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Launch of the first Zambia Export Development Fund (ZEDEF) Strategic Plan
20 January 2017
Speech of H.E. Alessandro Mariani, Ambassador of the European Union to the Republic of Zambia and to COMESA
Honourable Minister of Commerce, Trade and Industry,
Dear Secretary to the Treasury,
Dear Director General of the Zambia Development Agency,
Representatives of the Private Sector,
Representatives of the Media,
Ladies and Gentlemen,
I am delighted to have the opportunity to address all of you today, on the occasion of the official launching of the Zambia Export Development Fund (ZEDEF) Strategic Plan. Please allow me to extend my best wishes to you all for the New Year! I also wish to thank our hosts, the Zambia Development Agency, for inviting the European Union to this very important event and for the excellent organisation.
History of the fund
The Zambia Export Development Fund is not a new instrument and it has been around since 2008. The aim of the Fund is to contribute to increase non-traditional exports through the provision of low-cost finance to exporters in Zambia. The fore-runners of ZEDEF are the Export Development Programme I and II, European Union-funded programmes running up to end 2007.
The Export Development Programs worked with loans and grants to Zambian producer associations active in the non-traditional exports sector. Selected associations used the funds in the form of loans to their members, but also in financing export market research, participate in trade fairs, acquire small capital equipment, provide pre-shipment finance and sponsor potential foreign buyers into Zambia.
The current Fund and the new Strategic Plan
At the end of the second Export Development Programme, the remaining funds and portfolio were passed on to ZDA for continuation. The continuation took the form of the Zambia Export Development Fund. The Strategic Plan which is being launched today constitutes a turning point in the management of ZEDEF and introduces clearer principles which are expected to improve its performance. In our view the most important ones are:
the introduction of a risk management framework and of a stricter monitoring and evaluation of the performance of the fund;
the introduction of collateral on loans;
the reinforcement and training of the team managing the fund;
the principle of direct lending to companies; and
the provision of non-financial services to the companies identified for benefitting from a loan;
I am not going to go into details on the important improvements introduced, as the Director General of ZDA, Mr. Patrick Chisanga, will certainly do that. I would only mention that we welcome the approach taken in the drafting of the Strategic Plan. This Plan took full account of the past experiences and proposed a management of the fund taking more precautions. We were consulted in the process, we have provided our input, and we would like to thank ZDA for that.
Importance of the fund
This initiative is very relevant and is in line with the country's policies of diversification and industrialisation of the economy by adding value locally. The export strategy of the Government which has reached the final phases of consultation and will soon be launched, as well as the trade, investment and enterprise development bill announced by the President, show strong commitment from the Government to facilitate the growth of non-traditional exports and scaling up of the companies producing for export.
Such initiative is also very much needed as the commercial interest rates are currently too high.
What else is the EU doing to complement these initiatives?
The European Union is in the process of pre-identifying a Private Sector Development Programme to be financed under the 11th European Development Fund. The identification is still in its early phases and the programme should become operational towards the end of 2018. As such, complementarities are to be sought with existing initiatives, such as the ZEDEF and we count on the involvement of ZDA, MCTI and other Government services and the private sector in the design of the new programme.
I would like to conclude by adding that the private sector is the engine for growth and diversification of the Zambian economy is a clear priority.
I wish Zambia Development Agency and particularly the team working on the Zambia Export Development Fund all the best with the implementation of the new Strategic Plan and in achieving its ambitious objectives!
Thank you for your attention; Zikomo Kwambiri!