Issue 17 February-May 2004

Traders speaks to
Wamulume Kalabo, president of the Kitwe and District Chamber of Commerce and Industry (KDCCI)

Please provide a brief overview of the
Kitwe and District Chamber of Commerce
and Industry (KDCCI), including
history, structure, and services offered,
size and membership base.

The Kitwe and District Chamber of Commerce
and Industry (KDCCI) was founded
in the late 1950's but only became active
as a Chamber of Commerce in 1963. The
activities of the chamber are run by an
elected 12 member executive committee
that holds office for 12 months at a time.
The executive committee is headed by a
president, with two vice presidents, a secretary
and a treasurer. All these positions
are held on a voluntary basis and are not
full time posts. The chamber has a full
time secretariat, currently composed of
an operations officer and an office assistant.
We intend to recruit a research officer
early 2004. The secretariat is supervised
by the chamber secretary.
The main service we provide to our
members is lobbying the state on economic
issues with a view to stimulating
industrial growth. The other roles we play
include providing information on sources
of reasonably priced finance (finance is
very expensive in Zambia), providing
information on trends in the economy and
information on partnerships for those that
are looking for equity or strategic partners.
Even though Kitwe has about 1500
registered companies, the chamber only
has 140 committed members. These members
provide the funding for the operations
of the chamber secretariat through subscription
fees. The executive committee is
accountable to all chamber members.

The main activity in Kitwe - as in the
rest of the Copperbelt - is the mining
of copper and cobalt. Given the recent
copper crisis due to the drop of international
prices, do you see a need to diversify
activities away from mining and if
so, what steps are / need to be taken in
this regard?

The non-performance of the copper/cobalt
mining industry should not be the main
reason to diversify activities. However,
with the unstable and low copper/cobalt
prices experienced in the past two and half
years, there is a more pressing need to
diversify economic activities. The government
of Zambia, with help from the World
Bank, set up a task force in 2002 to make
recommendations to government on what
measures should be taken and what activities
should be put in place to encourage
investment in economic activities other
than copper/cobalt mining. The task force
handed over its recommendations to government
in May 2003 and I expect that
government will begin to implement the
recommendations during 2004. Having
said this, I wish to bring you back to the
current status of economic activity in Kitwe.
Kitwe is traditionally a copper/cobalt
mining and mineral processing town and
almost all business activity is in one way
or another dependent upon this industry.
Kitwe also has potential in agriculture
and agro processing, as well as in gemstone
mining and jewellery manufacture,
amongst others. Kitwe has a lot of trained
but unemployed people. In a nutshell,
Kitwe has rich unexploited resources
aside from copper/cobalt. For this potential
to be exploited Kitwe, and Zambia at
large, has to have certain basic requisites
in place in order to stimulate investment
from local investors as well as foreign
/ multinational investors. Infrastructure
such as road networks, electricity and water
supply has to be upgraded to acceptable
standards. There is also a need for
government to put an attractive and stable
legal and economic policy framework in
place. Without a good physical infrastructure
and a stable and consistent legal and
economic policy framework, economic
diversification will be painfully slow.

In the 1970s/80s, a significant quantity
of the goods and spares supplied to the
mines were manufactured locally. There
was a vibrant engineering manufacturing
industry, the bulk of which was
in Kitwe. With the opening up of the
economy in the early 1990s however, it
became cheaper to import these goods
from South Africa and Zimbabwe. Can
you comment on whether anything is
being done to address this issue and
revitalise the local industry?

Again as above, one cannot revitalise industry
without first revitalising or putting
in place an attractive physical infrastructure
and attractive legal and economic
policy frameworks. An attractive infrastructure
and policy framework reduces
the cost of doing business by reducing
risk and the general cost of operating.
I hope through the recommendations of
the Economic Diversification Task Force,
government will speed up the process of
infrastructure development and come up
with a consistent and stable development
agenda. Currently government is making
correct pronouncements, but there is still
the need to put those pronouncements
into action. Investors, whether local or
multinational, need to be stimulated, not
only by the potential, but by other basic
prerequisites. I am saying this because
I know a lot of investors that would be
willing to invest in Kitwe and Zambia in
general if the requisites were in place. At
the moment it would appear that Kitwe,
and Zambia in general, is supplied from
Zimbabwe and South Africa. This situation
is unhealthy as the market remains
small and in many cases shrinks due to the
ever-declining employment numbers.

There are reports that new investors to the Kitwe district
prefer to work with their own support companies. This has
led to an outcry from some sectors of the business community
that this preference is denying business to companies that
previously supported Zambia Consolidated Copper Mines
(ZCCM) Ltd - the sole mining company before privatisation
- and companies that are locally owned. What is your comment
in this regard?

First of all, people do business with people they know. This is
mainly due to aspects of reliability. It is normal that initially any
body setting up or taking over some business operation would
contact the people they know to provide services and support
to their operations. However, over time it is imperative for any
business to source services and other production inputs from
service providers or suppliers within their immediate environment.
I think there is a movement amongst the new investors in
Kitwe and the Copperbelt to support local suppliers, unless there
is no competitive local supplier. There will always be employees
of any investor that will want to continue sourcing from their
'friends' for the wrong reasons. Morally investors should support
local people and service providers as this is the only way the
investment will make sense to both the investor and the environment
in which the investment is located. I believe good corporate
citizenship is beneficial to any meaningful investor.

What opportunities are open to foreign investors in the Kitwe
District?

Kitwe has one of the richest gemstone (emerald) deposits in the
world. This deposit is still largely unexploited. Kitwe has good
arable land and good rain to support agriculture. The linkages,
both backward and forward, that these two industries might provide
are opportunities in themselves. All possible business opportunities
in Kitwe are open to everyone, foreigners included.

Is there anything else you would like to add?

Kitwe is a very friendly and peaceful town and I would urge all
interested investors to come and visit us for more information.

For further information, contact:

Wamulume Kalabo
President - Kitwe and District Chamber of Commerce and Industry
(KDCCI)
Tel: +260 2 218712 Fax: +260 2 214391
Email: hypz@zamnet.zm

Rosta Nachalwe
Operations Officer - KDCCI
Telefax: +260 2 221681
Email: kitchamber@zamtel.zm