ZIMBABWE and Zambia are working on setting up industrial joint ventures riding on the recent signing of a Memorandum of Understanding (MoU) aimed at facilitating close collaboration between the two countries towards rejuvenating the manufacturing sector.
Industry and Commerce Minister, Dr Sekai Nzenza, told regional ministers who attended the 4th Comesa Committee of Ministers of Industry last Thursday that the joint venture efforts would assist the two countries to unlock higher economic potential in line with regional industrialisation ideals.
The two neighbouring counties will seek to utilise complementarities of national resources in key sectors to drive value-addition of skills, technology and marketing, among other capabilities, said Dr Nzenza.
“So far, the governments of Zambia and Zimbabwe have signed a Memorandum of Understanding to form a Joint Industrialization Cooperation Programme, which will facilitate deeper collaboration by setting up joint ventures,”
“Priority sectors include agriculture and agro-processing, mining and mineral beneficiation, petrochemicals, fertilizers and pharmaceuticals, capital goods industries, textiles, forest and timber-based industries, building materials and knowledge economy, among others.”
Minister Nzenza said Zimbabwe and Zambia were well positioned to develop and facilitate regional value chains based on their comparative advantages. For instance, she said copper from Zambia could be smelted at Mhangura in Zimbabwe while cotton from Zimbabwe could be ginned at Mulungushi Textiles in Kabwe, Zambia.
“Such intra-regional trade could justify infrastructure projects such as the Lion’s Den to Kafue railway, right up to the Beira Corridor,”
said Dr Nzenza.
“The intention is to establish common agro-industrial parks based on comparative advantage. Such an initiative requires a harmonised framework of managing Special Economic Zones and industrial parks at regional level.”
The 4th ministerial committee meeting deliberated on key regional integration issues and closed with adoption of the draft implementation strategy for the domestication of the Comesa Local Content Policy Framework.
The regional industry framework is anchored on management of Special Economic Zones and Industrial Parks and seeks to enhance industrial production during and after the Covid-19 pandemic in an inclusive and sustainable way.
This is a critical step for the Comesa market, which represents 42.6 percent of Africa’s population and 27.2 percent of the continent’s Gross Domestic Product. In the past five years average GDP growth rate for Comesa has been hovering around 4.89 percent.
In 2014, the region attracted investment of around $15 billion representing 27.8 percent of Africa’s total foreign direct investment inflows. According to the African Economic Outlook, real GDP in Africa grew by an average of 3.6 percent in 2015, higher than the global average growth of 3.1 percent and more than double that of the European Union.
The United Nations Economic Commission for Africa (UNECA) reports that:
“the continent has many growth opportunities and has become a magnet for investment driven by improved governance, better macro-economic policies, abundant human and natural resources, urbanization and the rise of the middle class, steady population growth, good economic performance, rising FDI, and huge market potential’’.
This resurgence has led to growing recognition of Africa as an emerging market and a potential global growth pole, ready for economic take-off.
Regional economic experts have stressed the need for the Comesa region and the African continent for structural transformation through industrialisation. This also entails embracing the precepts of the 4th Industrial Revolution and introducing innovation of new technologies to industry and commerce.
Dr Nzenza has said that industrial development was critical pillar of the Tripartite Free Trade Area Agreement and the recently launched African Continental Free Trade Area, which came into force in January this year.