Factors influencing poverty reduction in the mining sector in Zambia: A case of selected mines

Abstract

The study focuses on how to reduce poverty by facilitating the inclusion of Zambian SMEs in the miningindustry and link them to global value chains. In the past 15 years, Zambia has adopted a series ofNational Development Plans aiming at the support of small and medium enterprises (SMEs). Despitethese plans, poverty levels are still high to over 60%. The main research question was what the barriersare that hold back local SMEs to join the Zambian mining chains and how to overcome them. The studyadopted an embedded multiple case study approach that included Lumwana, Konkola and Kansanshimines and the SMEs in the proximity of these mines. Primary data was collected through a surveyinvolving 150 members of the Mining Suppliers and Contractors Association of Zambia, and 35 indepth interviews with immediate stakeholders in the three selected mines, government authorities,NGOs, and experts. Data processing involved use of EQS for a structural equation modeling and selfadministered questionnaire for qualitative data. Data analysis framework focused on RMSEA values,FIT indices, and multiple regression analysis for quantitative data while theory construction involvedcoding the indicators that measure variables into themes, categories and subcategories which wereexpanded with detailed explanations, and thereafter summaries and conclusions. The conclusion of the study was that despite public and private support, SMEs continue to be excluded from supplying to the mine. The study recommends the formation of Zambia National content development and monitoring board for managing local content policies for inclusive growth, formation of Mining incubator to support SMEs upgrade to reach international requirements, formation of the mining commission of Zambia to implement mining policy, and form the supplier development working group to implement the private and public policies to improve capacity of SMEs to supply to the mines