SOUTH African grocery retailer Pick n Pay on Thursday opened its fifth Zambian store in Kitwe, the country’s second-largest city.
The retailer, which opened its first store in Zambia in 2010, already had three stores in Lusaka and one in Ndola. Next year it plans to open more stores in Luanshya, Lusaka and Ndola.
Pick n Pay operates 94 stores on the continent outside South Africa, including one in Lesotho, 10 in Swaziland, nine in Botswana, 17 in Namibia, one in Mozambique, where a second store opens next month, two in Mauritius and 48 in Zimbabwe under the TM brand.
Next year it expects to open a store in Malawi and, in 2014, one in Lubumbashi in the Democratic Republic of Congo.
The International Monetary Fund’s Survey magazine said earlier this year that the odds were in Africa’s favour as it sought to sustain its impressive growth of recent years that had already lifted millions out of poverty.
Last year, against a threatening global backdrop, most economies in sub-Saharan Africa turned in a solid performance. Growth in the region averaged more than 5% and export shares stayed high.
A World Bank report, De-Fragmenting Africa: Deepening Regional Trade Integration in Goods and Services, has shown that African countries lose out on billions of dollars in potential trade earnings every year because of high trade barriers with neighbouring countries, and that it is easier for Africa to trade with the rest of the world than with itself.
According to the report, regional fragmentation could become even more costly for the continent, with new World Bank forecasts suggesting that economic slowdown in the eurozone could shave Africa’s growth by up to 1.3 percentage points this year.
Trade and regional integration are core elements of the World Bank’s new Africa strategy, launched in March last year, to help countries create opportunities for their transformation and sustained growth. By July last year, the bank had already doubled its investment in regional integration from $2.1bn in 2008 to $4.2bn.
Persistent barriers include trade permits, export taxes, import licenses and bans.
World Bank trade research showed that retailer Shoprite, for example, spent $20,000 a week on securing import permits to distribute meat, milk, and plant-based goods to its stores in Zambia alone.
For all countries in which it operates, it applies for about 100 single-entry import permits every week, and this can rise up to 300 per week in peak periods.
As a result of such documentary requirements, there can be up to 1,600 documents accompanying each Shoprite truck that crosses a Southern African Development Community (SADC) border.
That is in part why the new 3,500m² Pick n Pay store located in Kitwe’s Copperhill shopping mall is sourcing most of its range from local suppliers.
“One of the most gratifying features of our presence in Zambia has been the extent to which we have been able to source much of our produce from local suppliers,” said Dallas Langman, head of group enterprises for Africa at Pick n Pay.
“When we first ventured into the Zambian market, we gave an undertaking to the government that we would procure 50% of our goods from local suppliers, as part of our commitment to developing indigenous enterprises and entrepreneurs,” he added. “In fact, we have considerably exceeded this target and are now sourcing 75% of our stores’ goods from Zambian manufacturers, agents and importers.”
Pick n Pay undertook to source 50% of its fruit and vegetables for the Zambian store from local producers. This proportion of fresh produce is now between 60% and 70%, depending on the season.