European Union External Action

Zambia and the EU

16/05/2016 - 17:13
EU relations with Country

The Delegation of the European Union to the Republic of Zambia is responsible for managing official relations between the European Union (EU) and Zambia.

These relations are conducted within the framework of the Cotonou Agreement, a global agreement signed in 2000 between African, Caribbean and Pacific Group of States and the European Union. The cooperation between the two started in 1975 with the coming into force of the Lomé Convention, precursor to the present Cotonou Agreement. This is the year that the office of the Delegation of the EU was established in Lusaka.

Zambia is a peaceful and stable country with a liberalised economy. The European Union and Zambia are engaged in a close political dialogue, conducted within the framework of the Cotonou Agreement, a global agreement signed in the year 2000 between the African, Caribbean and Pacific Group of States and the European Union. Dialogue is not only with Government but with all Zambian stakeholders including political parties, Zambian institutions and civil society.      

The dialogue is constant and focuses on development and consolidation of democracy, rule of law, fundamental freedoms and human rights. The dialogue also covers all subjects of mutual interest including those being discussed at the UN level. Zambia is increasingly active in regional and continental affairs, bearing also in mind that it is currently a Member of the African Union Peace and Security Council and the Vice Chair of the SADC Organ on Politics, Defence and Security. Zambia is also participating to peace keeping missions.

A formal political dialogue with Government is organised annually and is based on Article 8 of the Cotonou Agreement. The Minister of Foreign Affairs leads the government team composed by a high number of ministers and senior government officials while the European Union is represented by all the EU Heads of Missions permanently resident in Lusaka and a number of EU HoMs accredited to Zambia but resident overseas. The agenda is comprehensive and covers a wide number of subjects. For instance in the last two years (2016 and 2017) the subjects included foreign policy issues, Zambia’s internal affairs, EU internal affairs, trade and investments, development relations and climate change. Discussions have proved to be cordial, fruitful and result oriented. The friendship between Zambia and the European Union is remarkable and over many years of close collaboration we have established a solid, dynamic and widening partnership. 

In the year 2016, in response to an invitation from the Zambian Authorities, the High Representative of the European Union for Foreign and Security Policy decided to deploy an EU Electoral Observation Mission (EU EOM) to Zambia to observe the elections held on 11 August 2016. As the European Union previously observed also the 2011 and 2006 elections, this decision underlined the EU’s continued commitment to supporting the Zambian democracy. The EU EOM issued its preliminary statement a few days after the elections and subsequently presented its final report, containing also its recommendations, during a return visit to Zambia from the Chief Observer, Cecile Kyenge, Member of the European Parliament at the beginning of November 2016.   

Economically Zambia is a country where, notwithstanding some challenges, the opportunities of interest to private sector investors are real, both for those already present in Zambia and for potential foreign investors. The EU intends to support Zambia’s sustainable growth and job creation focusing on sustainable agriculture and sustainable energy, fostering reforms and facilitating investment opportunities with a focus on private sector investments. The EU intends to encourage trade and investment relations with Europe and engages in economic diplomacy. In this framework worth mentioning us the EU Delegation and the EU Member States took the initiative to create the first ever EU Zambia Business Club (EUZBC) in June 2016. The EUZBC, composed of around 200 companies from 15 EU Member States, provides a networking platform for members to gain knowledge of the business environment and business opportunities. It aims at contributing towards a sound environment and for businesses and investments by becoming a good partner of the Zambian government in terms of dialogue and policy definition. The EUZBC is today registered as an Association and has its own website at www.euzbc.org. The EUZBC is currently run by an interim board and the secretariat is ensured by the EU Delegation. In the near future the EUZBC is going to elect its Board for a two year mandate and efforts will be made to further expand its membership. Furthermore the EU Delegation has launched a study on the impact of EU investment in Zambia which should be available in the next few months. The results will be used to better map and engage the EU investors in Zambia and to inform the dialogue with the Government. Trade relations are good and balanced (ref to dedicated chapter here below)

All the above is done in full support to Zambia Development Strategy in coherence with the EU Member States and consistently with the development efforts which are financed mainly through the European Development Fund (EDF) but also via the budget of the European Union.


