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Strategic Plan

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1.0 Situation Analysis: Medium and small enterprises in Zambia – Defining the country Context

The private sector has since 1991 been playing an increasingly more dynamic and recognised role in Zambia’s economy. Prior to that, the country was characterised by a State-driven economy. The private sector in Zambia is understood as including a wide range of formal and informal enterprises from the largest formal businesses to micro, small and medium enterprises, individual family farms and diverse livelihood generating activities. It is estimated that out of a total labour force of 4.7 million, only 12% (or 564,000) is in formal employment sector. These bear the brunt of the tax burden, while the rest is engaged in informal activities and conveniently out of the tax net.

The Zambian Government through the SNDP, Vision 2030 as well as the Poverty Reduction Strategy Paper (2002-2004) strongly acknowledges that: Micro, small and medium enterprises (MSMEs) form the basic linkage between manufacturing and poverty reduction (PRSP, 2002-2004, p.66). The importance of the sector was later recognized in the Transitional Development Plan (TNDP) (2004 -2005) and has been entrenched in Vision 2030 and the SNDP. The Zambian Government together with the help of several cooperating partners formulated the Private Sector Development Reform Program (PSDRP). The first phase of this program ended in July 2009. A second phase is in the process of being finalized before it is implemented. The PSDRP is a manifestation of the Zambian Government’s political will towards supporting the private sector as the primary driver for Zambia to achieve its middle income status over the period to 2030. One of the priority areas under phase II of the PSDRP is MSME development.

The renewed emphasis on the development of MSMEs is appropriate as there has been a policy gap in respect of the advancement of the sub-sector. In fact, the assumption has been that the sub-sector would eventually be developed within the broad framework of the country’s macro-economic reforms. Consequently, inadequate attention has been given to crafting and implementing policies and programmes specifically targeted at MSME development.

The macro-economic environment

There is currently a very positive macro-economic environment with great possibilities and opportunities for enhanced participation in national development. The macroeconomic environment has stabilised and the government has been through the Private Sector Development Programme focusing on improving the economic competitiveness of the country. All these efforts will not benefit the majority of Zambians if the government does not take a serious look at the challenges and constraints that hinder the MSME sector from taking advantage of the unfolding business opportunities.

Government has pledged support to capacity building of the private sector through its own budgetary processes and also through its cooperating partners (donors) with whom it signed a Memorandum of Understanding (MoU) in 2004 for donors to support the Zambian private sector in its capacity building needs. The government has also committed itself as a co-financier of the ZAISMBA project, a pinnacle MSME capacity building project being run by ZCSMBA. To this effect, an MoU has been signed between ZCSMBA and the Government of the Republic of Zambia.

The role of government in addressing some of these challenges is critical. This is especially the case in developing countries like Zambia where, besides government, there are very few other institutions to which MSMEs can look to for assistance. Among key principles underpinning government support to MSMEs in Zambia are the following:

(a) MSMEs comprise an important component of the private sector which is viewed as the engine of economic and social development in the country.

(b) The informal sector to which a significant proportion of MSMEs belong has grown greatly in the last fifteen years and is likely to continue growing in the foreseeable future.

(c) The informal sector is home to a large number of the unemployed, especially rural women and urban poor.

(d) The Government has initiated notable strategies such as the CEE fund, Youth empowerment fund, setting up of MFEZ, credit guarantee scheme, improving infrastructure, gender initiatives etc. And also put in place a national policy for MSME development so that all citizens can fully participate in the development of the economy.

(e) The MSMEs sector has special or unique characteristics which must be taken into account when designing and developing strategies and interventions aimed at promoting the growth of the sector.

(f) Women and youths are an important component of the MSMEs sector. Therefore strategies to promote the growth of the sector must take into account the special needs of women and youths.

National MSME Development Policy

The government through the Ministry of Commerce Trade and Industry approved and recently launched a national policy on MSME development and its Implementation plan. This is a step in the right direction as the policy will provide the much needed strategic direction. However, having these documents in place is one thing and having them implemented is most definitely another. Government commitment is what will determine the success or failure of this policy.

The National Gender Policy

The MSME sector continues to grow as the main source of employment in Zambia, with women accounting for up to 55% of the people employed in the informal sector. Government also recognizes the importance of Gender and that Gender issues cut across all areas of development and involve multiple institutions and sectors, especially the MSME sector where the majority of participants are women. It has further been established that one of the most serious problems confining women to the informal sector is lack of capital and access to credit. Also, women are concentrated in areas of informal sector activity characterized by ease of entry and requiring little initial capital outlay. Thus profits are continually cut by increasing competition as new entrants crowd the sub-sector. These areas, such as vending and brewing are characterized by low productivity, and are also affected by lack of capital which means that the enterprises have little prospects for development and expansion.

It is thus against this background that government put in place the national Gender Policy to address these Gender imbalances. In the National Gender Policy (NGP), Government decided to streamline the institutional framework for Gender mainstreaming, supposedly to ensure speedy and effective implementation, co-ordination, monitoring and evaluation of the NGP. The framework includes the following;

º National level – Gender in Development Division and Gender Consultative Forum

º Sectoral level – Line Ministries – Gender Focal Points

º Provincial level – Gender Coordinating Points

º District level – District Gender Focal Points

Government has through the adoption of the NGP committed itself to addressing gender issues and concerns at all levels of National Development. The NGP contains policy measures and interventions, activities, expected results and actors for specific sectors to facilitate its effective implementation. Each specific sector has a lead actor or/and actors and a set of Gender interventions that will be implemented.

b) Zambia Development Agency.

