Zambia has in the last 15 years lost about US$40 million agricultural exports market from an excess of US$80, says University of Zambia (UNZA) economics lecturer Dale Mudenda.
He observed that the private sector was unable to produce enough local products for export because they had challenges accessing financial capital due to expensive loans.
“It is sad that 15 years ago horticulture and agricultural products we were exporting in excess of US$80 million but now we are exporting about US$40 million,” Mr Mudenda said.
He said access to cheaper loans by the private sector could enable Zambia to revamp her industries and to export more local products.
“Government can give incentives to banks to enable businesses access cheaper credit which will enable them to invest and export and then pay back after some time.
“In this country what constrains the private sector is that loans are very expensive and with expensive loans you cannot support an industry. But that is one way the Government can use to diversify the economy and grow the private sector,” Mr Mudenda said. He said other African countries such as Kenya and Ethiopia had taken up the market which was for Zambia.
“The industry has collapsed and our competitors such as Kenya and Ethiopia have take advantage of the market which was ours just because we have not kept consistent policies to support the industry,” Mr Mudenda said. Meanwhile, Mr Mudenda said while domestic borrowing was good, it crowded out the private sector.
“I think generally, we know that current activities on the domestic front is pushing up interest rates, so how can we leverage that; let us try and maintain fiscal policy,
“While domestic borrowing is good, it also crowds out the private sector and because the private sector has to borrow and invest, it is important to ensure that some sectors are sustained,” he said.