The Government of the Republic of Zambia amended its public procurement guidelines to decentralise public procurement to local communities in 2021. This was achieved through a 16-fold increase in allocations to the Constituency Development Fund (CDF) for each of the country’s 156 constituencies, unlocking about US$1.3 million for each constituency to spend on local development. Similarly, the Government proposed an increase in the budget allocation of CDF to K4.8 billion in 2024 which implies that each constituency will receive K30.6 million during the implementation period. The CDF complements other Government empowerment programmes under the Citizens Economic Empowerment Commission (CEEC), Gender Division, the Ministry of Community Development and Social Services, the Ministry of Youth, Sports and Arts and the Ministry of Small and Medium Enterprise Development.
The Zambian Government has made significant investments through CDF. Out of the 62 maternity annexes built by the end of August 2023, 19 were financed through CDF. Additionally, the Government procured 442,000 desks through CDF and targets to procure 1 million desks manufactured by local entrepreneurs in the respective communities, thereby creating jobs and increasing income for the local communities. Further, the Government is training youths in building skills to bridge the skills gap in the rural areas.
Zambia’s increased allocations to CDF objectives resonates strongly with the worldwide community-driven development approach. Through the community-driven development approach, various countries provide block grants to communities to fund local development projects. They also provide technical assistance to help make local decision-making more inclusive, transparent and democratic. For instance, on an annual basis roughly every person received US$4.5, US$4 and US$1 in Sierra Leone, Liberia and the Democratic Republic of Congo respectively. It was observed that there was substantial investment in technical assistance, equivalent to two-thirds of the block grant budget in Sierra Leone. It was also noted that Sierra Leone had the most improvement in local public goods and economic welfare compared to the Democratic Republic of Congo which focused only on financing.
Notably, Micro, Small and Medium Enterprises (MSMEs) located in rural areas struggle to supply Governments due to limited capacity. It is for this reason that goods required for use in the wards would be non-existent or in low supply from the locals. In other cases, the goods may be of a lower quality. This failure to meet quality and quantity demands becomes a barrier to the Government’s efforts for economic transformation and improvement of the people’s lives at the grassroots level. Simply put, MSME’s participation in CDF projects is constrained by the lack of technical capacity to produce high-quality goods and services and meet the required demand.
Currently, the Government in partnership with the Zambia Association of Manufacturers (ZAM), is implementing the Proudly Zambian Campaign (PZC) aimed at promoting locally produced goods and services and driving the local content initiative in the country. Local content is taken to mean a set of policy instruments designed by National Governments to ensure a certain share of factors of production required at various stages of the value chain are sourced from the domestic economy. In this regard, campaigns and trainings have been undertaken, the most recent of which involved 21 MSMEs receiving training and mentorship for 6-months.
However, due to various challenges such as physical presence and budgetary constraints, the campaign has been focused on companies based in urban areas such as Lusaka and the Copperbelt, leaving out other parts of the country especially those in rural areas. As a result, rural areas are at risk of continued lag due to exclusion from fully reaping the benefits of CDF. The Zambia Association of Manufacturers thus recommends a budgetary allocation from CDF be made towards the Proudly Zambian Campaign to build capacity in communities. Other than the need to train MSMEs and hold various campaigns in these communities, PZC will be required to document each enterprise in every ward for purposes of business linkages and effective local procurement. In addition, business from CDF should be targeted towards the entities that have undergone this training.
In conclusion, it is worth noting that the initiative we propose faces several risks that could hinder its effectiveness, such as the potential rise in corruption and political interference. Hence, it is recommended that the initiative targets to have very little human interaction by putting in place self-running systems. However, considering most stakeholders are in rural areas and may lack necessary exposure to technology, the use of e-platforms can be done gradually.
The Author is Lead Policy Analyst at the Zambia Association of Manufacturers