The establishment of a one stop shop on investment is a boost to the MSME sector, in particular the establishment of the SME Division at the Zambia Development Agency whose mandate among other things is to coordinate and monitor all national efforts on MSME development. The ZDA though fully operational now, has provided little noticeable support to the sector. There is need to strengthen the SME Division so that it can effectively executive its mandate.

c) The Citizens Economic Empowerment Commission

The provisions of the CEEC Act are in line with the general aspirations for a strong citizen driven economy. At this stage in the Zambian economy this implies strengthening the MSME sector. The CEEC seems to have a number of efficiency issues though such as poor disbursement capacity, inadequate information outreach, nepotism etc. that have lead to low absorption of funds by would be beneficiaries.

The recent partnering of the CEEC with another government agency, the Patents and Companies Registration Authority (PACRA) is an initiative aimed at developing MSMEs through formalization. The PACRA only has presence in Lusaka thereby making it costly for those outside of this district to register their businesses, get formalised and reap the benefits thereof such as access to the CEEC funds as is a requirement. The strategy therefore, by PACRA to use the CEEC’s existing structures present in most districts of the country is a move intended to benefit the MSMEs. There will be need to monitor the progress of this initiative.

ii) Ministry of Finance and National Planning (MoFNP)

The MoFNP through Projects and programmes support and initiatives such as the Poverty Reduction Budget Support has streamlined and prioritized issues aimed at reducing poverty through programme support and allocation of funds to areas most likely to benefit the impoverished. This has seen a number of even private sector organisations such as ZCSMBA, ZBF getting support through annual budgetary allocations. The Government is also partnering with the private sector through the Public Private Partnerships as means of empowering citizens.

a) Zambia Revenue Authority (ZRA)

The ZRA in 2008 embarked on a modernization program with the intention of enhancing overall performance and effectiveness of tax administration. This is to be achieved through a service delivery that focuses on the taxpayer unlike previously when focus was on revenue collection. Under this project, taxpayers where segmented according to their turnover, i.e. Large, Medium and Small Taxpayer offices. This segmentation is aimed at helping to provide services to taxpayers according to their needs, it also allows for the allocation of audit resources and enforcement of areas of greater risk.

iii) Ministry of Science, Technology and Vocational Training (MSTVT)

The Ministry has reformed the provision of technical education vocational and entrepreneurship training by implementing government policy on Technical Education Vocational and Training. This has involved redefining the role of the Ministry by the creation of Technical Education, Vocational and Entrepreneurship Training Authority and other institutions such as National Science and Technology Council, the national Institute for Scientific and Industrial Research and the National Technology Business Centre.

a) Technical Education, Vocational and Entrepreneurship Authority

Key to the mandate of TEVETA is entrepreneurship skills training. With the Shrinking Formal Sector currently employing only about 12% of the Labour Force, job opportunities have become scarce leading to high rates of unemployment among people with various skills. Government through TEVETA is promoting entrepreneurship and has since enacted the TV

b) National Technology and Business Centre (NTBC)

NTBC was established with the main objective of linking developed and proven technologies from various local and international sources with the local technology seekers i.e. business community and MSMEs, for creation of wealth and employment.

Their key role is to assist in the transformation of new ideas, innovations into products and new businesses that are financially viable. Through their range of services, investment and innovation resources they aim at graduating products at prototype stage into commercialized products.

iv) New Financing initiatives for MSMEs

There has been in recent times a proliferation of financing options from Commercial Banks and Micro Finance Institutions (public and private) for MSME related business activities. This is a positive development and can help stabilise the operations of MSMEs. This financing however is mostly short term and suitable for working capital requirements only. What is needed for the sector in addition to this, however, is long term investment financing to drive the expansion of the sector as a whole and for individual enterprises. Lending rates are also too high.

So far, in all these support efforts, the government and its implementing agents is more of a participant than the driver of development efforts.

Private Sector Initiatives

The private sector and the donors have also initiated activities aimed at the development of the MSME Sector. These efforts though a good step in the right direction need to be coordinated, monitored and channelled towards achievement of set national goals.

As hinted, there are very few MSME support institutions besides the government. One of these is the Zambia Chamber of Small and Medium Business Associations (ZCSMBA). ZCSMBA is the largest and most successful chamber for MSMEs in Zambia.

Apart from engaging the Government interfaces at a national level to represent interests of its members, more than sixty (60%) of the ZCSMBA members are in the rural areas and interface with Government and local authorities on various committees on behalf of their members. Despite this the effective participation of the Micro, Small and Medium Enterprise (MSME) sector has been a real challenge.

The above efforts though a very positive feature on the MSME development scenario, fall short of the requirements for a fully-fledged purposeful and goal oriented national programme. As a result, the MSME sector is still overwhelmed with multiple challenges and constraints at different levels. The major constraints and challenges include the following:-

A friendly and supportive regulatory environment is a necessary requirement for the effective implementation of any measures aimed at promoting the growth and development of the MSME sector of any economy, including that of Zambia.

Lobbying and advocacy activities by organizations such as ZCSMBA continue to play a significant role in helping to shape policies affecting MSMEs at national level. ZCSMBA efforts have, for example, contributed to the formulation of the first ever Micro, Small and Medium Enterprise National Development Policy. This is a policy that spells out the developmental agenda of the sector. Various studies on policies such as the Analysis of the Petroleum Sub-sector in Zambia; the MSME’s Credit Constraints and Financial Access; Enhancing the Participation of MSME’s in Infrastructure Development under the Public Private Partnerships, The Impact of the Global Economic Meltdown on Selected Sub-sectors of Micro, Small and Medium Enterprises (MSMEs) in Zambia; Review of Zambia’s National Agricultural Policy which have and will lead to the sector making major contributions towards the revision of policies or amendments to Acts such as the;[M1]

· Energy policy,

· Public Private Partnerships policy,

· National Agricultural Credit Act,

· Public Procurement Act

· National Gender Policy

· Registration of Business names Act

· National Quality Policy

· Technical Education, Vocational and Entrepreneurship Training (TEVET) Policy

· Industrial Development Policy etc.

