We’re back to work….
How many of you thought of taking a vacation in Lusaka, Zambia?
I thought so. If you did, I would have been surprised, because this city—about 7 hours and 250 miles by bus from Victoria Falls, is better recognized as the 4 million inhabitants (about a third of the population—and they were on the street to greet us in their cars at 1:30 when we arrived—or so it seemed) of the business and political capital of Zambia. That’s why we’re here—to resume our quest for knowledge about doing business in sub-Sahara Africa. The British moved it here from Livingstone in 1935 to be close to the copper mines) I should point out that there are some safaris nearby, and camping as well (it’s a big country relatively sparsely settled); the economic officer of the embassy, who helped arrange many of our visits, noted he prefers this station to his previous posts—Beijing, Hanoi, and Cape Town—partly because of the less frenetic pace here. He regaled our table at lunch with his camping experiences—from having the attendants at the park (they are basically water bearers) cut a ten foot branch, bring it down, and slay it. The snake is both aggressive and territorial, and deadly, bad combinations of traits; or the time a pride of 9 lionesses dropped in one day. And we think raccoons are annoying!
Anyway, you can probably tell why you might not want to come to Lusaka, unless you want to do business in this country. Today’s headline screamed “Zambia’s economy thriving—experts,” and while we’re not quoted in the article, from what we’ve seen and heard, there’s reason for the optimism. Some of the optimism comes from the relative political stability, and stabilizing of the local currency (which depreciated about 15% last year); part comes from the natural resources—copper is king here, and we’ll be visiting a company tomorrow; part from the agricultural potential. It has the highest percentage of undeveloped arable land on the continent, and 40% of the available surface water in the region. Hence the potential for hydroelectric power to replace the non-sustainable charcoal, which accounts for 80% of the heating/cooking/pollution/deforestation.
The embassy staff hosted us last night, and noted some of the other economic problems, especially the fact that this is a landlocked country that does not have easy access to the sea. The roads are ok, but the overall rating of logistics is 178th out of 181 countries, with containers costing about 6 times more than in the United States. The Chinese helped build a railroad to Mozambique, but it apparently collapsed during the rainy season.
We might have peered into the future last night, because after the embassy briefing, the embassy and FDIB hosted a session with the American Chamber of Commerce. The cards I collected included someone from the department of Tourism, a Lebanese print shop owner who’d been here for 16 years, a Dane and a Norwegian working on advanced degrees and interning with the Standard Bank, and the Executive Director of the Chamber, a 30 year old graduate of the University of Dayton who saw the job advertised, and came out; he told me if I had students who want to intern to be sure to contact him.
The highlight was the Minister of Commerce, an exceptionally articulate woman who had been managing director of one of the banks. I thought: “This woman should be president.” When I shared that thought with one of the chamber members, he replied: “That’s why she was put in the cabinet. They want to fast track her.”
Today’s visits included a $300 million agribusiness company, whose goal is to “feed the nation” (and eventually the continent). We went to their dairy farm, which is a small part of the business, but with two of our faculty from Wisconsin, and the importance of agriculture, a nice visit for us. We donned white coats, hairnets, and golashes to go to the dairy, a feedlot, with a look at some of their consumer products (they make a yummy hazelnut yoghurt), and a discussion of free range and non gmo meat. Stock feed, beef, edible oils, and crops account for about 15% of the income each. The company lost money last year because of exchange rates and the decline of the local currency. It started 25 years ago and now has a major partnership with Shoprite. The agricultural outlook here prompted Cargill to purchase a $30 million operation.
The other visit was to a Chinese Special Economic Zone. In 2006, Hu Jintao said China would open 3 in Africa, and the one here is just getting off the ground. We went into an exhibition hall which hosts Chinese who want to sell and Zambians who want to sell or buy, too. The red banner celebrating “Motherland in heart, mobilize our love for Africa to win hand-in-hand,” reminded me of similar slogans in China to stimulate production and pride. By the end of last year the Chinese claimed to have spent $151 million on infrastructure improvements (it’s near the airport) and attracted $1.2 billion in Chinese investment, primarily from Northeast China’s Jilin province (Changchun is the capital city, and the managing director beamed when I told him, in Chinese, of course, that I had been there). While most of the businesses are in nonferrous metals industry, we toured a mushroom-growing (indoor) farm. We got quite an education on mushrooms (including the numerous health benefits; I think I heard the same type of talk visiting tea farms in Fujian years ago), and the many varieties, including the “oak mushroom,” more commonly known in the West as “shitake” (the manager didn’t seem happy that the Japanese had rebranded it successfully); and several varieties of oyster including a golden one, named for the scientist who took the wild variety and domesticated it.
One room provided a real education; Zambians were in it using a knife to pare down the large mushrooms for sale. While the company at this point is still selling only locally, I had visions of something I had said half in jest when my international business class discussed the rising cost of Chinese wages—“There’s always Africa.” The special economic zone claims to have created 8,000 jobs.
We saw a number of Chinese language hotels and restaurants in the city, which indicates to me the presence of a substantial Chinese population of traders and businessmen. I shouldn’t complain, though. We’re staying at a Taj Hotel (probably because of the Indian traders and businessmen), and as a result, I had freshly-cooked dosa, paneer, and sambal for breakfast. It was a very welcome change (to me) from American and British breakfasts that have been standard fare for the last three weeks since I left the US.
Bon appetite!