By Staff Writer, Lusaka
United Party for National Development (UPND) President, Hakainde Hichilema says the mining sector remains the dominant economic sector in Zambia, accounting for over 70 percent of foreign exchange earnings.
However, Mr Hichilema who is also an economist says despite the dominance of this sector, its contribution to employment creation has been very low, owing in part to the current capital intensive mining technologies.
“While the mining sector is not likely to deliver
significant direct employment opportunities, it could, with
the right incentive package and through linkages with small
scale enterprises, be a source of significant indirect
employment creation.
“Small scale enterprises have been proven, the world over, to
be engines for economic growth, employment creation and
poverty alleviation. This is so because of their agility and
employment of min-max model for productivity. What this
means is that they employ minimal means in their
production but with maximum impact. Essentially they meet
the three basic tenets of a good business. Faster. Cheaper.
Better; this, a large corporation cannot do. With the basic
means of production employed, this means small scale
enterprises can be set-up in rural areas too,” he says.
He explains that Zambia started off on a promising note in the 1970s, with
the establishment of the Small Scale Industry Development
Organization (SIDO), which nurtured and developed small
scale business.
“It was from SIDO that companies such as
Mwinilunga Pineapples, Mongu Cashew Nut, Mansa
Batteries, and Luangwa Bicycle Industry – famous Eagle
bicycles – were established. These were promising
enterprises, which provided employment opportunities to
significant numbers of our rural populations. Unfortunately,
SIDO was disbanded in the early 1990s, when anything
connoting socialism was done away with. That was
completely the wrong position to take and the results are
there for all to see.
Had the promotion of small scale industries continued, of
course with some adjustments, employment creation and
poverty alleviation would have been much easier to achieve.
Having been voted on a platform of ‘more jobs and more
money in people’s pockets’, one would have expected the PF
Government to have vigorously fought for the restoration
and establishment of small scale industries. In reality they
have not. After cheating small scale traders that they would
be empowered by reserving some business ventures to
nationals, PF have effectively been on a mission to sell off
every conceivable business including national assets to
foreigners.
This has seen our small scale businesses in a head to head
competition with foreigners selling farm produce like
tomatoes and onions or involved in activities such as
chicken rearing,” says Mr Hichilema.
The opposition leader suggests that PF must and should implement positive
discrimination, a model which works on the basis of
excluding foreign investors from participating in certain
sectors of the economy.
“For a firm to set up in a foreign
country means they have capital that by far will surpass any
indigenous firm. On allowing wholesale foreign investment,
we are killing local industry.
Does the PF not know that local businesses are being killed
in the process? Of course they know! The reason is simple:
they have allowed petty trading by foreigners for one simple
reason: to get commissions from the foreign businesses to
finance their party!
Because of their fake promises and disjointed approach to
small scale businesses, PF have even stopped talking about
the fantasy of ‘more jobs and more money in the pockets’
that they sung about in 2011! Money is going in individual’s
pockets at the expense of the poor people,” he explains.
He further explains a UPND Government will reignite growth of small scale industries through facilitating access to concessional
financing.
“This will allow maximum participation for the majority of our people. It has been established world-wide that Small scale enterprises are a proven intervention for
immediately creating jobs and reducing poverty above all for sustainable economic development. A UPND in government will facilitate small scale enterprises development through,” says Mr Hichilema.
In a statement, Mr Hichilema charged that
'access to funding' is undeniable and is the biggest obstacle to
starting up in business is financing for both capital
expenditure and working capital to meet immediate
expenses.
“Reforming the CEEC and Development Bank of
Zambia to address this financing gap is UPND’s priority,” he stated.
He said his party has observed contract discrimination in the country.
“We have seen a lot of road
contracts being awarded to foreign companies. These
foreign companies use fellow foreign companies as
suppliers. Our construction contracts will be strictly bundled
in such a way that local suppliers benefit e.g. there is no way
a foreign company can be supplying quarry dust to another
foreign company,” charged Mr Hichilema.
On value addition, Mr Hichilema pointed that this is a huge industry, farmers cannot be supplying raw sunflower to cooking oil companies, they can process that oil such that the only thing the bulk suppliers
do is purifying the cooking oil supplied by the small scale
industrial producer.
“What this does is that the by product of
this process –sunflower cake – is then used by farmers to
feed their livestock. Zambia still imports potato crisps. Why?
Because our local producers have no means to supply
ready-made potato crisps that can fry for only 5 minutes and
they are supplied.
These are only a flavour of what the UPND will do for the
small scale industries when they get into power. With this
formalisation, it will be easy to collect taxes for Government
to invest in social service of health, education and water and
sanitation,” he explained.
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