Tourist invasion expected.

The solar eclipse in June and the OAU summit in July are expected to bring a large number of visitors to Zambia thus giving the country's tourism industry a much needed shot in the arm

Although the devaluation of the Zambian kwacha has made Zambian exports cheaper and therefore more competitive on ,the international market, there is one invisible export for which it make little difference.

Gaudenzio Rossi, chairman of the Hotels and Catering Association of Zambia, told African Business that the fall in the value of the Zambian kwacha has "not done much to attract more tourists to Zambia."

Rossi explained that for the international tourist, many hotels, motels and lodges have their prices quoted in US dollar. "So even in the last few months, especially late last year when the value of the Kwacha was falling, the dollar prices remained the same. It is the kwacha prices that went up."

He said, now that the Zambian kwacha is gaining marginal values, "some hotels have been reducing the kwacha prices, which is an advantage for local tourists. But many Zambians consider it an expensive luxury. Local people don't have that kind of money to spend on hotel accommodation."

Steady increase in tourist numbers

Nevertheless, Rossi said there has been a steady increase in tourists coming to Zambia, owing to the relative stability of the Zambian economy over the last two months. He said the prospects for Zambia's tourist industry are bright because of a number of international events, among them the solar eclipse next June, and the Organisation of African Unity (OAU) Heads of Stare Summit scheduled for July in Lusaka.

Because of these events, Rossi said Zambia will have what he called "a bumper harvest of international tourists. As I am speaking to you right now, all the hotels are fully booked for the eclipse of the sun."

Apart from the international events, Rossi said his association expects the country s economy to stabilise. "No one can tell the future. But we are hopeful things will improve. This," he explained," will help us plan properly. As you know it is difficult to plan when there is no stability in the economy."

The Copperbelt is slowly but surely proving to be an attractive destination, following the privatisation of the country's copper-mines. Rossi said: "In Kitwe especially, most of the hotels, lodges and guest-houses are usually full. Other towns are not performing as well, but they too are slowly building up."

In Lusaka the prospects are also promising. Many hotels are upgrading their facilities in readiness of the coming international events.

The Intercontinental Hotel, one of the country's leading hotels, has been undergoing extensive renovations since last year. The five-start hotel previously had only three presidential suites but will, after renovations have 10. It will have a new and expanded entertainment centre, including a modern casino.

A hotel spokesman told African Business that the renovations are expected to be complete before the OAU Heads of State summit. He said: "We have done a lot of groundwork in terms of publicising our new facilities.

Cletus Chanda, marketing manager of the Zambia National Tourist Board, added that he expects a significant increase in the number of foreign tourists this year. The solar eclipse alone is expected to attract not less than 10,000 international tourists to Zambia, although the event is only for a single day.

Chanda said the opening of two Sun International hotels this month in Living-stone, the tourist capital of Zambia, will also add significantly to the country's tourism assets attracting, at the very least, 60,000 international tourists this year.

Finance minister Dr Katele Kalumba said the tourism is one of the few sectors of the Zambian economy which holds bright prospects for growth. He said last year the sector grew by 7.2% compared to 5.6% recorded in 1999, adding that this year it will grow even more markedly.

To enhance Livingstone's attraction as a tourist destination, Dr Kalumba in his budget speech said: "The government will zero rate accommodation offered by hotels, motels, lodges and guesthouses in Livingstone for two years. I expect the hospitality industry in Livingstone to help transform the area into a major international tourist destination, boost foreign exchange and promote investments in related industries."

He added that his ministry will closely study the measure with a view, if the results are positive, to "replicating the lessons learnt in other parts of the country."

Phillip George, Sun International regional director, said the Sun International resort complex has the three-star Zambezi, five-star Royal Livingstone, and an entertainment centre all built, at a cost of $55m, on 46 hectares of land on the Zambian side of the awe-inspiring Victoria Falls. George enthused: "When we call this resort an African treasure, we are not overstating the case."

