SIGNED AND SEALED

Zambia 2015 | ECONOMY | FOCUS: 11 BILLS

Legal reforms are being enacted to improve the business climate, making it easier for small businesses to enter the formal market and ensuring that property rights are well defined.

In 2013, at the fifth Tokyo International Conference on African Development, the UN Secretary-General Ban Ki-moon spoke at a lecture entitled “Private Sector, Trade and Investment as Engines of Development” session. In his presentation the secretary general stressed the potential of Africa as a FDI destination and the need for new proactive policies to promote international trade and address non-tariff barriers.

The African Development Bank Group has always stressed the importance of the private sector. In their Private Sector Development Strategy 2013-17, they wrote: “The future of African economic growth—and the futures of millions of Africans and thousands of African communities—is closely tied to the private sector.”

Zambia, experiencing high rates of economic growth, is committed to creating a business environment in which the private sector can thrive. In line with this, the Minister of Commerce, Trade and Industry of Zambia, Hon. Margaret Mwanakatwe recently presented parliament with eleven bills that represent her Ministry's aggressive efforts to overhaul the national business environment. In her interview with TBY, Hon. Mwanakatwe said that “the bills relate to strengthening intellectual property rights, trade facilitation, re-engineering of the national quality infrastructure; aligning company law to international best practices and expanding access to finance for micro, small and medium enterprises.”

At the present time, a continent where fifteen million new job seekers enter the market every year needs to develop the kind of business environment that ensures that available resources generate jobs and growth. With a population of 14.6 million, the labor force of Zambia is approximately of 6 million workers. In order to take advantage of that number and local expertise, Zambia must create an environment where new businesses and jobs are created. If companies are able to integrate the expertise of local resources and efficient processes, they may be able to improve their international competitiveness and promote their exports. If not under control, unemployment, especially youth unemployment, can create social tensions. According to data of the ILO (International Labor Organization) the employment rate of the Zambian youth (male and female between 15 and 24 years old) is as high as 50%, a number that should improve in the next years. For people older than 25, there is also a gender gap with an employment rate of 86% among men but only 74% among women. In order to tackle this problem, Zambia has put in place a citizen's economic empowerment program that targets women entrepreneurs by providing them with information regarding access to credit, land, and markets.

Another challenge is to move small entrepreneurs into the formal market. The Private Sector Reform Program will speed up the process for obtaining licenses and will lower the costs of doing business. Hon. Mwanakatwe explained that the “registration of SME's at the Patents and Companies Registration Agency has grown substantially” and that, “local authorities are now implementing single licensing systems to make it cheaper and more effective to formalize small businesses.” At the moment, Zambia occupies the 5th position in the Sub Saharan Africa doing business ranking, it is the 3rd among SADC countries, 4th within COMESA, and the 8th in the whole of Africa.

The bills presented to parliament will improve the business environment and facilitate trade, which means that we may see Zambia climb even further in the ranking in the coming years. Hon. Mwanakatwe has confirmed to TBY that “the bills are at different stages in the legislative process.” Some of them have already been approved and will only have to undergo legislative drafting. However, she concluded that she was, “confident that all the eleven bills will have been presented to Parliament by 2Q2016.”