South Africa’s economic recession may negatively affect the Zambian economy in the short-term as much of that country’s finished products end up in the local retail sector, says the Zambia Chamber of Commerce and Industry (ZACCI).

Commenting on the technical recession South Africa is now in where real Gross Domestic Product (GDP) in that country slumped to -0.7 per cent in the second quarter of this year, ZACCI president Michael Nyirenda said that Zambia was likely to be negatively impacted in the short-term owing to the heavy dependence on that country’s finished products for the local retail sector.

South Africa is Zambia’s second biggest source of imports, accounting for 24.4 percent, after the Democratic Republic of Congo (DRC), according to the Central Statistical Office (CSO).

“As a business chamber, whether operating in Zambia or not, we want an environment that is always conducive for doing business. So, definitely South Africa, it is unfortunate that they have gone through a recession. Seeing that we are trading partners and more so that South Africa is actually our biggest trading partner, we might have negative effects in the short-term, but maybe not in the long-term. We need to be looking at in terms of what has happened of course the first thing is to say, look, it may not show today, but it may have these effects in terms of immediate things that as you and me are aware, most of our products and finished products on our shelves actually come from South Africa. So, the immediate reaction in the short-term is that, we might be affected in that, if the production is affected by this, the productive sector in South Africa, that might affect us in terms of what will be available in our shelves seeing that most of our retail outlets in Zambia stock South African finished products,” Nyirenda told News Diggers! in an interview.

“I personally heard that sad news and development coming from our biggest trade partner. As ZACCI, we are concerned about this development and definitely are looking at what the likely impact will be. Without discussing the South African economy, we hope this will not affect our trade relations negatively. If indeed this development brings a reduction in the productive capacity of South African businesses, I would implore our businesses in Zambia to look at alternatives, especially imports coming out of South Africa. Every challenge brings with it an opportunity and probably, that is the way we must look at this issue.”

Nyirenda, however, added that Zambian businesses needed to take the current recession in South Africa as an opportunity to improve on the quality of local products and to find alternative trading partners.

“It’s high time that we broaden our trading partners to ensure that we are not directly affected by what happens in other countries. We need to be doing value-addition and this is why we have to integrate in Africa. Free trade is about what do we need to do to our products? Standardisation and quality control are very key. We need to wake up and re-group to ensure that we have many more trading partners or start adding value to our own. We need to ensure that our products are up to standard so that when they hit the foreign markets, they do not give problems to people. Chain store markets do not want to be associated with products that are not up to standards because they know that such can destroy their name. That is why honey from Zambia has been banned from South Africa. It could be that it is not up to standards. We need to improve the quality,” said Nyirenda.

“Mind you, these retail stores have standards. If the recession impacts Zambia negatively, then this might be an opportunity for us to change trading partners. They say when one door closes, another opens.”