VNc#0726: Of Zambia’s 44-Year MSME history
By Comm. VPM NyasuluPart III:
From Inclusion to Competitiveness. Following last week’s discussion on the finance bottleneck, attention now shifts to a broader transformation agenda for indigenous Micro, Small and Medium Enterprises-i-MSMEs.
The agenda must be anchored in industrialization, value chain integration, formalization, digitalization and governance (IvFDG). For i-MSMEs to grow sustainably, they must be fully integrated into key sectors such as mining, agriculture and manufacturing. This integration cannot remain a policy aspiration; it requires clear, enforceable local content frameworks that ensure meaningful participation of small businesses.
Without structured inclusion, i-MSMEs risk remaining on the margins of economic activity rather than becoming active contributors to national productivity. Industrial upgrading is central to this shift. i-MSMEs must move beyond survivalist operations toward improved productivity, adherence to standards and readiness for export markets. Achieving this requires targeted technical support, the development of industrial clusters and reforms in procurement systems. Strategic procurement, in particular, can play a catalytic role by prioritizing capable local enterprises and creating reliable demand for their goods and services. The concept of empowerment must also evolve.
Historically, empowerment initiatives have often leaned toward consumption-driven approaches. However, the current economic context demands a stronger focus on competitiveness.
Empowerment should enable i-MSMEs to produce efficiently, compete regionally and globally, and sustain growth over time. This shift from consumption to production-led empowerment is essential for long-term economic resilience. Equally important is the issue of formalization.
Many i-MSMEs remain informal not by choice, but because the costs and complexities of compliance outweigh the perceived benefits. Addressing this requires deliberate reforms. Simplified tax regimes, reduced regulatory burdens and accessible digital payment systems can significantly lower the barriers to entry into the formal economy.
However, formalization efforts will only succeed if they deliver clear, tangible value. MSMEs must see direct benefits such as improved access to finance, eligibility for public procurement opportunities and legal protections that safeguard their operations. Without these incentives, informality will continue to be a rational and persistent choice for many entrepreneurs.
Digitalization plays a critical enabling role across this agenda. Digital payment platforms can enhance financial inclusion, improve transaction efficiency and create verifiable business records that support access to credit. At the same time, digital tools can streamline compliance processes, making it easier for i-MSMEs to engage with regulatory systems. Finally, governance reforms are essential to ensure that empowerment initiatives achieve their intended outcomes.
Funds and support programs must be managed with transparency, accountability and a clear focus on productivity. This means prioritizing investments that strengthen business capacity rather than those that offer short-term relief without sustainable impact. In summary, i-MSME transformation requires a coordinated approach that links industrialization with value chain participation, lowers the cost of formalization, leverages digital tools and strengthens governance systems. By focusing on competitiveness and productivity rather than consumption, i-MSMEs can transition from peripheral players to central drivers of economic growth and industrial development.
Ndakubotelani kapati, ndasumpuka!
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The Author can be reached on +260 955 746 997 or via email at vpmn69@gmail.com
