Analysis: BENEDICT TEMBO
THE global message today is entrepreneurship and it is gratifying that President Edgar Lungu recently made an appeal for Zambians to seize the opportunity and invest in various businesses.
There is a wider context to show that this is the time for Zambians, young and old, men and women, to take the risk and invest in enterprise.
Economist Chibamba Kanyama says we live in a digital economy with new technologies in the mobile communications, block chain, crypto currencies, Internet of Things (IOT), Big Data and growing e-commerce.
Mr Kanyama says these platforms have significantly reduced the transaction costs, particularly with regard to efficiency and delivery of services and products.
“Individuals can now trade anything beyond the borders of Zambia with greater ease. Entrepreneurs in remote areas of Mbala can trade their beans with consumers in Kalabo and payments made via mobile money. Quick adoption of these platforms provides opportunities for successful enterprises,” Mr Kanyama says.
He says the young generation in particular, currently facing huge challenges of unemployment, can easily become entrepreneurs if well nurtured.
“We have no other way of growing this economy outside robust entrepreneurship. If the Somalians, Rwandese, Chinese and many others are here to make money, why should Zambians fail? By the way, we already have a lot of entrepreneurs in this country; all we need to do is help reskill them so that they offer competitive products and services, get highly rated by banks and also supported to enter the regional market,” Mr Kanyama says.
A quick look at China and how it has become a global economic powerhouse: Since 1971, grown from almost zero to six million entrepreneurs
• Private enterprise accounting for well over half of industrial output and over 70 percent GDP
• Since economic reforms supporting private enterprise, economy has grown on average at approximately eight percent annually
• Leading to a ten-fold growth in GDP
• Emerging middle class grown from 174 million in the mid-1990s to a remarkable 806 million in 2009
Zambia is emerging from a socialist economy and the economy only got liberalised in 1990s.
Mr Kanyama says this has been too short a time to produce highly successful and innovative entrepreneurs.
Under a socialist state, there was nationalisation of industry making it difficult for Zambians to own assets, clipping of prospects for private enterprise and we have since suffered the impact of restricted property rights to capital accumulation.
“However, in the past 25 years, we have witnessed a resurgence of citizen-driven businesses. I am sure the Citizens Economic Empowerment Commission funding has had its own share of contribution in the most recent years,” Mr Kanyama says.
Zambia has 65,000 formally registered entities and 99.3 percent are small and medium enterprises (SMEs).
“This is a huge challenge because we need a fine balance between the large and small businesses for efficient upward and downward linkages. Local SMEs only contribute 38 percent to the GDP (gross domestic product) even though they constitute 99 percent of the private sector. This means our SMEs are not adding much value to the economy at the moment. No single financial institution in the country supports start-ups in the country with access to credit for SMEs. There is need for further deregulation in most sectors to unlock entrepreneurship potential (energy, telecoms),” Mr Kanyama says.
The author is editorials editor at the Zambia Daily Mail.
Analysis: BENEDICT TEMBO