The Landlocked African Copper Mining Capital With Unlikely Tech Hub Ambitions
When it was time for Zambians to elect a president last year, the shortcomings of the then-incumbent administration of Edgar Lungu seemed to become more apparent. For many, it was deemed a necessary realization, one for which natives had to be at their most decisive.
Apart from being on the tougher side of a rule which began in 2015, the fundamental promise of Lungu’s regime—placing ordinary Zambians at the center of the country’s development—came up as short as the pledges of the presidencies before his.
Zambia’s recent polls ended Lungu’s tenure and ushered in that of Hakainde Hichilema, a 59-year-old economist and businessman who looks to leverage the powers of his newly assumed office to heal the landlocked Southern African nation’s heavily beset economy.
The nation has no seaports but gone has the days when a landlocked geography was deemed a huge economic disincentive. Presently, economists point to landlocked countries as “land-linked” economies with an opportunity to become focal trading points between different jurisdictions.
Generally, Hichilema’s administrative efforts are expected to expunge corruption from all aspects and create just about enough jobs to cater to a grossly unemployed youthful populace.
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Barely a week after taking office, Zambia’s leader created the Ministry of Technology and Science, something which, despite six preceding leaderships, has never existed in the country. The Ministry was set up to ensure that some [or many] of the world’s emerging technologies are tapped to solve the issues hampering inclusive and sustainable Zambian development.
“We’ve created the Ministry of Technology and Science as we believe that technology will be a major catalyst for our country’s economic growth, development, and transformation. My young friends in the tech space, feel free to engage us with your ideas,” Hichilema later said in a typical evening update on Twitter.
The incumbent Zambian leadership—led by someone who has tried to do so five times before—is actively looking to undo its substantial dependence on copper, a natural resource which brings the country 75 percent of its export earnings. Currently, Zambia is Africa’s biggest copper producer and a major actor in the industry’s international scene.
According to Perseus Mlambo, however, “Copper is old and boring. Governments risk missing the proverbial boat by over-investing in extractives and under-investing in software. Tech uplifts multitudes of people, and the barrier to entry is very, very low.”
Roughly a month before the current president came into power, the technological prospects of the Zambian economy had been flaunted.
The much-celebrated—and just as scrutinized—Y Combinator picked up its first-ever Zambian [and second Southern African startup], a non-bank card-issuing API fintech billing as Union54. The service not only launched just last year but also touted as the first of its kind in Africa.
Union54 wants to be the card-issuing partner of all fintechs or software companies across Africa [hence the 54], most of whom face financial and durational complications procuring virtual and physical debit cards for their customers. To increase its chances out there, VC juggernaut Tiger Global joined other American investors to issue the fintech a USD 3 M seed round.
Early into 2022, word broke out that the Zambia Technology Sector Working Group—an organization created by Perseus Mlambo, co-founder at Union54 and Mwiya Musokotwane, CEO of Zambia’s Thebe Investment Management—was starting to make big moves to take advantage of the emerging tech environment of the country.
After a few months of onboarding, the Group now counts fintech unicorns Flutterwave and Chipper Cash as its newest members, while names such as Kuda Bank, RiseVest, Ethereum Foundation, BongoHive, and Co-Creation Hub are existing working partners. This is creating a pool of resources to transform Zambia into a startup-friendly sanctuary.
According to reports, the Zambia Technology Sector Working Group is now in talks with the just-set-up Ministry of Technology & Science, with hopes of developing a regulatory framework designed to immensely bolster African early-stage tech companies looking to have ops from or incorporate in the country. In this regard, Zambia is being touted as the potential “New Mauritius”.
Although Zambia is not exactly pro-crypto, the nation is among the bare handful of African countries willing to explore the creation of a central bank-backed digital currency (CBDC). With this, the country looks to cut down the cost of transactions and boost participation in the formal financial ecosystem.
In a related but more recent development, Vitalik Buterin—a Russian-born Canadian programmer and writer who is best known for being part of those who founded Ethereum, the world’s second-largest cryptocurrency—has thrown his weight behind the push to transform Zambia into Africa’s tech hub, which means conjuring enough results to beat incumbent startupping hotspots.
Should Zambia emerge successful at luring in tech companies from across Africa and perhaps beyond with favorable policymaking, there will be sufficient room to solve the country’s fundamental economic setback; the lack of youth employment, which Hichilema pledged to solve while campaigning for president.
According to data from the International Labor Organization, over one in four Zambians below the age of 24 have no income, a reality that has been worsening since 2013. In 2020, the unemployment rate in Zambia was at 12.17 percent; it was 7.85 percent in 2012.
While well VC-funded Zambian startups are a rarity, names such as Zazu (fintech), Rent to Own (proptech) and WidEnergy (cleantech) have landed considerable cash to further their ambitions. Since the tech ecosystem is still in its infancy, there is likely to be some runway upsides of implementing attractive business policies early enough for the first wave to flourish. But, only time can tell if all this would not end up only on paper.
Featured Image: The Culture Trip
