POLICY SUCCESSES

The Association aims to influence the policy development, formulation and implementation processes in order to support the growth of the local manufacturing sector. The Association also seeks to assist and capacitate its members in overcoming various business constraints through trainings and other capacity building interventions that enable them produce internationally competitive, high quality products that are able to penetrate sophisticated markets. Further, the Association creates a platform for networking through business seminars, workshops, and other corporate functions; business linkage through various programmes and opportunities; marketing/advertising opportunities that bring together firms providing services to the sector and manufacturers through various platforms including digital, print, and video.

  • Policy Advocacy and Research Department

The Policy Advocacy and Research Department is responsible for policy advocacy with the view to ensuring that the policies, legislation and programmes formulated and implemented by government, relating to the local manufacturing sector, are geared towards supporting the development of a competitive local manufacturing industry. In this regard, the department engages in various activities that include formulation, implementation, monitoring and evaluation of government policies and programmes. The department is also instrumental in ensuring that country positions in regional and multilateral trading systems serve to advance rather than disadvantage the local manufacturing sector.

Through the Policy and Research department, the Association has been:

  • Fostering  Preferential Procurement for Locally Manufactured Products by the Government.

ZAM has been working closely with the government to ensure that all imported products by government that can be locally manufactured are procured locally. In this regard, the Minister of Finance in the 2015 National Budget gave a directive to all Government Agencies to give preference to locally manufactured products. In 2015, a preferential procurement business seminar was hosted by ZAM in which manufacturers interacted directly with officials from the Zambia Public Procurement Authority and procurement staff from government ministries.

  • Fostering Integration of Locally Manufactured Products into Supply Chain Stores (Super Markets)

Zambia has in the recent past seen an increment in the number of supply chain stores like super markets (Shoprite, Pick ‘n’ Pay, Spar etc). These chain stores provide an important market for the local manufacturers. In this regard, ZAM has been working with Chain Stores and the government to ensure that local manufacturers are able to supply their products into these chain stores. For members that have the capacity to consistently supply the stores, ZAM has been engaging the same to improve shelf space for their products. The Association is also currently working on projects aimed and building the capacity building of small scale manufacturers to supply the chain stores.

  • Fostering Integration of the Local Manufacturing Sector into the Mining Industry

The Mining Industry consumes huge volumes of manufactured products annually. ZAM, through the Mining Local Content Initiative, has been working closely with the Chamber of Mines to ensure locally manufactured products are integrated in the mining industry. ZAM has also organized a number of business seminars where representatives of the Mining companies interacted with local manufacturers on supporting the growth of the sector through procuring local products, and facilitated plant visitations by various mining firms to manufacturers to assist them ascertain the capacity to supply

  • Influencing/ Advocating for Policy Change on Behalf of Members:

ZAM assists members resolve various challenges they face as regards tax and non-tax policy. For example, the following are some of the tax policy measures that the Association has been able to influence;

2018

  • Measures to Enhance Local Participation in MultiFacility Economic Zones: ZAM lobbied for improvements in incentives for local manufacturers to participate in MFEZs, as a result the Government alerted the nation of its  plans to review the performance of MFEZs in order to identify and address challenges affecting their operations.
  • Measures to Enhance Access to Finance: ZAM lobbied for measures to enhance access to finance and reduce the cost of borrowing  for manufacturers and more so measures to enhance MSME development. As a result of this lobby, the Government announced its plans to set up the Agricultural and Industrial Credit Guarantee Scheme aimed at facilitating access to credit by SMEs.
  • Tobacco Processing Industry: ZAM lobbied on behalf of its members for measures to enhance the levels of tobacco processing in the country. As a result, the Government moved to  to increase customs duty on unmanufactured tobacco and tobacco refuse to 25 percent from the 15 percent, exempted unprocessed and semi-processed tobacco, from VAT,
  • Government to remove customs duty on various inputs used in the manufacture of stock feed and fish feed.
  • Government to increase the number of items to which the surtax applies and remove some items that were erroneously put on the surtax schedule.
  • Government to reduce customs duty on bricks that are used in the formation of furnaces from 15 percent to 5 percent.
  • Government to change the due dates for submissions of VAT returns from the 16th to the 18th of every month
  • Government will in 2018 finalize the cost of service study whose results will provide a basis for future adjustments to electricity tariffs.

2017

  • Packaging industry and Textiles Sector Duty Waiver: ZAM lobbied on behalf of members and obtained a obtain duty waiver on critical inputs through Statutory Instrument Number 6 of 2008 used in the manufacturing of their products.
  • Leather and Leather Products Sector: Removal of 15 percent customs duty on lifting, handling and loading machinery and carious inputs used in the Shoe Industry.
  • Wood and Wood Products Sector: Introduction of specific tax rates on the export of unprocessed and semi-processed timber products at the rate of k10 per kg and k5 per kg respectively to promote local value addition.
  • Alcoholic Beverages Sector: Advocate for the reduction of excise duty on clear beer to 40 percent from 60 percent in order to spur local manufacturing, promote investment and curb smuggling.
  • Agro-processing Sector – Edible Oils: Increment of the specific customs duty rate on refined edible oils to K4.0 from K2.20 per litre.
  • Agro-processing Sector – Tobacco: Increment of the specific excise duty rate on cigarettes to K200 from K90 per 1,000 sticks and introduce incentives to support local manufacture of cigarettes.

ZAM has and continues to advocate for policy change at a cross cutting level to spur the holistic growth of the manufacturing sector. Some of the interventions ZAM has actively been engaged in include:

  • Lobby for the Creation of a Level Playing Field with Imported Products: The sector has continued to face unfair competition from imported products. In this regard, ZAM has been able to influence policy that has led to the introduction of surtax at the rate of 5 percent on selected imported goods which are also produced locally. This measure is important for the manufacturing sector as it will encourage consumption of locally produced goods.
  • Increase in Asycuda Processing Fees by ZRA: Consultative Meeting with ZRA regarding the increase in Asycuda Processing Fees from K124.50 to K324.60, representing an increase of about 161%.
  • Proposed 75% Increment in ZESCO Electricity Tariffs: The Zambia Electricity Supply Corporation Limited (ZESCO) has proposed a 50% increment in electricity tariffs effective 1st May, 2017 and an additional 25% increment effective 1st September, 2017. This will mean that electricity tariffs will be increased by 75% before the end of 2017. ZAM facilitated a consultative breakfast meeting with ZESCO to discuss the implications of the proposed 75% increment in electricity on the manufacturing sector with a proposal for more gradual increments overtime for the manufacturing sector.
  • Implementation of VAT Rule 18: Following successful lobbying for the revocation of VAT Rule 18(b) ZAM has continued in its efforts to lobby for improvements in the administration of VAT Rule 18 which ties up capital for re-investment for a number of manufacturers.
  • Revocation of SI 33 and 55 on the Monitoring of Balance of Payments: The Association was able to influence government policy in collaboration with other key stakeholders towards the revocation of SI 31 and SI 55 of 2014 in the interest of the local manufacturing sector.

Further, the Association actively participates and engages members in providing input and recommendations when various government ministries, agencies and departments want to amend or formulate different pieces of legislations and policies. Key examples of input provided on policy documents include; the National Export Strategy, the Cooperatives Act, and the National Budget.