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Light Manufacturing in Zambia: Job Creation and Prosperity in a Resource-Based Economy
While Zambia’s recent growth has been impressive, it has not been accompanied with adequate job creation. To be sustainable and to create productive employment for its people, growth needs to be accompanied by structural transformation. Such transformation entails a growing share of manufacturing output in the economy. Light Manufacturing in Zambia shows that Zambia has the potential to become regionally competitive in several light manufacturing subsectors by leveraging its comparative advantage in natural resource industries such as agriculture, livestock, and forestry. Light Manufacturing in Zambia has several innovative features. First, it provides in-depth cost comparisons between Zambia and four other countries in Asia and Africa at sector and product levels. Second, the book uses a wide array of quantitative and qualitative techniques to identify key constraints to enterprises and to evaluate differences in the performance of firms across countries. Third, it uses a focused approach to identify country- and industry- specific constraints. Fourth, it highlights the interconnectedness of constraints and solutions. For example, solving the manufacturing input problem requires actions in agriculture, education, and infrastructure. This book suggests directing government policies toward removing constraints in a few of the most promising light manufacturing sectors using practical and innovative solutions inspired by the fast-growing Asian economies whose starting point 20 years ago was not very different from Zambia’s today. Growing production of light manufacturing goods would allow Zambia to capture more value from its raw materials and create more jobs.
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Light Manufacturing in Zambia: Job Creation and Prosperity in a Resource-Based Economy
While Zambia’s recent growth has been impressive, it has not been accompanied with adequate job creation. To be sustainable and to create productive employment for its people, growth needs to be accompanied by structural transformation. Such transformation entails a growing share of manufacturing output in the economy. Light Manufacturing in Zambia shows that Zambia has the potential to become regionally competitive in several light manufacturing subsectors by leveraging its comparative advantage in natural resource industries such as agriculture, livestock, and forestry. Light Manufacturing in Zambia has several innovative features. First, it provides in-depth cost comparisons between Zambia and four other countries in Asia and Africa at sector and product levels. Second, the book uses a wide array of quantitative and qualitative techniques to identify key constraints to enterprises and to evaluate differences in the performance of firms across countries. Third, it uses a focused approach to identify country- and industry- specific constraints. Fourth, it highlights the interconnectedness of constraints and solutions. For example, solving the manufacturing input problem requires actions in agriculture, education, and infrastructure. This book suggests directing government policies toward removing constraints in a few of the most promising light manufacturing sectors using practical and innovative solutions inspired by the fast-growing Asian economies whose starting point 20 years ago was not very different from Zambia’s today. Growing production of light manufacturing goods would allow Zambia to capture more value from its raw materials and create more jobs.
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Light Manufacturing in Zambia: Job Creation and Prosperity in a Resource-Based Economy

Light Manufacturing in Zambia: Job Creation and Prosperity in a Resource-Based Economy

Light Manufacturing in Zambia: Job Creation and Prosperity in a Resource-Based Economy

Light Manufacturing in Zambia: Job Creation and Prosperity in a Resource-Based Economy

Overview

While Zambia’s recent growth has been impressive, it has not been accompanied with adequate job creation. To be sustainable and to create productive employment for its people, growth needs to be accompanied by structural transformation. Such transformation entails a growing share of manufacturing output in the economy. Light Manufacturing in Zambia shows that Zambia has the potential to become regionally competitive in several light manufacturing subsectors by leveraging its comparative advantage in natural resource industries such as agriculture, livestock, and forestry. Light Manufacturing in Zambia has several innovative features. First, it provides in-depth cost comparisons between Zambia and four other countries in Asia and Africa at sector and product levels. Second, the book uses a wide array of quantitative and qualitative techniques to identify key constraints to enterprises and to evaluate differences in the performance of firms across countries. Third, it uses a focused approach to identify country- and industry- specific constraints. Fourth, it highlights the interconnectedness of constraints and solutions. For example, solving the manufacturing input problem requires actions in agriculture, education, and infrastructure. This book suggests directing government policies toward removing constraints in a few of the most promising light manufacturing sectors using practical and innovative solutions inspired by the fast-growing Asian economies whose starting point 20 years ago was not very different from Zambia’s today. Growing production of light manufacturing goods would allow Zambia to capture more value from its raw materials and create more jobs.