These regulatory changes continuously make it easier for MSMEs to operate.

i) The launch of the MSME development policy by Government is an important step towards creating the desired enabling environment. The next step should be a review of relevant legislation with a view to providing necessary legal space to the policy and the allocation of necessary resources for its implementation. What the sector yearns to see though is an Act of Parliament that will/can oblige government and other key players to mobilise and commit resources for its development.

ii) In its present form, there is no clear coordination and monitoring of development efforts in the MSME sector which can help get information of the status, performance of the sector and its contribution to national development.

The MSME sector thus still needs a more supportive and conducive operating environment that can propel it towards success and eventual growth. In particular, the MSME Sector has:-

i) Inadequate designated operating premises that can facilitate the growth of individual enterprises and of the sector as a whole. The Sector lacks systematically structured support in this area. The building of trading premises such as markets and Multi-Facility Economic Zones (MFEZ) and Industrial parks is commendable but much more is required.

ii) Poor infrastructure impacts negatively on all sizes of businesses. A bad road is a bad road to both small and large enterprises. It contributes to the high cost of doing business. In recent months for example, the increase in fuel prices and shortage of electric power manifesting in sudden power cuts has cost business a lot of money. Estimates of production losses by the mining industry as a result of these changes and disruptions to power supply were significant. To an MSME poor hard infrastructure such as warehouses, roads especially in the rural areas, poses a great challenge to doing business as it adds to the already high cost of doing business.

iii) Limited access to modern and appropriate ICT’s

Within the context of the global, knowledge-based economy, use of information and communications technologies (ICTs) has proven to be vital in improving the efficiency and expanding the market reach of MSMEs as well as in establishing new ways for MSMEs to obtain and make the most effective use of business information. Use of modern ICTs can help improve production systems, production processes, productivity, and product/service quality among MSMEs.

iv) Lack of access to new and appropriate technology is a common occurrence among MSMEs. For a start most can’t afford it, others don’t know where to look for it and yet it is one of the major causes of low productivity and poor quality products. This situation has long been recognized and the Zambian government has established a number of institutions to make it easier for MSMEs to access new and appropriate technology. Institutions such as the Technical Development Advisory Unit (TDAU) in the school of engineering at the University of Zambia and the National Technological Business Centre (NTBC) under the Ministry of Science and Technology and Vocational Training were established to service MSMEs in this area. Unfortunately these institutions have not performed to expectations for a number of reasons, one of which is poor funding accentuated by lack of suitably qualified manpower. Government will have to prioritise and give this area the urgent attention it deserves.

v) Limited access to suitable Business financing. Although business financing has been improving, financial products that address the specific growth requirements of different categories of MSMEs are still lacking. Surveys conducted by associations and other interested organizations cite the lack of or poor access to finance as the greatest constraint to the growth and development of MSMEs in Zambia. Financial institutions, especially commercial banks, are reluctant to extend credit facilities on reasonable terms to MSMEs partly because they consider lending to MSMEs a high risk business. Ordinarily, one would have expected micro financing institutions to fill the gap, but in Zambia, these are still very small and weak and exploitative at best times in terms of conditions set and interest rates charged.

Elsewhere in the financial markets, there are new initiatives by some commercial banks e.g. Twikatane (embattled finance bank), Makwebo (intermarket Bank),etc to develop products ‘specifically tailored’ for the needs of MSMEs. These have also fallen short of expectations as (i) the issue of collateral still stands (ii) loans are short-term and (iii) interest rates are still pegged at the comparatively high market rates.

vi) Limited entrepreneurial and enterprise management skills. Most entrepreneurs/owner managers have limited ability to grow their businesses beyond the establishment phase. They lack the entrepreneurial and management ability to effectively respond to opportunities present in the business environment. And yet, the acquisition of relevant vocational, technical and business skills is considered as one of the most important factors for success in small business operations. In addition, literacy and entrepreneurial awareness are seen as particularly important requirements to enable people to advance lower level activities into larger and better earning enterprises.

In order to cater for the special training needs of MSMEs, the ZDA will need to strengthen its collaborative role with TEVETA and other training institutions in order to ensure that the training being provided is relevant and that modification of curricular are being made from time to time to meet emerging and changing needs. Efforts in this direction should be speeded up and other innovative skills transfer approaches tapped.

vii) Limited access to markets. Access to markets both local and international poses a huge problem for most MSMEs. It is one thing to produce goods and services but quite another to be able to find a willing buyer at a price that covers the costs of productions and allows for some profit margin. As a result, they sell their product/services in saturated localised markets which do not offer any opportunities for business growth. The inability to sale their products and services has hampered the growth of most MSMEs beyond subsistence levels. This limited access to markets is due in part to the MSMEs inability to access relevant marketing information and channels. Through the proposed preferential provision of government contracts to local companies it is anticipated that this will open up many market opportunities for MSMEs.

MSMEs trying to break into international markets also find the prospect daunting for a number of reasons. For instance in order to take full advantage of the African Growth and Opportunity Act (AGOA), there is need to address the supply-side constraints and ensure that expansion is affordable for fair competition in the Zambian business environment. Further attention is needed in the area of productive capacities of Zambian businesses, quality of products, freight costs and associated infrastructure as well as technology and communication options.

viii) Limited access to coordinated Business Development support. Most MSMEs require guidance and hand holding to grow into independent established business entities. This support is more effective if delivered in a well-coordinated holistic manner that can create positive impact on the enterprise performance. Currently however, the Sector has limited access to comprehensive integrated business development support in the area of business registration, Advisory and mentoring services, Accounting/Auditing/Taxation, Business Planning, Business linkages and brokering, Governance and legal issues. If the ZDA is to effectively play out the role of coordinating, they will need to have a nationwide presence.

ix) Emanating from the lack of coordinated business development support is the issue of business licenses. The cumbersome licensing procedures have proved inimical to the growth of MSMEs. The number of licenses required and the places to get them are still too many despite a lot of them being cancelled. This is costly in terms of money and time as it involves moving from one authority to another, adding to the already high cost of doing business especially for the many outside Lusaka. This is an issue that can only be resolved through inter-agency coordination.

x) Low representation and advocacy for the different categories of MSMEs in different geographical areas. Business associations and similar groupings for MSMEs in the private sector have an important role to play in lobbying and advocating for the interests of MSMEs with government and other stakeholders and for the provision of various services for their growth and development.

