President Mugabe urges Comesa to industrialise
Sunday, 16 October 2011 01:00
By Caesar Zvayi, recently in Lilongwe, Malawi
PRESIDENT MUGABE has urged Comesa member states to transform from being mere producers of raw materials by harnessing science and technology to process the raw materials or manufacture finished products to get maximum value from their natural resource endowments.
The President, who was addressing the main plenary on Friday evening, said the summit had convened at a time of great concern over the level of development in the Comesa bloc with many countries still preoccupied with plans, projects and policies for development at the expense of implementation.
Many of the economies in the region, President Mugabe said, focused on primary extractive industries that cry for value-addition through harnessing science and technology development.
He took the opportunity to apprise the meeting on Zimbabwe’s indigenisation and economic empowerment programme, saying all foreign-owned corporations were duty-bound to have 51 percent indigenous ownership and those who did not want to be bound by the law were free to ship out.
He encouraged the member states to insist on the beneficiation of their mineral resources and ensure that indigenous people have total control and ownership of their resources as the country has done through the indigenisation law.
‘‘You begin to worry that from the ’60s to this day, we have not found ways of adding value to them so that we can be the main producers of the more valuable products that come out of these raw materials. This is why I take it that was the reason why we found it necessary to address this theme of science and technology,’’ President Mugabe said.
The 15th Comesa Summit, which ended yesterday, was held under the theme, ‘‘Harnessing Science and Technology for Development’’. Africa, the President said, produces all conceivable raw materials, but exports them in raw form to the West from which it imports expensive finished products.
He cited the example of Zimbabwean, Tanzanian and Malawian tea, which, he said, was being branded as English tea by British firms in Dubai for sale the world over yet the African countries could brand it and get maximum returns from it.
‘‘Malawi has been producing tea for a long time, so have we; cotton for a long time, so have we. We have had processes that add value; spinning, weaving, but it should not stop there.
“The machines that do the weaving and spinning we have to import, why can’t our people make them? Haven’t we got the resources?
“We produce iron, Zimbabwe does, South Africa does. Probably other countries also produce iron. But where does our iron go? We export it, as ore, in some cases.’’ The President urged member states to work together in all areas of endeavour, saying there was power in numbers.
‘‘The products of our education, science and technology, we can share, pool our resources and see what development we can make.
“It’s one thing to work on a national basis to try to produce what you can produce alone, but when you are two, three, that’s in our African parlance, two hands, two minds . . . that gives you greater scope for development, greater scope for knowledge.’’
President Mugabe had earlier on signed the African Trade Insurance Agreement, a Comesa initiative supported by the World Bank, aimed at insuring trade within the region.
The agreement seeks to facilitate private sector-led trade flows, investment and productive activities through the provision of insurance, co-insurance and reinsurance, financial instruments and related services. It is open to all African Union members, corporate and regional body members.- The Sunday Mail
Labels: COMESA, INDUSTRIALISATION, ROBERT MUGABE
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Zambia’s recovery plan, Part III: the execution strategy
Written by Prof Clive Chirwa
Thursday, May 28, 2009 3:08:27 PM
The Business Plan we prepared together in Part I mapped our future, the Stimulus Plan in Part II stipulated the areas we need to concentrate on in search of a quick recovery and this Part III details how much we can make from manufacturing using our perfected Execution Strategy. To facilitate our presentation, we will use copper as the natural resource that we want to take to finished products.
If you want to know more including other natural resources, there will be a one-day workshop in the first week of June in Lusaka, organised by Squaremark Market Solutions of Ndola. At the workshop we will give you the tools and the knowhow to the execution strategy. Contact details will be advertised in this newspaper.
What is the Execution Strategy? In its simplest term it is the tactic our country can use to make more money by creating conditions for primes, supply chains and converters to blossom. Since Zambia is a developing country, we need as a nation to direct our growth route. Otherwise, nobody will come and do that for us as investors are cherry pickers and are more interested in acquiring raw materials than developing Zambia. Therefore, the government should create primes that are supported by the private supply chains. The government can even go into joint ventures of 51/49 percentage weighting on primes.
