1. Doing Business in Zambia
EADI-NORDIC Conference 2017, Bergen, August 21-23
Søren Jeppesen, Copenhagen Business School
Peter Kragelund, Roskilde University

2. The story Improved business environment
Improved doing business indicators (DBI)
Drive to further improve DBI
What are the local effects of this drive?
What is the reality on the ground (Zambia)
Struggling and stagnant domestic private sector
Argument: mismatch between local companies’ needs (on meso and micro-level support) and policies’ focus (on macro-level issue)
Improved BDI → FDI↑, but
do not necessarily benefit local firms

3. The Africa Rising Narrative
Africa’s moment / Africa emerges…:
Ample business opportunities / growing middle class, business openings etc.
WB launch of Doing Business Project in 2003 to stimulate economic growth
DBI measures: extent to which rules and regulations apply to businesses & cost of abiding to rules and regulations
DBI rankings show that African countries are moving ‘up the ladder’ - Reflecting the Africa Rising Narrative
African governments pursue enabling policies and reduce red tape to move up DBI

4. The Africa Rising Narrative seen from the local firms’ perspective
Two sub-sectors of importance in Zambia
Agribusiness (AB): Grain milling, edible oils, dairy products:labour intensiveness & linkages
Suppliers to the mines (StM): engineering, manufacturing and service providers: copper=75% of exports / 13% of GDP
Performance (incl. turnover, employment…):
AB: on par or better than industry average
StM: On par or lower than industry average
Supports the Africa Rising Narrative :
AB & StM performing increasingly worse

5. Challenges faced by local firms in Zambia:
Non-existing meso– and micro-level policies
Weak representation via PSOs
Limited influence on government policies
Challenging business environment
Limited skills / capabilities
(the above plus):
State’s inability to deal with deteriorating business environment
Lack of state-business engagement
Absence of relevant support schemes

6. Getting policies right – for whom?
All policies see the PS as the driver of economic growth
(almost) all policies originated in international donor org.
All seek to:
Reduce red tape, increase bureaucratic predictability, promote PPP, increase access to finance, reduce cost of finance, promote trade, intensify competition…
Follows one-to-one the DBI prescriptions

7. Outcome of 1½ decade of DBI-led policies
Booming FDI
Mining dominated by foreign TNC
1st, 2nd and 3rd tier suppliers are foreign
Agribusiness driven by South African supermarkets/hotels
Imported food stuff
Local companies marginalised
Closing down
Diversifying into other sectors
Policies do not meet the need of local firms
Be specific
Implemented