In Zambia most if not all of the existing business associations for MSMEs are very weak with limited capacity to play their role properly. They need all the support they can get. There is therefore need to for non-state actors and the government through its relevant agencies to work out measures in support of institutional strengthening of existing associations at various levels as well as encouraging the formation of new ones in sectors where there are none. Measures such as the provision of office space and annual grants for operation, including salaries for a limited number of key staff, for a specified period of time under agreed upon conditions, would go a long towards promoting the growth and strengthening of such membership business associations.


 

ZCSMBA was established in January 2000 as a national body representing the interests of small and medium enterprises in Zambia. ZCSMBA was formally registered as an Association under the Societies Act Chapter 119 on 28th March 2000. It is the only private sector organization which represents the interests of MSMEs across the whole country through its network of Business Associations in 69 of the 72 districts of Zambia.

The USAID was instrumental in identifying the need for the development of the MSME sector following the macro-economic reforms in 1991. A bilateral cooperation Agreement was subsequently signed between the USAID Mission and the then National Commission for Development Planning (NCDP). The Agreement, among others, resulted in the establishment of the Human Resources Development Project (HRDP) as a framework for USAID’s contribution to private sector development. HRDP interventions were primarily targeted at business training for the MSMEs sub-sector. ZCSMBA was born as an exit strategy of the HRD Project after five years in operation (1995 – 1999).

The Chamber is organized for the protection and promotion of trade, business, trade and services, influencing policy decisions, collecting and disseminating relevant information and fostering relationships between Government, Business and Society.

The Chamber acts as the voice of its members; it ensures that members’ interests are heard, understood and addressed at local and national levels; it promotes corporate social responsibility and promotes good public image of its members. The Chamber also collects and disseminates statistical and other information relating to trade, potential business opportunities and offers advice on risks and security issues.

ZCSMBA is now one of Zambia’s most successful Business Membership Organizations (BMO). For almost ten years, it has played an important role in creating a more enabling environment for Micro, Small and Medium Enterprises (MSMEs) through lobbying and advocacy efforts and through providing and facilitating Business Development Services (BDS) to MSMEs. Over the last five years, ZCSMBA has grown and is well known and respected for its role in MSME development amongst MSME business associations and public, private and civil society sectors in Zambia

To promote the sustainable growth and profitability of MSMEs through lobbying and advocacy for a supportive business environment and by facilitating demand-driven business development services.

To unlock the power of the Micro, Small and Medium Enterprise (MSME) sector in Zambia

The preceding values are the belief, traits and behavioural norms that the Chamber’s personnel are expected to display in conducting the Chamber’s business and pursuing its vision and strategies.

Integrity

º Candour when required

º Minimum standards as part of Code of Conduct

º Development of professional HR practices recognition of employees as valuable and are seen as such.

º Adhere to all regulations (Taxes and NIS etc.)

Responsiveness

º Keeping track of emerging threats to businesses

º Keeping track of emerging opportunities

º Reporting to members on threats/opportunities

º Providing market information to members

º Proactive approach to responding to members grievances/concerns.

Commitment

º Members/office bearers take responsibility to fulfill the Chamber’s mandate

º Fulfil obligations in a timely manner

Collaboration

º Actions must represent the concerns of all

º Decisions should be transparent and fair

º Work with like-minded organizations for the benefit of MSMEs

Members' Success

Provide targeted products, services, events and programs that members consider as essential elements of their success.

Organization Improvement

Position ZCSMBA to be innovative, resourceful, responsive and effective for long term sustainability.

The HRDP was the first of its kind in Zambia to provide training to MSMEs in entrepreneurship and business management. After almost 4 years of operation, from 1995 to 1998, the project was coming to an end and the beneficiaries of the project thought it was wise to establish independent business associations to continue advancing the ideals and services started through the project. By the end of 1998, nine (9) Provincial Business Associations had been formed, one in each of the nine provinces of Zambia. In 1999, the members of the nine associations resolved at a national conference to establish District based Associations rather than Provincial Associations so that services can be brought closer to MSMEs in each district across the country. It was at this point that the need for an apex body to represent the anticipated 72 District Business Associations was brought to the fore. This led to the birth of ZCSMBA in January 2000, with a membership of 30 District Business Associations. ZCSMBA was formally registered by the Registrar of Societies under the Societies Act of 1994 in March 2000. By 2009, ZCSMBA had a membership of 63 District Business Associations, 7 Ordinary Business Associations, 10 Sector-specific Associations, 1 Gender- based Association and 43 Corporate members. These represent over 200,000 MSMEs spread countrywide.

While most of the DBA’s were formed after the establishment of ZCSMBA, some DBA’s have been in existence since 2000 and some have scored several achievements though with varying degrees of success from one Association to the other. Some of the notable past achievements of DBA’s are highlighted below.

º At the policy level

o Increased policy engagement at the district level. This has been achieved through effective representation of MSMEs on District Development Coordinating Committees (DDCC), highest policy making organ at district level.

o Increased voice and visibility of MSMEs through organized representation under the Business Associations.

º At service delivery level:

o Facilitation of business and entrepreneurship training to over 10, 000 entrepreneurs between 2000 and 2009.

o Facilitation of access to finance from micro-finance institutions amounting to US$200,000.

o Hosting of the annual MSME’s Business Enterprise Exhibition and improving market access.

o Provision of only reliable hubs in selected districts for business information through established agribusiness support centers.

o Provision of most reliable platform for accessing ICT services in selected districts through established Multi-purpose Telecentres.

o Facilitation of MSMEs access to contracts from big companies – e.g. mines, Zambia sugar.

o Establishment of Community radio stations

o Facilitation of formation of commodity specific associations – Cashew growers Association.

