Zambia has been pursuing economic diversification ever since the first republic and copper mining has been the major forex earner but with notable fluctuating trends over the years. As early as the First National Development Plan (1966-1970), both the need to diversify away from copper, as well as the emphasis of growth of other sectors such as agriculture and manufacturing, were emphasized. Economic diversification is the process of shifting an economy away from a single or dominant revenue source towards multiple sources from a growing range of sectors and markets. Economic diversification is widely viewed as a positive objective in sustaining economic growth as it enables countries to be less vulnerable to adverse terms of shocks by stabilizing export revenues. According to the Seventh National Development Plan (7NDP 2017-2021), the key sectors towards Economic Diversification in Zambia include; Agriculture, Tourism, Energy, ICT and Manufacturing sectors. One of the primary benefits of diversification is that a diversified economy creates a sustainable cycle of economic activity where sectors and businesses continually interlink and share benefits even as the economy grows. This also increases prospects for employment and growth and is in alignment with the multi-sectoral development approach being espoused in the 7NDP today.  Zambia has continued to pursue economic diversification with policy shift away from mining towards agriculture, manufacturing, and tourism among other sectors. The focus of this article is the manufacturing sector.

The Manufacturing sector in Zambia accounts for approximately 11% of the country’s GDP and has been growing at an average annual growth rate of three (3) percent in the last five years, based on figures available from the Zambia Development Agency (ZDA). Zambia’s manufacturing sector has considerable investment potential as the domestic economy is relatively well endowed with resource factors such as raw materials, required labour force, abundant water and rich minerals. The priority areas for investment in the sector include; food processing, textiles and clothing, mineral processing, chemical products, engineering, leather products, electrical goods, pharmaceutical products and packaging materials. (ZDA, 2018). In a quest to diversify the economy in the manufacturing sector, the Government has been working on setting up Multi Facility Economic Zones, Industrial Parks and other support infrastructure to accelerate industrialization. The actualized investment into the Multi Facility Economic Zones is estimated at US$ 3.3 billion, with more than 15,000 jobs created. In a bid to promote local content, the Government is implementing the National Local Content Strategy aimed at fostering business linkages between micro, small, medium and large enterprises.  The strategy is also meant to enhance local content along the value chain, which will benefit Zambians as millions of dollars are spent annually on goods and services, which are imported into the country. The Government through the Zambia Development Agency is also implementing the business linkage programme aimed at creating synergies in industry and market access for micro, small and medium enterprises.

The success of diversification depends on the mix, sequencing, and timing of investments, policy reforms and institution building, and on the consistency with the underlying assets and related comparative advantages of the country. Investments in skills, infrastructure, institutions and governance quality (ie. enhancing the transparency, accountability, and predictability of Government decision-making) increase the likelihood of success of diversification but are in turn affected by the extent of diversification. Providing the foundations for structural transformation and private sector-driven growth is an essential element in achieving a broader base of economic activities. Further, clear, transparent and predictable business regulations that provide a level playing field among investors (small and large, foreign and domestic) are essential for economic diversification.


Zambia has to make fundamental policy shifts if the country is to achieve the objectives of the Vision 2030. Achieving these objectives is essential to repositioning the Zambian economy onto growth and development, in a manner that makes the country less susceptible to both domestic and external shocks. This is seen as a critical area of focus midway before the expiry of the Vision 2030. The Seventh National Development Plan (7NDP) provides a clear roadmap of what needs to be done to diversify our country’s economy, going forward there is dire need for the mobilization of resources that will finance the various strategies and policies as outlined within the 7NDP towards the realization of economic diversification.