 

Bilateral trade

As a Least Developed Country (LDC), Zambia benefits from a variety of preferential market access initiatives such as the EU Everything-But-Arms initiative (EBA) under which Zambian goods exported to the EU enjoy a duty-free, quota free treatment.

According to 2016 Zambian data, the EU remains an important trade partner for Zambia, being its 3rd import partner and its 7th export partner.

The bilateral trade in goods was at 786 million EUR in 2016:

  • EU goods imports from Zambia: 434 million EUR

  • EU goods exports to Zambia: 352 million EUR

    EU's imports from Zambia are mainly primary products (non-ferrous metals and agricultural products). EU's main exports to Zambia were machinery, transport equipment and chemical products. Zambia has opportunities to increase its exports to Europe. The country can also emerge as regional food exporter and develop long-term competitiveness of local mining supply cluster.

    For more information on the EU-Zambia bilateral trade, please have a look at the:

  • Summarised factsheet, or

  • Detailed factsheet

In line with its Communication "Trade, Growth and Development – Tailoring trade and investment policy for those countries most in need", the EU seeks to ensure that its trade and development policies help developing countries, in particular, Least Developed Countries (LDCs) to benefit from increased trade opportunities.

In Zambia, the EU proposes a number of ways to improve the effectiveness of EU trade and development, including:

  • Bilateral trade: through the Everything but Arms Initiative, the EU aims to ensure that Zambia benefits from duty free and quota free access to the EU market;

  • Aid for Trade: the EU provides financial assistance to help Zambia undertake domestic reforms to develop its capacity to trade, to produce, as well as the institutional and economic infrastructure necessary to expand trade.

  • The EU provides an online service, the Trade Helpdesk to facilitate market access to exporters, especially small operators, who are interested in supplying the EU market. In turn, the Market Access Database has been specifically designed to address the needs of EU-based exporters and importers. 

EU Investment relations with Zambia

Zambia has definitive advantages to attract investors:

  • Peaceful and stable economic environment,

  • abundant natural resources,

  • access to water,

  • profile to become an energy and agricultural exporter.

    In 2016, Zambia was the 7th best performing country in Sub-Saharan Africa (and the 98th in the world) in terms of business environment, according to the Ease of Doing Business index.

    The EU Foreign Direct Investment stocks in the country is in second place after OECD non-EU countries, and followed closely by Asian investments and by significantly lower amounts from COMESA and SADC. In terms of FDI flows, the EU also occupies the second place, with 35.3% of the total FDI flows into Zambia in 2015.

    In terms of investors' perception, 2016 Bank of Zambia survey indicated that starting a business, overall ease of doing business, and paying taxes got favourable evaluation of respondents, whereas getting credit, enforcing contracts, trading across borders and resolving insolvency were rated unsatisfactorily. The main concerns of investors included high cost of doing business, the macroeconomic environment, the bureaucratic administrative procedures, and the poor service delivery by key institutional players. 

    Zambian Development Agency was created in 2006 to facilitate investments in Zambia. Zambia declared as well  six areas as Multi-Facility Economic Zones (MFEZ) and/or Industrial Parks.

     

One of the Delegation's key areas of responsibility is the programming and the implementation of external assistance programmes with Zambia and with COMESA. The EU is a long-standing cooperating partner of Zambia. For over 40 years the EU has been supporting Zambia's social and economic development under the European Development Fund (EDF), the main instrument for providing EU assistance to countries in Africa, Caribbean and Pacific (ACP).

The EU implements its programmes in the frame of the New European Consensus for Development (link), the EU development policy document which is geared towards Agenda 2030 and the achievement of Sustainable Development Goals 

EU development relations with Zambia are guided by three overarching goals, namely to: 1) Advance economic and democratic governance, accountability and effective use of public resources 2) Promote sustainable and inclusive growth, job creation and resilience; 3) Reduce poverty and income inequalities, promote human development and gender empowerment.

