of another economic zone in Chibombo.
He said currently, Zambia’s copper industry sees little value addition, with most raw copper being exported. However, studies suggest that if Zambia participated in the high-value-added copper stage, it could earn significantly more, up to $6.5 billion per year from smelter production alone or $10 billion from copper cathodes.
Dodia said to achieve this, the country needed to address challenges like declining copper grades, energy insecurity, and tax hurdles, while investing in reliable energy sources like solar power and creating a stable tax regime.
“Zambia could significantly benefit from value addition in the copper mining industry, similar to how other countries have done with their natural resources. By focusing on value addition and empowering domestic investors, Zambia car create a more sustainable and beneficial economy for its citizens,” said Dodia.
