Headline: China: Zambia’s football bed-fellow?
Location: Northmead, Lusaka, Zambia.
Article synopsis: Investigating the impact increased Chinese investment in Zambia may have on reversing the country’s football fortunes in the wake of the global credit crunch.
First paragraph: The rise and fall of football in Zambia has centred on the vast mining sector for one reason: mining controls local sport.
Key words: China, Zambia, Copperbelt province, Luanshya, Munaile, Copper, Kalusha Bwalya, 2010 World Cup, ZCCM, Nkana, Mufulira.
Related media: N/A
Text: The rise and fall of football in Zambia has centred on the vast mining sector for one reason: mining controls local sport. Yet the question begging an answer is: Will increasing Chinese investments in the mining sector of Africa’s biggest copper producer build on this sporting inheritance?
“The total Chinese investment in mines in Zambia from January 1993 to December 2008 is $2.1 billion,” says Margaret Chimanse, spokesperson for the Zambia Development Agency, a unit overseeing Zambia’s investment.
Historically, the contribution of the mining sector to Zambian sport spans four decades. Mining is the country’s main economic activity and major foreign exchange earner. The contribution has evolved from only the provision and development of sports infrastructure to actual production of sports personalities.
“The Copperbelt was the backbone of Zambia’s football because the mines poured money into sport. Besides, there were so many industries whose survival depended on the mines and those industries in return sponsored sport,” reflects Simataa Simataa, a former Football Association of Zambia (FAZ) president. Simataa is correct. The Copperbelt province has produced some of Zambia’s sporting legends, such as former 400-metre hurdles world champion, Samuel Matete, and former Commonwealth light heavyweight champion, Lottie Mwale. The province also fathered the 1988 African Footballer of the Year and South Africa’s 2010 World Cup ambassador, Kalusha Bwalya.
But after the privatisation of the mining conglomerate, Zambia Consolidated Copper Mines (ZCCM), in 1992 in a bid to resuscitate an ailing economy, sport was relegated to the foot of the new investors’ priority list. The new mine owners concentrated on their core business of mining copper.
The Copperbelt region has a new problem that further threatens the future of Zambia’s sport, football in particular: the world economic recession. Conversely, Zambia, like any other resource-rich country in Africa, has seen a strong interest of Chinese investment, especially into the key mining sector in the wake of the economic crunch.
The recent rollercoaster in copper prices saw the price of the red metal hit $8,900 per metric tonne in mid-July last year before collapsing to $2,900 last December at the height of the economic recession. And with copper prices hovering around the $6,300 band on the London Metal Exchange, Chinese investments in Zambia’s mining sector have substantially increased. Recent estimates are pointing to further growth, whereas most Western investors indicated signs of reducing or scaling down their investment at the height of the economic crunch, citing collapsed copper prices.
Apart from taking over mining operations deserted by Western investors who generally have a high affinity for sports development, Chinese investors have promised to increase investment in greenfield projects. Just this year alone, China has invested over $400 million in Zambia’s mining sector, while a whopping $3.6 billion beckons in mining-related activities in north-west Zambia.
In a country where the survival of sport is strongly linked to the mining sector, can increasing Chinese investment rescue the falling fortunes of football?
“It would be a fallacy for Zambian football to look to Chinese investment as its saviour for simple reasons,” notes Chiwoyu Sinyangwe, a business reporter with Zambia’s biggest daily, The Post. “In a country where companies are expected to embrace sports development as part of CSR [Corporate Social Responsibility], the Chinese are definitely not the way to go,” he says.
Sinyangwe fears sponsorship of sport in Zambia is now a CSR rather than an obligation. He laments that Chinese-run companies in Zambia often clash with workers over things like poor service conditions. Sinyangwe notes that Zambian workers, especially on the mines, have complained about poor conditions, including a lack of protective clothing for staff in highly dangerous mining projects. “Many are wondering whether Chinese investment could be relied upon to rescue Zambia’s failing sports or if authorities can put incentives in place to attract Sino investment to support sport,” Sinyangwe observes.
Simataa agrees: “At the rate we are going, I am afraid the Chinese may not even reach a tenth of what ZCCM invested in football. The biggest sponsor of football in Zambia right now is Konkola Copper Mines (KCM), a company with Indian origins. To be honest, I don’t know why the Chinese here have no interest in sport because China is a sports country – they hosted the last Olympic Games, remember.”
Simataa says the priorities of Chinese investors in Zambia “is to make money”. Football commentator Ponga Liwewe has a different view. “Private companies need an incentive to contribute as they are in the business of ensuring maximum returns to shareholders,” he says. “There must be a return on their sponsorship investment, so the owners of the sponsorship properties need to show them the benefit of getting involved in sponsorship,” he says, citing television exposure to mass markets as an example of the benefits for sponsoring companies.