These goals are articulated within focal sectors of cooperation. Under the 11th EDF, covering the period 2014-2020, the EU has allocated an envelope of EUR 484 million for programmes in key economic sectors (Energy, Agriculture) and in the area of Governance. The EU financial support is entirely on a grant basis. Priorities for cooperation are set out in the National Indicative Programme for Zambia, signed in October 2014 following negotiations with the Government of the Republic of Zambia and consultations with EU Member States, civil society and other cooperating partners. The financial breakdown of the NIP over the focal intervention areas is as follows:

In the area of Governance, the EU has been focusing on 1) Strengthening the election system, 2) Access to Justice and Human Rights and more specifically women's and children's rights; 3) Public Financial Management.

Elections Support - The EU made available € 7 million to support the electoral cycle for the elections which were held in 2016, with a view to promoting wide participation of Zambian citizens in credible and transparent electoral processes. The programme provided capacity support to the Electoral Commission of Zambia, and to civil society to organize civic and voter education before the elections, enhance women’s participation and carry out domestic observations. During the 2016 Elections the European Union deployed a European Union Observer Mission (EUOM) and post-electoral assistance is being provided to implement the recommendations made by the EUOM and further improve the electoral cycle. The EU works closely with other cooperating partners in this area.

 

Justice and Human Rights Protection - The EU is contributing to efforts to enhance equality in the access to legal assistance through a flagship programme on Legal Empowerment and Enhanced Justice Delivery (PLEED) implemented in close cooperation with Germany. The programme works to strengthen access to legal and paralegal support for the most vulnerable, including women and juveniles and promote policy and institutional framework reforms for a more effective efficient and inclusive just delivery.

 

It is complemented by projects to improve conditions of detention within Zambia's penitentiary institutions implemented by non-governmental organizations.

 

The EU will continue to support the protection of women and children rights through a € 25 million programme on Sexual and Gender Based Violence (SGBV) to be rolled out from 2018 in the Northern Province and the Luapula Province. The programme will have three main components, namely 1) prevention - through the change of mindsets and behaviours; 2) comprehensive support packages to survivors and 3) institutional support at national, provincial and district level.

Training of marriage counsellors against GBV

 

On Public Finance Management, the EU is supporting the Ministry of Finance and the Ministry of National Development Planning to strengthen efficiency and effectiveness in the management of public resources and delivery of services, which are critical to the achievement of public policy objectives, including achievement of Sustainable Development Goals. The ongoing PFM project aims at developing a structured training and professional development programme for government accountants and civil servants, as well as improving monitoring and evaluation systems for the 7th National Development Plan and specific sector plans. The EU also works together with the Ministry of Mining and Mineral Development to enhance capacities for more effective monitoring of mining activities and mineral production in Zambia in order to contribute to increased domestic revenue generation. To that end a new information management system for mineral production data has been developed.

 

A fruitful cooperation has been established with the National Assembly of Zambia to strengthen scrutiny during budget preparation and oversight of budget implementation. This has already led to the creation of a Parliamentary Budget Office that supports the Parliament's ability to monitor the budget. This cooperation will be expanded under a new PFM programme (EFFECT) to include other key institutions that have a mandate to hold spending agencies accountable such as the Office of the Auditor General and the Anti-Corruption Commission.

 

Agriculture – Agriculture is the primary source of income and food for the rural poor; The sector employs more than 50% of Zambia's labour force, however its contribution to GDP remains modest.. The EU is committed to help accelerate the transition from a still predominantly subsistence-based agriculture to more business oriented farming systems that can promote economic diversification, generate decent jobs and improve livelihoods of smallholder farmers. The EU is currently investing to scale up conservation agriculture country-wide based on a more efficient use of natural resources such as water and soil. The EU is also strengthening the capacities of key government institutions for more consistent agriculture and nutrition policies and improved service delivery to farmers.