Why are we doing this? The main reason is that the current revenue from taxes is too little for a country to function properly. Zambia gets about 80 per cent of its revenue from copper. But in money terms this is just peanuts. Statistics show us that in year 1990 with copper at US$2300 per tonne, we got US$423 million and in 2006 with copper at US6500 per tonne on average, we had only US$133 million from copper exports estimated at US$3 billion.
This shows how we have lost a lot from privatisation of mines. Tax on profit alone is not working because of the mining companies’ sophisticated systems to avoid paying taxes by channelling their profits through offshore companies on islands like Mauritius. With the new tax regime in place, Zambia in 2008 was suppose to have earned US$421 million from US$3 billion that was made by the mining companies, but it only received US$200 million. Why? No wonder we are depleting our international reserve faster than we built it.
The government must insist that the mining companies pay the rest. We cannot just throw away US$221 million because the multi-nationals have contested the new tax regime. These companies are using the same known tactics of taking the government to court, risk redundancies, threatening of taking the business or investment away from Zambia and so on. Indeed if you look closely at history, you will find that Zambia was doing well under ZCCM despite the inefficiency and lack of mature management skills. In the last 5 years of the boom, Zambia received less money despite very high prices of copper. This again depicts Zambia’s hard luck background that has never seen copper benefitting it apart from the short period when ZCCM was supreme.
If we really want to develop, it will not come from selling copper raw material. It will come from us using copper to its fullest potential and that is creating a vibrant manufacturing base that will add value. Let us turn that US$200 million tax revenue from copper to US$10 billion in five years. This is how we can do it.
The first thing to do is to identify the areas where our copper is used, that is in electrical/electronics, building, health care, food industry, cars, trains, ships, aerospace, telecommunications and many more.
Electrical uses of copper, including power transmission and generation, wires in building, telecommunication, electrical and electronic products, account for three quarters of the total global copper use that stands at over 933000 tonnes per year.
The use of copper in wires is the oldest and still the world has not got enough of it. This is why I propose it to the government to invest in the prime company. We currently have ZAMEFA that is doing an excellent job. But ZAMEFA is just too small with 347 employees to make a dent in that big global market and hence make money for Zambia. Especially with its current capacity of over 30,000 metric tonnes of copper rods, bare wires, power cables, building wires, and telecommunication cables.
We need between 4 and 5 more companies like ZAMEFA created by the government as primes. The companies will specialise in just drawing of copper rods and wires each having a capacity of minimum 50000 metric tonnes. Then private Zambian investors will make cables in Zambia and electric motors of any size. Even as we speak, Zambians can buy copper rods from ZAMEFA and extrude them further to wire and make cables, hence more value addition. The Zambian wire industry alone can create between 10000 to 20000 jobs. The global market is still open and in the next few years after the recession, the Asian, European and especially the African market will also pick up. We can become the African centre in copper wire production and bring home to Zambia needed revenue.
For instance a tonne of bare copper wire will bring in from US$20,000 for 1 mm diameter to US$112,000 for 0.05 mm diameter (visit: http://wires.co.uk/index.html). Even if we bring in half that we will still be making far more than selling copper raw materials at US$2500 per tonne.
The second government investment should be in making copper alloys.
Four companies can be formed for making brass (copper with zinc), bronze (copper with other metals such as aluminium, nickel, iron, etc), Beryllium copper (copper with beryllium and nickel), and cupronickel (Copper with nickel).
There are 28 countries that cast and wrought copper alloys. Why is South Africa doing it and we are not. We have all the raw materials. It is just the matter of combining them in proportions. Then the other five extruding firms and the private enterprises will work the alloys into tubes, rods, and plates. Copper alloys are usually used in high technology areas such as in automobile and aerospace, heat exchangers, military equipment and so on. Brass and bronze are used at the low end of the market while cupronickel and beryllium copper are used in high strength tools, oil fields, aerospace and military.
Brass, a combination of copper and zinc, is probably the most famous copper alloy. It can be found in house door knobs, hinges and locks. Also used in making bearings, fan blades and decorative parts. It is cheap and adds limited value to the product. It is mass produced due to its great demand in buildings. Typical brass products can be sold on average between US12000 per metric tonne to about US$20000 per tonne.
