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HomeBusinessManufacturers Reduce Production Amid Power Crisis, Exchange Rate Fluctuations

Manufacturers Reduce Production Amid Power Crisis, Exchange Rate Fluctuations

By Felix Katyetye

The Zambian manufacturing sector is grappling with severe disruptions as load-shedding and an unstable exchange rate force manufacturers to cut production.

Speaking at the Zambia Association of Manufacturers (ZAM) pre-budget meeting, ZAM Vice President South, Fronscen Haloba, highlighted these challenges to the minister of finance at the Intercontinental Hotel in Lusaka.

Ms. Haloba emphasized that the lack of a critical input—power—has significantly impacted the industry’s efficiency.

She further attributed the current difficulties to external factors such as climate change, which has exacerbated the situation by reducing water levels necessary for electricity generation.

“The manufacturing sector relies heavily on consistent power supply and stable exchange rates. Unfortunately, the ongoing load-shedding and fluctuating Kwacha have made it extremely difficult for industry players to operate efficiently,” Haloba stated.

She added that the instability in the exchange rate has further complicated planning and predictability for manufacturers who depend on imported raw materials.

The meeting attended by key industry stakeholders and government representatives, aimed to present the issues hindering the sector’s operations to the Ministry of Finance and National Planning for consideration in the 2025 national budget.

Ms. Haloba stressed the importance of government support in addressing these challenges to progress towards Zambia’s Vision 2030 target of attaining a 36.12% annual contribution from the manufacturing sector.

In response, Finance Minister Dr. Situmbeko Musokotwane acknowledged the severe impact of the ongoing drought, which has necessitated power rationing and hampered productivity.

Dr Musokotwane also noted the additional strain caused by a cholera outbreak at the start of the year, which led to a decline in manpower and overall productivity.

“The government is fully aware of these challenges and has been implementing strategic interventions to restore macroeconomic stability and boost economic growth,” Dr. Musokotwane said.

He further outlined measures such as tax holidays in the cotton value chain, broader local product eligibility for a 2% local content allowance, and increased company income tax relief for businesses in rural areas as part of efforts to support the sector.

 

The event that was supported by notable sponsors including Zambia Breweries, ZAMBEEF PLC, Coca-Cola Beverages Zambia, British American Tobacco, National Breweries PLC, Zambia Industrial Commercial Bank, and Trade Kings Group.

This is according to a statement issued by the Zambia Association of Manufacturers Chief Executive Officer, Muntanga Lindunda.

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