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Governement Implements Reservation Schemes for Citizens PDF Print E-mail
Friday, 06 November 2015 11:46

Zambia experienced consistent Gross Domestic Product (GDP) growth of about 6% for over a decade. Despite this strong economic growth, the Zambian economy is still characterised by relatively low participation of Zambian citizens in the ownership of strategic industries, as well as in value addition. Economic growth is sustainable when it is anchored on citizen participation.

Recognising the challenge in citizen participation levels, Government has had to put in place deliberate measures to avail and secure citizens participation in the domestic economy, particularly through entrepreneurship and value chains.

Government has selected Poultry, Block Making, Quarrying and Domestic Haulage sectors for the Reservation Schemes for the following reasons:

(a) We have many Zambians already participating in these sectors and increasingly,

Zambians have shown that they can run businesses competitively in these sectors;

(b) The barriers to entry and exit into these sectors are low. The capital requirements are fairly low and the sectors have low levels of regulation thereby making possible for many Citizens to participate;

(c) Many of our Citizens have the necessary technical and managerial skills to be successful in these sectors.

For Micro, Small and Medium Enterprises wanting to enter these sectors or needing to expand, government will provide support in terms of finance, entrepreneurial skills and technology through the Value Chain Development Programme under the Citizens Economic Empowerment Fund.

During its meeting held on 19th October, 2015, Cabinet approved in principle, the introduction of Reservation Schemes under the provisions of Section 21 (1) and (2) of the Citizens Economic Empowerment Act No.9 of 2006 for the Poultry sector, Quarrying, Block Making and Domestic Haulage by reserving these sectors for Citizens, Citizen Influenced, Empowered and Owned Companies.

The reservations will be implemented in the following manner:

Poultry Sector

(a) The selling of live birds in markets and other public places designated under the Markets and Bus Stations Act by foreign owned enterprises will cease once the Statutory Instrument comes into force. The issuance of retail licences and wholesale licences to sell live birds in markets so designated under the law, will be restricted to citizens, citizen influenced, empowered and owned companies;

(b) Firms owned by non-citizens and currently operating in the country will continue to produce the birds but they will not be allowed to sell live birds in places designated under the Markets and Bus Stations Act. They will be able to sell their birds at wholesale from their places of production provided they are in compliance with the Trading Licences Act;

(c) The Reservations measures will not apply to firms producing and selling Day Old Chicks, Grandparent Stock, Parent Stock and Layers. The sector has a key few players in these segments of the Poultry Value Chain. The country welcomes additional investment and technology in the Sector given the ever increasing demand for poultry products in the country; and

(d) Firms processing chickens and other birds will continue to do so.

The Ministry will continue to actively encourage and support Zambians to invest in all stages of the Poultry Value Chain so that we have significant citizen participation.

Block Making and Quarrying Sector

Firms already operating in the sector will not be affected by the reservation scheme. Therefore firms already established in the country will continue to operate. All firms entering the sector anew once the Reservation Statutory Instrument is in force will be required to comply with the requirement to be Citizen Influenced, Empowered or Citizen Owned Companies unless the investment is above US$5 million. Firms wholly owned by foreigners will be expected to progressively migrate to this investment threshold. Government will work with them to determine how they can migrate over a given period.

Domestic Haulage Sector

Domestic Haulage for all public procurements will be reserved for citizens, citizen influenced, empowered and owned companies. This measure will take effect with the issuance of the Statutory Instrument.

Firms wholly owned by non-citizens will continue to operate in this country. This measure is only with regard to haulage related to public procurement (i.e. government procurement) and not private haulage transactions or requirements. This measure will largely impact haulage of Maize, Agricultural inputs and other procurements by Government Agencies.

Government is seeking sustainable growth and diversification of economy. To achieve this, there needs to be participation by both Foreign Investors and Local Investors. As such we welcome Foreign Investment and Government encourages the working together of foreign and local investors. In encouraging these partnerships, each party, both foreign and local, must bring value to the table – be it in kind or cash; and this must be between willing parties.