Lusaka financial consultant Andrew Kamanga says the costs associated with CSR are really minimal and should not be an issue for big corporates. Kamanga says in the absence of legal instruments to compel companies to perform CSR, the only alternative is for sport to be regarded as a government programme, rather than relying on private companies. “There may be a need to create a sports fund for the purpose of building new sports infrastructure,” he says.
Despite the dubious commitment of Chinese investors towards sport, there is reason to remain optimistic. The Zambian government has acquired a $65 million concessional loan from the Chinese government for the construction of a 40,000-seater ultra-modern stadium in the Copperbelt region. Construction has already begun for the 26-month long project, the first of its kind in Zambia’s history. Two similar stadiums are expected to be constructed in the capital Lusaka and the tourist capital Livingstone, government has announced.
There is further cause for excitement, especially for Roan United football club players and management, whose future hit a brick wall when their previous owners, London-listed Enya Holdings, abandoned their investment at the peak of the recession. The withdrawal forced staff to go for more than six months without pay.
While some of the workers could not cope with the uncertainty and committed suicide, a Chinese firm, China Non-Ferrous Mining Company, has taken over Luanshya Copper Mines and pledged to continue with their CSR. “The issue of Roan United and other social amenities is part of the purchase agreement. We will continue with the sponsorship,” assures company spokesperson Sydney Chileya. “Though the players have not been cleared for their outstanding salaries accrued from the previous investor, the new mine owners have picked up a monthly wage bill of about $9,000. The players started getting their salaries from July and so far, things look promising despite the fact that we are only starting production by mid-December.”
Broadly speaking, while the crunch is ebbing and copper prices are picking up, the biting effects of the recession still haunt Zambia. Clubs have not been spared. Early this year, KCM announced it was reducing by half its $232,000 annual sponsorship of the country’s domestic league as a cost-cutting measure. Though the company is now reconsidering some of its decisions, KCM, at the time, said “the low copper prices have impacted negatively” on its ability to continue with its sponsorship programmes. The firm said “it was focusing on cost-cutting measures that will ensure the viability of the company and the job security of its employees”. The company also withdrew its offer to pay the salary of the national team coach, Herve Renard.
In the past, legendary clubs like 11-time Zambian record champions Nkana and their rivals Mufulira Wanderers contributed to the bulk of players to the national team. The scenario has long since changed. The two clubs now wallow in the lower division, unable to attract the best talent because of their pathetic remuneration packages. In fact, Nkana and Wanderers have no players donning national colours. After the privatisation of the mines, Nkana and Wanderers assumed new sponsors that were giving them a monthly $4,000 grant for their operations. Last year, the two clubs lost out on this money as their sponsors withdrew the offer, citing hard economic times.
“There are certain things we are not doing in order to cope. For instance, we are supposed to put our players on medical schemes, but we have cut these,” complains Nkana business development manager Stan Kaseko. “Our buses are not insured because we can’t afford it. The only thing the players get after a match is a token of appreciation.”
He says Zambian clubs are far from learning how to run football as a business because people have lived in a “tradition where the mines have been doing things for clubs”. According to Kaseko, one of the reasons for the dwindling clubs’ revenue is the low fan turn-out at league matches. In the past, spectators watched football as a luxury and had disposable income for match tickets. Now, it appears the majority would rather use the minimum gate charge of $2 to put food on the table.
Kaseko says apart from gate-takings, Nkana only manages to raise about $2,500 from well-wishers annually, yet their annual budget is close to $200,000! Emmanuel Munaile, a former Wanderers great, is now the FAZ spokesperson as well as an independent member of parliament. He believes officials running clubs in the Copperbelt province are partially to blame for their misery because they have forever gone to the mines with a begging bowl. “Most of the club officials on the Copperbelt have just folded their arms, assuming manna will fall from heaven. They are doing nothing other than complain,” he lashes.
Munaile points out that FAZ is planning to introduce a national football league, which would ensure the separation of the body from the running of the domestic league. In that way, Munaile anticipates, the league will have its own sponsors, thereby easing the burden and cost of FAZ running all football activities.
The plight of Zambian football has not eluded government attention. The loss of sponsorship, coupled with thousands of job-losses in the Copperbelt province in the wake of the crunch, has compelled government to engage mine owners in a bid to find solutions. Sports minister Kenneth Chipungu says mining companies have an obligation to support sport. “These companies must continue with this obligation despite the economic environment having gone sour,” he says. “After all, mine workers are the very people who play the sport or follow it.”
Only time will tell if Zambia’s football will continue to wither away or investors from Asia provide its salvation.