Diversification a necessity for Zambia’s economic growth
Diversification is key to economic growth for Zambia, experts have said.
It is believed that the need to diversify an economy is particularly seen when there is a downturn in commodity prices, when largely mono-product economies such as Angola, Nigeria and Zambia suffer certain level of economic crisis and stagnation.
In 2015, when copper prices fell by nearly 30 percent, Zambia immediately saw a currency crisis partly attributed to the lack of foreign exchange that came in because the country only depended on one commodity which is copper.
“That is why diversification is important because it helps you manage risks,” explained Caesar Cheelo, a Research Fellow with Zambia Institute of Policy Analysis and Research, a local think-tank.
Cheelo said Zambia had little control of the copper prices and so the country suffered almost immediately when that commodity’s price collapsed.
He said Zambia would do well to consider implementing agriculture diversification programs, particularly ones that focused on untraditional and unconventional produce such as rice, millet and soya beans.
He pointed out that diversification helped create jobs as more economic activities created more markets as well as producers.
“However, for diversification programs to be successful, there is need to provide specific detailed support based on good research that is anchored on a good understanding of what is needed in these very specific sectors,” Cheelo said.
The Centre for Trade Policy and Development (CTPD, another local think-tank, said Zambia’s agriculture sector presented a lot of opportunities for diversification.
Brian Mwiinga, CTPD Head of Programs and Research, said the horticulture industry was one of the areas which if exploited could contribute to the much needed foreign exchange among other benefits.
“There is currently a huge demand for flowers within the region and beyond. Zambia’s horticulture industry can tap into these opportunities and derive a lot of benefits from them,” Mwiinga said.