The Center for Trade Policy and Development (CTPD) says the Multi Facility Economic Zones are key to Zambia’s effective participation in the Africa Continental Free Trade Area (AFCFTA).
CTPD Executive Director Isaac Mwaipopo tells Money FM News that the decision by Zambia to sign the protocol for the AFCFTA as the country await its ratification is a commendable.
Mr. Mwaipopo says with the free trade area, intra African trade is expected to increase.
He said the recent report of the consultative meeting on the implications of the African continental free trade area to Zambian trade notes that trade amongst African countries would increase between 33% and 52%.
“It notes that the combined African GDP would increase by between 0.2% and 1% while total employment could increase by 1.2%. This growth for Zambia translates into opportunities to diversify its export industry from the traditional export commodity-copper. It offers a new market to sell new products that the country can produce besides raw mineral exports,” he said.
“For Zambia to maximize benefits from the AFCTA, CTPD is of the view that Zambia now needs a robust industrial development drive.”
He added that the country may not need to go far in re-inventing the will as there is already a viable plan through the Multi Facility Economic Zones (MFEZ) initiative.
“What the Zambian government now needs to do is to ensure that the MFEZ in general and in particular, the Lusaka South Multi facility Economic Zone (LS-MFEZ) is fully supported to realize the purpose of its establishment. The MFEZ is a strategic investment which if well executed will give Zambia a competitive edge as it engages in business with other countries on the continent under the continental free trade area. At present Zambia’s manufacturing sector/industrial base is weak,” said Mr. Mwaipopo.
Mr. Mwaipopo noted that the country is a net importer of finished manufactured goods from other countries.
He further noted that very little manufacturing vis-a-vis value addition is made on Zambian products destined for the export market.
“Instead Zambia is seen as a producer of raw materials which are usually bought cheaply by other countries. As such, the idea to create the MFEZ as a conduit for spurring industrialization is a breath of fresh air for a resource rich country like Zambia. Zambia’s geographical position is also an added advantage in a business sense as it is linked to eight neighbors. It was envisaged that with a well-established industrial base anchored on manufacturing, the country would increase its competitiveness on the world market and move away from a typical developing country model where natural resources are exported as raw materials, and consumer and capital goods are imported resulting in the domestic manufacturing sector being less-developed,” he said.
“In addition, the MFEZs were to create a platform for Zambia to achieve economic development by attracting significant domestic and foreign direct investment (FDI) through a strengthened policy and legislative environment (ZDA 2016).”
The CTPD Executive Director however said, in a recent study conducted by CTPD which focused on assessing the performance of the Multi Facility Economic Zones since they were set up, it was evident that the Zones were operating below their expected potential.
He disclosed that the investment flows into the Zones especially LSMFEZ were getting affected due to policy inconsistency on the part of government regarding fiscal incentives.
“This affected actualization of investment pledges into the zones. For example, in 2017, LS-MFEZ had approved 33 with total investment pledges amounting to $1,355,978,000 but only $42,000,000 of the pledges had been actualized as at the time of the study. In addition, the study found that at the time of the study, only 7 companies had been set up with 3 already commissioned for commercial production. In contrast however, the LE-MFEZ and the Chambishi MFEZ run and controlled by ZCCZ seemed to have been doing far much better with more actualised investments than the LS-MFEZ,” he added.
“Going forward, CTPD wishes to call upon the Zambian government to step its commitment to making the MFEZ initiative work. It is a panacea to the country’s vison of transforming Zambia into a Middle-income Country by 2030 as enshrined in the country’s vision 2030 and its Seventh National Development Plan (SNDP).”

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