He added: "The resort is an asset for Zambia. Aside from the direct capital investment in the country, it is intended to significantly add to the bottom-line o('the country and will, in the next five years of its existence, contribute at least 3% to the GDP of Zambia."

General manager of Sun International in Zambia, Phillip Couvaras said the Zambian government has realised the importance of Livingstone as an international tourist destination, and is upgrading the town's airport.

Couvaras said: "The Zambian government is keen on bringing Livingstone airport I up to international standards, realising that considerable amounts of revenue will be generated for the country's economy."

He confirmed that next year the two hotels are projected to attract close to 100,000 international tourists to Livingstone, and "this is why a good international airport is needed."

Livingstone airport upgrade

The Zambian government, through the National Airport Corporation, is expected to spend at least $10m on upgrading Livingstone airport. So far it has spent $1.Gm on expanding and upgrading the terminal buildings. Another $1m has been spent on repairing the runways and taxi-ways with more money budgeted for the construction of new runways and taxi-ways. The rehabilitation work done so far enables the airport to land and handle aircraft like Boeing 727, 737 and the Airbus A320.

However negative media images in the foreign press have been hampering tourism development. Chanda said: "Some of our journalists have been exaggerating things to a point where some tourists get scared."

Chanda added "it has been difficult and costly for us to counteract these negative reports." But it is not an entirely lost cause. He said that the Zambia National Tourist Board has created a website as one way of giving the international tourist "the correct picture of what Zambia is like. The website is new but we have already started getting favourable responses."

PARMALAT'S VISION FOR ZAMBIA

Parmalat, which produces dairy products and fruit juices, is one of the most important industrial investors in Zambia.

African Business interviewed Hennie Trolhp, Managing Director on his vision for Zambia.

African Business: Can you tell us why your company has made such an important commitment to Zambia?

Hennie Trollip: Our Italian parent company views Zambia as a politically stable country, and while our operations here are not as large as in South Africa, our head office feels we are the most important, and the most successful, in the Southern African region.

There are also sister companies in Mozambique, Swaziland, and Botswana, but we have our own policies, philosophies, our own strategies and budget -and we must make our own money and basically finance ourselves. Obviously, the company helps with capital expenditure, but in principal we must generate our own money.

Our market in Zambia is growing all the time. We are distributing in the Lusaka area, where there is a maximum of 2.5m potential customers, and the Copper-belt with perhaps a further 1-l.5m customers.

That is only half of the Zambian population, and it is our challenge to get the other half of the population on board and distribute our products into the rural areas.

We market low margin/high volume products, so we can't actually sell significantly cheaper in the low-income areas, but what we can do is make the product available. And we believe that we can be competitive and contribute with this approach.

For example, we have refrigerated containers all over the country and are able to offer a safe and healthy quality product to the other half of the population. That's our vision.

African Business: Now that the COMESAFTA agreement has come into force, what do you expect from the ETA?

Hennie Trollip: From the advantage point of view, the obvious expectation we have is that the FTA enlarges our potential market arena.

On the challenge side, I really see it as having the ability to operate to international standards. Our products have to be up to the company standards, which are international standards, and the challenge is for the government to keep assisting all the local companies, not only us, in this respect and to make sure the playing-field is level.

For example, production costs. We all know that our fuel and electricity expenses are high and at some stage we have to address all of that together. That's why I am not too critical of the government, and speaking personally, I believe this is the challenge for the FTA -- we must all compete on equal terms.

African Business: Regarding your new juice product lines, will the fruit come from local produce?

Hennie Trollip: We have changed the formulation so our juice range will become Parmalat types of juices, a nectar -- a certain amount of fruit concentrates plus sugar.

We are able to use local sugar and will most probably be using local concentrate as well. We already know that orange and pineapple concentrates can be sourced locally, and Zambian sugar is plentiful. These products will also be suitable for export under COMESA rules.

Realising export opportunities is very important in terms of foreign exchange sources for both the company and Zambia. As with our dairy products, we can't export to the detriment of the local market. So, we are looking to export markets for our range of products, but are taking the challenge one step at a time.