Local content in Zambia-a faltering experience?

Abstract

At independence in 1964, Zambia inherited an economy driven by copper mining. This has not changed despite post-independence policies to industrialize and diversify the economy. This chapter traces the role of local content in Zambia's mining sector in supporting industrialization and economic diversification. It assesses productive linkages and manufacturing competitiveness during the import-substitution industrialization and post-1991 liberalization and privatization periods, and the adequacy of the current policy environment. Despite diminished productivity and export competitiveness during import-substitution industrialization, that era was successful in terms of domestic manufacture of mining goods. Privatization and liberalization stymied local content capabilities, retarding industrialization and economic diversification. Post-2000 policies emphasize local content development and export competitiveness. Their success, however, depends on addressing continuing weaknesses in the regulatory environment; human and technological capital; endogenous entrepreneurship; and the macroeconomic environment.