Article No.12: the Expected MSME bill v2
On 3rd September, 2025, the 18hours news bulletin of Hot FM contained an interesting news item! It was about some Zambian MSMEs representatives led by one Mwizukanji of the rising Meatopia business “empire”!
The team ably stated some of the most pressing hurdles that Zambian MSMEe face daily. Zambian MSMEs simply CANNOT really cannot afford the increasing compliance costs that are fast piling!
We love the idea that there is a flat 5% tax on turnover for all non-consultancy MSMEs. If that was the burden, there would a very weak case for any MSME in Zambia to complain! No other compliance i.e., indirect taxes keep piling up against the thinly capitalised MSMEs.
Having done article 4 on the intended MSME law in Zambia, I am happy to reproduce as an addition to what the government is thinking according to Honourable Engineer Elias Mubanga, the Minister in charge of MSMEs!
In my mother tongue it is said “ushitasha mwana wandoshi” (he or she who does not express gratitude under any circumstance is the child of a witch)! Consequently, let me here put my gratitude to the President Hakainde Hichilema for doing a real kwenyu by actually introducing the MSME ministry in the first place just upon being established as Zambia’s 7thPresident.
My second gratitude is to the man himself at the helm of the MSME ministry. Minister Mubanga is simply available, approachable, reasonable and altogether passionate, it’s hard to miss those attributes about the honourable Engineer Minister of SMEs! I mean how many important men with an elaborate protocol structure can just pick up a call from an acquaintance and agree to an impromptu meeting in the midst of as busy a day as 4th September 2025! That was the day the man was to officiate at the WEAC conference and his ministerial Public Relations Officer simply refused and could not possibly imagine how I could have been squeezed into the Minister’s heavy schedule. She convinced me to try the next day and I went away despite having had word from my night call to Hon. Mubanga to the effect that he would meet me that 4 th September 2025 morning at 08:30 hours.
As I was about to switch on my motor vehicle engine, she called and said the Minister Mubanga still wanted to see me and the rest as they say is history! That’s servant leadership 101! Keep it up honourable Mubanga and may others in your shoes take a leaf!
The Government of the Republic of Zambia-GRZ is thinking chiefly of Formalisation, Incentives and Protection of particular lines of business and scale.
By Formalisation, I understand that the law would demand registration of all businesses in the MSME sector. This would be the pre-condition for appropriate Incentives. Of course, formalisation is in fact already a requirement as status quo when one wants to do business with the GRZ and private big corporates in Zambia. I guess, therefore, that this forthcoming formalisation would be re-emphasize and codified in the MSME law with detail.
The idea of Incentives was remarkable coming from the GRZ! Ever since Zambia changed economic approach from a command to a largely private sector driven economic model, incentives tended to be focussed and almost reserved for big business. This big business has typically been Foreign Direct Investors-FDI and therefore, most helpful to the FDI as opposed to the Local Direct Investors-LDI especially in the mining space. Retailing also was incentivised in the earlier days!
Again, it is refreshing to hear that GRZ intends to focus on the real potential engine of growth and jobs in Zambia and worldwide, that is, the MSMEs. I exclaimed ‘finally’, when Hon. Mubanga mentioned the long overdue recognition and support. It is trite law that previously disadvantaged MSMEs anywhere need hand holding always! How that could have been ignored for over a generation simply beats me!
Anyway, it is said ‘better late than never’, would be my comment. It was in order for the new dawn government to establish a full MSME ministry and credit is due and payable!
The only thing of course is that time, is of the essence. The consultation needs to get into
overdrive today not tomorrow! I now summarise and restate my earlier submissions as follows:
1. The ministry name must be changed to include the term Micro so that we now call it Ministry of Micro, Small and Medium Enterprises-MMSMEs for inclusivity.
2. Citizen owned MSMEs must enjoy a legal right of first refusal for specified goods and services from all local and central government ministries, spending agencies, authorities and parastatals.
3. The compliance threshold must be Zambian MSMEs friendly for obvious reasons
4. The MSMEs law must have sanctions against crippling debtor payments delay by large and/or public sector entities in favour of MSMEs. That would put pressure on large corporates/public sector players to pay on time and assist the MSMEs to operate smoothly thereby increasing the chances of their reduced time of graduating from Local Direct Investments-LDIs to “Zambian exported” Foreign Direct Investments-
FDIs!
5. Auditable capacity building must be mandatory because sometimes it is really not trying that affordable financial capital is the only problem, there may be a serious lack of management capacity and attitude
6. Compliance costs must be capped by percentage of turnover of the MSME by law
7. Outside the box or adaptable MSMEs support solutions need to be provided for by bodies by for example allowing cautious discretion by the CEEC Management to provide customisable support to MSMEs. For example, rent-free suitable premises and/or offices for deserving entities!
8. Fiscal support to MSMEs would also come from graduated income tax bands for MSMEs, PAYE-style!
9. Single shareholding allowing individuals to incorporate as opposed insisted on a minimum of two shareholders!
Napita mukwai!
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The Author is Victor PM Nyasulu of VICTOR NYASULU Consult-VNc, a Partner @NS-CGMA. +260955746997. vpmn69@gmail.com