º At the policy level:

o Increased policy engagement at the national level through representation of views and issues affecting MSMEs at various Working Groups, PSD Committees, Parliament Committees, ZIBAC, etc.

o Contribution to policy changes through lobby and advocacy, radio programs, and research studies. ZCSMBA was a major player in the development of the first-ever MSME Development Policy in Zambia.

o

º At the service delivery level

o 10 years of providing business services and capacity building to MSMEs in Zambia

o Established the only annual Business Enterprise Exhibition (BEE) for MSMEs in Zambia.

o Establishment of the Business Development Centre for MSMEs and other stakeholders.

o Establishment of 7 agribusiness support centers in 7 districts.

o Establishment of 3 multi-purpose Telecenters in 3 districts.

o Training of over 30, 000 MSMEs in the last decade.

º Holding of annual SME Conference which promotes business excellence.

º Forging of strategic partnerships with other organizations – ZACCI, ZBF, ZRA, ZICA, ACCA, NTBC, NATSAVE, ZDA, and ZNFU.

º Training of over 100 BDS providers.

º Creation of 50 direct employment opportunities through various programs and projects.

º Establishment of 4 warehouses in high-producing areas and other strategic areas such as Kasumbalesa border post.

º Linking of MSMEs to sources of finance to a tune of US$________________.

º Leverage of financial resources from diverse donors amounting to over US$7 million from 2000 to 2010.

At the policy level

ZCSMBA as mandated will continue to complement development strategies by the Government through project activities such as policy analysis, policy dialogue and engagement in order to influence positive change towards realizing the potential role of the private sector to contribute to Zambia’s long term development. Thus, ZCSMBA is aimed at enhancing the capacity of MSME business associations in Zambia to fully engage in policy analysis and change. Enhanced skills and leadership training provided for business development should enable the MSMEs to occupy the new environment for their growth and development.

In February 2011[M2] , the Government launched a policy on MSME and its implementation plan in recognition of the importance of the SMEs in the growth of the private sector. The production of these important documents has required full engagement on the part of SMEs and their representative organizations so that their interests are well represented. ZCSMBA was a major player in the drafting of this policy and is part and parcel of the implementation program. The very existence of these documents is an indicator of government willingness to engage and support the sector. ZCSMBA in partnership with other stakeholders is in future scheduled to engage Government to go a step further by ensuring that the Government commits itself to continue proving an enabling environment through passing various pieces of legislation such as:

· The MSME development Act,

· The Agricultural Credit Act, which will greatly benefit the MSMEs involved in agriculture and agribusiness related ventures.

ZCSMBA therefore continues to lobby and advocate at national and local levels with Government, the Private Sector and other partners for a legal, regulatory and micro-economic environment that makes it easier for MSMEs to operate.

ZCSMBA builds relationships with members, Government, partners and the private sector , and conducts research to identify business opportunities for its members:

In ensuring better services for MSMEs

Given the reality that access to affordable finance is a major setback to MSMEs in Zambia; the government in 2006 set up the Citizens Economic Empowerment Fund in order to unleash the potential of the economy and its citizens. The CEE is now being implemented in the country but with seemingly serious inefficiencies. There is need to actively involve organisations such as ZCSMBA in the implementation of the program at all levels; national, provincial and district through its members.

In addition to representing members’ interest, the Chamber offers a range of value added programs to its members. Our services are based on a thorough understanding of our members needed to ensure that we provide the support that they need. These include (but not limited to) the following:

º ZCSMBA creates links and facilitates relationships with providers of business development services to enable our members to take advantage of business opportunities and to expand their businesses. These include links with providers of:

o Finance: banks and micro-finance institutions;

o Capacity building which is tailor-made to meet identified in:

o Governance, business management and technical skills.

o Information about policies and regulations that affect MSME;

o Market information and opportunities

1) Zambia Indigenous Small and Medium Business Association Project (ZAISMBA) - funded by the African Capacity Building Foundation (ACBF): 2008 - 2011

Amongst other areas of support, this program provides for:

º Training of Entrepreneurs

º Exchange Visits Among members

º National Workshops on policy engagement

º Building Partnerships with public sector, private sector and civil society

º Radio programmes and other information dissemination activities.

2) Institutional and Program Support (funded by the Zambia Governance Foundation -ZGF): 2010 - 2011

Co-financing ZAISMBA project activities, program support, information base, knowledge management, dissemination and outreach, skills building and upgrading, interface, coordination & networking, Governance and human resource strengthening.

3) Wealth Creation Through Business Association Agri-business Centers - (funded by Oxfam-Novib): 2007 - 2011

The purpose of this program is to increase income and access to finance of farmers and MSMEs in agricultural activities through:

º Improving marketing systems through trade and business information services, communication services and trade facilitation services;

º Improving the value and quality of marketable commodities;

º Enabling farmers to access credit on their warehoused produce.

4) Sustainability Program funded by the Kingdom of Netherlands and the Government of the Republic of Zambia): 2009 - 2010

These programmes provide capacity building programmes for ZCSMBA and its member associations to improve the productivity and growth of MSMEs.

 

Stakeholder

Role in implementation of ZCSMBA initiatives

Members

These are the key stakeholders as they are the reason the chamber exist. They are organized in District Business Associations and the members are drawn from trade, services, agriculture, tourism, small mining and manufacturing.

Ministry of Commerce, Trade and Industry

The Ministry provides effective mechanism for the implementation, evaluation and improvement of policies aimed at facilitating economic and social improvement through coordinating actions in areas of commerce, trade, industrial development and Consumer Affairs. It also formulates and advocate trade policy that advance Zambia's multilateral, regional and bilateral trading interests and identify opportunities for developing new markets for existing goods and services and new exportable goods and services. The Ministry also has the responsibility to support the local industry and business development through the identification and removal of barriers to trade.

