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The Zambia Association of Manufacturers (ZAM) has highlighted a range of structural constraints limiting the country’s industrial growth, with illicit trade—particularly in tobacco, alcoholic beverages, and fast-moving consumer goods—emerging as a major concern.
ZAM President, Ashu Sagar, said illicit trade was eroding the market share of compliant businesses while undermining government revenue collection efforts.
Speaking at a media briefing in Lusaka on Friday, Sagar noted that these challenges were compounded by unpredictable and uncoordinated tax policy shifts, which disrupt long-term business planning and dampen investor confidence.
“While the recent stability in exchange and inflation rates is commendable, what the industry needs is sustained macroeconomic consistency to translate into lower production costs and competitive local pricing,” he said.
He added that exchange rate volatility continued to inflate the cost of imported inputs, machinery, and raw materials, while manufacturers also contended with bureaucratic licensing processes and limited access to affordable long-term financing.
Sagar pointed out that energy insecurity, including load shedding, had significantly driven up production costs, arguing that manufacturers were now relying on costly alternatives such as diesel, which cuts into profit margins and lowers productivity.
He further cited non-tariff barriers and infrastructure deficits as key limitations preventing Zambia from fully benefiting from regional trade opportunities under the African Continental Free Trade Area (AfCFTA).
To support Zambia’s industrial future, ZAM called for greater transparency and coordination in tax policy formulation, stronger enforcement against illicit trade, and streamlined licensing through harmonization and digital platforms.
The Association also proposed scaling up access to affordable, tailored industrial financing—particularly for Small and Medium Enterprises (SMEs)—and called for increased investment in energy reliability and industrial infrastructure.
“Stronger incentives for local procurement, value addition, and regional market integration are crucial,” Sagar added.
He revealed that in 2024, the manufacturing sector contributed 10.4 percent to Zambia’s gross revenue and was the second-largest employer after wholesale and trade.
Sagar also cited 2025 first-quarter estimates indicating that Gross Domestic Product (GDP) at current prices stood at K153.9 billion, with manufacturing accounting for 9 percent.
“While this reflects steady progress, it still falls short of the Vision 2030 target of a 36.1 percent GDP contribution,” he said.
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