Zambia reaps rewards from Zimbabwe's woes

By Manoah Esipisu

Harare - Zambia's agriculture and tourism sectors have reaped rich benefits from Zimbabwe's economic and political woes, analysts say, though other countries have suffered losses.

White Zimbabwean farmers displaced by President Robert Mugabe's land reforms have also boosted farm output in Malawi and Mozambique with their expertise.

But Zimbabwe's economic collapse, which has seen joblessness soar and created food shortages, has also robbed neighbours like Mozambique of a key market for their exports.

Zimbabwe was once a prized client of hydroelectric company Cahora Bassa and Mozambique Ports and Railways, but the volume of its goods through Mozambique has declined due to a persistent foreign exchange shortage, analysts said.

"Zimbabwe used to be an important trade partner for Mozambique but foreign exchange problems have limited cross-border activity," Professor Cardoso Muendane, a Maputo development consultant, told Reuters on Monday.

"The economic and political situation in Zimbabwe has negatively affected Mozambique. That country has limited ability to buy Mozambique's produce," Muendane added.

"A quick solution would be desirable but unfortunately this does not depend on a calendar and it is difficult to forecast when a turnaround will happen," he told Reuters in Maputo.

Malawi had benefited from a trickle of Zimbabwean farmers, foreign exchange shortages in Harare had distorted prices making Malawi's produce comparatively more expensive, analysts said.

Zimbabwe faces parliamentary elections on March 31 which Mugabe hopes will help counter international criticism of his government.

Mugabe has faces five years of international isolation amid charges he rigged the last major parliamentary vote and his own re-election as president in 2002. The European Union and the United States have put sanctions on his government on charges of previous election rigging.

"Zimbabwe has hit Malawian exporters because of instability in the exchange rate," said Malawi University economics professor Ben Kalua. A decline in the Zimbabwe dollar hurts Malawi whose kwacha is relatively stable, they said.

Zambia meantime has had a boost, with significant gains in agriculture and tourism, said financial commentator Ignatius Chicha, treasurer at CitiBank Zambia.

"We are now seeing more tourists visiting Livingstone to see the Victoria Falls from the Zambian side because of instability and food shortages in Zimbabwe, growing tourism," Chicha said.

"There are more planes landing at Livingstone airport bringing in people who would ordinarily be visiting Zimbabwe because of the good infrastructure it has," Chicha added.

The growing tourism sector in Zambia had made small airlines in the region - including Zambian Airways and Air Botswana - expand their southern African routes, analysts said.

And the latest data from the Tobacco Association of Zambia (TAZ) showed that tobacco production would rise to 52-million kilograms this year from 31-million kilograms in 2004 and just 3.4-million kilograms in 2000 on the back of white Zimbabwe farmers now in Zambia.

CitiBank's Chicha said Zimbabwe's economy could experience a rebound after Mugabe leaves office, probably after 2008 when Zimbabwe is due to hold its next presidential elections.

"They are working hard to stabilise the exchange rate and also to try and lower interest rates and bring down inflation. The only thing they need to do is repair their relations with Western donors," Chicha said.

Zimbabwe has had soured relations with Western donor agencies and countries in a row Mugabe says was instigated by British Prime Minister Tony Blair, angered at his taking of white farms for redistribution to landless blacks.

Mugabe's critics say he, not Blair, must bear the blame for 5 years of economic decline in Zimbabwe.

Abel Mkandawire, chairman of the Zambia Association of Chambers of Commerce and Industry (ZACCI), said an influx of Zimbabwe farmers and business people also improved technology use in Zambia and fuelled production of quality goods.

"They have created jobs for Zambians and they have improved how we do business," Mkandawire told Reuters in Zambia.