Zambia Bureau of Standards

The role of Zambia Bureau of Standards (ZBS) is to promote standardization in industry and commerce and to encourage or undertake educational work in connection with standardization which is aimed at improving the quality of life of the people of Zambia through the process of standardization.

Zambia Revenue Authority

The role of the Zambia Revenue Authority is to ensure compliance with Zambian tax, trade and border laws and regulations.

Zambia Development Agency

ZDA is a semi autonomous institution mandated to further economic development through promotion of investments and exports in Zambia.

Zambia Association of Chambers of Commerce and Industry

ZACCI is a national body representing the interests of the private business sector in Zambia.

Zambia Business Forum

The mission of ZBF is to provide a forum for member business organizations in Zambia to discuss cross-cutting issues, exchange information, network and share ideas on what and how to lobby, advocate and engage Government, Parliament, co-operating development partners and other stakeholders so as to enhance opportunities for sustained economic growth and broadly-based prosperity of all inhabitants within Zambia.

Technical Education, Vocational and Entrepreneurship Training Authority

The mandate of TEVETA is to regulate, coordinate and monitor technical education, vocational and entrepreneurship training in consultation with industry, employers, and other stakeholders.

Donor Agencies

The role of the Donor agencies is to provide developmental assistance and to ensure that resources provided are allocated in accordance with the conditions of signed agreements.

Media

The print and electronic media disseminate news and information to the general public.

STRENGTHS

WEAKNESSES

Committed Board of trustees

DBA institutional capacity is weak

Dedicated and hardworking professional staff

Public awareness of ZCSMBA programs is limited

Partnerships with agencies and organizations at national and local levels

Limited funding for staff retention and operations

Have established strong organizational credibility

Board lacks people with strong money connections to fund the Chamber

Still the best advocate and representative of MSME Associations in Zambia

Board does not embrace its fund raising role

Nationally and provincially respected by peers and government for its work in the policy arena

Services are spread too thinly to too many associations (76)

Ten (10) years of continuous service to MSMEs in Zambia (2000 – 2010)

No Board Charter to regulate conduct of board members

Image – nationally recognized

Difficulty of operating with a Board so spread out geographically

Diverse sectoral membership

Current office space is limited and not conducive for operations

Large number of members (76) with country wide representation

No Membership Charter

Well established networks and goodwill with key stakeholders

Over-dependency on donor funds for programs and operations

Organizational culture of team work, dedication and high work output

Staff establishment is small and skills not adequate to match the needs of members

Access to registered experienced and qualified consultants

Benefits of membership not clearly understood by members

Democratically elected Board of Directors

OPPORTUNITIES

THREATS

MSME policy provides opportunity to lobby Government to create an enabling environment for MSME sector

Failure to cultivate and serve our members adequately

Leverage critical and current MSME issues to gain visibility

Danger of the Board becoming disconnected with ZCSMBA mission as it grows to a ‘monied’ board

Enormous potential membership and partnership base

Insufficient funding to allow needed staff and program expansion or should funding for the current operational fall and contraction of staff occurs

Lobby Government and the Financial sector and facilitate the actual delivery of more appropriate financial services to MSMEs.

Change of Government policy towards MSME development could occur should the newly elected President have a less supportive approach to MSME development than the former President

Use status and reputation to garner institutional and member capacity building assistance

Global financial crisis and impact on our funding sources

Potential for many alliances with like-minded organizations

The growth of competing organizations and their quest for funds/sponsorships challenges ZCSMBA position

Huge untapped pool of MSMEs in need of ZCSMBA services across the country

Technology is outpacing our ability to communicate effectively with members

Potential to effectively influence policies through representation on WGs, Committees, and lobby & advocacy

Work with other business organizations (local & regional) – meaningful affiliations

Relocate Chamber office to make it more visible from marketing perspective and gain more physical space for operational purposes

To be more vocal on matters affecting business, especially MSMEs.

STRENGTHS

WEAKNESSES

Democratically elected Board

Corporate governance culture is low among Board members

Diverse sectoral membership

Failure to engage many of the MSMEs who would like to become involved

Strategically positioned as major business hubs in districts

No funding for full time staff and operations

Nationally recognized as formally established business support structures for MSMEs

Board term limits are not observed in some Associations

Board members are conversant with local MSME issues

Most Boards do not embrace their fund raising role

Representation of MSMEs on highest policy making organs at district level - DDCC

Failure to engage many talented people who are sidelined without a role to play in the Associations

Lack of financial, personnel and procedures policy documents in most Associations

No proper office space to carry out DBA operations

Membership is still very small relative to the potential

Failure to actively engage their membership in DBA activities

No Board leadership transition planning

Lack of sufficient commitment from members

OPPORTUNITIES

THREATS

Large membership potential

Failure to provide adequate services demanded by members

Potential for forming many alliances with local NGOs and other organizations

Disengagement of Board and members due to limited face to face meetings

Potential to effectively influence local policies through the DDCCs.

Lack of clear policies and procedures to govern Associations

Huge untapped pool of MSMEs in need of services across the country

Insufficient funding to allow needed staff and program expansion

To be more vocal on matters affecting business, especially MSMEs in respective districts

Inability to adapt policies and goals over time

Inter-DBA networks and potential for learning

Lack of strategic planning

Potential to mobilize resources from funding organizations

Activities of other private sector organizations could lead to marginalization of Associations

Potential to establish value-adding enterprises, especially in rural areas


3.1 Overall Strategy of ZCSMBA

The Chamber is continuously reviewing its structures, policies and programs to better serve its members and to ensure that their interests are heard, understood and addressed.

