Analysis: KUMBUKILANI PHIRI
ON JUNE 4, 2019, I did an article titled ‘Local versus foreign products in supermarkets’ which appeared in the Zambia Daily Mail.
The article attracted a lot of feedback both from the public and industry experts. The truth is that many Zambians would like to see more local products on the supermarket shelves despite the many factors that are hindering this progression.
Today, I would like to talk about the feedback I received from one of the industry experts. This expert gave me an informed background of the Zambian manufacturing sector and highlighted in details the current status of the local products on the supermarket shelves.
Contrary to what many of us have believed, I was told that actually one of the leading supermarkets in Zambia has over 41 percent products sourced from local manufacturers, 47 percent foreign products sourced from local agents and only 12 percent products sourced directly from foreign manufacturers. Their target is actually to source more than 80 percent of the products in their supermarkets from local manufacturers.
Honestly, this revelation gave me a lot of hope and it is my prayer that more supermarkets could also up their game and increase the proportion of locally manufactured products on their shelves.
As we chatted on the phone with this expert, I also learnt a bit more about the challenges that local manufacturers are facing.
The expert mentioned that the packaging from most Zambian manufacturers is not up to standard due to poor labelling and strength test failure leading to damages.
There is also the issue of quality in that the grading of products for long shelf life is not up to standard. The expert pointed out that; they have had instances where product samples from local manufacturers have been found to have weevils in them.
It was also observed that currently, most Zambian products Barcodes are not GS1 compliant. There has also been an issue with inconsistency in supply by many local manufacturers.
Further, it has also been observed that most local manufacturers are unable to meet HACCP type hygiene standards. Supply volumes from local manufacturers are also not enough to justify extending range to other stores.
Most local manufacturers do face logistical problems and are unable to deliver to outlying stores as orders are not economic due to small range offering. There is also the challenge of 30-day payment terms which most local manufacturers find very difficult to cope with due to low capital investments.
These financial challenges faced by local manufactures have also meant that they are unable to fund marketing/advertising campaigns and IT systems to run their businesses.
After our extensive chat, I concluded that Zambian local products have a huge potential to fill the over 50 percent supply gap to the local supermarkets if only we could overcome the challenges mentioned above.
Apart from the solutions I highlighted in my previous article that included a request to government to incentivise local manufacturing by giving tax holidays to indigenous and local manufacturers, zero rating customs duty on all manufacturing equipment, increase the setting up of industrial and business incubation hubs, increasing access to cheap financing for local manufacturers, introducing of entrepreneurship in the school curriculum from grade five, etc., there is also need for Zambians to learn how to team up and work together.
Having lived in other countries before, I have observed that there are very few partnerships among Zambians when it comes to running businesses. It seems like, most of us are very comfortable running our small ‘tuntemba’ businesses.
It is even disheartening to notice how thousands of Zambians are travelling abroad to go and buy products for resell in the country instead of teaming up and start producing such products locally. I remember a few years ago how a number of Zambians were travelling to South Africa to buy some snacks called jiggies and yet these snacks are made from maize which we have in abundance.
The only thing they needed was to buy an extruder machine and start producing them locally. If only they realised this and teamed up to buy the equipment which they could have easily afforded, the country could have served millions of dollars. Thank God someone saw the opportunity and started producing these snacks locally saving the country forex that could have otherwise gone to other countries.
Zambians should know that economic dominance is a matter of life and death, if we want our country to develop, we should as well stand up and get ourselves organised.
If it means the entire village coming together to buy a single machine that can help them add value to their agro produce like grounds to make peanut butter, let it be so. It is only out of commitment that our country will win the economic war otherwise Zambia will continue being a dumping ground for all foreign products.
The author is an entrepreneur.
Analysis: KUMBUKILANI PHIRI