Why trade tension between DRC and Zambia is escalating

The DRC’s foreign trade minister, Julien Paluku. (@julienpalukucom/X formerly Twitter)

• The DRC has banned, for a year, the importation of beer, soft drinks, lime, earthenware and tiles from Zambia.
• Not amused, Zambia then closed three of its borders with the DRC.
• The ban on exports to the DRC could harm the economy, said the Zambia Association of Manufacturers.

The Democratic Republic of Congo (DRC) imposed a 12-month ban on importing beer, soft drinks, lime, earthenware and tiles from Zambia.

In retaliation, Zambia closed three of its borders with the DRC.

The DRC’s foreign trade minister, Julien Paluku, defended the ban, citing his aim to lower import taxes, safeguard local businesses, boost their output, and combat the import fraud prevalent in DRC border posts.

If these products find their way into the DRC, they will be returned or destroyed at the expense of the offender.

Both countries are members of the Common Market for Eastern and Southern Africa (Comesa) and the Southern African Development Community (SADC).

However, the DRC does not participate in Comesa and SADC free trade agreements.

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As such, the DRC and Zambia work through a trade pact, which was entered into on 6 August 2015, under which each signatory has the right to “safeguard measures in respect of a product on conditions that it causes or threatens to cause serious injury to the domestic industry producing like or directly competitive products”.

The DRC government said it was within its rights, enshrined in the agreement, to restrict the named products from entering its markets.

It also said that it would adhere to the trade agreement, which stipulated that restrictive measures could not go beyond four years.

The DRC also said it was acting to protect itself from being a dumping ground for goods that were likely “being subsidised or sold at such a low price as to cause injury to the local industry”.

According to the trade agreement, Zambia was meant to lodge a written complaint – but it, instead, closed border posts in Kasumbalesa, Sakania and Kipushi.

The DRC has since initiated talks with Zambia because of the border closures, which it said were “not covered by the trade agreement”.

Big challenges

The Zambia Association of Manufacturers (ZAM) said the move by the DRC presented big challenges to regional trade as well as Zambia’s manufacturing sector and economic stability.

“The sudden cessation of imports will disrupt established supply chains, leading to potential revenue losses, the under-utilisation of production capacity, and the potential closure of operations that were heavily dependent on the DRC market.

“This disruption poses a severe threat to jobs and livelihoods in the Zambian manufacturing sector, with ripple effects felt throughout the economy,” reads a statement issued by Ashu Sagar, the ZAM president.

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He added that Zambia’s border closures would make trade between the two countries difficult, considering that there was a deteriorating security situation in the border shared by both countries.

Sagar highlighted that ordinary people and cross-border traders had been affected by the closure of crossing points.

The development between the DRC and Zambia shows that functionalising the African Continental Free Trade Area has major challenges ahead.

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