Features

Effective, efficient public institutions key to sustainable industrialisation

CHAMBO NG’UNI, Kabwe
IT IS an indisputable fact that industrialisation and economic diversification is the way to go if Zambia is to achieve real economic growth.
It is envisioned that industrialisation and diversification will trigger value addition, growth of the manufacturing sector, increase exports and create wealth among other things.
Currently, Zambia is heavily dependent on copper. Although agriculture is another economic mainstay, the economy is largely un-diversified and copper remains the major export commodity.
The country is largely a consumer, despite its potential to develop a robust manufacturing sector due to the availability of raw materials and expertise.
The agriculture sector is mainly focused on maize production despite the land being rich for cultivation of rice, cotton, soya beans, cassava and cotton.
“The strategic importance of industrialisation is an indisputable fact. To achieve the objective of industrialisation, we should create value for Zambians through innovative strength and value addition that will generate jobs and increase people’s income,” Minister of Commerce, Trade and Industry Margaret Mwanakatwe says.
Ms Mwanakatwe emphasises the need to create a value chain that contributes towards the expansion of individual choices.
This is one of the avenues to establish inclusive growth and achieve human development.
She says as part of the global economy, Zambia is not immune from external economic volatility.
“As we have recently seen, Zambia is particularly exposed to factors beyond our control.
“Low demand and prices for our copper which fuelled sharp currency depreciation compounded by one of the worst energy crises seen by our country due to an over-reliance on large hydro sources for electricity generation,”Ms Mwanakatwe observes.
The United Nations Development Programme (UNDP) agrees with Government that the country’s development should be within the context of sustainable Development Goals (SDGs).
UNDP’s aspirations are outlined in the 2016 Zambia Human Development Report (ZHDR) under the theme: “Industrialisation and Human Development: Poverty Reduction through Wealth and Employment Creation”.
United Nations (UN) resident coordinator Rogan Janet highlights in the report the importance of industrialisation and how it can help in diversifying the economy, increase productivity and labour.
On the other hand, Ms Rogan who is also UNDP resident representative notes how  industrialisation can assist  the private sector to increase and sustain economic output through value addition.
“It (industrialisation) can generate direct and indirect employment if there are strong forward and backwards linkages with other sectors of the economy to ensure that growth and other factors that limit the social impact of industrialisation on economic development,” Ms Rogan says.
Ms Rogan stresses the need to invest in local MSME technology capabilities, fostering deliberate foreign direct investment and MSME linkages.
Accelerating the implementation of local policies in mining, manufacturing and agriculture is key in the transformation of technology and integration of domestic firms into global value chain.
In this regard, Zambia’s future industrial policy should focus on accelerated investments in research and development, human capital accumulation and particular emphasis on science and technology skills.
“In this manner, labour can contribute to the development of Zambia’s value-added sectors, as well as provide the basis for exploring profitable opportunities in new markets.
“The expansion of secondary industry in Zambia also requires strong, transparent, and efficient institutions within a supportive regulatory environment,” Ms Rogan says.
Modernising Zambia’s economy, upgrading of skills and institutions, development of social infrastructure are among the necessary conditions for overall industrialisation.
UNDP economic advisor Colleen Zamba says there is need for pragmatic steps in transforming Zambia into an industrialised country.
Ms Zamba shared recently with stakeholders during the Central Province discussion forum on ZHDR 2016 report that Zambia’s economy remains un-industrialised and is largely dependent on copper.
She says this is despite sectors such as agriculture making meaningful contribution to the economy.
Through industrialisation, Ms Zamba projects the country will achieve economic diversification rather than solely depending on mining-particularly copper.
This is why whenever there is fluctuation in prices of copper on the global market, Zambia’s economy is affected.
She says it is cardinal for the manufacturing sector grows to a level where it will have the capacity to process, add value, export and create jobs.
“It is important to diversify so that sectors like manufacturing can meaningfully contribute to the economy,” she says.
An economist in the Ministry of Commerce, Trade and Industry Moses Ngosa is of the view the ZHDR is elaborate on the need for industrialisation to promote sustainable economic growth.
Mr Ngosa says the manufacturing sector is currently under-performing due to gaps in the economy.
“The strategic focus of the policy is to provide direction for industrialisation growth .As a ministry, we have also gone further to develop strategies which are sector specified,” Mr Ngosa explains.
During the same forum, ZALCO Limited chief executive officer Joe Safieddine echoed the need to promote industrialisation and human development in transforming the economy.
Mr Safieddine says ZALCO is one of the best examples in terms of diversification and industrialisation as the company is actively involved in recycling and metal processing while, the core activity is value addition.
“Going into the future, as ZALCO, we agree with the report that industrialisation and human development is cardinal if the country is to grow the economy through value addition and reduce poverty by creating wealth and employment,” Mr Safieddine says.
Daniel Mauzu, an academician at Mulungushi University says the country needs to develop the right human capital to foster development.
Mr Mauzu observes industrialisation offers the country an opportunity to locally process and add value to crops such as cotton, tobacco and soya beans.
“Why are failing to add value to our agriculture produce but opt to export  raw materials and later import them as finished goods,” he asks.
As Zambia focuses on industrialisation, there is need for learning institutions to produce learners who will be key players in the process.
And  for industrialisation to be effective and sustainable, there is need for effective and efficient public institutions that will continue to  contribute to  the country’s real economic growth.

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