ZAMBIA’s manufacturing sector is a pivot of economic development through its backward and forward linkages to economic growth, exports and employment creation.
It provides a market for primary products and sets the basis for exports with employment generation capacity.
The Zambian manufacturing sector’s contribution to Gross Domestic Product fell from 11.5 per cent in 2008 to 10.7 per cent in 2012 growing at about half the national growth rate of just over six percent.
This is depressing given the importance of manufacturing to trade, innovation and jobs.
Two thirds of the total contribution by manufacturing to GDP is accounted for by food and metals subsectors, while textiles and chemicals account for another quarter according to the Zambia Association of Manufacturers (ZAM).
Manufacturing becomes important to drive productivity growth, innovation and trade. It also plays a critical role in reducing energy and resource consumption and limiting greenhouse gas emissions.
To grow industry, a country must have access to low cost or high skill labour, be close to demand markets, efficient transport, natural resources and energy, and sources of innovation.
The nation’s goal is to develop a diversified and competitive export led value adding manufacturing sector which will contribute 12.5 percent to GDP.
Government is in the process of accelerating massive industrialisation across the country in order to create jobs and wealth.
Minister of Commerce Trade and Industry, Margaret Mwanakatwe, says Government is doing everything possible to ensure that the manufacturing sector thrives and becomes locally and internationally competitive.
She said that the Ggovernment will endeavour to add value to products that are produced in a particular region of the country by setting up industries that would subsequently employ the local people.
A well organised manufacturing sector provides a market for primary products and sets the basis for exports.
Like any country, Zambia’s vision for the manufacturing sector is technology-based and export-focused, which is dynamic and competitive with effective entities that add value to the locally-abundant natural resources.
To achieve this milestone, there is need to promote value addition to products and grow the economy to satisfactory levels.
At the moment, Zambia creates employment in other countries through the export of raw materials which are turned into full products and re-exported to the country.
Zambia exports large quantities of raw materials such as copper, gemstones, timber and agro products like maize and cassava for example, whose value is added elsewhere.
This has not only reduced the country to the position of major importers but has also helped countries where raw materials go, with massive job creation.
Zambia being among the top four fast growing economies in Sub-Saharan Africa, will do well to concentrate on value addition programmes that will guarantee sustainable economic diversification, job creation and poverty alleviation.
Government has granted a number of tax concessions over the past three years to spur growth in the manufacturing sector.
In the 2015 National Budget, the Government directed its departments to give preference to locally-produced goods in line with the current Industrialisation and Job Creation Strategy.
Finance Minister Alexander Chikwanda said he had removed the voucher system applicable on such imports.
The country is endowed with abundant natural resources but such resources remain worthless if they are not transformed into something valuable.
Zambia will continue to be a dumping ground for sub-standard finished products unless the citizens start owning the production process from extraction to actual manufacturing products.
There is need to put up processing facilities to transform the materials into finished products for the local people to realise the true value of the resources.
It is encouraging to note that the Government has continued challenging manufacturers in Zambia to take advantage of the conducive business environment for them to engage in value addition before exporting their products.
Government has pledged to start inspecting supermarkets operating in Zambia to ensure that they begin to stock local products as a way of supporting local manufacturing industries.
Commerce, Trade and Industry Deputy Minister, Miles Sampa, says the government needs to identify supermarkets that are importing products that could be produced or manufactured within the country so that they could be compelled to start stocking local products.
Mr Sampa notes that most supermarkets in Zambia are importing products including farm produce instead of buying from local manufacturers and farmers.
He said that Government will ensure that local contents are supported by encouraging supermarkets to stock locally-produced goods side by side with imported ones.
Mr Sampa notes that the manufacturing industry plays an important role in the development of the country by creating jobs for the local people and enhancing the growth of the country’s GDP.
He said that Government will continue creating conducive environment for the manufacturing industry by formulating good policies to ensure that the industry flourishes.
Zambia Association of Manufacturing (ZAM) president, Bright Chunga, appeals to Government to level the playing field for the local manufacturers to compete.
Dr Chunga says the application of duty and imports of raw materials and intermediary products used in the manufacturing sector penalises them and creates an unfavourable environment for manufacturers.
He says the promotion of local content is the only answer to the growth of the manufacturing sector and the nation.
Local entrepreneurs need to add value to their raw materials if they are to penetrate the international market.
Doing so will see more job opportunities being created for the local people in the country.
Achieving the concept of value addition is dependent on good marketing practices at country and organisational levels.
This can translate into organisational growth and sustainability, thereby creating employment and economic growth for the country.
Zambia should raise the profile of the manufacturing sector by investing in local value addition of its mineral industry.
Value addition to metals could become the basis for many different forms of manufacturing across the country.
This would enhance the promotion of value addition to raw materials which in turn would boost the manufacturing sector.
Zambia could transform the economy from a primary raw material producer, to a sustainable manufacturer of semi-processed and processed metal products