First Steps to Face Economic Challenges in Zambia; Samuel Holmes

The Zambian economy: you pay a South African firm to provide you with a Chinese box to watch British Television. This is the problem. There is little home grown competitive business. There is not even much knowledge of how to run a business, even among those doing exactly that. Despite having five BBC channels neither Dragons Den nor the Apprentice is broadcast in Zambia and it shows.

The lack of Alan Sugar and Evan Davis is not the only thing stunting business in Zambia though, there are cultural and legislative issues as well. The cultural issues seem to exist mainly among older generations. As a Zambian friend told me ‘Zambian’s are just waiting for the government to solve everything with aid money’. This is certainly not true of all, but when a colleague of mine dropped litter, their response when questioned on it was that it was not their job to keep the streets clean, it is the government’s.

This cultural attitude manifests itself in the legislative problem, particularly in agri-business, as the government guarantees a price for maize, resulting in farmers not being as keen to grow produce that has higher demand in the market. The consequence of this is that the agro-economy is not diversifying, and products are not being made to export. There is little value added.

And the solution? Well there is not one, there are many, all of which are necessary for change to occur. The key element though, is that it has to be a bottom-up solution. Yes, a hugely reformist government would be great, but it would still not change the working culture overnight. What does change the working culture, is people finding out about the benefits of being a consumer, producer and even owner.

How can Zambian’s gain the skills necessary? I suppose that is where Challenges Worldwide and organisations like it come in. Going to work in SMEs with growth potential, and helping them to understand how to improve is surely a step in the right direction. SMEs need help in Zambia, in everything from streamlining production to setting up basic accounts. These small things can make a huge difference, and are certainly the first step.

Beyond strengthening businesses, they need investment. Sub-Saharan Africa (excluding South Africa) is often painted as heavily impoverished with little potential, thus the foreign direct investment (FDI) inflows are much lower than they need to be. When so many countries are dependent on one country for FDI, namely China, all it takes is for that country to slow down, and all the dependant economies slow, which is what is happening at the moment. Thus, it is increasing investment from around the world that is another part of the solution. Challenges Worldwide is supporting this with its online Marketplace to help businesses find investment, as is the Department for International Development with its Private Enterprise Programme (PEP), which can provide growth grants.

There are other players that need to reform, and other actions that need to be taken, from greater government consumer protection and clamp downs on corruption to improving education and healthcare. But fundamentally skills and investment are the first step to a cultural-shift. As my Zambian counterpart said to me about one of the businesses “Basil Faulty had a better idea of how to run a business than this guy did at the start of the programme, but soon he will he like that Virgin dude”.

 

 

 

 

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