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Zambia prices itself out of the African cannabis boom

Zambia has priced itself out of the emerging legal cannabis market and is contravening its own laws in how it intends to issue licences.  The country is asking an astounding US$250 000 to be paid annually in order to get a licence to cultivate hemp or cannabis.

And by advertising the licence in dollar denomination the Ministry of Health has contravened Zambian law which compels all tendered goods and services be offered in local currency. The cost of the Zambian licence is outrageous compared to South Africa, (which seeks a once off fee of R27 000) and is equivalent to the capex required to build a modest facility.

The Zambian Medical Association welcomed the decision by the Zambian cabinet to legalize the cultivation of medicinal cannabis, but investors and ordinary Zambians have been horrified by the high cost, with one businessman pointing out that one could build a modest processing facility a year for the cost of a Zambian licence.

No foreign investors have taken up the Lusaka’s invitation to invest in the country’s fledgling cannabis industry. All that has happened in the face of legalization was last year’s high profile court battle in which the leader of the Green Party tried to force the Minister of Health to court give him a cannabis licence.

Peter Sinkamba failed in his June 2019 High Court action in that the judges ruled that the right to issue a licence was at the Health Minister’s discretion. Sinkamba welcomed the court ruling but complained that the exorbitant licence fees were beyond most Zambians. He argued in court that the Zambian government was motivated by greed and desperation and in not putting together a comprehensive cannabis growth plan. Zambia, he said, could be earning US$3 billion a year but was squandering the opportunity to be part of the African cannabis boom. 

“The licence fee is arguably an open invitation to big-money foreign and local cartels not only to use Zambia as a platform to clean up their dirty money but also an opportunity for them to make a killing at the expense of ordinary Zambians” he said.

One commentator observed: “If this happens, we would have laid the perfect breeding ground for an underground Cannabis market which will undoubtedly be punctuated by gun violence as participants look to claim a share of what they believe is an opportunity systematically denied them.”

Zambian analyst Anthony Bwalya argues that the Cannabis industry has the potential to replace Copper as Zambia’s leading foreign export earner.

“It must be noted that the level of technical expertise and intensity of capital associated with the cannabis supply chain, from growing, marketing to selling; is relatively friendly and nowhere near as laborious as the mining industry, perhaps save for a few stringent global regulatory requirements. But what this means is that Zambia and Zambians can own the Cannabis industry 100% and internalize 100% of all forex revenues arising from this business. Capturing even a paltry 1% of the global Cannabis market could potentially generate a staggering $3.4 billion per annum for the country. But again if we are not careful, this amount of money could very easily end up in the hands and pockets of cartels who I imagine are well poised to pounce on this multi-billion honeypot.”

Critics argue that ordinary Zambians will not benefit anything from this new lucrative opportunity just like many other natural resources have not benefitted Zambians but only produced a clique of wealthy well-connected individuals to those in power.

Zambian business and financial analyst Blessings Kafwanka raised a red flag on the frenzy surrounding Zambia’s decision.

“Those thinking that Zambia will now be earning about $3bn per annum from the export of marijuana alone as projected by Green Party president Peter Sinkamba, please relax. There’s so much more that still needs to be done than just legalizing the cultivation of the crop. Zambia is endowed with many natural resources that are more valuable than Marijuana that we have lamentably failed to take advantage of. We have Gold, Mukula, Copper, cobalt, the Best Gemstones in the world, etc. None of these resources is bringing in anything close to $3bn.”

Zambia destroys over 60 tons of Marijuana each year. Secretly and culturally the consumption of Marijuana is accepted in many regions of Zambia and is believed to have religious and spiritual effects by some sections of society. But some Christian leaders have loudly condemned the decision by government arguing that it amounts to a betrayal of the country’s Christian values.

One Response

  1. I want to pay for the Licence, how much is it? 0977779664. I want to fundraise for Vulnerable Youths.

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