Government says in order for Zambia to negotiate contracts with mining companies and stipulate local inputs for operations, there is need to have a local content strategy.
Addressing delegates at the stakeholders’ consultative meeting on Local Content Strategy in Lusaka, Mines and Minerals Development Minister Hon Richard Musukwa said government has prioritized the mining sector to achieve economic diversification and job creation.
Hon Musukwa noted that through local content, the sector will propel growth of other sectors such as manufacturing, trade and agriculture.
He mentioned that investors in the mining sector will also benefit from this strategy as they would be able to replace expensive imports with cheaper local products once local supply chains are fully developed.
“Ladies and gentlemen, as you may all be aware, Zambia’s Seventh National Development Plan is focused on building a diversified and resilient economy. Mining has been identified as one of the sectors to drive this agenda. One of the measures is putting in place a local content strategy that will spur the growth of other sectors thus achieving a diversified and resilient economy,” he said.
“As a starting point in developing this strategy, the Ministry Of Mines And Minerals Development with the support from the African Development Bank undertook a study to identify low hanging fruits among small and medium enterprises capacities can be strengthened and in turn lead to wealth and job creation for many Zambians. This meeting is very important because it will set the tone for local content initiatives in the mining sector covering topical issues such as training, employment of Zambians, manufacturing and local procurement of goods and services to support the mining sector.”
He added that the strategy is meant to enhance local content along the value chain which will benefit Zambians as millions of dollars are spent annually on goods and services which are imported into the country.
“You may recall that in 2017, a framework for local content policy for the mining sector in Zambia was developed. The report we are discussing today emanates from the recommendations of that framework. The following are some of the recommendations made; 1. To create an inventory of available standards and identify industry standard needs for selected mining inputs; 2. To develop a costed local content implementation work plan that can be monitored; 3. To identify raw materials for manufacturing inputs; 4. To identify gaps in the existing legal and policy frameworks that hinder local content in the mining sector and further recommend a framework for local content policy for the mining sector in Zambia, he highlighted.
Hon Musukwa reiterated that these resolutions were researched, articulated and documented for possible development into workable solutions in order to come up with a vibrant local strategy for the sector that will benefit the country.
Speaking at the same meeting, African Development Bank Country Manager – Zambia Mary Monyau stated that Zambia’s competitive advantage lies in her enormous mineral resources.
Ms Monyau observed the need to develop strategies to harness these resources to support Zambia’s industrialisation drive through manufacturing mining input goods and value-added products for consumption and export.
“However, it is common knowledge that besides a few countries, Africa has not succeeded in using its mineral resources to foster development. Some of the persisting challenges mirror the characteristics of an enclave sector where most inputs for production are imported, and minerals are exported without much value addition. Meanwhile, earnings are also mostly repatriated except for portions retained for operational needs. Clearly, such an industry cannot underpin Africa’s economic and social transformation,” said Ms Monyau.
She added that Zambia’s economy has been dominated by copper mining for a long time further adding that today, this accounts for more than 70% of the country’s foreign exchange earnings and about 14% of the country’s GDP.
“Given the sector’s dominance in Zambia’s economy, it is not surprising that economic diversification and industrialization have dominated policy goals since independence. However, actual progress on the ground has been slow. For example, the mining procurement value chain is worth between 2-4 billion United States Dollars annually in goods and services. Most of these goods are in fact imported into the country, and very few are manufactured in Zambia. The services too are mostly provided by foreign companies, rather than Zambian owned firms. This has led to arguments that much needs to be done to localize the rather large procurement value chain, which is expected to support greater job creation and industrial growth,” she said.