The unit’s core works planned for the year included the following activities:
a) Commercial Banks’ Performance: A financial ratio and Competition analysis
Financial inclusion of both firms and individuals is central to Zambia’s socioeconomic development. However, many stakeholders express concern about the limited participation of businesses and individuals in Zambia’s financial sector and the high costs of financial products and services that potentially act as barriers to accessing financial products and services. For business firms that are envisaged to drive economic growth and employment creation, access to financial services, particularly loans, is indispensable to their growth. Given the seemingly unjustified prices of financial products and services, this study seeks to analyse the degree of market competition in Zambia’s banking sector and infer how the market concentration of diversification potentially impacts consumer welfare. The competition analysis will provide a starting point towards understanding what could be some of the underlying factors that contribute towards the observed prices of products and services charged by commercial banks. Other important factors that will be considered will include financial performance of commercial banks in order to understand whether or not the profit margins generated by commercial banks are justified.
b) A Diagnostic Analysis of Zambia’s Industrial Revolution
This study has been motivated by the need to enhance the quality of industrial policies following the EQuIP methodological framework developed by the United Nations Industrial Development Organization (UNIDO), and the German Development Cooperation (GDC) through GIZ. The EQuIP framework aims to support the development of effective industrial policies in developing countries for inclusive and sustainable industrial development. Industrialisation remains the widely recognised stepping stone for economic growth that comes with strong employment creation, poverty reduction and economic development multiplier effects. However, to industrialise, Zambia needs a strategic and effective industrial strategy that can drive this process. The first stepping stone to designing such a strategy requires an industrial diagnostics that provides critical information on the characteristics of Zambia’s industrial landscape; the constraints and opportunities; the country’s industrial production and export performance relative to exemplary and regional comparators; the high growth manufacturing sub-sectors; the high labour absorbing manufacturing sub-sectors; and the extent of product and export concentration or diversification required to inform an evidence-based industrial policy.
The unit’s BDU activities planned for 2019 will include the following:
c) Africa Continental Free Trade Area (AfCFTA) Rapid Impact Assessment Phase II – Stakeholder Engagement
African leaders launched the African Continental Free Trade Area (AfCFTA) on 21st March 2018 in Kigali, Rwanda. The aim of the AfCFTA is to create a single continental market for goods and services with free movement of businesses and investments which will culminate in the establishment of the Continental Free Trade and the African Customs Union. Zambia has not yet signed the AfCFTA owing to the need for thorough engagements with stakeholders and the private sector in the country. The objective of Phase II of the AfCFTA impact assessment is to facilitate public dialogue on the expectations and envisaged opinions on the AfCFTA from industry players, youth, women, Civil Society Organisations (CSOs) and Non-Governmental Organisations (NGOs) among others and consequently, guide Zambia’s position during the AfCFTA negotiations. The study will focus on in-depth stakeholder engagement with relevant stakeholders, businesses and government departments involved in trade related aspects; including behind the border issues such as competition, investment and intellectual property rights.
Trade & Investment Research Team:
Shimukunku Manchishi