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VALUE ADDITION ON LOCAL GOODS CRITICAL – ZAM

By BUUMBA CHIMBULU

VALUE chain analysis in manufacturing’s priority sectors remains cardinal for promoting value addition on raw materials produced in Zambia and can help to reduce importation of certain items.

The knowledge of which raw materials are required to be developed locally will feed into policy interventions that will ensure that the manufacturing sector realises subsector and sector wide economic growth.

This is according to the Zambia Association of Manufactures (ZAM) Chief Executive Officer, Florence Muleya in her write up on “Developing Local Manufacturing Value Chains.”

Ms Muleya regretted that the manufacturing sector’s ability to add value to vast local raw materials remained extremely low despite having a positive growing contribution to Gross Domestic Product (GDP) and a good outlook over the years.

Such growth challenges, she said, merited the need to ensure that local raw material value chains were developed within the country to feed into the local manufacturing production processes.

She stressed that most of the raw materials extracted were exported in raw form, therefore breaking the value chain at the first level.

“Each manufacturing subsector has different inputs. While some subsectors can easily acquire most of their inputs locally, others must import most inputs.

“Most Zambian manufacturing subsectors are importing a significant number of raw materials and intermediate goods for their production process,” Ms Muleya said.

Ms Muleya indicated that total imported manufacturing inputs had been increasing rapidly with no deliberate policy action to overturn the status quo.

“Large imports of manufacturing intermediate inputs due to the absence of a local intermediate inputs sector and the low levels of manufacturing value addition as a percentage of GDP have constrained the development of a raw material and an input industry for intermediate goods production within the country,” she said.

Six out of the eight manufacturing subsectors contracted in 2020 largely on account of the disrupted value chains.

The subsectors negatively affected by Covid-19 are among the priority sectors meant to enhance.

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