ZAMBIA: Focus Shifts to Agri-Economy

New measures aim to boost agriculture

LUSAKA – President Levy Mwanawasa has announced measures aimed at turning agriculture into one of the main drivers of Zambia’s economy. The fall in copper prices, Zambia’s main source of foreign currency, has made the country focus on economic diversification. Among the measures announced by Mwanawasa include sourcing “cheap foreign currency” for long- term agricultural sector financing, zero-rating tax on imported farming equipment and keeping power tariffs low.

“My administration wants to make agriculture a priority. We are sure that with long-term financing, more Zambians shall engage in agriculture, create jobs, earn foreign exchange and improve food production,” Mwanawasa said.

A critical food shortage after two consecutive droughts left Zambia with a shortfall of 635,000 mt of grain last year. Food prices rocketed, and 2.9 million people needed food aid.

Agriculture Minister Mundia Sikatana said: “If you have no land, you have to buy land before you can farm. Water costs [money], equipment costs [money] – all these things cost, hence the reason we are reviving the cooperative banks [to] lend specifically to the agriculture sector. We shall also have a specific fund to lend to small-scale farmers.” In a bid to boost production, the government has continued to support more than 150,000 farmers with subsidised maize seed and fertiliser. The scheme began last year and has resulted in a harvest of some 1.2 million mt of maize, double that produced at the height of the food crisis.

Despite the recent success, there remains some scepticism around the implementation and efficacy of the recently announced measures. “The plans sound good on paper but in reality farming is still a rip-off in Zambia. Take for instance the reduced power tariffs they [government] are talking about … you have to grow at least five hectares of maize for you to qualify, and anyone in farming will tell you that [farming] five hectares [is] three times more expensive than the [savings realised by the] reduced rates. It does not make sense at all,” said Vincent Malambo, a commercial farmer from Lusaka North.

Another farmer, former vice president Enock Kavindele, commented: “It is easy to make policy statements that sound good, but implementing them is often a problem.” He warned that unless government fast-tracked implementation of the new policies, “we shall keep talking about this agriculture-driven economy without achieving results”.

An example is the government’s sluggishness in accessing a US $50 million World Bank facility, half of which is a loan and the other half a grant. The money was made available after a workshop held two years ago to find ways of diversifying from copper to agriculture. Laurence Clarke, the former World Bank representative to Zambia, said that “up to now, Zambia has done nothing to access the money that could have helped in agriculture”.

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