Zambia’s exports to the Democratic Republic of Congo – DRC have suddenly been banned sending panic on the markets as forex inflows are expected to dwindle and likely affect the Kwacha.
DRC, which is Zambia’s very important northern neighbor has announced a 12 month ban on importation of beers and soft drinks.
And Minister of Trade Chipoka Mulenga has confirmed to ZBT that Zambia is already facilitating a diplomatic way of engaging with the DRC to understand why they have suspended imports of beers and soft drinks.
This sudden move by DRC which will negatively affect Zambia’s financial markets is expected to draw retaliation as the export proceeds from drinks and beer industry ultimately contributes to the expected forex inflows.
According to information made available to the Zambian Business Times – ZBT, the Minister of Foreign Trade of the Democratic Republic of Congo – DRC recently announced the controversial measure of the suspension of the importation of beers and soft drinks for a period of 12 months for the whole territory of DRC.
When contacted for a comment by ZBT, Trade and Industry Minister Chipoka Mulenga, said the Government is aware of this development and the impact this will have on the local Companies and the economy at large.
Mulenga said the government is facilitating meetings between the two Trade Ministers to understand why they made such a decision and see how the two countries can work together going forward for the good and success of both countries.
The Zambian Trade Minister noted that Zambia has developed its production capacity in confectionery products among many others as it produces beyond what it can consume in the country and it has created many other sources of income and revenue of which it is even exporting more.
“The Zambian government and the DRC are countries that have been doing trade for years since time immemorial and we wish to continue that because Zambia has a lot of benefits from DRC just like DRC has a lot of benefits from Zambia. And am very optimistic whatever reason they bring, if we sit around the table will resolve them for Zambia to continue to trade with the DRC.” He said.
“Definitely like everybody knows there will be a loss in sales and revenue from our industries but this is something that happened just last week on Friday 19th of July 2024 and we have [engaged in] bilateral talks to see how we can resolve that. I have just finished a meeting right now with the DRC Ambassador to discuss the way forward and facilitate meetings with the two trade Ministers.”
When asked by ZBT what would be the impact of this move on US dollar inflows and Zambia’s exchange rate if this ‘ban’ is not lifted?
Mulenga however said, this would not have a major impact on the dollar inflows stating that Zambia’s major currency inflows are largely impacted by the mining sector.
“What impacts Zambia’s major forex inflows is the copper production which contributes more than 70 percent but of course, it will have an impact but obviously not as large as it would impact if this was coming from the minerals exportations.”
“Right now I can assure you especially that we have now revamped the mines, if we increase productivity the currency will not be affected in the way that we are anticipating an increase in copper production but what we have to focus on right now, is the day-to-day trade that happens between Zambia and DRC.”
“We are engaging them on bilateral terms so that we can find the way forward, right now it would be premature to say any countermeasures because we have not yet spoken to our colleagues in DRC. They made a decision for our Country without engaging us to understand, but we will in a very decent and diplomatic way, we have said we will engage our brothers and sisters to find a way forward and after our meeting then we will give a comprehensive statement.” Remarked Mulenga.
