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Zambia's Exports and Imports

Next issue - Zambia's Balance of Payments Situation >>

In order to understand Zambia's trading and balance of payments positions it is important to have a clear understanding of the nature of the goods and services the country exports and imports.

Main Export Items

Coffee Production in Zambia

Copper and cobalt are Zambia's traditional exports. In 1996 taken together they accounted for about 67% of Zambia's merchandise exports. However, the export earnings from these two commodities have fallen and the government has actively encouraged the growth of non-traditional exports. These include:

• engineering products: e.g. copper rods, cables, wire, billets and brass ingots,
• textiles: e.g. cotton yarn, loomstate fabric, acrylic yarn, toweling, chitenge
• processed foods e.g. sugar, molasses, honey and bees wax
• building materials e.g. cement, PVC pipes asbestos pipes
• primary agricultural commodities,
• animal products such as crocodile meat, poultry, fish and leather products
• gemstones,
• floricultural products
• electricity

Most of the items listed above are raw materials or processed raw materials. In 1998 over two thirds of all Zambia's exports comprised of exports of primary commodities with metals, notably copper and cobalt accounting for the overwhelming amount. The other third of Zambia's exports were manufactured goods. The export of primary commodities either in their raw state or having undergone some processing means that there is a relative small amount of value added by the producing nation. Further processing takes place in the importing country. It is in these countries that the extra added value achieved by manufacturing and distribution earns importing firms greater profits.

Declining export prices coupled with the low price elasticity of demand for primary products contrast with rising import prices of oil and manufactured goods, leading to a persistent worsening of terms of trade. Some economists argue that LDCs must look to develop the manufacturing sector of their economy so as to engage in higher value added and profitable production. However this requires investment, and improved access to the markets in the MDCs.

Zambia's Imports

The major imports to Zambia include capital equipment for the mining sector, crude oil, and fertiliser. Other imports, including consumer goods, have increased as a share of total imports - from around 40 per cent in 1992 to over 60 per cent in 1996. This reflects in part the considerable liberalisation of the trade that has taken place following the election of President Chiluba.

The table above shows the breakdown of Zambia's imports for 1998.

Non Traditional Agriculture

Manufactured goods dominate Zambia's imports. Of these over half of the country's imports were capital goods, mostly equipment, for the mining industry. During the 1990s the quantity of consumer goods increased and along with energy and fertiliser account for most of the rest of the country's imports.

The consumer goods consist of both food and non-food products. Despite the intention of the government to be self sufficient in the production of food the data shows that food has had to be imported most years. During periods of drought when domestic production has fallen the quantity of food imported has increased.

Economic Costs of Tourism

The regime of trade liberalisation has also led to a substantial growth in the quantity of consumer goods imported. The question is whether this strategy has impacted on development. Are the imported non-food consumer goods contributing to the reduction of poverty? If foreign exchange is being used to purchase luxury goods then clearly this is not.

Next issue - Zambia's Balance of Payments Situation >>

Related Glossary Items:
Value added
Primary products
Investment
Capital
Trade liberalisation

Related Issues:
Zambia's Trading Partners
Zambia's Trade Policy
Tourism in Zambia

Related Theories:
Interpreting the Balance of Payments
The Benefits of Trade
The Principle of Absolute and Comparative Advantage