Zambia: Government, stakeholders' AGOA review timely
Government's initiative to engage the Zambia Association of Manufacturers (ZAM) and other stakeholders to review the country's performance under the African Growth Opportunity Act (AGOA) duty-free export market, underscores the importance it attaches to the development of the manufacturing industry.
Its concern emanates from Zambia's failure to export products to the lucrative US market despite the numerous incentives offered under the AGOA facility.
This comes on the heels of a recent report by the Hub Digest, a publication of a US Government department of Commerce, which indicated that Zambia's failure to utilise the AGOA market was due to the lack of a well-coordinated garments industry.
The failure does not only apply to Zambia alone, but to Africa as a whole, whose performance on the AGOA market in 2013 had dwindled considerably, compared to previous years, a fact that points to the lack of capacity to meet growing demand for that market.
Although some African countries such as Kenya, Lesotho and Mauritius, have tried under difficult circumstances, it is important to note that their manufacturing industries are all performing very well.
For instance, The Hub Digest reveals that, Lesotho emerged as a top exporter of garments to the AGOA market earning revenue in excess of US$314 million, followed by Kenya which raked in $259 million, and Mauritius which earned not less than $159 million.
The performance of these countries as well as others under the AGOA facility has helped in the creation of more than 300,000 job opportunities.
Countries such as Ghana and Ethiopia, for instance, have also exhibited a strong manufacturing capacity which makes them sustainable on the AGOA export market.
What has caused all this in the case of Zambia is the fact that the country's manufacturing sector, which should have been producing apparel and other textile garments mainly for export to the US market, has completely collapsed.
The announcement by Commerce, Trade and Industry deputy minister Miles Sampa that Government is in the process of reviving the local textile industry, is an economic decision that needs to be expedited and implemented as soon as possible.
It is believed that Government meeting with all the stakeholders will yield the desired results and put the country's manufacturing sector back on its feet again.
Government should give full support to the revival of the manufacturing industry by looking at some of the bottlenecks that have led to the general collapse of the sector which includes the lack of incentives as well as other pressing issues which makes it uncompetitive in the face of imported cheap textile products from Far East countries such as China and India.
It is not too late for Zambia, especially that the US Congress last year extended the provisions under the AGOA facility up to September 2015 and this gives chance to participating countries, to build capacity in the manufacturing sector to enable them become more competitive on the US market.
The other important factor worth noting is that by building capacity in the revived sector, Zambia would prepare well to meet growing demand in the region, should the US government decline to extend the facility beyond 2015.
What the Zambian Government and all stakeholders should realise is that, AGOA has proved largely successful as a tool of economic development for African countries and this will help in massive job creation, increase export revenue for the country and help to alleviate high poverty levels.
As Private Sector Development Association (PSDA) chairperson Yusuf Dodia has indicated, there is an urgent need for collaborative strategies between Government and the private sector, if the country is to reap full benefits from the AGOA export market.
This is the time for Zambia to strengthen the local manufacturing sector whose shortcomings have been exposed through the country's failure to utilise the duty-free US market otherwise, the call by Africa to extend the facility by at least 15 years, will be meaningless if these same countries fail to build the export capacity.