Africa: Zambia needs to look at the Aviation cost Structure to enable Airlines Survive to boost Economy says EAZ
The Economics Association of Zambia (EAZ) president Dr Lubinda Haabazoka says there is need for energy diversification to cushion power deficits in the country.
Meanwhile, Dr Haabazoka has announced plans to hold another National Economic Summit in April 2020 in the tourist capital.
Addressing journalists in Lusaka yesterday, Dr Haabazoka said Zambia has a lot of key power projects.
“Zambia has key projects in the pipeline such as Kafue Lower for 750MW due end of next year, Lusiwasi lower and upper in addition to other key solar projects in the pipeline that will hedge the copper producer from future bottlenecks. However, it is evident that Zambia is well positioned to be Southern Africa’s net energy exporter with the Batoka’s 2, 400MW earmarked for completion in 2024,” Dr Haabazoka said.
“Proposed solutions to some of the energy challenges include de-risking of energy risks with models that transfer risks to fiscal balance sheets. Entities like GreenCo Company Ltd are key in providing renewable energy avenues such as solar projects”.
He said the other issue that was extensively looked at during last week’s summit was the need for local businesses support for value addition purposes.
Dr Haazaboka added that local businesses involved in value addition needed to be assisted with a conducive environment to achieve the requisite growth.
“Entities such as Zambia Metal Fabricators Plc and Neelkanth Cables Ltd have immense potential to grow in the manufacture of copper cables if the right conditions are designed such purchasing copper at negotiated local prices as opposed to London Metal Exchange pricing which balloons their operating costs,” Dr. Haabazoka said.
He said the other issue discussed was the need for the Vision 2030 for Zambia and Africa 2063 to align with the electric car and technology era.
“One of the recommendations is to use economic diplomacy through ambassadors in countries that produce cars such as Germany to facilitate discussions and agreements between Zambia and these entities for direct purchase of these minerals,” Dr Haabazoka revealed.
He further revealed that the other issue looked at was the need for competitiveness and sustainability of the national airline while easing the aviation costs.
“Aviation costs remain elevated and one of the highest in Africa, making it very uncompetitive to run airlines locally. Flying local routes in Zambia is almost the same cost as flying regional routes. As such, the Ministry of transport will require to relook the aviation cost structure. With a national airline soon to be launched, the question of sustainability of operations is of key concern given that the last National Airline was commercially not viable,” Dr Haabazoka said.
“However, with a well-crafted viable business model, the airline industry could be strategically used to revamp dead industries such as the fresh cut flower (horticulture) industry to life. The likes of Agriflora collapsed due to lack of access to markets given high transport costs into Europe. However, with a local airline and access to commercially viable routes, the fresh cut industry could potentially come to life to compete with the East African market.”
He said another issue of importance that was looked at was the need for partnership between white farmers and locals.
Dr Haabazoka said Zambia’s political stability makes the agriculture environment predictable.
“It was established during the summit that Zambia is one of the few countries that have a well-defined title deed system, with its arable landscape, makes it a very attractive destination for farming investments. An opportunity that exists for Zambian farming landscape is for partnerships with white farmers that are facing land expropriation policy changes this will ensure technology transfer and increased productivity for Zambian agro sector. This was established during a session on agriculture with World Farmers Organization President Theo De Jager,” he said.
“Africa has a combined population of about 1.25 billion inhabitants with a combined GDP of $2.5 trillion. Africa has an immense opportunity to trade with itself. However, this will require that African nations start to produce competitive products on the international markets. The Africa Free Trade Area is one initiative that African nations, Zambia inclusive, have taken up to actualize intra Africa trade. Other initiatives include MANSA digital platform that will enhance the visibility of African businesses to allow for trade with each other. Intra Africa trade will address some of the trade imbalances the continent faces today.”
Dr. Haabazoka said the summit also resolved that there is need for infrastructure funding under private public partnerships (PPPs).
He said the Association supports infrastructure development in light of the gap that Zambia has.
“The Association also acknowledges that infrastructure has pay off economic benefits in the future which open up the economy to investment flows. There is need for Public Private Partnerships (PPPs) funding of infrastructure projects such as the dual carriage project. Funding infrastructure projects in this fashion helps ease the costs of finance and will allow for non-traditional source of cheaper finance,” Dr Haabazoka said.
He also announced plans to hold another Economic Summit next year.
Dr Haabazoka proposed that the summit will be held under the theme “Sustainable Development Goals, We are 10 years to 2030; Where are we now?”
By Chris Phiri