Harnessing Our Resources: The Case For Value Addition In Zambia Through Productive Value Chains.

Zambia’s economic future lies not just in what it owns, but in how it uses it. In this compelling thought piece, Mr. Ashu Sagar, a respected voice in manufacturing and economic development, argues that while mining has long dominated national discourse, real growth will come from building strategic, multi-layered value chains—particularly in agriculture and minerals.

Using cotton as a case study, Sagar demonstrates how local industries can benefit from deliberate government and private sector interventions—what he refers to as “yellow dots”—that support value addition at every stage. From seed to export-ready garments, each step in the chain offers employment, innovation, and wealth distribution opportunities. But first, Zambia must secure resource control and implement smart, targeted policies that empower local producers.

The article also touches on the urgent need for mineral reservation policies, tax incentives, and streamlined regulations to foster an environment where businesses can “connect the dots” and scale industrial growth.

As the nation looks to diversify its economy, this timely call to action outlines a practical roadmap for translating Zambia’s natural wealth into lasting prosperity.

As I begin to write this article, it is tempting to feel that I may simply be stating the obvious. Yet, in policy discourse and economic development, it is often necessary to reiterate the obvious in order for it to be formally acknowledged, understood, and acted upon.

Zambia has long depended on mining as the backbone of its economy, both prior to and after independence. The sector is frequently perceived as the “special needs” child of our national economy, receiving the most concentrated attention and support. While the importance of mining cannot be overstated, it is equally critical to ensure that the natural resources we own are harnessed in a way that contributes meaningfully across multiple points of value creation for the Zambian population.

The concept of trade offers a useful comparison. Think of it this way: when a one-hundred kwacha note passes through many hands—traders, producers, and service providers—it multiplies in value across the economy. Similarly, the more stages a resource passes through in a well-structured value chain, the more economic value is created, leading to increased employment, industrial diversification, and wealth distribution.

Zambia is richly endowed with a wide variety of natural resources—minerals, gemstones, arable land, wildlife, scenic tourism sites, and most importantly, its people. For the purpose of this article, I will focus on the potential of mineral and agricultural value chains as key drivers of inclusive industrial development.

HARNESSING OUR RESOURCES: The Case for Value Addition in Zambia through Productive Value Chains
Broadly, there are two approaches used in the development of value chains. One is organic growth, which occurs naturally over time. The other is deliberate intervention, which is mostly driven by targeted government policies and private sector engagement. In Zambia, we have seen limited success through either path, though a few notable exceptions exist. This presents a compelling case for intentional, strategic intervention.

For such intervention to be successful, we must first understand how to map value chains and identify multiple paths of value creation for each resource. Let us consider cotton as an illustrative example. I have used an example from the Zambia Association of Manufacturers (see next page) to amplify the process. Starting with the seed, we can map its progression through various stages: ginning, spinning, weaving, and eventually garment manufacturing. Each stage represents an opportunity for value addition.

Critical to this process are deliberate external interventions, represented by the “yellow dots” in the chart, which come in the form of government legislation (tax policy, regulation), private sector investment, and support from cooperatives and development agencies.

Controlling the Resource
To build effective value chains, we must first ensure control and consistency of resource supply. In the mining sector, for example, copper is Zambia’s most prominent mineral. Yet, local manufacturers often face high costs due to pricing benchmarks set at the London Metal Exchange (LME), which include logistics and warehousing expenses. There is a need for a mineral reservation policy that allocates a small percentage of refined copper for local procurement at fair domestic prices. This would enhance supply reliability for the secondary industry.

In the case of agriculture, cotton represents a resource we can create and scale through support to farmers and the input supply chain. The Zambian Government made encouraging strides in the 2023 Budget by introducing tax incentives to revive the cotton value chain. These must be supplemented with additional measures such as allowing high-yield seed varieties (non-GMO where appropriate), strengthening out-grower schemes, and supporting cooperative development.

Creating the Yellow Dots
In the context of the mapped value chain, the “yellow dots” represent critical points for deliberate policy intervention. These points mark strategic opportunities where targeted government and private sector actions are essential to stimulate value creation. While initial interventions such as securing a consistent supply of raw materials have begun to establish these key points, further expansion of value creation hinges on additional, purposeful policy measures.

Government policy plays a pivotal role in enabling these interventions. Instruments such as tax incentives, streamlined licensing requirements, improved access to financing, targeted Constituency Development Fund (CDF) allocations, and initiatives aimed at skills development are among the many potential enablers. Although not exhaustive, these measures exemplify the types of support required to catalyze the growth of productive value chains.

Ultimately, the concept of engineered or “forced” value chain development necessitates robust external support mechanisms to flourish. While discussions surrounding the “how” and “when” of these interventions are ongoing, excessive deliberation often leads to missed opportunities. Timely and decisive action remains vital to translating potential into tangible economic outcomes.

Connecting the Dots
Once policy interventions are in place, it is the private sector that must mobilize resources and seize emerging opportunities. With access to capital, skills, innovation, and entrepreneurship, the private sector can connect the dots—transforming theoretical value chains into practical engines of economic activity.

Each point of value creation contributes not just to profits, but also to employment, tax revenue, GDP growth, and most importantly, economic diversification. As we aspire to transform Zambia into an industrialised, resilient economy, value chains must become our central focus.

About the Author
Mr. Ashu Sagar is a Zambian qualified accountant who is a Fellow of the Association of Chartered Certified Accountants (ACCA) and an Associate of both the Chartered Institute of Management Accountants (CIMA) and the Zambia Institute of Certified Accountants (ZICA).

With over 25 years of experience, Mr. Sagar holds various positions at the top management level. He is the Managing Director at Carribean Beverages Limited Zambia, manufacturers of Aquavita Mineral water.

Mr. Sagar is the President of the Zambia Association of Manufacturers (ZAM), Vice Chairperson of the Zambia Development Agency (ZDA), and the Vice President Manufacturing at the Zambia Chamber of Commerce and Industry (ZACCI). He is also a Board Member and Past President of the Ndola and District Chamber of Commerce and Industry, currently serving as its Trustee.