The Manufacturing Association of Zambia (ZAM) has attributed the slow growth of the manufacturing sector in the country to the previous government’s excessive borrowing.
ZAM President Ezekiel Sakala, says the previous government has been borrowing unnecessarily thereby, limiting and affecting the growth of the private sector.
In an interview in Lusaka yesterday, Mr Sakala complained that due to huge borrowing by the public sector, private entities were unable to borrow from commercial banks because the rate of competition with the public sector was too high.
“For the private sector to compete with the government only means you are competing at a higher rate, which you cannot do as a business entity, “he said.
Mr. Sakala observed that the situation has affected manufacturing companies from adequately expanding and contributing to the social economic development of the country.
He charged that as borrowing is inevitable for the government to run its various economic activities, there is a need to reduce its borrowing so as to allow the private sector to run the economy.
Mr. Sakala further explained that it is on record that countries that have strong economies strive to support and to provide an enabling environment for private companies to conduct businesses through favorable taxing.
“World over the private sector are the ones driving economics because their governments have created partnerships and opportunities that are encouraging them to thrive.
He expressed hope that President Hakainde Hichilema and his administration will address the loopholes in the manufacturing industry.
The ZAM President pointed out that the private sector has the capacity to not only contribute to employment growth but also to alleviate poverty coupled with social economic growth of the nation.
And Mr. Sakala has commended Zambia Revenue Authority ZRA (ZRA) for meeting and beating their targets on tax.
He, however, called for the change of mindset with regards to policy on manufacturing companies which he said should be long term. Mr. Sakala said taxation and revenue collection alone is putting pressure and hurting the growth of the manufacturing sector.
Meanwhile, Zambia Kaypo Research Institute Frank Kayula says the path to economic recovery set by President Hichilema is cardinal and should be supported. Mr. Kayula said President Hakainde’s plans and vision should be supported with hard work in the various sectors of the economy. He also observed the need for innovation in the manufacturing sector saying it is key to realizing government efforts on promoting economic recovery.
Mr. Kayula said the manufacturing sector has a big role to play in transforming innovation into viable products. Mr. Kayula who is also a representative of farmers highlighted that manufacturing and processing of products should be done locally for the country to realize the benefits.