LOAD SHEDDING, EXCHANGE RATE FLUCTUATIONS CRIPPLE MANUFACTURING SECTOR, ZAM VICE PRESIDENT WARNS
LOAD SHEDDING, EXCHANGE RATE FLUCTUATIONS CRIPPLE MANUFACTURING SECTOR, ZAM VICE PRESIDENT WARNS
The Zambia Association of Manufacturers (ZAM) Vice President South, Fronscen Haloba, has sounded the alarm on the devastating impact of load-shedding and fluctuating exchange rates on the manufacturing sector. According to Mrs. Haloba, the sector has been forced to reduce production capacity due to the lack of a critical input in the production process – power.
Speaking during the 2024 pre-budget meeting at Intercontinental Hotel, Lusaka, organized by ZAM, Mrs. Haloba attributed the challenges to external factors such as climate change, which have negatively impacted the manufacturing sector. She emphasized that the sector has been significantly affected by electricity disruptions due to reduced electricity generation from low water levels.
The ZAM Vice President South stated that the meeting aimed to present to the Ministry of Finance and National Planning the issues hindering the smooth operations of the manufacturing sector, for consideration in the 2025 national budget. She highlighted that the sector heavily relies on the importation of raw materials, and the instability in the exchange rate has further affected planning and predictability for manufacturers.
Mrs. Haloba emphasized the need for government support to achieve the Vision 2030 target of attaining an annual contribution of 36.12% from the manufacturing sector. She called for the government to address both sector-specific and cross-cutting issues to maximize the benefits from the manufacturing sector.
In response, Minister of Finance and National Planning, Dr. Situmbeko Musokotwane, acknowledged the challenges faced by the sector, including the severe drought and power rationing, which have significantly hampered productivity and impacted the broader value chain development. He highlighted the government’s efforts to restore macroeconomic stability, enhance economic efficiency, and boost private sector-led economic growth through enhanced investments.
Dr. Musokotwane outlined several strategic interventions, including tax holidays at various stages of the cotton value chain, broadening the list of local products eligible for the 2% local content allowance, and increasing company income tax relief for businesses located in rural areas.
The meeting, sponsored by Zambia Breweries, ZAMBEEF PLC, Coca-Cola Beverages Zambia (CCBZ), British American Tobacco, National Breweries PLC, Zambia Industrial Commercial Bank (ZICB), and Trade Kings Group, brought together stakeholders to discuss the challenges facing the manufacturing sector and potential solutions to drive growth and development.
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