How to broaden Zambia economic base

December 20, 2014

As the dark clouds of global economic uncertainty continue to cast a shadow over the copper value and demand, Zambia cannot afford to take for granted its current economic robustness.This was the message delivered by an economic researcher currently working in Lusaka, the country capital. He told me that the economy will grow between 6.1 and 6.6 percent next year, slightly under the government’s projection.He cited the lack of effective measures to ease the electoral crisis that has engulfed the country since the death of President Michael Sata two months ago, the deadlock in responding to the threat of political uncertainty in the country will remain threats to Zambia’a economic growth in 2015.But it is not only the short-term economic outlook that the business community and the government should be concerned with. The longer term horizon is more critical, given the importance of drawing up a coherent strategy.It is clear that the economy must develop a third pillar to stand on besides domestic consumption, mining and investment.

These two have kept the economy humming along for the past few years but unless the country develops its manufacturing sector, its long-term economic future is at risk. Domestic consumption can buffer the country against economic uncertainty, but it must not forsake exports and underestimate the importance of trade. Currently, exports only account for less than ten percent of GDP growth, a number that must be increased for a more balanced economy.It is, however, also important that Zambia moves up the value chain in terms of attracting new manufacturing investment and boosting exports beyond natural resources like Copper. The researcher was for the idea that Zambia must develop high-tech companies and industries that are engaged in technology to meet tomorrow’s demand and must invest in education, infrastructure and innovation.The growing number of trade delegations arriving in Zambia reflects the growing stature of the country on the continental economic stage. As its economy expands, Zambia is highly regarded as a trading partner across the region.This is a positive trend for the country and the economy (http://www.contadorharrison.com/zambian-govt-needs-to-boost-the-supply-of-housing/).

The more it trades with the region and world, the faster its economy will grow and the better the lives of its people will be. Trade has been a great creator of wealth through the centuries and remains so.The latest trade delegation to call on Zambia was a group of 30 people, representing businesses ranging from energy to machinery, to promote trade and looking to do business with Zambian companies.These are tentative first steps toward developing closer economic and trade ties between the Zambian business and outsiders seeking investments (http://www.contadorharrison.com/a-boost-for-zambia-tech-start-ups).While companies seek new opportunities here, Zambian companies too must explore new markets in Africa. African countries, with a population of more than a billion people, offers a significant consumer market and a diversified economy for country’s companies seeking potential investment destinations.But if trade is to grow, Zambia need to lower tariffs and encourage greater investment flows. In this regard, talks between Zambian companies and outsiders need to be accelerated.Hopefully such agreements, once signed, will speed up bureaucratic reforms in Zambia and make it less arduous for foreign companies to operate in Southern Africa country. Lowering trade barriers by Lusaka will be essential for continued economic growth(http://www.contadorharrison.com/integrating-sustainability-into-zambias-businesses-model/).

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