Lusaka, Thursday (June 6, 2024)
Zambia Association of Manufacturers (ZAM) Vice President South, Fronscen Haloba, says the load-shedding and a fluctuating exchange rate has forced manufacturers to reduce their production capacity due to the lack of a critical input in the production process, power.
Mrs Haloba said the country is undergoing a challenging period, influenced by external factors such as climate change, which have negatively impacted the manufacturing sector.
She said the challenges have made it extremely difficult for industry players to operate efficiently.
Mrs Haloba said the manufacturing sector has also been significantly affected by other factors such as the current electricity disruptions due to reduced electricity generation from low water levels.
She was speaking during the 2024 pre-budget meeting at Intercontinental Hotel, Lusaka organised by ZAM.
The ZAM Vice President South said the meeting aims 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.
Mrs Haloba also said 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.
She said to progress towards the Vision 2030 target of attaining an annual contribution of 36.12%, the government needs to support the growth of the sector by addressing both sector-specific and cross-cutting issues to maximize the benefits from the manufacturing sector.
Mrs Haloba paid tribute to sponsors of the meeting among others Zambia Breweries,
ZAMBEEF PLC, Coca-Cola Beverages Zambia (CCBZ), British American Tobacco,
National Breweries PLC, Zambia Industrial Commercial Bank (ZICB) and Trade Kings Group.
In response, the Minister of Finance and National Planning, Dr Situmbeko Musokotwane, says the severe drought, leading to power rationing to manage the energy deficit, has significantly hampered productivity and impacted the broader value chain development.
Dr Musokotwane said at the start of 2024, Zambia again faced a cholera outbreak that resulted in a noticeable decline in manpower and overall productivity.
He said the combined effects of such challenges have weakened the Zambian Kwacha, exacerbating the cost of inputs due to the still-developing input industry.
Dr Musokotwane said the Zambian government is not oblivious to the challenge as it has been implementing strategic interventions aimed at restoring macroeconomic stability, enhancing economic efficiency and boosting private sector-led economic growth through enhanced investments.
He said the Government is implementing tax holidays at various stages of the cotton value chain to spur investment, enhance raw material availability, and foster job creation.
The Minister said the Government is broadening the list of local products eligible for the 2% local content allowance to encourage domestic value addition.
He said the Government is increasing the company income tax relief from 14.5% to 20% of taxable profits for the first five years of operation for businesses located in rural areas.
This is contained in a statement issued by the Zambia Association of Manufacturers (ZAM) Chief Executive Officer, Muntanga Lindunda.
