Saturday, July 20, 2024

Informal sector hindering economic growth-Chabala


The Ministry of National Development Planning has noted that the continued informalisation of the economy is one key factor impeding the development trajectory of the country.

Permanent Secretary for Development Planning, Chola Chabala says the country’s huge informal sector continues to be one of the key issues affecting the country’s development.
Mr Chabala was speaking during the special virtual National Development Coordinating Committee meeting in Lusaka last week.

Mr Chabala said the informal sector among other factors continues to negatively affect the country’s tax base.

The virtual meeting was opened by Secretary to Cabinet Simon Miti and drew participation of Deputy Secretary to Cabinet for Economic Development Mike Masiye, United Nations (UN) Resident Coordinator, Coumba Mar Gadio, European Union( EU) Head of Delegation to Zambia Jacet Jankowski, African Development Bank (AfDB) Zambia Country Manager, Mary Monyau among other various development and cooperating partners, the private sector, civil society, academia and senior government officials.

The Permanent Secretary said there is a need to reconfigure the economy and ensure the country’s economy migrates predominantly from informal to formal.

Mr Chola who cited various factors affecting the country’s development agenda, also pointed out an identified need to expand production and supply of electricity in the country to spur economic activities

He cited Luapula province which has seen increased economic activities with a demand of over 100 megawatts of power but the region only has capacity for 20 megawatts.

The permanent secretary regretted that inadequate access to productive resources, low processing and the country’s inefficient value chains continue to limit economic growth.

Mr Chabala stressed that there’s urgent need to reform the Food Reserve Agency and implementation of the Farmer Input Support Programme (FISP) and make them efficient and expand their efficiencies to strengthen the agro sector’s contribution to economic diversification and growth.

The permanent secretary also said low resilience of the economy to external shocks due to low diversification efforts continues to be a matter of grave concern as it affects the economy negatively.

Mr Chabala said though the country continues to improve its social protection to Zambians, there is growing need for enhanced reduction of poverty across disadvantaged and vulnerable communities in the country.

He said lack of efficiency and heightened performance from the public service and slow pace of the decentralization process continue to negate the country’s development agenda.

The permanent secretary praised Zambia’s development and cooperating partners, and other key stakeholders for supporting the country’s formulation of the Eighth National Development Plan (8NDP) that will run from 2022 to 2026.

The UN, European Union, World Bank, African Development Bank, various cooperating partners, private sector, civil society and Academia and other stakeholders have overwhelmingly resolved to support, participate and partner the government in preparing and implementing the country’s next development plan.


  1. This is very true. Many do it to avoid paying taxes. All my businesses are registered and pay taxes in full unlike people like mmembe who dodged taxes and today want to come out holier than thou. Fuseke

  2. The informal sector continues to be bigger because you have failed to industrialise – which would have created jobs, added value and increased tax revenue. Give this sermon to ECL

  3. And this Hopani is a permanent Secretary? Talking utter crap. Iwe chi’ngwa’ngwa,if all jobs were formal wud u even have been born?.

  4. Most formal companies start as informal, in backyards, garages and bedrooms before graduating. Make them know that paying tax as “business people” is not a burden but joy to support social amenities.
    The FISP program has had the same people benefitting without weaning. They keep milking govt without formalising the farms apart from the scattered cooperatives. They must grow to give room for new entrants on seed and fertiliser.

  5. I thought the Informal Permanent Secretary would investigate what has caused the proliferation of informal Sector. In any case its not illegal , but the government has to be innovative to include most of the informal businesses into the tax base.

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