Export-led Industrialisation in Zambia: The case for multi-facility Economic Zones

Thumbnail Image
Nyangu, Tennieson C.
Journal Title
Journal ISSN
Volume Title
Zambia gained its independence from British rule in 1964. Between 1964 and 2000 various economic policies and pieces of legislation aimed at accelerating economic growth and development had been passed. However, not much economic development as had been anticipated took place. From 2001, the government embarked on a path of export-led industrialisation through the introduction of the Export Processing Zones (EPZs) and the Multi-Facility Economic Zones (MFEZs) policies. Both policies were aimed at increasing exports through value addition to raw materials that hitherto were exported in their raw form. To operationalise these policies, the government enacted the Export Processing Zones Act and the Zambia Development Agency Act in 2001 and 2006 respectively. However, the EPZ policy was abandoned in 2002. Following the enactment of the Zambia Development Agency Act, certain sections of society argued that MFEZs were nothing but a drain on the nation’s revenue considering the generosity of the investment incentives, such as tax holidays, offered to investors. They further argued that MFEZs were bound to fail because the Zambia Development Act contained provisions that inhibited investment by local entrepreneurs in preference to foreign investors. The problem, therefore, was that local entrepreneurs were unable to invest in MFEZs because the Zambia Development Agency Act, 2006 was allegedly biased towards foreign investors. The efficacy of the ZDA Act was also questioned by many. This situation necessitated an investigation into MFEZs and the provisions of the Law.The aim of this research was to investigate the prospects of MFEZs and determine gaps, if any, in the policy including the Zambia Development Agency Act, 2006. It was further hoped that the study would make a modest contribution to the debate and literature on MFEZs so that the public was aware of the ramifications of the policy as the country sought an accelerated economic development strategy.In so doing, the research answered the following questions: (a) are MFEZs relevant in the economic development of Zambia? (b) to what extent did the EPZ Act contribute to the EPZ policy failure? (c) to what extent does the Zambia Development Agency Act, 2006 provide a balance between the needs of local and foreign investors particularly in MFEZs? and (d) is the Zambia Development Agency Act adequate or should there be a separate piece of legislation specifically for MFEZs?The study was essentially desk review of both primary and secondary sources which included Parliamentary debates, statutes and scholarly journal articles. The review of statutes also involved an analysis of selected provisions in both the Export Processing Zones Act, 2001 and the Zambia Development Agency Act, 2006 to determine their efficacy, significance and import. Heads of selected government institutions were interviewed to provide qualitative aspects on government policy. The institutions included the Zambia Development Agency and the Ministry of Commerce, Trade and Industry.The research showed that 67% of the developers of MFEZs were foreign while 89% of the operators in Chambishi MFEZs were not only foreign but also Chinese and argues that the prospects of MFEZs in Zambia are bright if properly managed.
Industrialisation-Zambia , Zambia-Commerce