The cupronickel is mid range copper alloy containing 25 per cent nickel and is used mainly for coin making. Because copper and nickel mix so readily the cost of manufacture is moderate and we can be able to make a wide range of alloys. When you add 45 per cent nickel, the alloy becomes high in electrical resistivity and used in resistors, thermocouples, and in rheostats. The mostly used cupronickel is that containing 30 per cent nickel. This is the most important and widely used for condenser tubes in steam-power plants as it is non-corrosive and possesses high resistant to oxidation at high temperatures. Depending on the type of cupronickel parts, the value addition begins at around US$35000 per tonne and US$45000 per tonne. General applications are in ship building, oil and gas pipelines, heat exchangers and condensers, hydraulic lines, for those in deserts use it in desalination units that make drinking water from sea water.
Beryllium copper alloy is at the top end in value addition. The alloy is very strong and therefore used in making spring wire, expensive tools such as spanners, hammers, farming ploughs and cutting blades.
Due to its electrical conductivity, it is used in low-current contacts for batteries and electrical connectors. Since it has other properties of being non-sparking and physically tough and nonmagnetic, it is used in making tools that can safely be used in environments where there are explosive vapours and gases in an oil field. It is widely used as tools in all our mines because of non-sparking qualities. Above all beryllium has become the well preferred material in making armour piercing bullets as it has the drilling capability. The biggest bonus for us is that beryllium copper alloy has now entered the biggest market of all time, the telecommunications and computer electronics markets.
The big multinationals are constantly looking for ways to reduce the size and weight of their products such as mobile phones and computers without sacrificing performance. The unique combination of strength, electrical and thermal conductivity of beryllium copper make it an ideal choice for miniaturised components. The value addition here is can go up to US$120000 per metric tonne depending on application.
The four government firms each can create up 10000 jobs at different levels making a total of about 40000 jobs in copper alloy industry alone. The government’s primes will employ about 9000 employees and the rest will be in private hands that will be part of the supply chain and converter chain. The revenue for each yearly production of 50000 tonnes of beryllium copper alloy to be conservative is about US$1.75 billion at the low end to US$6 Billion at the top end.
In health care, copper has been recognised as a hygienic material since the dawn of civilisation. Indeed when the first European settlers came to Zambia they were amazed to find that the people around Bwana Mkubwa in Ndola used copper canister and containers for their medical herbs and cleaned tools in copper basins. Research has now been supported by scientific output showing that copper is antimicrobial, that is it inhibits the growth of harmful pathogens-bacteria, moulds, algae, fungi and viruses. The latest research output has even shown evidence of copper’s antimicrobial effect on a range of disease-causing organisms including MRSA, Clostridium difficile, Ecoli, Listeria monocytogenes, Influenza A and Aspergillums Niger.
In Zambia many patients die each year in hospital because they have been infected by a hospital acquired germ. For instance, hospital-acquired infections in England cost about a £1 billion in treating patients who were in the first place admitted to hospital with a completely different disease. About 5000 patients die of complications from infections that they contracted in hospitals.
These hospital-acquired infections are preventable. Replacing frequently touched surfaces with copper and its high copper content alloys such as brass and bronze, which are naturally antimicrobial, could be an important infection control measure and complement other measures such as hand washing, patient screening and isolation, and improve cleaning. Frequently touched surfaces in hospitals which could be made from copper and its alloys are: door handles, push plates, light switches, bed rails, grab rails, intravenous poles, dispensers (alcohol gel, paper towel, soap), dressing trolleys, counter and table tops. Nobody so far has entered this market of using copper in hospitals. We can be one of the few and it is a big market for us. Every year we can save hundred of thousands of patients across the globe by us producing the copper surfaces. The technology involved in making these parts is old and even a man and dog round the corner can metal bash into shape the basins, cups, holders and make a real fortune. Hospitals around the world are looking for solutions and copper surfaces are the long term solutions that do not need disinfectants. Zambia can create a prime to just make these surfaces. If target is 50000 tonnes of copper per year, the revenue can be in the range of US$2 billion to US$8 billion. This is our niche market that will create 4000 to 5000 jobs.
