THE Zambia Tax Platform (ZTP) has called on the government to put in place protectionism measures that can encourage domestic businesses to be more productive and competitive and attain quality assurance of international standards.
In a statement, Tuesday, ZTP Private Sector Enhancement Expert Ellen Makinishi stated that the progress made by the country in harnessing the diversification agenda for sustainable and inclusive growth leaves much to be desired.
“Economic diversification remains a challenge for most developing countries more so for countries whose economies are small, landlocked, and dominated by primary commodity dependence. Economic diversification is a key element of economic development in which a country like Zambia can move to diverse production and trade structures. However, the opposite is true as this exposes the country to shocks that undermine prospects for longer-term economic growth. Diversification helps to manage volatility and provides a more stable path for equitable growth and development. In the wake of slowing economic growth, it is imperative for Zambia to increase the number of the quality of jobs. Needless to say, it leaves much to be desired in terms of the progress the country has made in harnessing the diversification agenda for sustainable and inclusive growth to date,” she stated.
Makinishi urged the government to enhance interventions in promoting value-adding agribusiness and agro-processing to connect more Zambians to jobs through value chains.
“In the agriculture sector, the government should therefore enhance interventions in promoting value-adding agribusiness and agro-processing to connect more Zambians, especially the young, rural, and poor to jobs through value chains. This ties in well with the government’s proposal to zero-rate value-added tax (VAT) on selected agricultural equipment and accessories that can improve productivity through mechanization. Consequently, it is crucial to invest in raising smallholder agricultural and informal productivity, support urbanization in secondary towns for off-farm jobs, and improve labour mobility among women and young people. Increasing investment in research and development also enables the country to adopt modern farming techniques that are suitable to the country’s culture and climate. Therefore, diversification has the potential to improve food security as well as contribute to adaptation efforts by decreasing vulnerability,” she stated.
Makinishi stated that building a strong manufacturing and industrial base was key to maintaining a strong export-oriented economy.
“On the other hand, building a strong manufacturing and industrial base is key to maintaining a strong export-oriented economy that can create resilience in the economy to both external and domestic shocks. It is necessary for Zambia to optimize the opportunities that initiatives such as the Multi-Facility Economic Zones present to enhance local manufacturing. The Zambia Tax Platform (ZTP) therefore calls for the government to put in place protectionism measures that can encourage the growth of domestic businesses to be more productive and competitive and attain the quality assurance of international standards. Thus, curtailing anti-competitive behavior is of the essence as this can seriously inhibit the scope and incentives to innovate and diversify,” stated Makinishi.
“Overall, Zambia cannot downplay the importance of value-addition in the various sectors and strengthen forward and backward linkages amongst agriculture, manufacturing, and the services sectors with the rest of the economy. Paving the way for economic diversification is, therefore, pivotal to increase the country’s capacity to become more self-sustaining, dynamic, and resilient to any external shocks, and support economic stability over the long term.”