Art.#0126: Of stronger support to MSMEs
By Victor PM Nyasulu
I promised to return to these MSMEs articles in April, 2026! I am, however, so inspired by the Ghanaian President Mahama’s address to the Zambian National Assembly that I am back today instead.The whole speech by the President Mahama contained stuff that makes me too excited to keep silent.
I heard the President of Ghana say that indigenous companies must be supported to participate meaningfully in the critical minerals value chain.
That’s huge and yet not new! I referred to that same idea in one of the articles last year. The President went further and hinted at ‘more sovereignty over African critical minerals’ compared with the status quo.
The President attributed the rise in military coups to a failure of constitutional democracies in Africa to deliver human development index-HDI for years now. In short, I think the President Mahama was basically communicating that the social-economic dividends to the common man from any growth in GDP matters most!Just what are Zambia’s constitutional and/or legal barriers to MSMEs economic participation?
In Zambia the national Constitution provides a foundational framework that encourages economic development and yet no direct and specific provision is stated to effectively reduce the barriers to post independence success of the Micro, Small and Medium Enterprises-MSMEs sector, 50 years on.
Strong policy commitments to MSME development in Zambia are constantly being pronounced. However, a considerable portion of the sector remains informal, low productivity, and limited in its ability to scale into sustainable job-creating enterprises.
The graduation from Indigenous Local Direct Investment-ILDI into Indigenous Foreign Direct Investment-IFDI is too low for sustainability. Evidence from policy and regulatory reviews suggests that MSMEs frequently face burdensome registration and licensing processes, inconsistent enforcement of local authority levies, limited access to procurement markets, and weak access to affordable legal remedies in commercial disputes (CCPC, 2024).
While MSMEs are frequently discussed in terms of financial constraints, skills gaps and market barriers, the constitutional and legal architecture that shapes economic participation has received comparatively limited scholarly attention. Yet, constitutionalism and the rule of law provide the conditions that enable citizens and enterprises to operate under predictable and non-arbitrary governance arrangements.
Where regulatory systems are complex, discretionary or weakly accountable, MSMEs face elevated transaction costs and may rationally choose informality or under-compliance, which in turn undermines both development outcomes and public revenue mobilization (North, 1990).
Constitutional principles—such as equality before the law, non-discrimination, property rights, administrative justice and access to justice—translate into the lived realities of MSMEs as they navigate licensing, taxation, local authority levies, compliance enforcement and access to procurement opportunities in Zambia.
From an institutional economics perspective, North (1990) argues that institutions—the formal and informal rules governing economic and social interaction—shape incentives and transaction costs, thereby influencing economic performance.
In MSME contexts, high compliance costs, uncertainty and discretionary enforcement can increase transaction costs and encourage firms to remain informal. Informality is therefore not merely a cultural preference but may represent a rational strategy where formal institutions are costly or unpredictable.
It is remarkable that President Mahama declared that Ghana has substituted execution for excuses! I surmise that Zambia must do the same yesterday. As a people we simply must put our money where our mouth is!
Napita Mukwai!________________________________________________________________The Author is on +260 955 746 997 or vpmn69@gmail.com
Art.#0126: Of stronger support to MSMEs
By Victor PM Nyasulu
I promised to return to these MSMEs articles in April, 2026! I am, however, so inspired by the Ghanaian President Mahama’s address to the Zambian National Assembly that I am back today instead.The whole speech by the President Mahama contained stuff that makes me too excited to keep silent.
I heard the President of Ghana say that indigenous companies must be supported to participate meaningfully in the critical minerals value chain.
That’s huge and yet not new! I referred to that same idea in one of the articles last year. The President went further and hinted at ‘more sovereignty over African critical minerals’ compared with the status quo.
The President attributed the rise in military coups to a failure of constitutional democracies in Africa to deliver human development index-HDI for years now. In short, I think the President Mahama was basically communicating that the social-economic dividends to the common man from any growth in GDP matters most!Just what are Zambia’s constitutional and/or legal barriers to MSMEs economic participation?
In Zambia the national Constitution provides a foundational framework that encourages economic development and yet no direct and specific provision is stated to effectively reduce the barriers to post independence success of the Micro, Small and Medium Enterprises-MSMEs sector, 50 years on.
Strong policy commitments to MSME development in Zambia are constantly being pronounced. However, a considerable portion of the sector remains informal, low productivity, and limited in its ability to scale into sustainable job-creating enterprises.
The graduation from Indigenous Local Direct Investment-ILDI into Indigenous Foreign Direct Investment-IFDI is too low for sustainability. Evidence from policy and regulatory reviews suggests that MSMEs frequently face burdensome registration and licensing processes, inconsistent enforcement of local authority levies, limited access to procurement markets, and weak access to affordable legal remedies in commercial disputes (CCPC, 2024).
While MSMEs are frequently discussed in terms of financial constraints, skills gaps and market barriers, the constitutional and legal architecture that shapes economic participation has received comparatively limited scholarly attention. Yet, constitutionalism and the rule of law provide the conditions that enable citizens and enterprises to operate under predictable and non-arbitrary governance arrangements.
Where regulatory systems are complex, discretionary or weakly accountable, MSMEs face elevated transaction costs and may rationally choose informality or under-compliance, which in turn undermines both development outcomes and public revenue mobilization (North, 1990).
Constitutional principles—such as equality before the law, non-discrimination, property rights, administrative justice and access to justice—translate into the lived realities of MSMEs as they navigate licensing, taxation, local authority levies, compliance enforcement and access to procurement opportunities in Zambia.
From an institutional economics perspective, North (1990) argues that institutions—the formal and informal rules governing economic and social interaction—shape incentives and transaction costs, thereby influencing economic performance.
In MSME contexts, high compliance costs, uncertainty and discretionary enforcement can increase transaction costs and encourage firms to remain informal. Informality is therefore not merely a cultural preference but may represent a rational strategy where formal institutions are costly or unpredictable.
It is remarkable that President Mahama declared that Ghana has substituted execution for excuses! I surmise that Zambia must do the same yesterday. As a people we simply must put our money where our mouth is!
Napita Mukwai!________________________________________________________________The Author is on +260 955 746 997 or vpmn69@gmail.com
