Zambian economy on the right path
By Nawa Mutumweno – Zambia’s predicted 6.8% growth this year reflects the performance of the economy, stability in foreign direct investment (FDI) inflows, the resurgence of local industries through SMEs and threefold growth in the non-traditional sector.
According to the Zambia Development Agency (ZDA) director general Andrew Chipwende, job creation, FDI inflows and diversification of exports were benefits from the reforms that were upheld by the country’s democratic institutions.
Outlining the promotion of the SME sector as one of the priorities of the ZDA, Mr Chipwende said the sector contributes significantly to the country’s gross domestic product 9GDP)
“Our success is going to ultimately be down to the measures we put in place to prop up the SME sector,” he pointed out.
The cost of doing business has been cited as the biggest challenge that affects ease of doing business with the poor infrastructure, legal reforms in the labour sector and reducing bureaucracy in government agencies as the main focus areas that the country needed to address in order to be more competitive.
“These primarily relate to infrastructure such as roads; the cost of energy and communications; facilities that support trading across borders, such as bridge crossings, airport facilities and storage. That is the area we are trying to address both in terms of the institutions that are involved, as well as attracting investment to address those deficiencies,” Mr Chipwende clarified.
And the multi-facility zones (MFEZs) are also playing a key role in making it easier to do business in the country. The zones will provide a whole range of infrastructure support necessary to conduct business, thereby decreasing the cost of entry.
The implementation of the Chambishi MFEZ on the Copperbelt was moving at record speed with a target of value addition and an estimate of about 50 key companies to be located in the zone by 2015.
“There is no reason why exports from that zone cannot hit the $500 -$600 million mark by that time, while employing 12 000 direct employees,” he said.
Commenting on the one stop border posts that have been recently developed, Mr Chipwende observed that the ease of trading across borders had been successfully implemented to reduce 75% of the bottlenecks at borders that had to do with regulation. Government should quickly establish the fast-track regulation to reduce the cost of doing business.
The creation of the ZDA has further contributed to the benefits the country has enjoyed but the driving force has been the macroeconomic policy framework implemented by government and facilitated by business reforms.
“The merger of the five institutions played a part but what counts for 98% of the results are the broader macroeconomic policy reforms,” he elaborated.
These institutions are the Export Board of Zambia (EBZ), Zambia Privatisation Agency (ZPA), Zambia Investment Centre (ZIC), Small Enterprise Development Board (SEDB), and Zambia Export Processing Zones Authority (ZEPZA).
