Growth Promotion Through Industrial Strategies a Study of Zambia.

Abstract

Zambia has experienced very good GDP growth rates in the last decade, above the SSA average. Growth remains largely based on copper exports, and on the high copper price that prevailed until 2013. The country has not yet achieved structural transformation of its domestic economy, in particular with regard to its ambition for broader based industrialization. There are important changes in demand with urbanization and increasing household incomes, in Zambia as well as in the neighboring DRC. A review of trade patterns and the sectoral performance in Zambia assesses the size and direction of different effects on patterns of industrial development. It particularly considers the impact on agro-processing and engineering sectors and the key factors in development of these activities. The paper considers concerns relating to competition, investment along the value chain, and the ability to build capabilities based on local demand and export opportunities in regional markets, especially in South Africa and via regional supermarket chains. Based on this analysis the paper asks what policies are required to support broad-based industrialization and critically assesses the existing framework and its implementation in this light. It concludes by considering the potential for collaboration in industrial policy across countries.