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Strategic Sectors & Export Growth |
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The diversification of Zambia’s economic base and the expansion of non-traditional exports (NTEs) have been driven by intensified production in the manufacturing sector.
Despite the many challenges raised by market liberalisation, such as stiff competition from imports, the manufacturing sector has performed well, becoming the backbone of private sector development in Zambia. During the period 2002-2005, the manufacturing sector’s average growth rate was 5.1 percent, on the back of robust activity in the food, beverages and tobacco subsectors.
Manufacturing has been identified as one of the priority growth sectors in the country because it provides forward and backward linkages with other sectors, such as agriculture, fisheries, livestock, mining and forestry. Small and medium-sized enterprises in rural and urban areas are encouraged so as to enhance labour-intensive light manufacturing, with emphasis placed on investment and
export promotion, as well as the support of local products.
MANUFACTURING INCENTIVES
Over the past few years, government has increased its efforts to provide an enabling environment for growth, and offers manufacturers a number of incentives. Buildings for manufacturing enjoy an initial allowance of 10 percent and an annual 5 percent wear and tear allowance of the cost. Machinery for manufacturing qualifies for a wear and tear allowance of 50 percent for the first two years.
Rising NTE earnings
At US $924.4 million, non-traditional export earnings rose by 24.5 percent in 2007 over earnings recorded for 2006, largely due to
the growth in the economies of Zambia’s trading partners.
INVESTMENT OPPORTUNITIES
Zambia has a fairly wide manufacturing base and well-developed infrastructure, and a variety of opportunities are available in several subsectors:
• Food processing and beverages
• Clothing and textiles
• Leather and leather products
• Wood and wood products, paper products and packaging
• Processing of metals, including the smelting and refining of copper
• Engineering products
• Processing and polishing of gemstones and jewellery making
• Agro-processing, including fertilisers, soil conditioners, pesticides and herbicides
• Plastic and glass containers
• Chemicals, pharmaceuticals and personal hygiene products
• Refining of petroleum
• Cement and explosives
Investment opportunities in the manufacturing sector are presently centred on the production of engineered products and agro processing. One particular area of interest is the recycling of waste and the production of steel suitable for manufacturing equipment such as jack hammers, for which there is high demand in the mining sector. |
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Manufacturing