© Independent Research Forum

 

Upcoming programmes will target inclusive value chains development and sustainable commercialisation of emerging farmers, as part of a wider approach that includes dedicated components on water management, climate-smart agriculture and nutrition. Sustainable and responsible agribusiness development will be supported through innovative financing mechanisms (AgriFI) and blending with European Financing Institutions.

© Bloomberg News

 

In the Energy sector the EU is working hand in hand with sector institutions, financing institutions and stakeholders to help pursue inclusive growth, economic diversification and build resilience to climate change. Financial and technical assistance under the 11th European Development Fund have been almost equally distributed among power generation, transmission and distribution as well as renewable energy and energy efficiency to improve access to clean, reliable and affordable energy for all.

For large power generation and transmission projects, EDF grants acted as catalyst for increased financing of strategic energy security investments such as the rehabilitation of the Kariba Dam which provides half of the country's total power generation (an investment grant of € 64 million for the reshaping of the plunge pool out of a total budget of € 250 million) and the high voltage transmission line from the newly built Itezhi Tezhi hydro-power plant to the national grid (an investment grant of € 18.2 million out of a total investment of € 255 million). Other priority projects include the Zambia – Tanzania power interconnector that will link the Eastern African Power Pool with the Southern African Power Pool and for which the EU financially supported technical design, feasibility studies and coordination activities.

© Zambezi River Authority

In the financing of power infrastructure projects the EU has joined forces with EU financing institutions (European Investment Bank - EIB) and EU MS development banks (Kreditanstalt fuer Wiederaufbau - KfW and Agence Francaise de Developpement - AfD) and multilateral banks (African Development Bank - AfDB, and World Bank - WB), by "blending" investment grants and technical assistance with concessional loans. 

As regards distribution, under the 10th EDF, the EU contributed, together with other development partners, to the Increased Access to Electricity Services project (EDF grant of € 10 million out of an investment of € 36.5 million) which provided 92,265 households connections to the electricity grid across the country, primarily in urban areas and with a majority of connections targeting households with single mothers and other vulnerable women. In rural areas an investment grant financed 305 km of transmission lines to reach the districts of Mumbwa and of Kaoma. The project resulted in new connections to more than 502 households, 210 micro and small enterprises, 11 clinics, and 24 schools.

 

Upcoming projects include the upgrading and extension of the electricity distribution network in Lusaka (EDF grant of € 65 million out of an investment of € 260 million) and in the Southern Provinces (EDF grant of € 10.4 million out of an investment of € 87 million), to increase connectivity within unserved, poor areas - today only one Zambian out of three is connected to the electricity network. These two investments combined are expected to connect over 100.000 households and provide electricity to hundreds of productive users such as micro and small enterprises. They also aim at reducing high transmission losses, which are currently in the range of 16%, thereby decreasing the cost of service.

As evidenced for example in the Mumbwa district, EDF financial support to access to grid electricity in rural areas had a major effect on economic and social development in the area, including agricultural development on a major scale as well as mining operations and related job creation. After just a few years of operations, power demand in the area increased so much that a new investment has now been carried out to enable increase of power supply by 800%. In rural areas, moreover, projects generate additional gender related benefits including increase of the number of girls / women having access to education arising from improved energy access; increase of the number of women having access to safe health care arising from improved access to energy; decreased burden of wood and water collection arising from improved access to energy

In addition to grid extension and distribution programmes the EU will increasingly support in the future small scale, private sector-led renewable energy projects, through innovative business models and financing modalities, particularly in rural areas far from the main grid. These are crucial for enabling broader, inclusive economic and social development as well as to facilitate uptake of a green economy. New programmes on renewable energy and energy efficiency have been launched and a Zambia dedicated window of the global EU Electrification Financing Initiative (www.electrifi.org) will be rolled out in 2018.  The EU is actively engaged in dialogue on policy and regulatory reforms to attract the much needed investments in the sector, to enhance performance of energy sector institutions and to promote uptake of renewable energy and energy efficiency initiatives.

