Contribution of local authorities to the development of small and medium scale enterprises in Zambia: a case of Lusaka city council.

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Nashoni, Charity
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The University of Zambia
The study investigated the contribution of local authorities to the development of Small and Medium Enterprises (SMEs) in Zambia, with a primary focus on Lusaka City Council (LCC). In an effort to develop SMEs in Zambia, government has, over the years, instituted various reforms which include the establishment of local authorities. The Local Government Act empowers local authorities to structure and manage their administration, budgeting and planning processes so as to bring about community development. The LCC, being a local authority, has a mandate to spearhead community development by creating an enabling environment where SMEs can thrive. The general objective of this study was to establish the contribution of the LCC to the development of SMEs in Lusaka District. The specific objectives were: to investigate legal and policy constraints to the growth of SMEs in Lusaka District; to examine interventions by the local authority to enhance the growth of SMEs in Lusaka District and: to recommend further measures the local authority should implement to develop SMEs in Lusaka District. The research adopted a case study by primarily focusing on LCC and SMEs situated in Lusaka District. Semi structured questionnaires were used to collect primary data from SMEs’ owners and workers who formed part of management for enterprises. Interview guides were also used to collect primary data from key informants. The sample size of this study was 56 respondents. Seventeen small enterprises and four medium enterprises were selected. Two from each of the 17 small enterprises were selected which brought the total number to 34 respondents and three from each of the four medium enterprises which brought the total number to 12 respondents. In addition, 10 key informants, namely, five SMEs’ owners, three LCCs’ officials, one official from ZDA and the Chairperson for ZCSMBA. Qualitative data collected from open ended questionnaires and interview guides were analysed using content analysis methods, while quantitative data from closed ended questionnaires were analysed using SPSS and Excel. The study further used secondary data obtained from LCC’s and other official documents in an effort to triangulate the findings. The study found some legal and policy constraints that hindered the growth of SMEs in Lusaka District. Policies on taxation and other regulations such as obtaining of trading licences from the local authority and other regulatory bodies, proved to be an obstacle to the development of SMEs in Lusaka District. The study also found that although there were no legal and policies that constrained the local authority from enhancing SMEs growth. The local authority did not take keen interest in spearheading the development of SMEs in Lusaka District. The local authority failed to financially support SMEs. The LCC also failed to provide business operating premises, water and sanitations services to SMEs. It was further established that the LCC had tolerated political cadres who assumed their role in most markets, bus stations and land allocation in Lusaka District. This was detrimental to the growth of SMEs and the LCC. To the SMEs, political cadres harassed them by making them to pay certain amounts of money every week. To the LCC, political cadres robbed the local authority resources which could have been used to provide better services to the public. The LCC was seen as an institution which only existed for the purposes of imposing levies and fees on SMEs. Therefore, SMEs held a common view that they did not see any efforts that were being made by the local authority to enhance their development. The study recommends that LCC should establish a department that will focus primarily on SMEs’ development. This will help the local authority to have a road map, on how SMEs in Lusaka District can effectively be developed.
Thesis of Master of Public Administration (MPA)