Towards More Jobs & Revenue in Africa: DR Congo, Zambia Embark on Special Economic Zone
Against the background of a framework agreement between the Democratic Republic of Congo (DRC) and Zambia to create a special economic zone, Sputnik talked to Lubinda Haabazoka who weighed in on this development.
SputnikThe agreement between the two countries implies establishing a value chain for their minerals, which ensures building infrastructure for value addition, Dr. Lubinda Haabazoka, Director Graduate School of Business, University of Zambia, says in an interview with Sputnik, explaining that this measure will create jobs and provide more revenue.
This week, Kinshasa and Lusaka signed a framework agreement implying the creation of a special economic zone, which is one more step towards implementing a joint project for the local manufacture of electric batteries announced in 2021.
Haabazoka believes the agreement is a good deal as it envisages that both countries understand the need for having a common approach towards benefitting from the production of cobalt, manganese, and lithium, which is sought by the world for the electric car industry.
"On paper, this agreement seeks to establish a value chain for lithium, cobalt, manganese to ensure that infrastructure is built for value addition in both countries," the expert notes.
Despite the fact that the DRC has more minerals than Zambia, the latter is seen as a more stable base "where smelters and other infrastructure can be built to add value," he says.
However, he also draws attention to the unknown "real motives" of the deal.
Answering a question as to why Western companies do not invest in local manufacturing projects and in creating the necessary infrastructure in Africa, the expert notes that the West
has employed a policy of extracting mineral resources from the continent without leaving any benefits for the local communities since time immemorial.
"Annually Africa loses over $50 billion in illicit financial flows and much of that money is unpaid taxes in the mining sector through tax avoidance," Haabazoka says, adding: "Western mining companies prefer to export raw minerals so that they underdeclare their value then add value in their own countries then sell at higher prices."
According to him, the countries that tried to resist this policy saw regime change sponsored by the West and got their foreign direct investments halted.
The expert thinks African nations
should speak as one, because individually, they "won't have bargaining power."
"Africa should concentrate on creating factories to provide value addition for job creation rather than the social spending approach being championed by the IMF," Haabazoka concludes.
Earlier, another expert, Rugare Mukanganga, economist at Development Reimagined, an African-led International Development Consultancy, told Sputnik that African interests take "a backseat" against the backdrop of the US' goal of dragging the continent away from China and Russia.
Two years ago, in order to establish the production of batteries, the DRC released a set of measures necessary to take. A Battery Council was created for "piloting the government's policy to develop a regional value chain around the electric battery industry," Prime Minister Sama Lukonde said, speaking at a two-day business forum in the capital Kinshasa.
Along with that, the government said it was committed to launching a special purpose vehicle to mobilize private sector funding and support battery manufacturing.
Then, neighboring Zambia's President Hakainde Hichilema said his country was ready to cooperate on the project. Besides him, several development banks, in particular the African Development Bank, also agreed to provide assistance in developing the project.
Along with that, African officials have repeatedly underscored the necessity for African nations to cooperate with each other more. For instance, South Africa's President Cyril Ramaphosa declared that "if there is political will," Africans can achieve their solutions to ongoing problems.
More to the point, Ethiopia's Prime Minister Abiy Ahmed, citing the ideas of pan-Africanism, said the nations of Africa
cannot "let constructed divides, geographic boundaries, and political ideologies hijack" their ideals.
"Pan-Africanism should flourish as an idea of cooperative integration, global competitiveness and peaceful coexistence," Abiy noted.