Zambia
Chapter 9 | Zambia Oluyele Akinkugbe, University of Namibia (Namibia)
Introduction: the case for agro-industrial development Agriculture and agro-industry are key priority sectors in attaining broad-based economic growth, food security and poverty reduction, not only because they are more labour-intensive, but also because they tend to have stronger linkages with the rest of the economy. About 60 per cent of the total population and 70 per cent of the poor in Zambia live in rural areas, the majority of whom rely on incomes from agriculture and agriculture-related industries, and/or consume domestically produced food. The agriculture sector alone provides means of livelihood for more than 50 per cent of the population and absorbs about 67 per cent of the labour force (GRZ/MACO 2004). The Government of the Republic of Zambia (GRZ) has recognized the importance of agriculture and agro-industries as key drivers of economic growth. It asserts that these sectors possess the capacity to generate strong backward and forward linkages, to promote demand for, and to add value to primary agricultural products. Agro-processing would reduce post-harvest crop losses which were as high as 30 per cent in 2004 (GRZ/MACO 2004), while agribusiness could create employment and income along the value chain from the primary producer to the ultimate consumer, widen the tax base, and increase foreign exchange earnings (GRZ 2006a). With a total land area of 75 million hectares of which 58 per cent is classified as medium-to-high potential for agriculture, and more than sufficient rainfall that ranges between 800 and 1400 millimetres annually, Zambia has a huge agro-industrial base (CIA/The World Factbook 2010). However, this vast resource endowment remains largely untapped and only about 14 to 15 per cent of total agricultural land is currently utilized (CIA/The World Factbook 2010). Although the country’s irrigation potential is conservatively estimated at 423,000 hectares, only about 50,000 hectares are currently irrigated (GRZ/MACO 2004), underlining the scope for major productivity gains if this potential could be exploited. The country possesses no less than 35 per cent of the fresh water resources in the entire 14-nation SADC region (GRZ/MACO 2004b). Although Zambia is landlocked and not directly linked to major world markets, it is situated close to good regional markets for many of its products. Full exploitation of these varied export market opportunities would enable the agribusiness sector to make a much greater contribution to foreign exchange earnings and to reduce the high degree of reliance on copper export earnings. The question then remains what needs to be achieved in Zambia by way of changes with regard of policy and the institutional framework to link up with the global value chain in agribusiness.
Structure and dynamics of agro-industries
Agro-industry refers to the establishment of productive linkages between enterprises and supply chains for developing, transforming and distributing specific inputs and products towards value addition in the economy based on the agricultural sector. Agro industries consist of food production sectors (processing staple and export products) and non-food production sectors (leather and leather products, textiles and garments, and furniture and wood products). The
277
ZAMBIA
Agro-industry contribution to Zambia’s economy
9