New mining projects are fueling increased economic activity in towns along the border between Zambia and the Democratic Republic of Congo, according to DHL Express Country Manager Nomsa Mumba.
DHL Express, a division of the German logistics company Deutsche Post DHL, provides
international express mail services. The company has seen a rise in shipments to and from the area, and for business people, this means new opportunities, Mumba told HowWeMadeItInAfrica.
The town of Solwezi, located in Zambia’s Northwestern Province bordering the DRC, has been described as a modern day African boom town, according to the report. Many new companies have opened in the town, and there has been a significant influx of people.
Chililabombwe, a town located about 125 miles east of Solwezi, is an important hub for merchants moving between Zambia and the DRC buying and selling everything from detergents to fresh produce.
Mumba also identified the town of Chipata, located in the east of the country on the border with Malawi, as a potential high-growth area. The economy of Chipata is agriculture-based with corn, cotton and tobacco the major cash crops.
Companies such as banks and insurers are also moving in. “Financial institutions are now seeing the opportunities in the region,” Mumba told HowWeMadeItInAfrica. “They see there is a lot of cash that is untapped that they can control.”
South African retailer Fruit & Veg City said in 2013 that it sees potential for
wholesale outlets selling food in bulk to traders on the border between Zambia and the DRC.
Much of the growth in Solwezi is fueled by new mining projects, the report said. First Quantum Minerals owns the largest copper mine in Africa, located six miles north of Solwezi. The company is also developing new copper and nickel projects about 90 miles west of the town.
First Quantum plans to build an entire new town in Kalumbila where the new mines are
located. There is significant investor interest in the new town. “That phone has
not stopped ringing,” a First Quantum representative told the Times of Zambia, HowWeMadeItInAfrica reports. “We have a Belgium-based company that wants to set up a US$100-million truck-assembly plant. We also have huge retailers, banks, agro processing firms and others queuing up to be part of the investment opportunity Kalumbila offers.”
Solwezi is a great example of a modern day African boom town, said Brett Abrahamse,
director of Terrace Africa, a property development company. “Growth is being driven by new copper mine investments and its strategic location in the Northwestern Province,” Abrahamse said. “We believe there are opportunities being created in the retail and residential property sector in Solwezi as well as other towns on the Copperbelt.
“We have heard of land tenure issues holding up developers but we believe these will soon be overcome. Overall we see Solwezi as an exciting investment destination in a stable country.”
Chipata, the government has started an initiative to improve infrastructure to cater for the growing economic activity.
“We have many cotton farmers in Chipata,” Mumba said. “Cross-border trade is also increasing with traders coming in from Mozambique and Malawi. Chipata has great potential for … DHL in terms of growth.”
Zambia’s economy expanding by 7.3 percent in 2012 and 6.8 percent in 2011, according to the African Economic Outlook report. However, Mumba says business people shouldn’t come to Zambia with preconceived ideas and should be familiar with the realities on the ground.
Foreigners often make the mistake of not taking the time to understand the local
culture. “Sometimes Zambian people will seem to be laid back, when they are not really laid back,” Mumba said. “Because we are sometimes quiet, foreigners sometimes get the wrong impressions.”
Foreign investors shouldn’t underestimate local Zambian companies, she added. “We have become a very competitive nation in terms of businesses. So the local firms are also fighting to sustain themselves and are extremely competitive in the various sectors.”
Overall Mumba said Zambia’s economy is heading in the right direction but more of the economic gains need to trickle down to the average man on the street and reduce poverty.
