By BUUMBA CHIMBULU
MANUFACTURERS have outlined some of the challenges they have grappled with during the first two quarters of this year, citing high cost of doing business, electricity disruption and volatility in the exchange rate.
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In their submission at a Mid-Year Economic Performance and 2024-2026 Medium Term Budget Plan meeting in Lusaka on Tuesday, the manufacturers submitted that the cost of doing business in the country still remained high.
The submission was made through the Zambia Association of Manufacturers (ZAM) Chief Executive Officer, Ms Muntanga Lindunda.
Ms Lindunda emphasised that the cost of doing business still remained high due to the high number of licences and permits that manufacturers were subjected to.
ZAM, she said, had been advocating for a reduction in the number of licences and permits through harmonisation.
“This challenge also acts as a barrier for Foreign Direct Investment in the country as potential investors shy aware from investing in the sector in fear of going through a cumbersome procedure of obtaining these documentations.
“To be specific, the agricultural sector is subjected to tax exemptions which increase the cost of doing business. Our recommendation therefore, is to apply zero rated tax to allow manufacturers claim input tax to reinvest in their businesses,” Ms Lindunda said.
On electricity disruption, Ms Lindunda said load-rationing affected production of many companies especially the Small and Medium Enterprises (SMEs) who did not have the capacity to use alternative sources such as generators.
She explained that the manufacturing sector was energy intensive, and that electricity remained one of the key inputs in the production process.
“Additionally, some manufacturers who use machinery that take time to heat up before commencement of production where heavily affected as Zesco implemented a six hours per period power rotation leaving them with only four hours of production time per day,” Ms Lindunda said.
She also said the instability in the exchange rate between the Kwacha and the United States Dollar exacerbated the impact on the sector.
She said the Kwacha-Dollar exchange rate was characterised with fluctuations in the first two quarters of 2023.
“This affected manufacturers who highly depend on the exchange rate when importing raw materials,” Ms Lindunda said.
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