In light of the advantages and opportunities which are available through globalization, COMESA Customs Union, SADC, bilateral and other trade agreements and the competitive environment within which businesses operate, the Strategic Plan will position the Chamber to be better able to meet the specific needs of its members, spanning from mercantile to services, and respond to those needs in a manner which will yield the desired outcomes.

The products and their value propositions to be offered will include a set of benefits which are both tangible and intangible. Some of these programmes and products are:

1) Analyze trade trends: locally, regional and internationally

2) Advocate tax payment reform to make it more friendly and accessible

3) Build membership capacity in areas such as human resources management, corporate social responsibility, corporate governance etc

4) Collect and disseminate information relevant to each membership segment

5) Craft Strategic Plans, Marketing Plans and Business Plans

6) Create Membership Value

7) Assist with members’ business development through training, workshops, seminars and trade fairs

The value propositions will aim to enable members to be more competitive, increase their efficiency and reduce their operating expenses.

 

 

The overall strategic objective of ZCSMBA will be:

Improved business environment for Micro, Small and Medium Enterprises to contribute to economic development in Zambia

From this strategic objective, ZCSMBA will run its main programmes under four key pillars namely:

1. Public policy influencing

2. Business development services

3. Membership capacity building

4. ZCSMBA management and Governance

PUBLIC POLICY

Programme objective I: By 2014, ZCSMBA’s positive contribution to the advancement and protection of public policy interest of MSMEs enhanced.

Under this objective, ZCSMBA will annually focus on a policy issue and plan with its members how best they will together influence change in the policy environment. Key interventions will include:

1. Undertaking research as a way of ensuring that all policy engagement is evidence based

2. Advocacy in the form of campaigns on identified issues

3. Lobbying of MPs, and other key government officials on identified issues

4. Creating platforms for engagement between the MSME owners and Government

BUSINESS DEVELOPMENT SERVICES

Programme objective II: By 2014 facilitation of access to business development services for MSMEs improved

ZCSMBA recognises that with its current human and financial resources, it cannot service all member DBA effectively, as such it has strategically decided to implement an approach that will focus on first building the capacity of just xxx DBAs in the following provinces xxxxx xxxxx xxxxx xxxxx and xxxxx. The goal will be to document lessons being learned and use them to replicate efforts in other districts once the DBAs have been weaned off from ZCSMBA. The DBAs have been selected primarily on the following basis:

1. The DBAs are currently at a stage where they are almost self sufficient and

2. Mmm

3. mmmm

MEMBER CAPACITY BUILDING

Programme objective III: Improved capacity of member associations to effectively meet the needs of their member MSME’s by 2014

Under this objective, ZCSMBA

ZCSMBA Governance and Management

Programme objective IV: By 2014, ZCSMBA governance and management in its role in developing the MSME sector enhanced

ZCSMBA is made up of the secretariat and the membership as such two separate sub objectives have been developed under this programme objective. In addition given the need for financial resources

THE SECRETARIAT

Sub objective I: By 2014, the institutional and human capacity of ZCSMBA is strengthened

Under this sub-objective one of the key outputs will be the development of a monitoring and evaluation system

THE MEMBERSHIP

Sub objective II: By 2014, ZCSMBA membership quality improved

RESOURCE MOBILIZATION

Sub objective III: By 2014, ZCSMBA’s financial and operational self sufficiency improved.


7.0 Institutional set up and organizational structure

The Chamber is led by its general members, which elects a Board of Directors to manage and plan the affairs of the Chamber. Out of the Board, an Executive Management Committee (EMC) consisting of the Board Chairperson, Vice Chairperson, Treasurer and Executive Secretary is constitutionally constituted to ensure expediency in the planning and implementation of the Board’s decisions.

The management of the Secretariat’s activities is vested in the Executive Secretary who is also responsible for implementing, directing and coordinating all of the Chamber’s activities in an efficient and effective manner. The executive Secretary is assisted by a small team of dedicated and qualified professional and support staff.

The executive Secretary works closely with the EMC and reports to the Chairperson of the Board every month. The Executive Secretary also reports to the Board on a quarterly basis on the status of programs, activities, and financial performance of the Chamber.

T the end of each fiscal year, the Chamber’s accounts are audited by an external auditor in accordance to International Accounting Standards. The Chamber also complies with all national regulations.

The successful implementation of this strategic plan hinges on the support of the Executive Management Committee through improved board functioning in areas such as resource mobilization, networking and policy based guidance, strengthening of the organizational structure which includes increased levels of human (technical) and material resources, among other vital interventions.

It will also require increased engagement and responsiveness of members of ZCSMBA to initiatives of the organization, demonstrated through their participation in meetings, events and technical and financial contributions to the secretariat to support its work.


Text Box: Annual General Meeting of Members


7.3 Staffing Plan

Position

2009

2010

2011

2012

2013

Executive Secretary

1

1

1

1

1

Capacity Building & Programs Manager

1

1

1

1

1

BDS Manager

1

1

1

1

1

Office Manager

1

1

1

1

1

Accountant

1

1

1

1

1

Policy Analyst

-

-

-

1

1

M&E Coordinator

1

1

1

1

1

Research & Knowledge Mag. Coordinator

1

1

1

1

1

BDS Officer

2

2

1

2

2

Assistant Accountant

1

1

1

1

1

Capacity Building Officer

-

-

1

1

1

Training Officer

1

1

-

-

-

M&E Officer

-

-

-

1

1

IT Officer

-

-

-

1

1

Office Assistant

1

1

1

1

1

Driver

1

1

1

1

1

Total

13

13

12

16

16


 


Appendix I: Zambia Chamber of Small and Medium Business Associations (ZCSMBA)Strategic Plan Logframe

 

VISION

Unlocking the power of MSMEs

MISSION

To promote the sustainable growth and profitability of MSMEs through lobbying and advocacy for a supportive business environment and by facilitating demand driven BDS.