© World Bank Group

Under the 10th European Development Fund (2008-2013) an amount of € 490 million was committed to Zambia with emphasis at sector level on strengthening health systems and improving transport infrastructure.

Transport - The EU has  supported through investment grants the rehabilitation and upgrading  of backbone road infrastructure in Zambia, to improve connectivity within Zambia and with its neighbouring countries, as well as to enable economic development along main transport corridors crossing the country. The most recently funded projects include the Choma - Livingstone road in the Southern Province and Great East Road (GER) in the Eastern Province (Luangwa Bridge - Sinda and Sinda – Mwami Border sections). The GER rehabilitation project co-financed with the EIB and the AfD during the period 2013-2017 has improved some 250km of an important link connecting Lusaka to the Eastern Province and Zambia with Malawi and the Nacala port in Mozambique. Support to road rehabilitation has gone in parallel with the reinforcement of capacities of institutional partners in the sector, such as the Ministry of Transport and Communications, the Road Development Agency, National Road Fund Agency and others, particularly in the area of road management practices, planning and budgeting for road maintenance and rehabilitation.

 

New projects under the 11th European Development Fund regional programme include the upgrading of an important section of the Great North Road, Chinsali - Mpika (co-financed with the EIB), which is another key economic  infrastructure for the country and for the region, linking Zambia with Tanzania (and the Port of Dar es Salaam) and the broader Eastern Africa region. It is expected that rehabilitation works on this road will commence in 2019.

Civil Aviation - The EU has also undertaken to assist in the modernisation of the civil aviation sector, through the development of regulatory and operational know-how and support to technology transfer with results in the areas of air safety, security and air traffic management. Further to efforts to enhance Zambia's compliance with the international air safety standards, in June 2016, Zambia was successfully removed from the EU Air Safety List which allowed Zambia registered carriers to operate in the EU airspace.

The second Aviation Sector Support Programme (2017-2021) is  implemented jointly with the European Air Safety Agency (EASA), a prominent EU agency in the field of air safety, who will assist Zambia to further enhance its air safety operations and management in order to meet most of its air safety management obligations as set forth by the International Civil Aviation Organisation (ICAO).  Further technical assistance will be provided to key sector stakeholders such as the Ministry of Transport and Communications, Civil Aviation Authority (CAA), Zambia Airport Corporation Ltd (ZACL) and others to strengthen their capacity to effectively manage the expected growth in air transport operations within and to/from Zambia. It is expected that those structural and operational improvements will enable the sector to not only meet international standards but also attract additional investments thereby benefiting the country's economic growth.

Within the Health sector, two EU flagship programmes are ongoing under the 10th EDF.  The first is the Millennium Development Goals Initiative (MDGi)  which aims to accelerate progress towards MDG 1c, 4 and 5, improving nutrition and reproductive, maternal, neonatal and child health in eleven selected rural and urban districts in the Copperbelt and Lusaka provinces. The Zambian MDGi programme is a comprehensive multi-sectoral programme with interventions at health facility, district and community level, covering the whole continuum of care from reproductive health, pregnancy, delivery, postnatal care, child health and nutrition. It focuses on improving the quality of care to mothers, adolescents and children within the health facility and through outreach into the communities – helping Zambia's most vulnerable populations. The programme has already made very tangible progress in 1) The expansion, rehabilitation and equipping of 54 Emergency Obstetric and Newborn Care (EmONC) health facilities; 2) The improvement of water supplies, sanitation and infection control in health facilities; 3) extensive capacity building efforts targeting both health care workers and community-based volunteers. The MDGi benefits from a EU grant contribution of € 50 million and is implemented through the Ministry of Health, UNICEF and UNFPA.

© UNICEF Zambia

 

The second flagship EU initiative is the € 18 million Health Systems Strengthening Programme which aims to improve the availability of quality-assured essential medicines in public and private health care and contribute to rational and correct use of essential medicines in Zambia. Main activities include the construction of a National Medicines Quality Control Laboratory as well as the expansion and upgrading of Medical Stores Limited' central warehouse in Lusaka for the storage of medicines.