The four areas we have targeted for Zambia to explore will create a minimum of 75000 jobs with revenue in the Bank of Zambia, if assuming a small conservative 50000 tonne per year in every sector with a total 200000 tonnes per year used in value addition firms that have been formed by the government, will bring in minimum of US30 billion per year. South Africa using our copper, zinc and nickel make billions and billions of dollars. Mozambique too has now started using our copper to add value. The latest IMF figures put Mozambique at top of fastest growing manufacturing base south of the equator. The time has come to wake up and see how much we have lost over the years. We are the richest in natural resources in the south of the equator. Other people are using us for their benefit. It is time for the government to think of what primes it needs to create in order to develop the private entrepreneurship that will service the primes and converters.
There will be a one-day workshop during the first week of June and it is being advertised here in The Post. This forum will empower you with the necessary knowledge and know-how to make your business a success. You will be equipped with the tools to move out of recession or start brand new company in copper value addition that will bring prosperity to Zambia. On the marketing side and the technology we will help you. So please register soonest for the workshop. Contact Mr Kenny Kangwa at Squaremark Market Solutions of Ndola on 0955628696 or 0966559450 ( squaremarkzambia@yahoo.com This e-mail address is being protected from spam bots, you need JavaScript enabled to view it ). When registering please indicate your interest so that we can help you with some solutions. If you are interested in other businesses please do not hesitate to ask. We will help you and perhaps take you to your promised land. Come on let us do it for Zambia.
The four government firms each can create up 10000 jobs at different levels making a total of about 40000 jobs in copper alloy industry alone. The government’s primes will employ about 9000 employees and the rest will be in private hands that will be part of the supply chain and converter chain. The revenue for each yearly production of 50000 tonnes of beryllium copper alloy to be conservative is about US$1.75 billion at the low end to US$6 Billion at the top end.
In health care, copper has been recognised as a hygienic material since the dawn of civilisation. Indeed when the first European settlers came to Zambia they were amazed to find that the people around Bwana Mkubwa in Ndola used copper canister and containers for their medical herbs and cleaned tools in copper basins. Research has now been supported by scientific output showing that copper is antimicrobial, that is it inhibits the growth of harmful pathogens-bacteria, moulds, algae, fungi and viruses. The latest research output has even shown evidence of copper’s antimicrobial effect on a range of disease-causing organisms including MRSA, Clostridium difficile, Ecoli, Listeria monocytogenes, Influenza A and Aspergillums Niger.
In Zambia many patients die each year in hospital because they have been infected by a hospital acquired germ. For instance, hospital-acquired infections in England cost about a £1 billion in treating patients who were in the first place admitted to hospital with a completely different disease. About 5000 patients die of complications from infections that they contracted in hospitals.
These hospital-acquired infections are preventable. Replacing frequently touched surfaces with copper and its high copper content alloys such as brass and bronze, which are naturally antimicrobial, could be an important infection control measure and complement other measures such as hand washing, patient screening and isolation, and improve cleaning. Frequently touched surfaces in hospitals which could be made from copper and its alloys are: door handles, push plates, light switches, bed rails, grab rails, intravenous poles, dispensers (alcohol gel, paper towel, soap), dressing trolleys, counter and table tops. Nobody so far has entered this market of using copper in hospitals. We can be one of the few and it is a big market for us. Every year we can save hundred of thousands of patients across the globe by us producing the copper surfaces. The technology involved in making these parts is old and even a man and dog round the corner can metal bash into shape the basins, cups, holders and make a real fortune. Hospitals around the world are looking for solutions and copper surfaces are the long term solutions that do not need disinfectants. Zambia can create a prime to just make these surfaces. If target is 50000 tonnes of copper per year, the revenue can be in the range of US$2 billion to US$8 billion. This is our niche market that will create 4000 to 5000 jobs.