Product Details

ISBN-13: 9780821399354
Publisher: World Bank Publications
Publication date: 06/17/2013
Series: Directions in Development - Private Sector Development
Pages: 124
Product dimensions: 6.70(w) x 9.90(h) x 0.40(d)

Table of Contents

Foreword ix

Acknowledgments xi

About the Author and Contributors xiii

Abbreviations xv

Chapter 1 The Potential of Light Manufacturing in Africa 1

Introduction 1

Why Light Manufacturing? 4

Light Manufacturing in Africa and in Zambia 5

Identifying Opportunities in Light Manufacturing 7

The Potential for Light Manufacturing in Africa 9

Previous Policy Prescriptions: An Intimidating To-Do List 11

Resolving Critical Constraints in the Most Promising Sectors 12

Notes 13

References 14

Chapter 2 Economic Background 17

Introduction 17

The Promising Economic Growth since 2000 17

Zambia's Potential and the Main Constraints to Competitiveness 19

Note 22

References 22

Chapter 3 The Business Environment for Firms 23

Introduction 23

The Macroeconomic Framework 23

Wages and Productivity 28

Access to Credit 30

Entrepreneurship, Management, and Technical Skill Training 31

Institutional Support and Policy Coordination 32

Economic Zones and Industrial Parks 33

Notes 34

References 35

Chapter 4 Light Manufacturing in Zambia 37

Introduction 37

Overview of Light Manufacturing 38

The Size of Manufacturing Enterprises 39

Market Segmentation 41

Notes 43

References 43

Chapter 5 Textiles and Apparel 45

Introduction 45

Sectoral Potential 46

The Main Constraints on Competitiveness 47

Recommendations 50

Notes 52

References 53

Chapter 6 Leather Products 55

Introduction 55

Sectoral Potential 55

The Main Constraints on Competitiveness 57

Recommendations 59

Notes 61

References 61

Chapter 7 Wood Products 63

Introduction 63

Sectoral Potential 64

The Main Constraints on Competitiveness 64

Recommendations 68

Note 69

References 69

Chapter 8 Metal Products 71

Introduction 71

Sectoral Potential 73

The Main Constraints on Competitiveness 74

Recommendations 77

Notes 79

References 80

Chapter 9 Agribusiness 83

Introduction 83

Sectoral Potential 84

The Main Constraints on Competitiveness 84

Recommendations 89

Notes 91

References 92

Chapter 10 Synthesis: Reform and Policy Recommendations 95

Synthesis of the Results across the Five Sectors 95

Policy Implementation Issues 100

Note 106

References 107

Figures

1.1 Sources of Relative Excess Production Costs, Ethiopia, Tanzania, and Zambia, 2011 4

3.1 World Copper Price, 1960-2011 24

3.2 GDP per Capita, Zambia, 1960-2011 24

3.3 Exchange Rate, Zambia, 2000-11 25

3.4 Changes in Real Effective Exchange Rates, Yuan and Kwacha, 2000-11 26

5.1 The Cotton-to-Garment Market and Institutional Support Structure, Zambia 46

5.2 The Cost to Produce a Polo Shirt, Zambia Relative to China 48

6.1 The Footwear Market and Institutional Support Structure, Zambia 56

6.2 The Cost to Produce Leather Shoes, Zambia Relative to China 57

7.1 The Processed Wood Supply Chain and Institutional Support Structure, Zambia 64

7.2 Cost and Composition of Major Inefficiencies in Wooden Chair Production, China and Zambia 66

7.3 The Value Chain of Wooden Chairs, Zambia 66

7.4 The Value Chain of Wooden Chairs, China 67

8.1 The Metal Products Market and Institutional Support Structure, Zambia 72

8.2 The Crown Cork Value Chain, Zambia 76

8.3 The Crown Cork Value Chain, China 76

9.1 Wheat Milling Value Chain, Zambia 85

9.2 Wheat Milling Value Chain, China 85

9.3 Raw Milk Value Chain, Zambia 86

9.4 Raw Milk Value Chain, China 86

9.5 Cost and Composition of Major Production and Margin Items: Wheat Flour, China and Zambia 88

Tables

2.1 Sectoral Composition of GDP Growth, Zambia, 2000-10 18

2.2 Quantitative Results of Company Surveys, China and Zambia, 2010 20

3.1 Real Effective Exchange Rate Index, Yuan and Kwacha, 2001-10 26

3.2 Monthly Wages in Light Manufacturing, Five Countries 28

3.3 Labor Productivity in Light Manufacturing, Five Countries 29

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