© UNICEF Zambia

 

Alongside assistance under the EDF National Indicative Programme for Zambia, the EU (European Union Commission and EU Member States together) has been a major contributor to the Global Fund against AIDS, Tuberculosis and Malaria, and the Global Alliance for Vaccines and Immunization (GAVI), of which Zambia has been among the main beneficiaries. The European Union also contributes to health research in Zambia under the Horizon 2020 Framework Research Programme. The European and Developing Countries Clinical Trial Partnership (EDCDP) programme has supported clinical development in sub-Saharan Africa of new or improved products against HIV/AIDS, malaria and tuberculosis. A number of these projects have been with the University Teaching Hospital (UTH). 

The EU is also part of the Universal Health Coverage Partnership with Luxembourg and the WHO that runs from 2016-2018 and focuses on health financing and donor coordination. The partnership supported the development of the 2017-2021 National Health Strategic Plan.

 

Cooperation with Civil Society

JCP | Bellah Zulu

 

The EU is partnering with non-governmental and civil society organisations for both service delivery and policy and advocacy work. It is currently contributing some €16 million to CSO-led initiatives in a broad range of areas including: Support to community schools, maternal and child health, family planning, media, elections, women’s participation in political processes and economic development, gender-based violence, prisoner’s rights, persons with disabilities' rights, and access to justice with specific focus on juveniles, children and women. These are supported (mainly through calls for proposals) under the EDF and under specific instruments and programmes, such as the DCI CSO /LA (Non-State Actors and Local Authorities) and Investing in People budget lines, as well as the European Instrument for Democracy and Human Rights (EIDHR).

For the period 2014-2017, objectives set out for Zambia under the EIDHR are: reduction of gender based violence, addressing human rights conditions in prisons and anti-discrimination. The most recent EIDHR call for proposals in Zambia focused on eliminating discrimination against disabled people, people living with HIV/AIDS and other vulnerable groups. The most recent call for proposals under the CSO/LA budget line focused on scaling up nutrition at community and district levels.

The EU Country Roadmap for Engagement with Civil Society in Zambia 2015-17 aims to establish a more structured dialogue and further improve collaboration between CSOs and the EU with its Member States. It has the following three main priorities: 1) to enhance CSOs capacities in project management, internal governance, fund-raising, monitoring and evaluation, 2) To enhance CSOs contribution to governance policy dialogue and development processes, including improved interaction with government; 3) To improve coordination between Delegation, EU MS and other cooperating partners & joint support where possible.. From inception of the roadmap, the EU has convened a number of “share and learn” events with mainly Zambian CSOs to discuss topics such as policy engagement, resource mobilisation, governance issues, financial and contract management, monitoring & evaluation and evidence based research A new country CSO Roadmap will be launched in 2018 for the period until 2020.

CSOs Consultation on the Roadmap - December 2017

Institutional Arrangements - Actions under the National Indicative Programme are implemented through the National Authorising Officer (NAO) of the EDF in Zambia. The NAO is the official representative of the Government of Zambia responsible for overall coordination of EU support in accordance with the Cotonou Agreement. The Secretary to the Treasury in the Ministry of Finance has been assigned the responsibility as the NAO. Under the programme, a NAO technical office has been established in the Ministry of Finance to provide the NAO with the necessary day-to-day administrative, coordination and technical support.


Cooperation with EU Member States - The EU Delegation coordinates closely with EU Member States in Zambia in the areas of policy dialogue, programming and implementation of development assistance, including a number of joint initiatives and co-financed programmes. Collectively, through the ongoing bilateral agreements and multiannual country strategies the EU has made a total envelope in the order of 1.2 billion available to Zambia for the period until 2020. These are all grants to which one should add the substantial support made available by European Development Financing Institutions, mostly through loans (e.g.: AfD, EIB, KFW) and the grant support provided through EU and EU MS regional and thematic instruments.

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