By partnering with manufacturing SMEs and large corporates, Prospero increases the sustainable and inclusive economic impact of manufacturing in Zambia. We help our partners seize local content opportunities and utilise technologies for improved economic efficiency and a reduced environmental impact.
Zambia’s industrial growth over the past decade has been mostly absorbed by the non-manufacturing industrial sector with copper mining being the largest contributor. Manufacturing accounts for less than 10% of the national economy despite its huge potential to create jobs through backward and forward linkages.
Key constraints to sector growth are:
- Lack of access to key domestic markets (mines, chain stores, government)
- Limited beneficiation and diversification
- Limited access to affordable long-term finance
- Outdated technologies
- Suboptimal local supply chains
We encourage investment in selected manufacturing sub-sectors for a sustainable and inclusive economic impact, to benefit low-income Zambians, especially women, youth, people with disabilities and rural populations.
The mining sector is highly important to the manufacturing sector, as shown by SMEs supplying inputs to large mining companies. However, the downward trend in mining exploration budgets and the limited lifespans of existing mines necessitate the seizing of additional opportunities for manufacturing SMEs to diversify their operations. At the same time, mining companies’ efforts to invest in local economic development allow for opportunities for diversification.
Initiatives
Zambia lacks a strong local intermediate inputs sector. This became apparent during the Covid-19 pandemic, when cross-border supply chains of manufacturing companies were disrupted, and business operations were badly affected. The key reasons for importing intermediate inputs are the local use of outdated technologies and low quality of local inputs. On the other hand, local raw materials are mostly exported without any value-addition. Strengthening local manufacturing value chains helps reduce the dependence on imported intermediate inputs, while adding value to locally available raw materials.
Together with our partners, who include large manufacturing companies in priority sectors; supplier SMEs; Ministry of Commerce, Trade & Industry; Zambia Association of Manufacturers; Zambia Development Agency; and mining companies; we increase local production, local value addition and local supply of intermediate inputs in selected manufacturing supply chains. These partnerships also extend to Supplier Development Programmes for SME suppliers to the mines. In addition, through partnerships with government agencies, associations, companies and other key stakeholders, we help improve the regulatory and business enabling environment in the manufacturing sector based on pressing lobbying issues such as the implementation of local content policies. We offer repayable grants, technical assistance, and partnership development. Skills development and knowledge transfer will be key areas of importance in the initiative.
Traditionally, the manufacturing sector is known to have a large negative environmental impact. This initiative promotes local economic development based on social and environmental sustainability. We identify SME intervention partners for capital investments in green manufacturing solutions, renewable energy, and waste management and recycling. We operate in selected geographic areas (urban and rural) with a clear impact on and involvement of local business communities. We additionally engage directly with mining companies to influence the spend of their corporate social responsibility (CSR) budgets on commercially sustainable and impactful business initiatives, dubbed CSI or Corporate Social Investment. By offering repayable grants, technical assistance, climate financing and (carbon) partnership development we support non-mine-dependent income-generating activities that can be sustained until after the mines’ lifespan. Business initiatives will be linked to carbon financing opportunities such as carbon credits, for additional revenues that will benefit local communities. Our key partners include “green SMEs”; Ministry of Commerce, Trade & Industry; Zambia Association of Manufacturers; Zambia Development Agency; and mining companies.