The four areas we have targeted for Zambia to explore will create a minimum of 75000 jobs with revenue in the Bank of Zambia, if assuming a small conservative 50000 tonne per year in every sector with a total 200000 tonnes per year used in value addition firms that have been formed by the government, will bring in minimum of US30 billion per year. South Africa using our copper, zinc and nickel make billions and billions of dollars. Mozambique too has now started using our copper to add value. The latest IMF figures put Mozambique at top of fastest growing manufacturing base south of the equator. The time has come to wake up and see how much we have lost over the years. We are the richest in natural resources in the south of the equator. Other people are using us for their benefit. It is time for the government to think of what primes it needs to create in order to develop the private entrepreneurship that will service the primes and converters.
There will be a one-day workshop during the first week of June and it is being advertised here in The Post. This forum will empower you with the necessary knowledge and know-how to make your business a success. You will be equipped with the tools to move out of recession or start brand new company in copper value addition that will bring prosperity to Zambia. On the marketing side and the technology we will help you. So please register soonest for the workshop.
Contact Mr Kenny Kangwa at Squaremark Market Solutions of Ndola on 0955628696 or 0966559450 ( squaremarkzambia@yahoo.comThis e-mail address is being protected from spam bots, you need JavaScript enabled to view it ). When registering please indicate your interest so that we can help you with some solutions. If you are interested in other businesses please do not hesitate to ask. We will help you and perhaps take you to your promised land. Come on let us do it for Zambia.
*****************
COMMENT - It is time that Zambia industrialized, and went beyond exporting raw materials. The money for that, has to come from the taxes on the mines. Manufacturing must be protected, so Zambian manufaturers will not be swamped by foreign corporations, who can take a loss on their sales in Zambia, just to gain market share.
Having said, 10,000 jobs, although much better than the present situation, is not going to make much of a dent in Zambia's 5,000,000 strong workforce. The key still I think is in the 80% of arable land that is not under cultivation, and the 97% of arable land that is not under permanent irrigation. Today, most people are still employed in agriculture, and even if 10,000 jobs were created in industry, that would still be the case. Also, the development of agriculture has many add-on effects. The creation of irrigation works will not only employ many people, it will also create agricultural land that these very same workers can go on to farm, creating jobs (in agriculture) by creating jobs (in works projects). The resulting water management will prevent the annual floods, that create so much loss of life, destruction of property and result in hunger in the affected areas because of failed crops. The truth is that low food prices come from an abundance of food, which is a great way to not only create hundreds of thousands of jobs, but also to leave consumers with more money to spend on other goods. In fact,anything that can be done to lower the cost of living will stimulate the economy indirectly, by stimulating demand.
Maybe there should be a two-tract development plan - one of industrialisation for the cities (mainly the Copperbelt), and one agricultural development, aimed at the rural areas, where most people live.
Labels: CLIVE CHIRWA, COPPER, ECONOMY, INDUSTRIALISATION, WORKSHOPS
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Africa’s industrialisation crucial
EDITOR — Africa has vast natural and human resources. Africa has the potential to develop itself if it can effectively harness its gold, diamonds, oil and various other resources.
How many tonnes of these resources are exported every year, making Western companies rich but leaving Africa without any meaningful development?
This is not to say that we should not export any resources to Europe and America.
There is no continent in the world that can thrive from buying and selling solely in its own markets.
What is needed is a trade set-up that benefits Africa more than it is currently benefiting.
Priority should be given to the processing of raw materials here so that our resources directly benefit us rather than buying back finished goods at ridiculously low prices.
This calls for intensified industrialisation in Africa.
More money should be directed towards building our own industries that are not only extractive but are developmental.
Obviously this calls for funding.
This will require African governments to use their resources more progressively by investing in the continent’s long-term development instead of just focusing on the immediate needs and concerns of our nations.
We must plan ahead just like the Russians and Chinese did as they worked to become the powers that they are today.
Africa must set up viable funding institutions of its own like the International Monetary Fund.
The African Development Bank cannot do much to assist because it is largely owned by Westerners and hence it eventually operates just like the IMF and the World Bank who have done little for this continent.
It would be better if we lent money to each other rather than running to the World Bank and IMF when we very well know the kind of conditionalities they will foist on us.
The funds for setting up such an institution will come from the resources that we have.
Where there is a will there is a way.
Gerald Mavedzenge.
Gutu.
Labels: INDUSTRIALISATION
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