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By Honesty Simulwi
IT is dismaying that since independence, Zambia is still grappling with economic challenges and widespread poverty due to delays in implementing the small and medium enterprise (SME) policy. This vital framework, designed to empower entrepreneurs and stimulate economic growth, has remained uncertain, exacerbating the country’s economic woes and perpetuating poverty.
Small and medium enterprises are the backbone of any economy, driving innovation, job creation, and revenue generation. In Zambia, they contribute over 70 percent of our Gross Domestic Product (GDP), account for 88 percent of employment in different sectors, and represent 97 percent of all businesses in the country. Unfortunately, economic growth and development have not kept pace with population growth, even with the immense natural resources Zambia possesses.
The delayed implementation of the Small Medium Enterprises policy has far-reaching consequences. It has denied entrepreneurs the support they need to grow and thrive, condemning them to a cycle of stagnation and poverty.
The ripple effects are felt throughout the economy, resulting in slow job creation and high unemployment rates, further straining limited social services. It has hindered economic diversification, leaving Zambia vulnerable to fluctuations in global commodity prices.
Local industries struggle to compete with foreign competitors, leading to a decline in domestic production and increased reliance on imports. Innovation and entrepreneurship are stifled, depriving the country of potential solutions to pressing development challenges.
Despite launching a revised 2023 National Micro, Small, and Medium Enterprises Development Policy in Zambia, the delay in implementation negatively affects vulnerable populations, including women, youth, and rural communities. These groups often rely on SMEs as a primary source of income and employment, making them more susceptible to the economic shocks caused by policy inaction.
To break this cycle of economic stagnation and poverty, the government of Zambia should expedite the implementation of the SME policy. This requires providing quality and quantifiable allocation of necessary resources and funds to targeted SMEs in different sectors.
The government should ensure sufficient funding for personnel and infrastructure, such as roads, digital networks, industrial parks, and clusters, to support policy implementation. Streamlining regulatory processes, reducing bureaucratic steps, and automating tasks where possible to reduce delays is crucial. Expedited access to finance, training, and mentorship opportunities for SMEs, along with proper training and support for officers responsible for policy implementation, is essential. Clear responsibilities should be assigned to implementers to avoid confusion and ensure accountability.
Regularly assessing policy implementation progress to identify areas for improvement is necessary to ensure successful implementation. Lastly, fostering public-private partnerships will stimulate innovation and investment, leveraging expertise from stakeholders.
The time for action is now. The future of Zambia’s economic prosperity depends on it, not on lip service. The government of Zambia should expedite unlocking rigidities to spur economic growth and development and create jobs that will match population growth, lifting millions of Zambians out of poverty.
About the Author: Honesty Simulwi is a Research Fellow at Impact Citi – Zambia. He is an advocate for better policy and freedom advocate.
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