The potential of non-traditional exports in Zambia in relation to growth, employment creation and the distribution of wealth and income

Project Active from to Firms and Trade

This study was commissioned to assess the potential for the diversification of Zambia’s agricultural economy into non-traditional export markets by determining the prospect for growth, employment creation and, equitable wealth and income distribution in the sugar, cotton and coffee sub-sectors. The study provides an in depth analysis of the key current and prospective natural, economic and policy issues challenging and enabling the long-term growth of the sub-sectors and consequently the attainment of sustainable economic development of Zambia. Both secondary and primary data was used, gathered through desk research and key in-country informant interviews.

Secondary data was collected through a review of published and unpublished material including past value chain studies. The study established that there is considerable potential for growth and employment creation in all the three sub-sectors through the expansion of agricultural production, as the country is well-endowed with natural resources that are well-suited for the competitive production of the three crops. Investigations into the export markets for sugar, coffee and cotton show that there is a growing global demand for these commodities and that the current preferential trade arrangements governing these markets are important for ensuring market access for Zambian products and subsequently increased income potential for producers in these sub-sectors. The study finds that the prospects for equitable wealth and income distribution are most available in the sugar and cotton sub-sectors that already have a significant number of small-scale producers engaged in production. Policy and economic issues confront these subsectors and limit their contribution to effective growth, employment creation, and equitable wealth and income distribution.

Lack of financing and high transactions costs have emerged as the cross-cutting constraints for all the sub-sectors. Hence efforts to promote export diversification in these sectors should ideally be focused first primarily on programmes that ensure financial availability and promote investments into infrastructure that will reduce the transactions cost, among other things more specific for each individual sub-sector.