October 30, 2015 / 1:12 PM / in 5 years

Zambia aims to boost Congo exports in diversification drive

LUSAKA (Reuters) - Zambia plans to boost exports of a whole range of products to Democratic Republic of Congo as part of efforts to diversify its economy away from copper and problems caused by its price volatility, the head of its trade promotion agency said on Friday.

Zambia currently provides about a third of Congo’s total imports and wants to increase its share to 40 percent, Zambia Development Agency (ZDA) director-general Patrick Chisanga said.

“Exports into the Congo DR in 2016 are expected to increase from the current 30 percent to around 40 percent of our export market share,” Chisanga told Reuters.

Zambia had targeted its northern neighbour Democratic Republic of Congo, with a population of 77 million, because it needs to find markets for exports other than copper.

“The low cost of doing business in terms transportation costs makes Zambian goods landing at favourably competitive prices to compete with other countries,” Chisanga said.

The price of copper, which currently makes up about 70 percent of Zambia’s export earnings, fell to six-year lows below $5,000 a tonne in August, hit by a slowdown in China, a big consumer of copper and other metals.

Chisanga said Zambia’s exports to Democratic Republic of Congo were expected to fall by 12 percent this year, largely because of declining appetite for mining related inputs. Congo is Africa’s biggest copper producer and Zambia is the second biggest.

Copper production in both countries has been affected by sluggish Chinese growth. Glencore of Switzerland plans to shut down some copper mines in Zambia and Democratic Republic of Congo to support flagging prices.

“We expect a slight decline in exports to the Congo DR in 2015 to just around $700 million. Total exports into the Congo DR in 2014 were $799.8 million,” Chisanga said.

“China’s economic downturn has resulted in a slow down of Congo DR’s consumption of mine related inputs such as lime and sulphuric acid from Zambia.”

But Zambia’s exports to Congo also include inorganic chemicals, precious metal compounds, salt, sulphur, lime, cement, sugar, soaps, lubricants and waxes, vegetable and animal fats, milling products and malt.

A trade mission to Zambia’s northern neighbour in September revealed a huge market for fish, peanut butter, dairy products, fertilizer, poultry, foot wear and agriculture seed, products which were available in Zambia, he said.

Editing by James Macharia and Jane Merriman

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