As new agro-business opportunities attract foreign investment, industry staples such as textiles and copper derivatives are keeping growth high.

The transformative role of light industry is a common theme among many economic success stories such as China and the Asian Tigers. By leveraging low labor costs, developing countries are able to compete with more advanced countries. In Zambia, industry executives and government policy makers are working to emulate this success by promoting manufacturing over raw resource extraction and sale. In 2013, manufacturing was already one of the main contributors to GDP, and at 11.2%, was third in line behind agriculture and construction. According to World Bank research, the country's state-led industrialization created large firms and continued demand by mines for a variety of locally manufactured products. From 2006-2011, the sector grew by 3% annually, most of which stemmed from the agro-processing (food and beverages), textiles, and leather subsectors. Secondary processing of metals such as smelting and refining of copper also contributes to sector output. The manufacturing industry breaks down as follows: food and beverages 63%, followed by wood products 11%, chemicals, rubber, and plastics products 9%, and paper products 7%. In 2013, manufactured goods accounted for 25% of the country's total exports, with the Common Market for Eastern and Southern Africa (COMESA) and the Southern African Development Community (SADC) trade blocs being the largest markets. The other 75% of export earnings came from copper. The export value of refined copper and unwrought copper alloys alone accounts for 63.5% of Zambia's entire trade value.

According to the Zambia Development Agency (ZDA), the priority areas for investment are in food processing, textiles and clothing, mineral processing, chemical products, engineering, leather products, electrical goods pharmaceutical products, and packaging materials. In food processing, the ZDA identifies the growing and processing of oil seeds, the downstream processing of livestock products in the beef and dairy industries, and carbonated soft drink and beer production as having significant growth potential. In textiles and clothing, the Manufacturing Under Bond Scheme (MUBS) and Multi Facility Economic Zones are identified as key to leveraging Zambia's competitiveness in garment and apparel manufacturing. Although Zambia has extensive copper mining operations, a large part of its extraction is sold internationally in raw form. However, secondary processing is becoming an important part of the sector and there is scope for manufacturing copper wire and other industrial products.

With its wealth of chemical, peat, and limestone deposits, as well as available phosphates, Zambia is well positioned to increase its chemical products manufacturing capacity. Although current chemical, and rubber manufacturing makes up 9% of the sector, the country still imports $200 million worth of fertilizers, most of which are heavily subsidized by the government at the expense of taxpayers. According to the ZDA, the required components of P fertilizers are found in deposits in the following areas: the Chilembwe deposits with an estimated at 1.6 million tons, the Mumbwa deposits with 500,000 tons, the Nkombwe deposits with 500 million tons, and the Kaluwe deposits with an estimated 207 million tons. Indigenous fertilizer manufacturing could offset the current deficit in this area.

Agriculture is the largest contributor to Zambia's economy, at 13% of the total GDP. With manufacturing contributing another 11%, there is significant overlap in the agro-processing sector. Agro-processing is uniquely suited to address Zambia's economically underdeveloped areas by increasing income and access to food among poor and rural populations. With a GDP per capita of $1,539 according to the World Bank's 2013 data, agro-business operations are ideal for the country. In 2013, export earnings from primary agriculture totaled $577,482, down 21.6% from $736,528 in 2012, with SADC and COMESA countries being the major markets. Other markets include the EU and Asia. Nonetheless, primary agriculture contributed 16.27% to total non-traditional export earnings in 2013.

The processed and refined foods sector is dominated by Zambia Sugar, which has a 90% share of the market. Recent expansions have allowed the company to increase its annual production from 200,000 tons to 450,000 tons per year. Zambia Sugar also grows over 65% of its own cane, on over 16,550 hectares. Around 2,500 hectares of this capacity was added during the group's recent expansion. In 2013, the sector's export earnings rose by 35.6% from $417,386 in 2012 to $565,807. The success of Zambia Sugar and other local agro-businesses has attracted outside interest and 2014 promises to be a good year for international investment in the sector. Nordzucker, Germany's second largest refinery, announced plans to build a refinery in Zambia at a cost of about $300 million. The limited expansion opportunities in the EU, and the impending end of European sugar market regulation make Zambia an ideal destination for such investment.

Zambia has a long history of textile manufacturing, with a peak during the 1980s when import substitution, high tariff protection, and government subsidies grew the garment sector up to 140 companies employing over 25,000 Zambians. By the 1990s, however, these policies were no longer fiscally viable and factories closed their doors while others scaled down operations. In 2014, there are signs that the industry is set for a rebound. To begin with, the fundamentals are in place for an efficient up scaling of production. Zambia has the capacity to produce over 100,000 tons of cotton to feed the industry. Secondly, the same monetary trends that undercut textile production may start to work in Zambia's favor, and recent investment seems to substantiate this.

During the first decade of the 21st century, bilateral trade between Zambia and China grew from $108 million to $2.85 billion, as China became the second largest consumer of Zambian copper. Chinese demand for copper in turn caused the appreciation of the kwacha, and raising the price of textiles in major export markets. This side effect, often referred to as Dutch Disease, made it difficult for other lesser Zambian exports to compete abroad to higher costs. Meanwhile, China manages this monetary propensity through a currency band. Economists suggest that the yuan is undervalued anywhere from 15% to 40% using this monetary policy. However, as other textile manufacturing countries are also learning, the tides are turning and China's growth is driving up production costs beyond what its economic policy is capable of displacing. Zambia is again a viable site of production.

In 2014, Vice-President Guy Scott urged Zambian farmers to increase cotton output. Two months later, Tanzania-based Mohammed Enterprises announced plans to invest $10 million to restart the defunct Mulungushi Textiles mill in Zambia, which closed in 2008. In April 2014, the Citizens Economic Empowerment Commission (CEEC) financed a KMW3.5 million cotton project, which includes setting up of a cotton ginnery in Mumbwa. According to Robert Sichinga, Minister of Trade, Commerce and Industry, the company will be the only fully Zambian owned cotton-ginning company, and will have a multiplier effect on the economy. If Zambia can turn its indigenous manufacturing around, added value will trickle down.