A REVIEW OF THE ZAMBIA DEVELOPMENT AGENCY ACT IN THE CONTEXT OF LOCAL AGRICULTURAL INVESTMENT BY CHAMA LENGANJI SIMBEYE
A REVIEW OF THE ZAMBIA DEVELOPMENT AGENCY ACT IN THE CONTEXT OF LOCAL AGRICULTURAL INVESTMENT
CHAMA LENGANJI SIMBEYE
A DISSERTATION SUBMITTED TO THE UNIVERSITY OF ZAMBIA IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE BACHELOR OF LAWS DEGREE
INTRODUCTION. Zambia, like any other developing country has been on the quest since independence to create an investment friendly environment as a host nation. One of the ways in which Zambia has tried to achieve this is through the sequential enactment of several pieces of legislation to control, manage and oversee investment in the country. In 2006, the Zambia Privatisation Act, the Zambia Investment Act, the Export Development Act, the Zambia Export Processing Zones Act, the Small Scale Development Act where all repealed and merged into the Zambia Development Agency Act (ZDA Act). This led to the creation of the Zambia Development Agency which presumed the functions of the functions of the five organisations created under the repealed five Acts mentioned above. The aims of the new Act are to foster economic growth and development by promoting trade and investment through an efficient, effective and coordinated private sector led economic development strategy; to establish the Zambia Development Agency as a one stop facility; to streamline bureaucratic procedures and requirements faced by investors.
Unfortunately the ZDA Act has proved not to have adequately accommodated the agricultural sector through its investment promoting provisions. Further, very little regard has been made to the needs of local agricultural investors that would promote their investment in the sector. This has demonstrated to be a problem as the agricultural sector has immense potential to boost the Zambian economy. Therefore the aim of this research to assess the policies that ZDA Act has in relation to local agricultural investment policies that address the prerequisites of local farmers which in turn speaks to the growth of the Zambian economy.
Agriculture in Zambia has the potential of enhancing economic growth and reducing poverty. This potential can only be realised if the existing laws speak to the needs of the agricultural sector. A thriving agricultural sector leads to significant improvements in the country’s Gross Domestic Product (GDP), contributes to employment generation, and broadens the country’s tax base. It is for this reason that the Seventh National Development Plan (7NDP) positions the agricultural sector as one of the driving engines for economic growth required to reduce poverty. This will be achieved through a review of existing agricultural provisions and to see if they are realistic in the insurance of sustainable development in this sector.
BACKGROUND. The copper mining industry has traditionally been the backbone of Zambia’s economy. It has accounted over the past years for more than three quarters of the country GDP. In fact, some experts estimated that copper had for many years contributed 90 per cent of the country’s foreign exchange earnings. Against the background of persistent reductions in copper prices on the international market, the decrease in the amount of copper in the country as well as decrease in the demand, coupled with all other economic and financial factors, Zambia has sought to invest in its agriculture sector so as to make it a source of national income.
The change of government from the United Nations Independent Party (UNIP) to the Movement for Multiparty Democracy (MMD) which took over power in November 1991 under Dr Fredrick T.J. Chiluba steered the introduction of Structural Adjustment Programmes (SAPs) as a means to create a sustainable economy. The SAPs led to the removal of government’s intervention in the running of the economy. In the agricultural sector, SAPS brought about the introduction of market liberalisation which resulted in the government’s removal of subsidies on fertilisers and other inputs, decontrolled prices of commodities and opened up marketing so as to attract competing marketing organisation.
The liberalisation process after 1991 was not supplemented by significant increases in marketing and agriculture. As a result of lacking clear and certain government policy, the SAPs failed to adequately address the agricultural sector. They were seen to instead make the sector worse with the outbreaks of many plant and animal diseases, poor delivery of pesticides and extension system, poor marketing and a lack of responsiveness to natural shocks like droughts and floods. Furthermore there was virtual absence of private sector participation in rural areas. Hence why, it has been the objective of the different governments that have taken office to address these challenges.
Developing the agricultural sector in Zambia is important given that about 80% of the country’s population depends on agricultural related livelihoods. Over the past decade, Zambia’s agricultural growth has been highly volatile. Many different factors have said to owe to this high level of volatility like the poor rainfall experienced in some preceding years like 2005 – 2007 which depicts Zambia’s high dependency levels on rain-fed agriculture. It is not novel to the nation that agriculture in Zambia can act as an engine of economic growth and poverty reduction within a relatively short gestation period, but only if it is given the necessary attention it deserves and resources that it requires. This demands a refocusing of the agricultural sectors development strategies and programmes towards drivers of inclusive agricultural growth.