 

Objective

Impact/Outcome

Indicator

Means of verification

Assumption

Strategic objective

Improved business environment for Micro, Small and Medium Enterprises to contribute to economic development in Zambia

Impact I

Appropriate MSME related policies developed and implemented

· Number of MSME related policies developed/reviewed

·

·

Impact II

Increased MSME growth in Zambia

· Increased annual Average annual turnover per member MSME

· Increase in average number of employees per member MSME

· Increase in the number of formally registered MSME’s

·

·

Programme objective I: PUBLIC POLICY

By 2014, ZCSMBA will positively contribute to the advancement and protection of public policy interest of MSMEs

Outcome one: Increase in the number of MA influencing policy at local and national levels

· Number of MA’s engaging with policy makers at district level

· Number of policies influenced by MA’s

·

·

·

·

Programme objective II: BUSINESS DEVELOPMENT SERVICES

Improved facilitation of access to business development services for MSMEs by 2014

Outcome one: Increased access to BDS by MAs in xxx districts.

· Number of MSME’s accessing at least one type of BDS

·

·

· Number of MSME’s accessing international markets

·

·

 


 

 

Objective

Impact/Outcome

Indicator

Means of verification

Assumption

Programme objective III: CAPACITY BUILDING

Improved capacity of member associations to effectively meet the needs of their member MSME’s by 2014

Outcome one:

·

·

·

Outcome two

·

·

·

Programme objective IV: ZCSMBA

By 2014, ZCSMBA and its role in developing the MSME sector enhanced

Outcome One:

·

·

·

·

·

·

Sub objective I: SECRETARIAT

Strengthened institutional and human capacity of ZCSMBA by 2014

Outcome one:

·

·

·

Outcome two

·

·

·

Sub objective II: MEMBERSHIP

Quality of membership Improved

Outcome I

 

· Increased internally generated funds to 25% of the annual budget

·

·

Outcome II

Existing partnerships with cooperating partners enhanced and new partnerships forged

·

·

·

Sub objective III: RESOURCE MOBILIZATION

Financial and operational self sufficiency by 2014

Outcome I

Timely payments of membership fees by members

·

·

·

Outcome II

Adherence of members to ZCSMBA’s rules and regulations

·

·

·

Outcome V

Increasing the levels of sustainability of members

·

·

·


Programme objectives,outputs and activities

Objective I: Public policy

 

Outputs

Activities

Comment/Budget

Output 1: Research on public policy issues affecting MSME’s conducted and results disseminated

1

2

3

4

 

5

6

7

Output 2: Lobbying and advocacy on at least three issues affecting MSME’s conducted

1

2

3

4

5

Output 3: Engagement between Member Associations and policy makers enhanced

1

2

3

4

5

6

7

8

Output 4: Advocacy and communication strategy developed

1

2

3

4

5

6

 

 

7

Output 5

1

 

 

2

 

 

3

 

 

4

 

 

5

 

 

6

 

 

7

 

 

 

 

 

 

 


 

Objective II: Business development services

 

Outputs

Activities

Comment/Budget

Output 1: Access to BDS by MSME’s enhanced

1

2

3

4

5

6

7

Output 2: A BDS assessment and facilitation system developed

1

2

3

4

5

Output 3: Appropriate technology to facilitate delivery of BDS purchased and training conducted

1

2

3

4

5

6

7

8

Output 4: Value addition and access to local, regional and international market promoted for MSME’s

1

2

3

4

5

6

 

 

7

 


 

Objective III: capacity building

 

Outputs

Activities

Comment/Budget

Output 1: Governance systems within member associations enhanced

1

2

3

4

5

6

7

Output 2: Financial management systems within member associations enhanced

1

2

3

4

5

Output 3: Capacities of business associations to access regional and international markets enhanced

1

2

3

4

5

6

7

8

Output 4: Capacities of business associations to participate in policy making and tracking enhanced

1

2

3

4

5

6

 

 

7

Output 5: ICT services for business associations enhanced

1

 

 

2

 

 

3

 

 

4

 

 

5

 

 

6

 

 

7

 

 

 

 

 

 


Objective IV:

Operational objective I:

 

Outputs

Activities

Comment/Budget

Output 1: Corporate governance improved

1

2

3

4

 

5

6

7

Output 2: Human resource management and capacity enhanced

1

2

3

4

5

Output 3: Monitoring and Evaluation system developed

1

2

3

4

5

6

7

8

Output 4: Visibility of ZCSMBA enhanced

1

2

3

4

5

6

 

 

7

Output 5 Organization operational policies and procedures and business processes strengthened

1

Outcome III

Improve communication and networking between ZCSMBA secretariat and the members and among the members

 

2

Outcome IV

Develop a service portfolio to provide proper levels of services to members

 

3

 

 

4

 

 

5

 

 

6

 

 

7

 

 

 

 

 

 


Operational objective I:

 

Outputs

Activities

Comment/Budget

Output 1:

1

2

3

4

 

5

6

7

Output 2:

1

2

3

4

5

Output 3:

1

2

3

4

5

6

7

8

Output 4:

1

2

3

4

5

6

 

 

7

 

 

 

 

 

 

3

 

 

4

 

 

5

 

 

6

 

 

7

 

 

 

 

 

 


Operational objective III:

 

Outputs

Activities

Comment/Budget

Output 1: communication and networking between ZCSMBA secretariat and the members and among the membersImproved

1

2

 

3

4

 

5

6

7

Output 2: A service portfolio to provide proper levels of services to members develop

1

2

3

4

5

Output 3:

1

2

3

4

5

6

7

8


[M1]How is this connected to what is being said above?

[M2]Review date

[M3]Do you have something from somewhere that will substantiate even further what the emerging issues are or can we just repeat what is above.. that the policies need work, the DBAs have capacity issues, ZCSMBA needs to strengthen itself.. etc..?

[M4]The idea here is to have say maximum of two pages of a narrative of what you are trying to achieve by 2014. See what I started to write as possible input.

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