By Edward Chisanga
The buzz about export value addition is not new in Zambia. Since independence in 1964, President Kaunda tried to push for export value addition and diversification. Noting that the country was single commodity-driven, in particular in international trade, and very aware that Zambians’ lives were literally dependent on it for national income, job creation and poverty reduction, he developed national plans none of which missed this problematique.
President Kaunda went on to try to introduce manufacturing in the economy by establishing parastatal organizations that began to produce manufactured goods, even if their quality were still on the low end. The important thing is that he began the export value addition drive and it was only in his Presidential rule that the share of manufacturing value added in the economy reached its highest peak of about 32%. It has since fallen to now 8%.
In monetary terms, as Figure 1 below shows, annual amounts of money injected in the manufacturing sector were not much to write home about. Today, for example, the monetary value of Zambia’s manufacturing value added in the economy is only $1.5 billion, in comparison for example with Viet Nam’s $45.2 billion or almost forty-fivefold that of our country. In dollar value terms, the image below shows a steady rise in Zambia’s manufacturing value added in the economy in the last ten years but amounts are too low. This is clear testimony of Zambia’s underfunding of the sector since independence.
On the other hand, use of the share of the sector in GDP as an economic indicator in Figure 2 shows significant rise of manufacturing which shot from 15.0% in 1970 to a record 35% in 1994, a reflection of one of President Kaunda’s flourishing economic policies towards value addition in proportional terms. If President Kaunda was able to score this
achievement, experts say that it is possible for other Zambian leaders do the same even if operating under different global, regional and national conditions such as the forbidden rules in the World Trade Organization (WTO). For example, there’re restrictions on parastatal organizations as well as on use of local content. Needless to say, there’s always room for maneuver and put excuses on the shelf.
In conclusion, since independence, save, President Kaunda’s efforts, Zambia has done very poorly in its pursuit of manufacturing or value addition. The so-called non-traditional sector, exporting non-copper products has continued to founder, meaning public policy statements have largely not matched action on the ground.
Now, the new dawn government of President Hichilema or the new kid on the block is rekindling the value addition drive, hopefully more vigorously in action than before. As a retired international civil servant specializing in international and regional trade and partially economic dynamics, I have a huge interest in issues of export value addition. At the time, I contributed to supporting developing countries, in particular those in Africa, including Zambia to integrate in the global economy focusing on export value added products. The new government’s efforts need complementing by ordinary Zambians, not the least through various suggestions, no matter how small.
I’m proposing a national colloquy on export value addition which I personally will begin by this introduction to be followed by more details in writing on non-exhaustive topics. My thoughts are:
- We should explain or define what we mean by export value addition.
- We will then explain why export value addition?
- We will explain why successful value addition is one driven by the Head of State.
- We will show countries that are leading Africa’s export value addition and why Zambia should initiate a Memorandum of Understandings with them.
- We will explain some factors that transmit value addition.
Hence, the publisher allowing, in the next article, our next step is to explain one or two of the listed topics above. We encourage other authors to do the same as well as put this colloquy on the national TV.