A poverty reduction agricultural-led growth requires an appropriate supportive policy environment that stimulates the participation of all sectors including the private sector. There is need for example to re-align legislation and ensure that budget allocations for production and productivity and commercialization incentives should work as they are allocated for, these are some of the provisions that may be contained in the ZDA Act as it is the Act that promotes Zambian investment. There is also need for the passing and implementation of market-based legislation including review of Acts of Parliament to that facilitate credits given to local farmers. There is further need for the ZDA Act to ensures the payment of a considerable amount of the expenses famers registered to the e-voucher system incur if it is to address local investment.
Statement of the Problem.
Zambia has a large agricultural potential which is still fundamentally untapped and can play a key role in the reduction of poverty as well as in the growth of its economy. It can be argued that the diversification of Zambia’s economy from mainly copper to agriculture is a narrative that has been known to Zambia for many years. Many factors account for the lack of implementation and the failure of the economic expansion among which poor investment legislation lays, a problem that may be corrected by the review of the ZDA Act as it is the Act that speaks to investment in Zambia. Nearly 63% of the country’s population live in rural areas where they are predominately engaged in the production of crops. This shows that agricultural production is dominated by small scale farmers who mainly depend on own labour and minimal finances to meet their subsistence needs. It can be contended that unsupportive investment policy framework and a lack of proper laws regard agricultural investment for these native Zambian farmers could have an effect on Zambia’s agricultural diversification goal as it does not enhance or encourage the growth of these farmers..Objectives.To explain what agricultural investment is and its importance.
To explain the need for the Act to address local agricultural investment.
To review the current local agricultural investment provisions in the Act.
Questions.What is agricultural investment?
What hindrances account for the failure of local agricultural investment in relation to the provisions of the Act?
Why should the Act specifically address local agricultural investment?
SIGNIFICANCE OF THE STUDY. The rationale of this study is that Zambia being a country that is trying to rebuild its economy creates the necessity for the concentration of the provisions in the agricultural sector. The laws themselves should address agricultural investment needs so as to attract local agricultural investors. This could be accomplished by warranting that there are laws in place that demand that local farmers have access to land, access to markets, utilisation of wetlands, receive the necessary fertilisers and seeds and with the coming in of the new e-voucher system, it should be law that farmers are paid on time and there is record keeping of the funds being paid to them. This study could contribute to the understanding of the importance of laws in the agricultural sector in Zambia given that Zambia is making efforts to improve the sector. This study will attempt to establish how the existing laws have failed to meet the needs of the local farmers and as a result the sector has remained undersized and in turn this knowledge will call for reviews that will lead to the development of this sector.
Crawford discussed how a more dynamic and inclusive agriculture dramatically reduced rural poverty. He noted agriculture as a paramount sector in poverty reduction in that it is already what the people are engaged in and cannot call for major changes in their livelihoods. He further highlighted the potential contribution of agriculture and food marketing towards attempts to improve rural incomes in developing countries. Currently, the existence of the few favourable policies account for the increment in production of certain crops such as soya-beans and rice. This clearly illustrates that with decently implemented policies the agricultural sector can expand extensively and impressively impact economic growth.
The role of the agricultural sector development of any country has been emphasised by a good number of scholars like Eicher and Witt. Both noted that there has never been a circumstance where major countries had successful development without a rise in agricultural production preceding or accompanying industrial and commercial developments. They thus illustrate that a well performing agricultural sector translates into significant improvements in the country’s Gross Domestic Product (GDP), contributes to employment generation, and broadens the country’s tax base. This discussion is then relevant because Zambia needs to better its agricultural policies as nearly 61% of the population live in rural areas and are principally engaged in the production of crops.
Kakulwa examined rural development through agriculture. He argued that heavy government involvement in agriculture has been costly but largely ineffective. He added that many government policies entail control and interference by government as well as centralised delivery of support services like transport, fertilizers and pesticides. This then shows that the existing policies do not favour the growth of small scale famers in the country. Many of the existing laws and policies on investment are heavily directed towards the encouragement of Foreign Direct Investment (FDI) at the expense of local investors and citizens. He stipulated that with favourable agricultural policies by the government, the country could record increased production of major crops.
The Seventh National Development Plan (7NDP) points the agricultural sector as one of sectors that can play an important role in the promotion of poverty reduction, food security, and rural development and at national level, help in building the economy. It points out that local farmers should be encouraged. This is because most of the population are already engaged in agriculture, when improved through better legal policies, it will easily change them. It further notes that if well developed and properly managed, the agricultural sector can be a stable source of foreign exchange and thus enabling the country to attain necessary imports. It added that agriculture generates between 35 – 40% of GDP and provides a livelihood for more than 70% of the population showing that agriculture and agro-based businesses or products are important in the Zambian economy. However, despite bringing out these points, the plan does not account for failure of expansion in the sector to the luck of existence of policies to support the larger part of the agricultural sector players which are the local farmers.
The Zambian National Agriculture Investment Plan highlights that despite GRZ’s high spending on agriculture and the robust growth rate, the country hasn’t seen a reduction in rural poverty and what has been said to account for this is the fact that 72% of all small scale farm households cultivate less than 2 hectares of land annually and are incapable to produce enough surplus for sell in order to benefit from governments spending on agriculture. Therefore, it can then be presumed that despite the government’s efforts, agricultural production from small scale farmers will remain undersized as they do not have supportive policy frameworks that can lead to the expansion of their efforts. Kakulwa also observed the same as he stated that administrative policies greatly impact the growth of the agricultural sector.
The abovementioned shortfalls and in some areas total luck existence of policies to deal with local agricultural investors necessitate the enactment and execution of legal frameworks to monitor plus control but more so enhance the potential of these investors. To increase the local crop yield, the investment figures among other things, the government should implement complimentary policies that directly speak to their needs.
The study mainly relies on primary and secondary data. It is a desk research that is qualitative in nature. Data collection has been done manly through reviews of articles, book, dissertations, journals, and other scholarly writing. The research being focused on the some of the contents of the Zambia Development Agency Act, most data has been collected in light of such contents so as to enable the researcher to better understand these contents. Data collected was analysed and reviewed before using it to write the dissertation.
OUTLINE OF CHAPTERS
This research follows the chapters as outlined below:
Chapter 1- General Introduction.This is mainly the introductory part of the research. It undertakes to offer a brief understanding of the proposed area of study that is to point out that the ZDA Act is inadequate in its provisions for local agricultural investors. A short genesis of economic reforms in Zambia has been given as well as the Acts that existed prior to the enactment of the ZDA Act.
Chapter 2 – MISCHEIFS IN THE OLD LAW: Agriculture in Zambia and the coming of the ZDA Act.
This chapter gives a picture of the scene of agricultural investment in Zambia prior to the enactment of the ZDA Act. It further discusses the mischiefs the enactment of the ZDA Act intended to cure and how it has failed to cure them. An attempt will then be made to identify the needed remedies to cure these lacunae and mischiefs and propose the needed policy options.
Chapter 3 – Why a critical review of the Act is imperative – a comparative study of Regulatory Frameworks for Investment in the Sub-Region .This chapter will embark upon a comparative excursion of legislation from a few common wealth countries with special regard to those that have reformed and registered growth. The provisions in their legislation will be a reference point for the ZDA Act and determine its efficiency to adequately address agricultural investment. Finally, it will suggest whether or not there are any lessons to be learnt from these countries.
Chapter 4 – Current Hindrances to Agricultural Growth and the Need for Proper Regulatory Framework.The chapter discusses the current hindrances that Zambia faces in the expansion of its agricultural sector despite all efforts that have been made to improve it. Further, it highlights the importance of having in place proper regulatory framework.
Chapter 5- Recommendations and Conclusions.
This chapter provides a conclusion to the research and goes on to give recommendations that relate to the way legislation can improve agricultural investment in the country. The recommendations are therefore dependent on results of the research and will outline whether or not there is a need for change in legislation.
Summarily, the first chapter provides a brief back-ground to the area of study by way of a brief introduction and discussion on the enactment of the ZDA Act and how it lacks adequate provisions for local agricultural investment and adds the importance of having such legislative provisions in place. The chapter also presents the literature review of various authors – both local and foreign relating to agricultural investment and amplifies the need of its being incorporated in legislation. The literature review attempted to establish how the Zambian legislation omits the necessary provisions for agricultural investment as being the main area of this research. The chapter briefly considers the role that the government through the enactment of legislation plays in the sustainable growth of the agricultural sector. It further contains research questions and objectives to be achieved by this research.
I.M Crawford, Agriculture and Food-Marketing Management, Rome, 1977.
C.K Eicher and L.W Witt (eds.), Agriculture and Economic Development, New York; Mc Craw-Hull, 1964.Dissertations
Kakulwa, Charles “Rural Development through Agriculture: A History of Mununshi Banana Scheme”. Submitted in partial fulfilment of the requirements of the award of Masters of Arts in History, Lusaka, 2012.Kanjoba, G.M., “Vulnerability and Resilience of Rural Society in Zambia: From the view point of land tenure and food security” Lusaka: Research Institute for Humanity and Nature 2008.
Government of the Republic of Zambia, “Seventh National Development Plan 2017-2021”, Lusaka: Ministry of National Development and Planning, 2017.
Government of the Republic of Zambia, “National Agriculture Investment Plan 2014-2018”, Lusaka: Ministry of Agriculture and Livestock, 2013.