UK: Zambia tries to woo investors in London, challenges West to match Chinese investment

Record ID: 453856

  • Title: UK: Zambia tries to woo investors in London, challenges West to match Chinese investment
  • Date: 9th June 2007
  • Summary: (AD1) LUSAKA, ZAMBIA (FILE - FEBRUARY 03, 2007) (REUTERS) CHINA PRESIDENT HU JINTAO AND ZAMBIA PRESIDENT LEVY MWANAWASA WALKING INTO THE ROOM TO AND THEN SITTING DOWN ZAMBIAN AND CHINESE OFFICIALS SIGNING TRADE DEAL TO SET UP A SPECIAL ECONOMIC ZONE IN CHAMBESHI ON THE COPPER BELT AND WRITE OFF PART OF ZAMBIA'S DEBT HANDSHAKE, PRESIDENTS EXCHANGE BOOKS OF AGREEMENTS
  • Embargoed: 24th June 2007 13:00
  • Keywords:
  • Topics: International Relations
  • Reuters ID: LVACJTR6GSKV9N52LHJ7WFNTCVFX
  • Story Text: Zambia's President struggled to woo western investors in London with promises of a favourable investment policy and a clampdown on corruption. But, Zambia also challenges the West to match Chinese investment, saying the Chinese are proving to be better and faster at getting down to business. The President of Zambia on Thursday (June 7) tried to woo investors in London, but warned the West that Chinese businessmen were making fast headway all over the continent.
    As the G8 leaders met in Germany, Zambian President Levy Mwanawasa said African nations were not interested in aid "just for the sake of it". Alleviating poverty in Africa and tackling climate change are top of the agenda at the three-day summit in Heiligendamm.
    "We want to be helped, so we can help ourselves. We are interested in merely aid for the sake of it, but we want aid for trade," he told Reuters on the sidelines of a business forum in London.
    Mwanawasa addressed the Business Action for Africa forum on Tuesday (June 5), followed by the Zambia Investment Forum on Thursday (June 7).
    Mwanawasa said he wanted Western companies to exploit Zambia's raw materials but they should do this by setting up local factories to produce value-added goods rather than simply extracting minerals.
    He said Zambia was serious about clamping down on corruption.
    "My government has zero tolerance for corruption, and if an official entrusted to facilitate the investment solicits for gratification, you should not hesitate to report that individual to some of the existing law enforcement agencies who will deal with him."
    He dismissed allegations his government's anti-corruption campaign was a political witch hunt against his predecessor Frederick Chiluba. Chiluba, who says he is the target of a witch hunt, is to stand trial on corruption charges on August 14, accused of stealing $488,000 in state funds while ruling the southern African nation from 1991 to 2001.
    Businessman David Parfitt, whose company exports spare car parts, said first hand stories of corruption from other businessmen were deterring him from investing in Zambia.
    "If the government is serious, if the Zambian government is serious on reducing corruption, then more potential investors will visit the country..but at this stage, the corruption element is the problem," Parfitt said.
    The Zambian Commerce Minister challenged the West to match Chinese investment in his country. He said would carry on welcoming Chinese investment, credit and loans despite domestic political opposition and unease in the West over the pace of China's drive to boost economic ties with Africa.
    China is pursuing a strategy of tapping African raw materials to feed its economic growth, in exchange for grants and unconditional loans to the world's poorest continent.
    Some Western companies are hamstrung by their bankers who balk at the potential risks of doing business in a continent with a poor record on corporate governance. " The West must remain competitive to China, they must be a bit more aggressive, must be a bit faster in terms of decision-making. You take a little longer to carry out risk assessment, this assessment, political stability, economic stability, neighbourhood stability, all these things will take them into a point, and when you do on your laptop, it tells you: "Assess again." The Chinese unfortunately don't do things like that, they just decide and move," Felix Mutati, Zambian Minister for Commerce, Trade and Industry said.
    Zambia said last month China had boosted its planned investment to $900 million in the country's mineral-rich Copperbelt over the next four years.
    China's increasing involvement in Africa has raised concerns among Western companies that they will be squeezed out of the race for Africa's mineral and energy deposits. Eyebrows are also being raised in Western political circles at China's rising influence in the populous continent.
    Chinese businesses have already invested more than $6 billion in Africa and are engaged across sectors from energy and mining to construction, infrastructure and textiles.
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