The manufacturing sector is generally regarded as the cornerstone of economic development, playing an important role in fostering innovation, employment opportunities, and export diversification in countries across the globe. According to the World Trade Organization (WTO), manufacturing accounts for approximately 16% of global GDP and employs around 15% of the world’s workforce, a significance which is mirrored in the Zambian context. International trade agreements, which will be the focus of this article, have played a crucial role in fueling the growth of manufacturing, allowing producers to rise above the limitations of small domestic markets.
Zambia’s proactive involvement in international trade agreements yields numerous benefits for its manufacturing sector. By dismantling trade barriers and smoothening the path to regional, continental, and global markets, these agreements provide an ideal platform for manufacturers to amplify their exports and draw foreign investments. On the expansive continent of Africa, one such trade agreement is the African Continental Free Trade Area (AfCFTA), an ambitious undertaking aimed at forging a unified marketplace for goods and services. For Zambia, AfCFTA becomes a gateway to broaden its export horizons and diminish the already-mentioned vulnerabilities stemming from reliance on traditional markets.
In the same vein, bilateral trade agreements with strategic partners provide Zambia with a competitive edge by granting access to advanced technologies and specialized technical know-how. This inflow of knowledge serves as a spark igniting a fire of innovation, fostering a culture of continuous development within the manufacturing sector.
However, the path to reaping the rewards of international trade agreements is not without challenges. Several factors continue to impede the full realization of benefits locally. Our landlocked geography for instance, inherently brings about transportation bottlenecks, leading to escalated costs not to mention lengthened transit times. According to the World Bank, landlocked countries like Zambia face trade costs that are, on average, 50% higher than those of their coastal counterparts. These logistical challenges threaten to negate the advantages that trade agreements promise. Investment in infrastructure and logistics thus becomes of prime importance in countries such as ours. A further challenge relates to surges in cheap imports facilitated by the very trade agreements to the detriment of local industries. Mitigating this, however, lies not in restricting imports but raising the competitiveness of domestic industry.
Reaping the rewards of free trade will thus require a multi-pronged approach from policymakers, the foundation of which should be infrastructure development. Efficient transportation networks, state-of-the-art facilities, and streamlined supply chains collectively serve to address transportation-related constraints, which in turn reduce operational expenses.
An equally impactful strategy will involve the creation of specialized industrial clusters. By clustering related industries in close proximity, the synergistic exchange of knowledge, skills, and resources becomes a reality, catalyzing growth and enhancing the sector’s competitiveness.
Skills development can play an equally potent role and must not be overlooked. A skilled workforce, equipped with the latest knowledge and practices, can more easily employ advanced technologies and innovative initiatives. Partnerships between the government, private sector, and international organizations emerge as vital channels for facilitating training and technology transfer. It is for this reason that the Zambia Association of Manufacturers (ZAM) continues to provide for numerous trainings and capacity-building events in partnership with diverse organizations for the benefit of local manufacturers.
In conclusion, as Zambia pours resources into infrastructure, cultivates ecosystems of innovation, and forges partnerships that strengthen the knowledge base, manufacturing positions itself as a driving force behind our economic transformation. ZAM’s role in advocating for the sector’s interests, disseminating information, and fostering collaboration will continue to cement Manufacturing’s centrality to our economic growth. In weaving a tapestry of proactive measures and collaborative endeavors, Zambia stands poised to navigate the intricate terrain of international trade agreements, creating a manufacturing sector that’s globally competitive and resilient. In this journey, Zambia not only charts its course toward economic growth but also contributes significantly to the overarching goal of sustainable development. As the curtain rises on Zambia’s manufacturing prowess, it’s a story bound to echo far beyond its borders.
The Author is Administrative Assistant at the Zambia Association of Manufacturers
