Zambia must prepare for the various potential challenges that she may face. In order to prepare for the potential increase of migration, various policies may be developed. These policies must be set up in such a way that Zambian citizens are protected from loss of employment; and that immigration of skilled labour is encouraged to ensure that the benefits of these skills are harnessed. Skilled labor allows the country to be efficient in its production and also its ability to develop advanced technological systems and equipment within the country. Zambia also needs to focus on strengthening the facilitation of movement of capital.
As the region becomes a large single market, competition is likely to increase for Zambian producers in particular. It is essential for Zambian producers and businesses to be able to survive in this very competitive market. Research on the potential demands of products that Zambia may have comparative advantage in should be carried out to ensure necessary targeting is done. This will give Zambia an advantage as it services varying customers in different countries. Cost-benefit analysis of the best means of business must be undertaken to ensure efficiency and to benefit from economies of scale. Zambia must also invest in technology and equipment which improve productivity.
Zambia can also mobilize domestic resources in such a way that it can survive the potential short term losses that come with developing the CFTA. In this way, the country may not incur a lot of costs despite the reduction in tariff revenue. The removal of trade barriers is likely to bring about foreign direct investment and more multinational companies that need to be regulated. The issue of cross-border tax avoidance may arise as a result of this. Zambia may avoid this by endorsing a global common reporting standard for Automatic Exchange of Information (AEOI) which allows easier access to financial information to the residence country.
Support must be provided for small scale producers to avoid crowding out by a market run by the private sector. Small scale producers may adapt to the post-CFTA market through enhanced technical, managerial and financial skills and meet industry standards. The Government may assist in the investment of these attributes.
Zambia’s priorities in its trading arrangements are currently focused on interventions that promote value addition, diversification and job and wealth creation. In order to achieve this Zambia has recently developed an export strategy that is focused on ensuring beneficiation for the domestic industry and manufacturing products that will be able to meet the demands of the CFTA countries.
Download the booklet here: