National Export Strategy (NEST)

1.0 Introduction ........................................................................................................... 1

1.1 Vision ..................................................................................................................... 2

1.2 Rationale ................................................................................................................ 2

1.3 Guiding Principles ................................................................................................. 3

1.4 General Objectives ................................................................................................. 4

1.4.1 Specific Objectives ................................................................................................ 4

1.5 General Targets of the Strategy ............................................................................. 4

1.5.1 Sector Specific Targets .......................................................................................... 4

2.1 Global Context ....................................................................................................... 6

2.2 Regional Outlook ................................................................................................... 8

2.3 National Context .................................................................................................... 9

3.0 Sector Performance .............................................................................................. 13

3.1 Trade in Goods ..................................................................................................... 14

3.1.1 Introduction ......................................................................................................... 14

3.1.2 Identification of product sectors ......................................................................... 15

3.1.3 Primary Agriculture ............................................................................................ 15

3.1.4 Cereals and Legumes .......................................................................................... 16

3.1.5 Floriculture and Horticulture Sub-sector ............................................................ 18

3.1.6 Animal and Animal Products .............................................................................. 20

3.1.7 Agro Processing (Processed Foods Sub-sector) ................................................. 22

3.1.8 Textiles and Garments Sub-sector ...................................................................... 23

3.1.9 Leather and Leather Products ............................................................................ 25

3.1.10 Wood and Wood Products Sub-sector ............................................................... 27

3.1.11 Building materials ............................................................................................. 29

3.1.12 Engineering Products ........................................................................................ 30

3.1.13 Non-Metallic Minerals and Gemstones ............................................................ 32

3.2 Trade in Goods .................................................................................................. 34

3.2.1 Introduction ...................................................................................................... 34

3.2.2 Identification of product sectors ...................................................................... 35

3.2.3 Services Sector in General ............................................................................... 36 Priority Sectors ................................................................................................. 36 The Strategy will focus on the following priority sub-sectors: ........................ 36

3.2.4 Transport Services ............................................................................................ 36

3.2.5 Financial Services ............................................................................................ 39

3.2.6 Education Services ........................................................................................... 40 ii

3.2.7 Tourism Sector ................................................................................................. 42

3.2.8 Creative Industries ........................................................................................... 44

4.0 Strategy Coordination and Management ......................................................... 46

4.1 Introduction ..................................................................................................... 46

4.2 Institutional Framework and Coordination ..................................................... 46

4.2.1 Strategy Support Network............................................................................... 46

4.2.2 Service Delivery Network............................................................................... 46

4.3 Overall Coordination ....................................................................................... 46

4.4 Monitoring and Evaluation.............................................................................. 47

4.5 Resource Mobilisation..................................................................................... 47

4.6 Public Sector ................................................................................................... 47

4.6.1 Governance Mandate and Policy Instruments ................................................. 47

5.0 Implementation Plan .......................................................................................... 1 Table 1 Economic growth Trends .................................................................................. 10 Table 2 Constraints Affecting Zambia's Trade Competitiveness .................................. 11 Table 3 SWOT Analysis for cereals and Legumes ........................................................ 16 Table 4 SWOT Analysis Floriculture and Horticulture Sub-sector ............................... 18 Table 5 SWOT Analysis Animal and Animal Products ................................................ 20 Table 6 SWOT Analysis for Processed Foods Sub-sector............................................. 22 Table 7 SWOT Analysis for Textiles and Garments Sub-sector ................................... 23 Table 8 Leather and Leather Products ........................................................................... 25 Table 9 SWOT Analysis Wood and Wood Products Sub-sector ................................... 27 Table 10 SWOT Analysis for building materials .......................................................... 29 Table 11 SWOT Analysis for Engineering Products ..................................................... 30 Table 12 SWOT Analysis for Non-Metallic Minerals and Gemstones ......................... 32 Table 13 SWOT Analysis for Transport Services ......................................................... 37 Table 14 SWOT Analysis for Financial Services .......................................................... 39 Table 15 SWOT Analysis for Education Services ......................................................... 40 Table 16 SWOT Analysis Tourism Sector .................................................................... 42 Table 17 SWOT Analysis for Creative Industries ......................................................... 44 iii Foreword It is my honour to present Zambia’s National Export Strategy (NEST) covering the period 2018 to 2022. The Strategy has been developed to actualise trade policy pronouncements with a view of enhancing Zambia’s export performance and attaining the Vision 2030 of becoming a prosperous middle-income economy. The promotion of export trade is key to enhancing productivity, employment creation and the attainment of sustainable and inclusive growth. Therefore, the development of the NEST has been necessitated by the need to have focused interventions with measurable targets in promoting the development and growth of Zambia’s export base, which currently is dominated by a few mineral-based products. Approximately 70% of Zambia’s export earnings are drawn from export of raw copper and headways have been made in increasing the contribution of non-traditional exports. Non-traditional exports have been dominated by raw or semi processed products. Yet, Zambia is richly endowed with resources that provide vast opportunities for value addition and product diversification for both the traditional and non-traditional sectors. The current situation of over dependency on export of commodities in their raw form is not sustainable in the long run and the country risks remaining at the bottom end of development. Sustainable Development Goal No. 8 places emphasis on inclusive and sustainable growth. As such, respective countries have a duty to ensure that mechanisms and programmes that are being developed aim at actualising such pronouncements. As a contribution to the national agenda of diversifying the Zambian economy and creating incomes and jobs to achieve sustainable development, the NEST seeks to address challenges in both the goods and services sector in a coordinated and systematic manner. To achieve this, the NEST identifies areas of strategic focus and spells out interventions to tackle bottlenecks related to market expansion, trade facilitation, production, access to finance and in more general terms, wealth and job creation. The objective is to enhance the competitiveness of Zambia’s exports at regional and multilateral levels, while creating opportunities for expansion of the productive base. It must be stated that the successful implementation of the NEST is dependent on buy- in from stakeholders and having in place the necessary frameworks for collaboration to facilitate implementation, monitoring and evaluation of set goals. Therefore, coordination, monitoring and evaluation are key components of this Strategy. Specific institutions have been identified to take the lead in the implementation of specific iv interventions while the Ministry will have an oversight responsibility for the monitoring and evaluation of this Strategy. I, therefore, appeal to the business community and various arms of Government to partner with my Ministry so that we make a difference today and lay the right foundation to ensure a better future for generations to come. Hon. Christopher Yaluma, MP MINISTER OF COMMERCE, TRADE AND INDUSTRY v Acknowledgment The National Export Strategy is a product of the Ministry of Commerce, Trade and Industry prepared as part of the overall national policy thrust to develop a competitive and diversified economy. The NEST is an outcome of extensive consultations with key stakeholders from the public sector, private sector, academia and Non-Governmental Organisations. Therefore, I, on behalf of the Government of the Republic of Zambia, wish to express gratitude to all institutions and individuals that provided valuable input and comments which made it possible for the Ministry to produce this strategic document. The publication of the NEST would not have been possible without dedication by members of staff and financial support from the European Union through the COMESA Regional Integration Capacity Building (RICB) Project for the consultative process for which the Ministry is grateful. The Ministry is also thankful to the support received from the Trade Related Facility Project (TRF). It is the Ministry’s expectation that this document will be owned by all stakeholders and will serve as an important guide for the development and expansion of Zambia’s export trade in order to increase earnings and contribute to the prosperity of the nation as a whole. Kayula Siame Permanent Secretary MINISTRY OF COMMERCE, TRADE AND INDUSTRY vi Working Definitions Agro Processing: The conversion of primary agricultural produce by manual, mechanical or biochemical means into a new product by changing the size, shape, composition, nature or quality of such produce. Bilateral Trade: This is a trade arrangement between two nations. Cooperative: An autonomous association of persons united voluntarily to meet their common economic, social and cultural needs as well as aspirations through a jointly- owned and democratically controlled enterprise and whose activities are not prohibited by law. Cross-cutting issues: These are issues that should be addressed with horizontal interventions, in order to enhance export potential for all economic sectors. Duty Free: This term is used to describe a situation where goods enter a market without being subjected to import duties or tariffs. E-commerce: This is the use of electronic and traditional delivery systems such as postal network to facilitate the process of trading in goods and services using electronic payment system and technologies such as the Internet. Economic Resources: This includes physical, technical, human and financial resources. Foreign Investor: A person who makes direct investment in the country and who, in the case of a natural person, is not a citizen or permanent resident of Zambia and (in the case of a company) is incorporated outside Zambia. Everything But Arms: The name given by the EU to the package it offered to the Least Developed Countries (LDCs) in 2001, to eliminate quotas and tariffs on all their exports into the European Union-except arms and ammunition (as in weapons). Export Earnings: These are the earnings of a company or country that are generated through the export of goods and services. Free-Trade Area: A group of countries that adopt free trade (zero tariffs and no other trade restrictions) among themselves, without necessarily changing the trade barriers that each member has for countries outside the group. vii Harmonized Standards: A complete product international classification system, formally known as the ‘harmonised commodity description and coding system’, that is organised in a particular framework and that employs a numbering or coding system consistent with its organisation arrangement. Generalised System of Trade Preferences: It is a concept developed within UNCTAD to encourage the expansion of manufactured and semi-manufactured exports from developing countries by making such goods more competitive in developed country markets through tariff preferences. Industrialisation: The act of transforming or value addition, on a commercial scale, of raw materials into finished or semi-finished products and includes the assembling of inputs into finished or semi-finished products. Industry: The goods-producing segment of the economy. In this respect, it includes agriculture and mining which are collectively referred to as the primary sector. It also includes manufacturing and construction activities which are referred to as the secondary sector. Additionally, the term ‘industry’ denotes services which constitute the tertiary segment. Intellectual Property: Refers to creations of the mind such as musical, literary, and artistic works; inventions; and symbols, names, images, and designs used in commerce, including copyrights, trademarks, patents, and related rights. Investment: Contribution of capital, in cash or in kind, by an investor to a new business enterprise, to the expansion or rehabilitation of an existing business enterprise or to the purchase of an existing business enterprise from the State. Investor: Any person, natural or juristic, whether a citizen of Zambia or not, investing in Zambia in accordance with the Zambia Development Agency (ZDA) Act. Manufacturing: The act of transforming on a commercial scale, raw materials into finished or semi-finished products and includes the assembly of inputs into finished or semi-finished products. Multi-Facility Economic Zones: These are specific geographic areas or premises with the highest quality of physical and social infrastructure that attract investments in manufacturing and act as engines for economic growth, wealth and job creation and increase foreign exchange earnings. Multilateral Trade: This is trade beyond the regional trade dimension. It follows the approach to conduct trade based on cooperation, equal rights and obligations, non- discrimination and the participation as equals of many countries regardless of their size, or share of international trade (multilateralism). Multilateralism is the basis of the rules and principles embodied under the World Trade Organisation (WTO). viii Non-Traditional Exports: This is a product cluster that consists of exports other than copper and base metals such as cobalt. Non-Tariff Barrier: This is a phrase that describes government measures other than tariffs that restrict trade flows such as quantitative restriction and import licensing. Proudly Zambian: This is Zambia’s “Buy Local Campaign” aimed at promoting the consumption of quality locally produced goods and services for wealth creation and employment generation. Quota Free: This is a term used to describe a situation where there are no quantitative restrictions on goods being imported or exported. Regional Trade: This is trade within a geographical region. It could be in the form of a regional trade arrangement such as a Free-Trade Agreement, Customs Union or Common Market. Zambia’s regional trade arrangements are within the framework of COMESA and SADC. Rules of Origin: This is a criterion for establishing the country of origin of a product. Often based on whether production (processing) leads to a change in tariff heading (classification) or in the level of value added in the country where the good was lastly processed. Sector-specific issues: These are issues that are critical for the priority sectors and require specific interventions. Support infrastructure: Services and supplies needed to sustain an organisation in its day-to-day operations such as communication, labour, power and transport. Target Sector: Sectors identified in this document as priority sectors for investment promotion, these include: Manufacturing (Food Processing, Wood and Wood Products, Leather and Leather Products, Textiles and Garments, Engineering Products, Mineral Beneficiation, Pharmaceuticals), Construction, Agriculture, Tourism, Education, Energy, ICT and Health. Tariff: This is a duty or tax levied at the border on imported goods. Technical Barriers to Trade: Trade restrictive effect arising from the application of technical regulations or standards such as testing requirements, labelling requirements, packaging requirements, marketing standards, certification requirement, origin marking requirement, health and safety regulations and sanitary and phytosanitary regulations. Trade Facilitation: The simplification and harmonisation of international trade procedures, with trade procedures being the activities, practices and formalities ix involved in collecting, presenting, communications and processing data required for the movement of goods in international trade. Trade in Services: This term refers to the supply of services on commercial terms to residents of another country. Services are intangible products such as banking, education or consultancy. Value Addition: Any step in the production process that improves the product or service for the customer and results in a higher net worth. Value Chain Cluster: The full range of business or economic activities which are required to bring a product or service from conception, through the different phases of production (involving a combination of physical transformation and the input of various producer services), and commercialisation, delivery to final customers and final product disposal after use. World Trade Organisation: This is an international organisation that deals with discussions, negotiations and resolution of trade issues covering goods, services and intellectual property. Its essential functions are administering and implementing the multilateral and plurilateral trade agreements that constitute it, acting as a forum for multilateral trade negotiation, seeking to resolve disputes, overseeing national trade policies and cooperating with other international institutions involved in global economic policy-making. x Acronyms AGOA African Growth Opportunity Act ASEAN Association of Southeast Asian Nations AIDS Acquired Immune Deficiency Syndrome BRICS Brazil India China & South-Africa BRRA Business Regulatory Review Agency BAZ Bankers Association of Zambia BOZ Bank of Zambia BOP Balance of Payment CAZ Cotton Association of Zambia CBZ Cotton Board of Zambia CDT Cotton Development Trust CCPC Competition and Consumer Protection Commission CEEC Citizens Economic Empowerment Commission CIF Cost Insurance and Freight CFTA Continental Free Trade Area COMESA Common Market for Eastern & Southern Africa CSO Central Statistical Office DRC Democratic Republic of Congo EAC East African Community EBA Everything But Arms EDF European Development Fund EIZ Engineering Institute of Zambia ERB Energy Regulation Board xi EIA Environmental Impact Assessment EPA Economic Partnership Agreement ESA Eastern and Southern Africa EU European Union FoB Free on Board FDI Foreign Direct Investment FRA Food Reserve Agency FTA Free Trade Area GDP Gross Domestic Products GRZ Government of the Republic of Zambia GSP Generalised System of Preference HS Harmonised System HIV Human Immune Deficiency Virus IAPRI Indaba Agricultural Policy Research ICT Information Communication Technology IP Intellectual Property MoA Ministry of Agriculture MRTAS Mega-Regional Trade Agreements MCTI Ministry of Commerce Trade and Industry MoGE Ministry of General Education MoHE Ministry of Higher Education MoF Ministry of Finance MoFL Ministry of Fisheries and Livestock MoJ Ministry of Justice MLNREP Ministry of Lands, Natural Resources and Environmental Protection MoLG Ministry of Local Government xii MTC Ministry of Transport and Communication MoTA Ministry of Tourism and Arts MWS Ministry of Works and Supply MFEZ Multi-Facility Economic Zones MMMD Ministry of Mines and Mineral Development MSME Micro Small and Medium Enterprise MTEF Medium Term Expenditure Framework NEST National Export Strategy NGOs Non-Governmental Organisations NTB Non-Tariff Barriers NTE Non- Traditional Exports NTP National Trade Policy PACRA Patents and Companies Registration Agency PPPs Public Private Partnerships REC Regional Economic Communities RCEP Regional Comprehensive Economic Partnership RICB Regional Integration Capacity Building R&D Research and Development SADC Southern African Development Community SDG Sustainable Development Goals SCCI Seed Control and Certification Institute SMEs Small and Medium Enterprises TFTA Tripartite Free Trade Area TTIP Trans-Atlantic Trade and Investment Partnership UNEP United Nations Environment Programme UNFCCC United Nations Framework Convention on Climate Change xiii UNZA University of Zambia WCO World Customs Organisation WTO World Trade Organisation ZABS Zambia Bureau of Standards ZACCI Zambia Chamber of Commerce and Industry ZARI Zambia Agriculture Research Institute ZAM Zambia Association of Manufacturers ZCF Zambia Cooperative Federation ZCSA Zambia Compulsory Standards Agency ZCSMBA Zambia Chamber of Small and Medium Business Associations ZDA Zambia Development Agency ZEGA Zambia Export Growers Association ZEMA Zambia Environmental Management Authority ZIPAR Zambia Institute of Policy Analysis and Research ZNFU Zambia National Farmers Union ZRA Zambia Revenue Authority ZRL Zambia Railways Limited ZTA Zambia Tourism Agency ZMA Zambia Metrology Agency xiv Executive Summary This National Export Strategy covers both trade in goods and services and sets out a strategic vision to structurally transform and diversify Zambia’s export base and enhance the export sector’s competitiveness at both regional and multilateral level. This is aimed at contributing towards sustainable and inclusive socio-economic development. Among objectives outlined towards the attainment of this strategic vision include product and market diversification, value addition and enhanced productivity at firm level, and increased contribution of non-traditional exports to export earnings. These will be attained through actions under the following thematic areas: (i) Thematic Area 1: Policy and Regulatory Environment: Creation of an enabling policy environment that supports and sustains export development; (ii) Thematic Area 2: Product development: Developing new products and improving existing ones; (iii) Thematic Area 3: Trade Support Network: Building capacity and enhancing coordination of trade support network to ensure that the network is responsive to the needs of the export sector; (iv) Thematic Area 4: Market Penetration and Development: Securing of markets and supporting penetration of key identified products and services in these markets; and (v) Thematic Area 5: – Trade Facilitation: Addressing trade facilitation-related constraints to improve the flow of goods and services. The Strategy has been developed taking into account the global, regional and national developments. It is also informed by analysis of strengths, weaknesses, opportunities and threats in each area identified for purposes of making informed interventions. To address the identified bottlenecks in both trade in goods and trade in services, a multi- pronged approach has been adopted, based on the International Trade Centres’ four- gear train system model that seeks to address: (i) border-in issues to increase exporters’ competitiveness, capacities and competencies; (ii) border issues to reduce transaction costs; (iii) border out issues to increase market penetration, and (iv) development issues to increase employment and reduce the levels of poverty, tackle income-related concerns. These pillars provide key parameters, through which, export competitiveness will be realised. Quick win issues will be addressed in the short term while the rest will be addressed in the medium to long term to ensure that momentum is not lost on promoting the growth xv of Zambia’s export sector. To this end, a clearly outlined implementation plan is contained in section 5.0 of this document. With regard to trade in goods, the following areas of focus, as highlighted in section 3.1 have been identified: primary agriculture with specific focus on cereals and legumes, cotton and its products; the horticultural and floricultural sub-sector and animal products. Agro processing with specific focus on the food sub-sector; the textiles sub- sector; the leather and leather products sub-sector; the wood and wood products sub- sector; building materials; engineering products; and non-metallic minerals and gemstones. Emphasis is placed on building and consolidating, in the short term, selected high growth sectors that have potential and currently contributing to Zambia’s export earnings to ensure that they sustain and expand their presence in both regional and multilateral markets. The particular challenges and opportunities of these sectors are specifically and expressly covered in the Strategy. The Strategy also identifies opportunities for strengthening sectors with potential for growth and export expansion in the medium to long term. To that effect, the Strategy proposes a strategic programme to further develop these sectors and realise their export potential. This is in a quest to address the existing concentration of exports which are mainly driven by traditional mineral products that account for more than two-thirds of the total exports. The Strategy observes that non-traditional export products are concentrated within engineering and foundry (23 percent), followed by primary agriculture products (18 percent), processed and refined foods (14 percent), industrial mineral-related products (14 percent) and chemicals and pharmaceuticals (10 percent). These products collectively account for 80 percent of total NTEs. Despite the importance of these products in NTEs, they constitute a small share of manufacturing industry in Zambia, which currently is dominated by food and beverages production. The categories of products broadly classified under horticulture, floriculture, wood, textiles, leather and animal products each contributes a marginal 1 percent to NTEs. Handcrafts and garments record the least exports accounting for less than a percent of total NTEs. The major market for Zambia’s traditional mining exports has consistently been Switzerland, while China has emerged as second largest destination 1. The major market 0 for NTEs is highly concentrated within the Common Market for Eastern and Southern Africa (COMESA) and the Southern Africa Development Community (SADC) regions with the Democratic Republic of Congo (DRC) and South Africa accounting for the largest share. These are followed by Zimbabwe, Malawi, Kenya and Egypt. The Strategy projects that the value of NTE exports can further be increased if challenges affecting trade necessitated by among other things changes in policy direction and volatility of the exchange rate are addressed. The identification of the core products prioritised in this National Export Strategy is based on a thorough analysis of the customs data from Zambia Revenue Authority (ZRA) and the Central Statistical Office for the period 2007 to 2015. A scoring 1 Metal exports reported as destined for Switzerland often end up in China. xvi criterion, based on ranking of products within and across years according to strategically identified sub-sectors, was used to objectively classify products in accordance with their observed performance and potential. In terms of services trade, the following areas of focus as highlighted in section 3.2 have been identified: transport services; financial services; educational services; and the tourism sector including creative industries. The Strategy recognises the services sector as a new frontier for promoting sustainable growth and development. The sector has exhibited potential to promote sustainable economic growth despite Zambia currently being a net services importer. For instance in 2013, services imports amounted to US$ 1,460 million compared to US$ 585 million in export receipts. The share of services in GDP increased from 51 percent in 2010 to 55.6 percent in 2014. The Strategy notes that domestic services dominate Zambia’s total services contribution to GDP. The construction, transport, communication, business and education services are cited as among the key contributors to Zambia’s GDP. The Strategy notes that enhancement of services sector exports has potential to contribute more to Zambia’s GDP. Therfore, key sectors have been identified to further enhance the sector’s perfomance. The criterion used in the identification of the core services sectors prioritised in this Strategy is based on a thorough analysis of the Bank of Zambia (BoZ) Balance of Payment (BoP) statistical information and other sector policy documents. A set of measures, which formed the basis for shortlisting sectors, were drawn and these measures assisted in arriving at the identified services sectors of this Strategy. The first measure used was to vet the sectors against their potential to contribute towards job creation and poverty reduction. Further, the recent trends in the global trade and focus on trade in services as a new frontier for sustainable growth and development and advances in technology also underpinned the projection and focus of the sectors identified in this Strategy. Lastly, the Strategy in section 4.0 outlines coordination and management mechanisms which include institutional frameworks, support networks, service delivery networks, resource moblisation and the governance mandate, among others. xvii

1.0 Introduction The Government of the Republic of Zambia has placed export development at the centre of its economic diversification agenda. It is the aspiration of the Zambian Government to create an enabling environment that fosters economic growth and development for the benefit of the Zambian population. This is in keeping with the national vision, which envisages the attainment of the status of a prosperous middle- income nation by 2030. To this end, policy reforms and initiatives are being undertaken. These reforms, coupled with initiatives at the regional and multilateral level, have seen Zambia and its trading partners maintain an open trade regime, thus creating market and value chain opportunities in partner countries and regions. The reforms have also contributed to positive real growth rates of 6.5% on average, single-digit inflation and a stable macroeconomic environment attained in the period 2010 to 2014 with significant improvement in Zambia’s trade balance. Alas, slow growth rates, a negative trade balance and double-digit inflation were recorded in 2015 and part of 2016 due to plummeting copper prices. However, inflation was brought to single digit by close of 2016 and 2017 to 7.5% and 6.6%, respectively. More broadly, the competitiveness of the export sector has remained low due to various productive and supply side constraints. These constraints do not, however, negate Zambia’s capacity to increase its export competitiveness. This National Export Strategy (NEST) has, therefore, been developed to address the identified challenges affecting export competitiveness. This is through spelling out sectoral interventions that will result in enhanced production and productivity, trade expansion regionally and globally, while creating opportunities for domestic trade growth. The NEST focuses on both trade in goods and trade in services with clearly identified challenges, proposed intervention and outcome indicators which measure progress at every stage of implementation. The NEST includes two sets of strategic issues: • Sector-specific issues, which are critical for the priority sectors and require specific interventions; and, • Cross-cutting issues which should be addressed with horizontal interventions, to enhance export potential for all economic sectors. A multi-pronged approach is proposed to address binding constraints along value and supply chains of the different key sectors identified to have export potential. In this regard, the International Trade Centre’s four-gear train model on promoting international trade competitiveness has been used. The model emphasizes on addressing; 1 • Border-in issues: Measures aimed at increasing exporters’ competitive capacities and competencies; • Border issues: Measures aimed at reducing time and transaction costs at the border; • Border out issues: Measures aimed at increasing market access and penetration; • Development issues: Measures aimed at maximising the impact of the NEST on poverty alleviation. The NEST also seeks to promote interventions that will assist the private sector to develop production networks and supply chains with the regional economy in order to take advantage of production unbundling, diversification and value addition. Therefore, the immediate imperative is to improve international competitiveness and allow the exploitation of regional and global export markets where Zambia is enjoying preferential access. The NEST does not only recognise Zambia’s specific difficulties such as poverty levels, limited export base, domestic market size and geographical position, but it also takes cognisance growing opportunities in regional and international markets. The NEST proposes a mid-term review to be undertaken after two and half years of implementation for the necessary adjustments to be made.

1.1 Vision A structurally transformed, diversified and competitive export sector anchoring Zambia’s socio-economic development.

1.2 Rationale Zambia has placed export development at the centre of its economic diversification agenda. To this end, nationwide policy reforms and initiatives are being undertaken. The reforms have contributed to positive real growth rates of 6.5% on average, single- digit inflation and a stable macroeconomic environment attained in the period 2010 to 2014 with significant improvement in Zambia’s trade balance. However, slow growth rates, a negative trade balance and double-digit inflation was recorded in 2015 and part of 2016 due to plummeting copper prices. However, inflation was brought to single digit by close of 2016 and 2017 to 7.5% and 6.6%, respectively. 2 The National Export Strategy (NEST) has been developed to address the identified challenges affecting export competitiveness through various mechanisms to enhance the export sector’s contribution to Zambian’s socio-economic development.

1.3 Guiding Principles The pursuit of the objectives of the NEST shall be guided by the following principles: • Vision 2030: The Strategy will operate within the national socio-economic development agenda and shall be aligned to the national development objectives outlined in the Vision 2030; • Regional Integration: Implementation of the Strategy shall take into account the adherence to regional and global best practices in export development and the practices of Zambia’s major trading partners. The Strategy shall place importance of domestic and international trade in stimulating economic growth and poverty reduction. By expanding exports, Zambia will earn additional incomes which can finance the importation of goods such as machinery, raw materials, and intermediate inputs needed in domestic production processes; • Diversification: The Strategy shall place importance of economic diversification away from the existing high level of dependence on a few commodities. Emphasis is therefore placed on attracting investments for product diversification as well as diversification of export market destinations; • Fair Trade (fairness): The Strategy recognises various Government measures and strategies aimed at minimising anti-competitive practices in the economy, to ensure fair trading practices and to protect the welfare of domestic consumers; • Multi-Sectoral Approach: Government shall collaborate with private sector, cooperating partners, Non-Governmental Organisations (NGOs), and other stakeholders in implementing the Export Strategy; • Transparency: The Strategy shall ensure a transparent and consistent technical regulation framework that creates an enabling policy environment which supports and sustains export development and does not constitute unnecessary barriers to trade; • Human Rights: A human rights-based approach is about empowering people to know and claim their rights and increasing the ability and accountability of individuals and institutions responsible for respecting, protecting and fulfilling rights. Based on this principle the Ministry shall endeavour to uphold Human Rights during implementation of this policy for the benefit of its clients. • Gender Inclusiveness: The Strategy shall ensure that all programmes are gender/youth sensitive and gender/youth inclusive. 3

1.4 General Objectives To enhance the export sector’s contribution to Zambian’s socio-economic development.

1.4.1 Specific Objectives • To diversify the range of exportable products and enhance value addition in them; • To take full advantage of existing markets and identify and develop new markets; • To promote sustainable growth at firm level through addressing the existing and potential new threats to production and exports; and, • To enhance the contribution of the non-traditional export sector to job and wealth creation and export revenue generation. To attain the above objectives, action will be required along the following thematic areas: • Thematic Area 1: Policy and Regulatory Environment: Creation of an enabling policy environment that supports and sustains export development; • Thematic Area 2: Product development: Developing new products and improving existing ones; • Thematic Area 3: Trade Support Network: Building capacity and enhancing coordination of trade support network to ensure that the network is responsive to the needs of the export sector; • Thematic Area 4: Market Penetration and Development: Securing of markets and supporting penetration of key identified products and services in these markets; and, • Thematic Area 5: Trade Facilitation: Addressing trade facilitation-related constraints to improve flow of goods and services.

1.5 General Targets of the Strategy • Zambia’s total exports to grow by 15% in value annually; and, • Zambia’s total NTEs to grow by 25% in value annually.

1.5.1 Sector Specific Targets

1.5.1.1 Trade in Goods • Exports of primary agriculture products to grow by 30% annually; • Exports of animal and animal products to grow by 7% annually; • Exports of processed foods sub-sector to grow by 20% annually; • Exports of textile and garments to grow by 15% annually; • Exports of leather and leather products to grow by 12% annually; • Exports of wood and wood products to grow by 20% annually; 4 • Exports of building materials to grow by 5% annually; • Exports of engineering products to grow by 15% annually; •• Exports Exports of gemstone of building products materials toto increase grow by 5%byannually; 10% annually; •• Exports Exports of of non-metallic mineralstotogrow engineering products growby by15% 25%annually; annually; and, •• Exports Exports of gemstone products to increase by 10% grow of horticulture and floriculture products to by 10% annually. annually; • Exports of non-metallic minerals to grow by 25% annually; and, • ExportsTrade 1.0.1.1 in Services of horticulture and floriculture products to grow by 10% annually. • IncreaseTrade 1.0.1.1 exports in of services earnings by 12% by 2021; Services • Increase services’ contribution to national employment by 8% by 2021; and, •• Increase Increase services’ exports ofcontribution to GDP services earnings byby 5%by 12% by2021; 2021; • Increase services’ contribution to national employment by 8% by 2021; and, • Increase services’ contribution to GDP by 5% by 2021; • Exports of building materials to grow by 5% annually; • Exports of engineering products to grow by 15% annually; • Exports of gemstone products to increase by 10% annually; • Exports of non-metallic minerals to grow by 25% annually; and, • Exports of horticulture and floriculture products to grow by 10% annually.

1.0.1.1 Trade in Services • Increase exports of services earnings by 12% by 2021; • Increase services’ contribution to national employment by 8% by 2021; and, • Increase services’ contribution to GDP by 5% by 2021; 5 5

2.0 Situation Analysis

2.1 Global Context The global economy is increasingly becoming complex and interdependent. This has resulted in unprecedented expansion in international trade and an emergence of new drivers of global trade and investment, drawn from among developing countries. Notable of these are China, Brazil, India and South Africa. The international community has continued to pursue common programmes at the multilateral level in an effort to expand global wealth with the aim of reducing the incidences of global poverty while addressing environmental related challenges. There is an increasing call to find innovative, integrated and common solutions to global problems, while respecting the sovereignty of states in defining their national strategies and policies. Thus, global collective action to address cross-border challenges (such as tax evasion and avoidance, illicit capital flows, global value chain operations, macroeconomic policy coordination, global trade rules, climate change and sovereign debt prevention and resolution) has become imperative as a means of strengthening the decision-making process at the multilateral level. In addition, several initiatives have been adopted in the recent past with specific focus on addressing the challenges faced by developing and least developed countries. These initiatives include the following: • The comprehensive 2030 Agenda for Sustainable Development adopted at the United Nations Sustainable Development Summit held in September 2015, where global leaders and the international community committed themselves to ending poverty in all its forms and dimensions; • The Addis Ababa Action Agenda, which complements and supports the means of implementation for the 2030 Agenda, which was adopted in July 2015; • The outcome of the twenty-first Conference of the Parties to the United Nations Framework Convention on Climate Change where global leaders agreed to limit global warming to 2°C and pursue efforts to limit it to 1.5°C of December 2015. • The Tenth Ministerial Conference of the World Trade Organisation held in December 2015 with several key decisions adopted including, commitment to eliminating agricultural export subsidies; enhancement of export competition rules, expansion of the plurilateral Information Technology Agreement to include new products and an affirmation to facilitate trade in services for least developed countries. Other notable initiatives include those adopted under the United Nations Conference for Least Developed Countries in 1981, the Istanbul Programme of Action in 2011 and United Nations Landlocked Developing Countries Vienna Programme of Action in 2014. 6 Several unilateral initiatives are being implemented by both developed and developing countries to facilitate trade. Notable of these include the Generalised System of Preferences (GSP) maintained by major developed countries, the Everything But Arms (EBA) Initiative maintained by the European Union and the African Growth and Opportunity Act (AGOA) by the United States of America. Developing countries like China, India and Brazil have also developed schemes to facilitate access by least developed countries into their markets on preferential terms. All these initiatives and platforms provide an opportunity for the global leadership to reflect on global problems and define global solutions thus contribute towards a multilateral trading system that is growth rewarding for participating countries. Further, these initiatives also re-enforce the critical role of trade and development and interrelated issues of finance, technology and investment for inclusive and sustainable development. It is, however, noteworthy that the global economy has gone through difficulties in the recent past due to the after effects of the financial and growth challenges experienced by major economies, which are yet to be resolved. Global growth is at its modest level with fluctuating oil and commodity prices, volatile capital flows and unstable foreign exchange and stock markets. The global economic system remains unbalanced, with wide socio-economic gaps both between countries and within social groups and communities. Globally, one billion people are still living under extreme poverty. The policy space for countries (especially the least developed among them) to pursue national development programmes is getting narrower and prospects to successfully conclude balanced trade agreement especially under the WTO framework are far-fetched, as countries increasingly resort to protectionist tendencies. Several challenges have arisen, especially in the area of trade and investment as countries move towards the creation of mega Free Trade Areas and the adoption of complex investment protection and promotion agreements. Currently, there are approximately 3,000 international investment agreements. Concerns have been raised about their lack of consistency with national development priorities and lack of coordination with other policy areas and objectives, including industrialisation, macroeconomic stability and sustainable development. The conclusion of negotiations between the United States and the European Union under the Trans-Atlantic Trade and Investment Partnership (TTIP) on the one hand will make up nearly 30 percent of world merchandise trade, 40 percent of global trade in services, and as much as 45 percent of the world GDP. Once concluded, this Agreement is expected to cover market access (on both goods and services), regulatory coherence and cooperation (e.g. technical barriers to trade, sanitary and phytosanitary measures) and the rules (e.g. intellectual property rights, sustainable development, labour, environment, customs and trade facilitation). 7 On the other hand, the Association of Southeast Asian Nations (ASEAN) composed of Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam is negotiating with 6 other major Asian economies (i.e. Australia, China, India, Japan, New Zealand, and South Korea) to establish Regional Comprehensive Economic Partnership (RCEP). This will be the largest bloc by its population (over 45 percent of the world population) accounting for nearly one-third of global GDP and its coverage is envisaged to go beyond trade liberalisation to cover investment, intellectual property, dispute settlement, and economic and technical matters. No African countries are participating in the mega-regional negotiations that involve their major trading partners and they face trade diversion from these markets. It has been argued that African countries could face greater competition in their export markets as well as investment diversion. On the positive side, there may be a growth stimulus that enhances economic opportunities for Africa in these trading partners. What, therefore, has been recommended as a remedy for African countries is to promote structural transformation to place the continent onto a more sustainable industrial development path. There is considerable potential to grow intra-African trade and investment through Regional Value Chains especially that the African Continental Free Trade Area has been launched and will become effective once 22 countries deposit their instrument of ratification. Therefore, Zambia and other African countries need to upgrade their industrial capacity, including technological capabilities if they are to participate more gainfully in Regional and Global Value Chains. Besides these mega developments, the decision by Britain to exit from the European Union, one of the longest standing regional blocs, puts a challenge on the regional integration agenda. Given the country’s economic strength, this development has infused intense speculation in the region and other blocs including SADC and COMESA. The resultant immediate impact of the decision on Britain has been in form of instability in stock markets and foreign exchange. It is, however, unclear on whether this scenario will be sustained in the medium and long term. Therefore, despite these associated challenges facing the global economy, the global market remains a viable market for both traditional and non-traditional products. Zambia also remains a source for key products in the extractive and agro-based sectors.

2.2 Regional Outlook At the African continental level, progress is being made towards increasing intra-Africa trade and integration of African economies into one market. This is for purposes of harnessing the continent’s rich endowments and improve Africa global trade, which is dominated by exports of commodities with low value addition. Among the specific interventions outlined by African leaders include the introduction of an Integrated High Speed Train Network; hastening the process for the creation of a Continental Free Trade Area (CFTA); the African Passport and free movement of people; capitalisation of opportunities in the aviation sector within the framework of the implementation of 8 the Yamoussoukro Decision on the Unification of African Air Space; implementation of the Grand Inga Dam Project; the Pan-African E-Network, and the creation of an Annual Consultative Platform for policy dialogue involving a wide range of stakeholders, among others. Africa is also championing an integrated approach to the continent’s development by promoting the trade agenda, while tackling infrastructure bottlenecks and creating an environment for industrial sector growth. This approach is also the focus of regional economic communities such as SADC and COMESA to which Zambia is a member. It is predicted that industrial products (i.e. chemicals, textile, metal products as well as electronic, machinery and transport equipment) would drive more than two-third expansion in intra-African trade in the coming years. The figure below is a projection of anticipated changes in intra-Africa trade, following the creation of mega free trade areas, which may require attention, for Zambia’s export strategy to keep in synch with developments at the regional and multilateral levels. Figure 1 Changes in intra-African trade following MRTAs combined with CFTA, by sector (USD bn), 2020 12 10 8 6 4 2 0 -2 Transport services Motor vehicle and transport equipment Livestock Other services Other manufacture Iron and steel Crude and refined oil Plant-based fibers Vegetable, fruit and nuts Other food products Textile, wearing apparel and leather products Sugar Mining Fishing Paddy and processed rice Electronic and machinery equipment Meat products Cereals and crops Non-metalic minerals Other energy Other metal products Milk and dairy products Chemical, rubber and plastic products Source: ECA (forthcoming). AU/TI/TD/AMoT/MRTA

2.3 National Context Zambia is a Landlocked Least Developed Country with a population of approximately 15 million people. The economy is predominantly driven by the production and export of copper and cobalt. Copper and cobalt account for approximately 70% of Zambia’s export revenues. The Government has over the years adopted policies and programmes aimed at diversifying the economy and reducing the dependence on Copper such as the 9 Rural Industrialisation Strategy, and the Job Creation and Industrialisation Strategy among others. In terms of economic growth, the Zambian economy has experienced strong growth in past years, with real GDP growth averaging about 6% per year in the period 2006-2014. This economic performance was largely driven by growth in construction, transport, communications and mining. However, slow growth rates were recorded in 2015 and 2016 due to plummeting global copper prices. (See Table below). Table 1 Economic growth Trends 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Real 7.90 8.35 7.77 9.22 10.30 5.62 7.57 5.13 5.02 2.9 3.4 3.9 GDP growth (p.a.) Source: CSO In 2017 real GDP growth stood at 3.9%, representing a marginal improvement compared to 2016. The continued improvement was largely because of good performance in agriculture, energy, non-mining industries, and services. In agriculture, the production of most crops increased in 2017. The maize harvest rose from 2.9 to more than 3.6 million tonnes in 2017, due mainly to a 21% increase in the area planted. For subsistence farmers, average productivity improved by 4% to 2.2 tonnes per hectare while larger farmers were able to produce 5.2 tonnes per hectare and commercial farmers up to 10 tonnes per hectare. Non-mining industries, on the other hand, such as energy and construction, also performed well in 2017. The exceptional rainy season increased water levels at the Kariba Dam reservoir, which resulted in most hydropower generation plants to return to full capacity. Domestic electricity generation improved by 22.5% in 2017, while electricity exports increased by 37.1% to 1.1 TWh. The large imports that were needed to meet demand in 2016 were reduced to 0.8 TWh from 2.1 TWh, transforming the country into a net exporter of electricity (African Economic Outlook 2018). In services, the best performing sectors included education, transport and storage. Education grew by 7.7% and has been a strong performer for the last six years. Its growth was largely due to Government efforts to expand education but also to the opening of more private schools. Similarly, transport and storage grew by 7.3% facilitated by the expansion of construction, mining and trading. Conversely, communication and information contracted by 12%, due to a slowdown in outgoing calls as consumers shifted to data services (African Economic Outlook 2018). The Government is still optimistic that real GDP growth of over 7% is till tenable and the role of trade in achieving that has been identified. And for trade to play a significant role, a number of productive and supply side capacity constraints which need to be addressed have been identified. These constraints are both external and internal and can be categorised under the following headings: 10 a. Production-related constraints; b. Trade and investment facilitation-related constraints; c. Market access-related constraints; and, d. Support infrastructure and institutions. Table 2 Constraints Affecting Zambia's Trade Competitiveness Production-related constraints Trade and investment facilitation/Support services-related constraints • Poor and/or costly economic • Weak, inefficient or costly trade- infrastructure services (i.e. related infrastructure, including including telecommunication storage and refrigeration facilities; systems, roads, railways, utilities, • Inefficient, lengthy and costly borders and airports); transit of goods in and out of • Limited availability of critical Zambia; production inputs at competitive • Limited capacity to acquire and prices, due to high transport costs analyse information on foreign and inadequate market leverage; market opportunities, and • Limited access to and high cost of inadequate knowledge of capital compared to competitors; international business practices; • Limited access to innovative • Limited export marketing production technology, limited experience, including negotiating technical know-how; skills; • Limited access to information • Inadequate knowledge of rules of technology for product design, origin, design, health, safety and input sourcing and manufacturing environmental standards in trade processes; agreements and foreign markets; • Weak management and technical • Inefficient customs? skills; Administration and other trade- • Scarcity of skilled labour and related administrative procedures; inadequacy of local • Inadequate or costly capital for the entrepreneurship with significant financing of exports, investment or export experience; other links with foreign firms; • Weak capacity in product designs • Limited knowledge of import and and packaging that are not export administration; appealing to consumers in export • Ineffective government and private markets and, in certain instances, sector export and investment do not meet international promotion services; specifications; • Limited application of information • Poor information on foreign technology to market research, markets requirements (health, transaction management and links safety, environment, quality and with buyers, suppliers, shippers social standards), and on the and others; 11 provisions of regional and • The lack of competent business multilateral trade agreements; associations and trade services • Poor national quality firms to help enterprises identify infrastructure, including lack of an markets, assemble financing, internationally-recognised process export sales and manage accreditation system; transactions. • High concentration of FDI (a valuable source of capital, technology and training) in few sectors; • Limited availability of efficient business support services. • Market access-related constraints 2 1 • National Quality Infrastructure 3 2 and Rules of Origin RoO • Sanitary and Phytosanitary • Poor participation in international measures, standard setting activities, • Technical regulations, • Limited national test laboratories • Non-mandatory international and accreditation system, standards, • Rules of origin constraints are • Restrictive rules of origin; and particularly severe for potential • Non-Tariff Barriers (NTB). value-added industries which heavily rely on imported inputs. 2 Note: Market access is essential to the success of any trade development strategy. New market opportunities help trigger investment and entrepreneurial activity and generate new business for suppliers and service providers that may currently have little direct involvement with the external sector. Being an LDC, Zambia is entitled to market access in developed countries under a number of GSP schemes. Zambia is also a party to regional Free Trade Areas. As such, tariff barriers do not constitute a strategic issue for Zambia, with few exceptions in the region and overseas. 3 Note: Major export markets maintain SPS standards that are higher than those currently recognised by international standard-setting bodies. In particular, systems of traceability being put in place by developed countries, which covers the complete food chain from the farm to table, are difficult to comply with by small producers. Technical regulations are a key entry barrier for Zambian products into overseas markets, by preventing such entry or imposing significant costs for exporters. 12

3.0 Sector Performance This NEST adopts the International Trade Centres’ four gear train system namely Border Issues, Border-In issues, Border-Out Issues and Development Issues. These pillars provide key parameters, through which, exports competitiveness will be realised. Border-In Issues Border Issues Measures aimed at increasing exporters’ Measures aimed at reducing transaction competitive capacities and competencies costs - Enhance existing supply capacity, in terms - Transport, logistics of volumes, quality and value-addition - Trade facilitation - Create new businesses, particularly SMEs, - Pre-shipment, post-shipment finance and through industrial clusters, joint ventures guarantees and sub-contracting arrangements with large firms - Competence development for current and potential export managers Border-Out Issues Development Issues Measures aimed at increasing market access Measures aimed at maximising the impact of and penetration the NEST on poverty alleviation - Identify commercial opportunities, improve - Increase income generation and market intelligence employment opportunities - Investment promotion - Increase export receipts retained by disadvantaged groups 13

3.1 Trade in Goods

3.1.1 Introduction Zambia’s merchandise trade as a percent of GDP averaged 65.6% between 2007 and 2015. The trade balance on merchandise goods strongly emerged from a narrow surplus during the financial crisis and recorded a substantial surplus up to the close of 2012. Zambia exports more than four thousand products into the region and overseas markets. Over the period 2007 to 2015, the country exported 4,358 products with an annual average export value of ZMW40.17 billion into 183 countries. The major exports are dominated by exports of traditional mineral products that account for more than two- thirds of the total exports while the remainder accrues to non-traditional exports. Non- traditional export products are concentrated within engineering and foundry (23 percent), followed by primary agriculture products (18 percent), processed and refined foods (14 percent), Industrial mineral-related products (14 percent) and chemicals and pharmaceuticals (10 percent). These products collectively account for 80 percent of total NTEs. Despite the importance of these products in NTEs, they constitute a small share of manufacturing industry in Zambia that is dominated by food and beverages production. The categories of products broadly classified under horticulture, floriculture, wood, textiles, leather and animal products each contributes a marginal 1 percent of NTEs. Handcrafts and garments record the least exports accounting for less than a percent of total NTEs. The major market for Zambia’s traditional mining exports has consistently been Switzerland while China has emerged as second largest destination 4. The major 3 market for NTEs is highly concentrated within the COMESA and SADC regions with DR Congo and South Africa accounting for the largest share. These are followed by Zimbabwe, Malawi, Kenya and Egypt. Prior to the 2008 global financial crisis, the Netherlands and the UK were significant overseas markets for NTEs. However, in the post-recovery period, the importance of these markets has diminished a factor that explains some of the dismal performance of floriculture, horticulture and handcrafts NTEs. The average picture across the years shows that the deterioration in the trade balance is driven by the importation of petroleum, chemical, pharmaceuticals, animal products, textiles, garments, building materials, agriculture and non-metallic minerals. Worse deficit overshadows the surplus recorded mainly in engineering and foundry, primary agriculture and industrial mineral- related products. Further, various productive and supply side challenges have contributed to the decline in exports. Given this situation, the sector selection was cautiously done and it was informed by a scientific method and approach. 4 Metal exports reported as destined for Switzerland often end up in China. 14

3.1.2 Identification of product sectors The identification of the core products prioritised in this Strategy is based on a thorough analysis of the customs data from Zambia Revenue Authority (ZRA) and the Central Statistical Office for the period 2007 to 2015. Tradable products are typically named in conformity with the World Customs Organisation (WCO) Harmonised System (HS) convention. The ZRA, through the ASYCUDA system, collects the necessary customs information on trade such as the physical address, type of trade flows – whether it’s an import or export and their associated Cost Insurance and Freight (CIF) and Free on Board (FoB) respectively, country of origin and destination. The chosen period of analysis is sufficiently long to reveal emerging trends and changing dynamics in Zambia’s import and export portfolio. A scoring criterion, that involved ranking products within and across years according to strategically identified sub- sectors, was used to objectively classify products based on their observed performance and potential. The products identified as high performers were assigned to the group of products that is more amenable to short-term strategic interventions. And the products identified as moderate performers were assigned to medium-term strategic interventions group. The products identified as poor performers, including products which have not been actively exported, were assigned to a group of long-term strategic interventions that can help to generate and sustain export productivity and competitiveness.

3.1.3 Primary Agriculture Agriculture is a major economic activity in Zambia. In 2015, its contribution to the country’s Gross Domestic Product (GDP) stood at 8.1 percent. This sector covers crop and animal including livestock and aquaculture. In 2015, export earnings from primary agriculture totalled US$ 415.02 million from US$ 372.70 million in 2014 representing an increase of 11.35 percent. Primary agriculture contributed 20 percent to the total non-traditional export earnings in 2015. The major export markets were Zimbabwe, Malawi, South Africa, Germany, Switzerland, Kenya, Tanzania, Mauritius, Singapore and China. The main export commodities under primary agriculture include cereals and legumes, cotton and its products, floriculture and horticultural products, tobacco and coffee. This section of the Export Strategy will focus on the following: • Cereals and Legumes; • Floriculture and horticultural products; and • Animal and Animal Products. 15

3.1.4 Cereals and Legumes Strategic objectives • Promoting investment in cereals and legumes production; • Modernise and commercialise the cereals and legume production; and, • Improve access to established markets and penetrate new markets. Table 3 SWOT Analysis for cereals and Legumes STRENGTHS WEAKNESS • Abundant land and water resources • Limited support infrastructure such as storage • Organic products • Weak interface between complementary • Existing producers policies and government institutions (i.e energy • Existing support institutions and taxes) resulting in implementation incoherence • Limited legal and regulatory frameworks resulting from non-enactment and implementation of the bills/Acts • Limited levels of compliance to standards and accreditation requirements among producers • Limited capacity for cereal and legume producers to effectively participate in marketing arrangements • Limited knowledge and understanding of the challenges and opportunities that exist (both upstream and downstream) on cereal production and trade • Limited capacity of public institutions to manage and monitor marketing arrangements • Absence of an integrated branding infrastructure at key institutions of learning (e.g. TEVETA institutions) to promote skills development • Limited appreciation of smart production methods and how to minimise post-harvest losses to enhance trade competitiveness • Absence of production processes informed by consumer priorities, needs and demand levels • Limited value addition interventions to support and sustain export diversification • Limited institutions offering finance OPPORTUNITIES THREATS • Availability of established and new • Disease and pests markets • Climate change • inconsistency in policy • Prevalence of NTBs • Commodity price volatility and competition 16 Strategic Actions • Review and streamline policies affecting cereals and legume production and marketing; • Revitalise inter-agency/ministerial platforms for dialogue to ensure policy coherence; • Push for the enactment and full implementation of the Credit Act, Marketing Bill and Commodity exchange bill; • Review standards and accreditation requirements for cereal and legumes producers and develop programmes that would facilitate compliance through using existing institutions i.e. ZABS, ZCSA, ZMA; Undertake inter-country business linkages programmes to promote market cooperation and integration; • Review production and marketing arrangements for cereal and legumes; • Support annual trainings facilitated by national, regional and international marketing institutions to build a resilient carder of marketers for cereal and legumes; • Review capacity and strengthen agriculture co-operatives and associations to promote better and effective policy dialogue; • Promote Zambia’s participation in regional and global value chains to enhance skills development, knowledge transfer and facilitate access to inputs; • Support development of business incubators to promote competiveness of farmers involved in the sub-sector; • Assess the capacities of ZARI, SCCI and other research centres on technology development i.e. plant breeding, good agricultural practices etc. seed production and certification with a view to strengthening their operations; and • Encourage product diversification and promote value addition. 17

3.1.5 Floriculture and Horticulture Sub-sector The floriculture and horticulture sub-sector has potential for further export growth in the medium to long term. The main export markets are; South Africa, the United Kingdom, Netherlands, and Germany. This section of the Strategy will focus on promoting exports of floriculture and horticulture products. Strategic objectives • Promote export growth of the sub-sectors; and • Improve access in established markets and penetrate new markets. Table 4 SWOT Analysis Floriculture and Horticulture Sub-sector STRENGTHS WEAKNESS • Favourable climatic conditions for • High transport and logistical costs floriculture and horticulture • Inadequate market infrastructure and cold • Abundant suitable farming land chain systems • Availability of labour • Weak supportive legal and regulatory • Established institutional framework framework to retain and support export • Existing producers growth • Absence of effective institutional framework that promotes strong vertical and horizontal linkages to promote coherent and sustainable actions on key challenges facing the sector • Absence of empirical knowledge on the effects of existing challenges in the sector on trade performance • Lack of effective investments in the sector to steer effective trade (domestically) and export competitiveness • Limited institutions offering affordable finance OPPORTUNITIES THREATS • Availability of export markets • Existence of NTBs • Private standards and consumer lobbying in destination markets • Competition from other producers • Climate change • Inconsistent power supply Strategic Actions • Strengthen the capacity of the MCTI and ZDA to monitor and consolidate trade data for the sector; 18 • Build capacity of farmer groups/ cooperatives in the sector through intense training and procurement of relevant equipment; • Establish quality control systems for key producers using existing institutions i.e. ZABS, ZCSA, ZMA and carryout sensitisation on conformity requirements; • Undertake an inventory of the sector’s production and export capacity and develop capacity-building programmes for the sub-sector; • Assess infrastructure capacity gaps and engage partners for support to address the gaps; and, • Promote investment in the sector through packaging better incentives. 19

3.1.6 Animal and Animal Products In 2015, the sector recorded total export earnings of US$7.08 million compared to total earnings of US$9.60 million in 2014, a decrease of 26.31 percent. The total export earnings of animal products accounted for 0.4 percent of Zambia’s total NTEs earnings. Poultry and poultry products dominate exports in this subsector and the main export markets are SADC and COMESA. Other products with potential for export in the medium to long term include fish, bovine fresh milk, goats, sheep and swine and their products. In this regard, the section of Strategy will focus on promoting exports of fish, bovine, goats, swine, poultry and their products. . Strategic objectives • Enhance extension services in order to improve the quality and quantity of animals and their products; • Improve existing support infrastructure in order to increase exports; • Enhance the capacity of producers to meet sanitary requirements to increase exports; and, • Commercialise and modernise animal and fish production for exports. Table 5 SWOT Analysis Animal and Animal Products STRENGTHS WEAKNESSES • Abundant pasturage and good climate • Weak supportive legal and regulatory framework • Existence of farmers to retain and support export growth; • National priority in the diversification • Limited capacity of industry players to produce agenda competitive and tradable products; • Existence of support institutions • Absence of empirical knowledge on the effects of existing challenges in the sector on trade performance; • Lack of adequate investments in the sector that steer effective trade (domestically) and export competitiveness; • Limited institutions offering affordable finance OPPORTUNITIES THREATS • Availability of established and new • Emergence of NTBs markets • Occurrence of diseases • Opportunities for value addition and • Private standards and consumer lobbying in diversification destination markets • Competition from other producers • Climate change • Limited power supply • High certification costs (HACCP, GMP, ISO 9000, BRC and IFS for processed food) 20 Strategic Actions • Undertake consultations with Ministry of livestock and Fisheries on the legal and regulatory framework governing the Animal sector with a view to revising/updating the legal and regulatory framework to support export growth; • Assess the existing capacity for animal feed production with a view to ascertain production levels to support the growing demand; • Build capacity of selected farmers on a series of integrated subjects including quality/standards management, grading technics, (HACCP, ISO, SPSs), animal husbandly practices; • Building capacities of training centers for animal husbandry through procuring equipment and improve their curricula with a view to enhance the operations and training being offered; • Strengthen institutional engagement between MCTI and Ministry of Livestock in mainstreaming of trade concepts in disease free zones to support the growth of export sector; • Undertake an assessment of the status of the sector’s challenges including diseases and their effect on trade, and enter into collaborative arrangements with partners to address challenges in the sector; • Undertake an inventory of animal breeding centers and build their capacity with the view to enhancing operations and increase animal stock to improve trade; • Assess capacity of abattoirs and facilitate capacity building programmes to improve sanitation and product quality for domestic and export markets; • Undertake capacity development for sub-sector players (i.e. aquaculture, poultry, ruminant etc) through provisions of specialised training (using existing models) and procurement of equipment to the sub-sector’s export competitiveness; • Develop cold storage facilities and enhance transport systems; 21

3.1.7 Agro Processing (Processed Foods Sub-sector) The Processed Foods sub-sector has generally performed well and demonstrated potential for further export growth. The major export commodities which are the products of interest in this category are sugar and confectionaries, non-alcoholic beverages, soya bean flour and meal, maize flour and related products, natural honey, milk and milk products, fresh vegetables, fruits and related products. The current main export markets are the Democratic Republic of Congo, South Africa, Namibia, Switzerland and Zimbabwe. This section of this Strategy will focus on sugar and confectionaries, non-alcoholic beverages, natural honey, fresh vegetables, fruits and related products. . Strategic objectives • Increase product diversification for exports; • Promote investment in the sector; and • Improve quality, branding and packaging of products. Table 6 SWOT Analysis for Processed Foods Sub-sector STRENGTHS WEAKNESS • Availability of Non-GMO products • Non availability of certain inputs locally • Favorable investment environment (e.g. • Insufficient power supply MFEZ) • Poor packaging and branding • Established Manufacturing companies • High cost of production • Weak value chain linkages • Limited access to finance OPPORTUNITIES THREATS • Availability of existing and new markets • Emergence of NTBs • of NTBs • Competition from other producers Strategic Actions • Zero rating import taxes on critical inputs to reduce the cost of production; • Build capacity of players in the sub-sector to meet international standards and market requirements; • Promote product diversity; • Strengthen linkages among sector players domestically and regionally by encouraging joint ventures and other forms of partnerships; • Promote investment in the sub-sector to support value addition; and • Undertake regular market surveys in existing and potential markets on consumer preferences and statutory requirements. 22

3.1.8 Textiles and Garments Sub-sector The Zambian textile sub-sector has potential to stimulate national economic growth and rural development owing to good climate, abundant arable land, labour availability and good water resources. In 2015, the textiles and garments sub-sectors recorded combined export earnings of US$12.61 million compared to US$11.17 million recorded in 2014 indicating a decrease of 12.85 percent. The main export market destinations for these products are Singapore, Zimbabwe, Malawi, United Kingdom, Congo DR and South Africa. The main export products include sacks, bags, twine, cordage, rope and cables of sisal and tarpaulins, awnings and sun-blinds, of other textiles. This section of the Strategy will focus on the textiles and garments sub-sector. . Strategic objectives • Promote value addition in the sub-sector; • Support cluster development and promote investment in the sector; and • Improve access in established markets and penetrate new markets. Table 7 SWOT Analysis for Textiles and Garments Sub-sector STRENGTHS WEAKNESS • New investments in ginneries • Weak value chain linkages (limited vailability of • Availability of cotton weavers etc) in the sub-sector • Existence of support institutional • Week colloboration among support institutions structures • Absence of a supportive legal and regulatory • Existence of MFEZs framework to retain and support export growth • Limited capacity of industry players to produce competitive and tradable products due to obsolete technology, limited skills and knowledge on key contemporary issues • Absence of empirical knowledge on the effects of existing challenges in the sector on trade performance • Lack of effective investments in the sector that steer effective trade (domestically) and export competitiveness • Limited institutions offering affordable to finance OPPORTUNITIES THREATS • Availability of established and new • Competition from other producers markets • Volatile global commodity prices • Consumer lobbying Strategic Actions • Undertake comprehensive capacity-building programmes in at least three categories: (a) Core skills and knowledge in machinery assembly, product development, and manufacturing operations; 23 (b) Professional skills and knowledge in operations and market development; and, (c) Specialised skills and knowledge in Environmental, Social and Governance compliance and management, as well as entrepreneurship and organisation development. • Support the development of a cluster-based centre of excellence to facilitate access to production facilities, where ginners, weavers and fashion designers could tap into common utilities and services; • Promote south to south cooperation to support the collaboration of the textile and garments value chain actors; • Provide incentives to support and increase cotton production 5; 4 • Increase Government funding for extension services to support cotton production; • Strengthen institutional collaboration among all players in the sectors including Cotton Development Trust (CDT), CAZ, the Cotton Board of Zambia (CBZ) and non-governmental organisation (NGOs) through bi-annual meetings; • Support cotton research and technology generation through the revitalisation of the Cotton Development Trust (CDT); • Support cotton seed genetic purity determination through biotechnology and build capacity in cotton seed research and technology of the Seed Control and Certification Institute (SCCI); • Support the CBZ to develop and prepare a pricing mechanism for cotton that benefits and protects both producers and buyers in the sub-sector; • Promote establishment of backward and forward linkages (value addition) in cotton sub-sector in order to maximise the export potential of the sector; 5 Note: Loyal cotton growers constitute about 25% of all cotton growers but produce more than half of the total national crop 24

3.1.9 Leather and Leather Products The Zambian textile sub-sector has potential to stimulate national economic growth and rural development owing to good climate, abundant arable land, labour availability and good water resources. In 2015, the textiles and garments sub-sectors recorded combined export earnings of US$12.61 million compared to US$11.17 million recorded in 2014 indicating a decrease of 12.85 percent. The main export market destinations for these products are Singapore, Zimbabwe, Malawi, United Kingdom, Congo DR and South Africa. The main export products include sacks, bags, twine, cordage, rope and cables of sisal and tarpaulins, awnings and sun-blinds, of other textiles. This section of the Strategy will focus on the textiles and garments sub-sector. . Strategic objectives • Promote product development and value addition; • Promote investment in leather tanneries in the country; • Expand the supply of high quality hides and skins; and, • Improve access to established markets and penetrate new markets. Table 8 SWOT Leather and Leather Products STRENGTHS WEAKNESSES • Availability of skin and hide • Low quality hides and skins • Existence of MFEZs • Lack of availability of data on the existing • Existence of support institutions quantities of leather hides and skins in the country • Low value addition and product diversity • Limited tanneries • Weak value chain linkages • Absence of a supportive legal and regulatory framework to retain and support export growth • Limited capacity of industry players to produce competitive and tradable products due to limited skills and knowledge on key contemporary issues. • Absence of empirical knowledge on the effects of existing challenges in the sector on trade performance • Lack of effective investments that steer effective trade (domestically) and export competitiveness in the sector • Limited institutions offering access to finance OPPORTUNITIES THREATS • Availability of established and new • Emergence of NTBs markets • Smuggling of skins and hides • Prevalence of diseases 25 Strategic Actions • Develop, review and enforce the relevant laws, regulations, guidelines, standards and codes of practice pertaining to leather and leather products; • Organise exhibitions for the sector to promote business linkages and consumer awareness; • Identify and develop an inventory of players at every segment of the leather value chain; • Capacitate SMEs to participate in regional and global value chains; • Facilitate the formation of cooperatives for the sector; and • Establishing clusters of tanneries in selected zones to promote value addition. 26

3.1.10 Wood and Wood Products Sub-sector Zambia is well endowed with forest resources that play an important role in the development of the national economy and in improving the living standards of people. This sector recorded an increase of 11.06 percent from the previous year rising from US$10.01 million in 2014 US to $11.12million in 2015. The main export commodities in this sub-sector include value-added wood products (pallets, doors etc.). The top performing markets were China, South Africa, Democratic Republic of Congo, Zimbabwe and Malawi. In this regard, the focus of this section of the Strategy will be on value-added wood products. Strategic objectives • Promote production of value-added wood products for exports; • Promote sustainable forest management; and • Improve access in established markets and penetrate new markets. Table 9 SWOT Analysis Wood and Wood Products Sub-sector STRENGTHS WEAKNESSES • Availability of wood •High cost of production • Established wood processing •Low levels of afforestation and reforestation companies •Limited investment in processing high-value • Existence of MFEZs and high-quality products • Absence of a supportive legal and regulatory framework to retain and support export growth • Limited capacity of industry players to produce competitive and tradable products • Absence of empirical knowledge on the effects of existing challenges in the sector on trade performance • Inadequate investments that steer effective trade (domestically) and export competitiveness in the sector • Limited institutions offering finance OPPORTUNITIES THREATS • Availability of established and new • Deforestation markets • Smuggling of logs • Climate change Strategic Actions • Strengthen implementation of legal provisions to curb smuggling of raw wood products; • Build capacity on afforestation and reforestation among players in the industry; 27 • Promote competitiveness through providing specialised training in value addition, standards and quality requirements and strengthen systems to meet required accreditation requirements; • Build capacity through procurement of commercial equipment for SMEs to support mass production of value-added wood products; • Strengthen market penetration through promotion of market linkages among the players; • Improve capacity of established wood processing companies to meet requirements of key markets; • Create platforms for dialogue among players in the value chain so as to strengthen linkages; and, • Engage relevant Ministry to explore the possibility of offering tax incentives on selected wood-processing equipment 28

3.1.11 Building materials In 2015, the sector’s performance fell below the 2014 level of US$70.6 million by 62.11 percent down to US$26.75 million. The building materials sector was largely dominated by exports of portland cement (excluding white), other hydraulic cements, plates, sheets and strips of agglomerated or reconstituted mica, natural steatite, talc, not crushed or powdered and cement clinkers. The main export markets for Zambia’s building materials are COMESA and SADC. In this regard, the focus of this section of the Strategy will be on cement and its products. . Strategic objectives • Improve access in established markets and penetrate new markets; and • Promote value addition and product diversification. Table 10 SWOT Analysis for building materials STRENGTHS WEAKNESSES • Availability of raw materials/inputs • Limited power supply • Established industry • High cost of production • Limited export product diversity • Absence of a supportive legal and regulatory framework to retain and support export growth • Limited capacity of industry players to produce competitive and tradable products • Absence of empirical knowledge on the effects of existing challenges in the sector on trade performance • Lack of effective investments in the sector that steer effective trade (domestically) and export competitiveness • Limited institutions offering affordable finance OPPORTUNITIES THREATS • Availability of established and new markets • Emergence of NTBs in target markets • Recent expansion of investment in the • Increased competition from low-cost producers sector • High cost of clean technology • Emergence of clean technology for cement • Main raw material being a wasting asset production Strategic Actions • Promote effective implementation of existing policies and legal framework to support development of the sub-sector; • Promote skills development through strengthening of the curricula and provisions of opportunities for training; and, • Undertake trade promotion missions and participation in trade fairs; 29

3.1.12 Engineering Products The main markets for the sub-sector are South Africa, Democratic Republic of Congo, United Arab Emirates, Kenya and Botswana. The total export earnings from the sector declined by 22.5 percent from US$511.4 million in 2014 to US$396.17 million in 2015. The sector lost its status as the top performing sector to primary agriculture in 2015. The top products exported from the sector are wire of refined copper, telephones for cellular networks or for other wireless networks, electric conductors, parts of machinery, aluminium wire and parts of pumps for liquids. This section of the Strategy, therefore, will focus on value- added engineering products. . Strategic objectives • Increase the production of value-added engineering products in order to exploit regional and international markets; and, • Promote investment in the sector. Table 11 SWOT Analysis for Engineering Products STRENGTHS WEAKNESSES • Availability of raw materials • High cost of production • Availability of skilled labour • Absence of a supportive legal and regulatory • Existence of MFEZs framework to retain and support export growth • Established industry • Limited capacity of industry players to produce competitive and tradable products • Absence of empirical knowledge on the effects of existing challenges in the sector on trade performance • Lack of effective investments that steer effective trade (domestically) and export competitiveness in the sector • Limited institutions offering affordable finance OPPORTUNITIES THREATS • Availability of established and new • Increased competition in the destination markets markets • Dependence on volatile international copper prices • Opportunities for value addition and diversification Strategic Actions • Effectively enforce existing laws/rules to address sub-standard imported products; • Institute legal reforms specifically on import duties to address the high cost of inputs in the sector; • Develop industrial clusters to support exporting companies and to create synergy effects which will help future exporting companies develop; 30 • Build capacity of some industries to start producing key materials such as copper sheet, zinc ingot, and ferrous raw materials; Promote business linkages programmes in both old and new markets to enhance growth of the existing and new exporting companies; • Develop systems for quality and standards adherence among players in the industry so as to help manufacturers establish a brand image in the regional markets; • Educate players in the industry on national and international quality standards for engineering products; • Undertaking reforms to address existing constraints (both soft and hard infrastructure) so as to improve production capacities of the existing exporting players; and, • Provide avenue for exporting companies and supporting local industries to exchange business information; 31

3.1.13 Non-Metallic Minerals and Gemstones In 2015, export earnings recorded were US$53.32 million representing a 13.42 percent reduction from US$61.82 million recorded in 2014. The sub-sector contributed 2.8 percent to total export earnings in 2015. The major export markets for non-metallic mineral products from Zambia are Congo DR, Malawi, Zimbabwe, South Africa and China. The main export products in this sector were slaked lime, quick lime, hydraulic lime and natural manganese ore. For gemstones, in 2015 the export earnings recorded were US$62.72 million representing a 77 percent reduction from US$273.84 million recorded in 2014. The sector made a contribution of 11.4 percent to total export earnings for 2015. The major export markets for Gemstone from Zambia are Singapore, India, China, South Africa and Israel. The main export products in this sector were articles of precious or semi- precious stones, quartz, rubies, sapphires and emeralds, as well as non-industrial diamonds and imitation jewelry. Gold is also another product that has potential for exports and what is affecting the performance of the sector is non–availability of tools to underwrite regulation. This section of the Strategy will focus on gemstones and gold. . Strategic objectives • Strengthen the regulatory framework for gold and gemstone mining and trade; and, • Promote value addition of gemstones products for exports. Table 12 SWOT Analysis for Non-Metallic Minerals and Gemstones STRENGTHS WEAKNESSES • Availability of high quality gemstones and • Inadequate support infrastructure gold deposits • Low investments in the two sub-sectors • Simplified export documentation • Limited lapidaries and downstream value addition requirements • Offshore auctioning of gemstones • Existence of MFEZs • Absence of a supportive legal and regulatory framework resulting in inadequate monitoring system • Limited capacity of industry players to produce competitive and tradable products • Absence of empirical knowledge on the effects of existing challenges in the sector on trade performance • Lack of effective investments that steer effective trade (domestically) and export competitiveness in the sector • Limited institutions offering affordable finance OPPORTUNITIES THREATS • Local auctioning of minerals • Competition from low-cost producers • Availability of established and new markets • Illegal mining and smuggling 32 • Tax evasion Strategic Actions • Develop guidelines for the gemstone sector/gold mining; • Undertake an inventory of legal and regulatory frameworks for trade in mineral products; • Promote skills development among SME producers and traders; • Facilitate the development lapidaries through collaborative arrangements with countries that have experience in the sector; • Address health and safety issues among SMEs; • Develop mechanisms for mineral beneficiation for SMEs and Government; • Undertake an inventory of mine cooperatives with a view to organise them; • Attract foreign investments (or work through a Public Private Partnership Arrangement) to address key challenges of basic infrastructure faced by small mining companies; • Support and encourage investment in alternative energy generation among industry players and provide incentives; • Promote investment in value addition and related activities; and, • Encourage financial institutions to diversify and relax interest rates to support growth of the sector. 33

3.2 Trade in Services

3.2.1 Introduction Zambia’s merchandise trade as a percent of GDP averaged 65.6% between 2007 and 2015. The trade balance on merchandise goods strongly emerged from a narrow surplus during the financial crisis and recorded a substantial surplus up to the close of 2012. The services sector has emerged as a new frontier for promoting sustainable growth and development in developing countries and is considered as an important enabler for the growth of other economic sectors. For this reason, promoting efficiency in the services sector is essential for catalysing the growth of other sectors, there by contributing to economic growth. This sector accounts for two-thirds of global output and slightly less than half of world employment. In 2012, global services exports were estimated to have reached US$4.4 trillion. At domestic level, the sector has exhibited potential to promote sustainable economic growth despite Zambia currently being a net services importer. For instance, in 2013, services imports amounted to US$1,460 million compared to US$585 million in export receipts. The share of services in GDP increased from 51 percent in 2010 to 55.6 percent in 2014. The construction, transport, communication, business and education services are among key contributors to Zambia’s GDP. This sector has witnessed increased FDI inflows and growth in the recent past because of reforms undertaken and is now contributing significantly to job creation, income generation and the production of goods. The enhancement of services sector exports has potential to increase its contribution to GDP. Trade in services has, however, grown at a slow pace with available data revealing that Zambia’s services imports are dominated by transport, business services and travel. Transport services imports increased from US$474.2 million in 2010 to US$825.3 million in 2015 from the total import services which stood at US$1,416.8. Imports of business services, on the other hand, stood at US$148 million of total services imports. Overall, services exports and imports increased from US$570.8 million and US$887.5 million in 2010 to US$861.5 million and US$1416.8 million in 2015, respectively (See figure below). 34 Figure 2: Imports and Exports of Services 1802.5 1629.8 1416.9 US$ Millions 1312.7 1076.6 990.09 887.5 850.87 861.51 758.02 665.40 570.85 2010 2011 2012 2013 2014 2015 Year Services Exports Services Imports Source: BOZ It, therefore, becomes inevitable for Zambia’s export strategy to promote services exports as one of the important means to achieve the envisaged diversification of exports.

3.2.2 Identification of product sectors The criterion used in the identification of the core services sectors prioritised in this NEST is based on a thorough analysis of the Bank of Zambia (BoZ) Balance of Payment (BoP) statistical information. A set of measures, which formed the basis for shortlisting sectors, were drawn and these measures assisted in arriving at the identified services sectors of this Strategy. The first measure used was to vet the sectors against their potential to contribute towards job creation and poverty reduction. Job creation and poverty reduction are key Government priority actions and therefore any sectors which have a high probability to contribute towards the realisation of these Government actions was considered key. The second measure used was an assessment of the extent to which the sectors have been liberalised and the existence of a legal and institutional regulatory framework given that a sound legal and institutional framework is key to promoting predictability and fairness in trade. The third measure used was to assess the performance of the sector against the “Four Modes” of supply from the context of how trade can further be promoted. The modes include; • Mode 1: Cross-border supply; • Mode 2: Consumption abroad; • Mode 3: Commercial presence; and, • Mode 4: Movement Presence of natural persons. Therefore, those sectors which showed high receptivity levels to the principles contained in the modes and those sectors that positively met the aforementioned 35 measures were selected as priorities. Further, the recent trends in the global trade and focus on trade in services as a new frontier for sustainable growth and development and advances in technology also underpinned the projection and focus of the sectors identified in this Strategy.

3.2.3 Services Sector in General The promotion of trade in services offers greater scope for up surging export revenue. With the emergence of global supply chains, services have become an important component for the smooth functioning of these supply chains. Companies worldwide are outsourcing their services and this is increasingly providing the necessary demand for service exports. It is, therefore, important for the Strategy to outline interventions that are critical to enable the services sector to exploit the existing and emerging markets. Priority Sectors The Strategy will focus on the following priority sub-sectors: • Transport services; • Financial services; • Education services; • Tourism; and, • The creative industries

3.2.4 Transport Services The transport sector is the second most important sector for developing countries after tourism and is an essential part of supply chains. This sector covers road, rail, air, inland waterways, maritime and pipeline transport. Other services auxiliary to the transport sector include maintenance and repair, selling and marketing services, reservation services, cargo storage and handling, warehousing, freight and forwarding and ground handling. Other associated services include supply chain logistics and supply chain management services related to the movement and storage of goods and information flow, as well as shipping and border-related services. In this regard, this section of the Strategy will focus on passenger and cargo (road and rail). Strategic Objectives • Support the development of coordinated transport network; and • Promote the export of transport services; and, • Promote regional cooperation in the transport sector. 36 Table 13 SWOT Analysis for Transport Services STRENGTHS WEAKNESSES • Established support institutions • Limited infrastructure. • Availability of skilled manpower • High operational costs • Central Geographical location • Limited bulk storage facilities • Weak enforcement of supportive legal and regulatory framework to retain and support export growth • Limited capacity of industry players to produce competitive and tradable services due to limited skills and knowledge on key contemporary issues. • Absence of empirical knowledge on the effects of existing challenges in the sector on trade performance • Lack of effective investments in the sector that steer effective trade (domestically) and export competitiveness • Limited institutions offering affordable finance OPPORTUNITIES THREATS • The rise of regional and global value • Operator licensing restrictions chains requiring efficient transport • Regional instability services • Competition from other players • Existing transport agreements with neighbouring countries • Regional programmes for corridor developments. Strategic Actions • Introduce and complement existing standards for passenger transport to improve passenger safety and comfort of buses; access provision for the physically challenged; and introduction of departure and arrival schedules for all operators; • Introduce and conduct training for bus crews in customer relations, courtesy, luggage handling, enroute information dissemination, care for the elderly and unaccompanied minors, care for the physically challenged, care for ailing travellers, among others; • Introduce and publicise, at all bus stations, in buses and related public places, a Passenger Rights Charter regarding right of fare refund, remedies for late departure and/or late arrival, unruly conduct by crew; right to lodge complaint to service provider or station manager; • Improve bus station and bus stop infrastructure by constructing proper, modern stations on Public-Private Partnership; • Expand passenger transport services to new destinations in foreign markets • Promote the use of local transportation by foreign nationals; • Encourage local transport service providers to set up in foreign markets; 37 • Support the export of transport services; • Strengthen enforcement of regulations through increased awareness programmes and capacity building; • Promote upgrading and modernisation of transport infrastructure facilities and systems • Initiate setting up of a national airline or flag carrier to address the problem of air connectivity • Undertake market and competition assessment in key markets to determine impediments in both domestic and foreign markets for operators; • Leverage investment to build support infrastructure (both soft and hard) for transport services; • Promote investment in product diversity and related activities; and, • Encourage financial institutions to diversify and relax interest rates to support growth of the sector. 38

3.2.5 Financial Services The financial sector plays an important role in the export diversification process by exporting services such as insurance, letters of credit etc. in addition to facilitating exports in the goods sector through trade finance. Zambia’s financial sector is comprised of banking, insurance and pensions, stock exchange and other non-banking financial institutions. This sector has experienced rapid growth due to technological progress, regulatory reforms and expansion in trade globally and should be repositioned to provide financial services in the export market. This section of the Strategy will focus on banking, insurance and stock exchange. Strategic Objectives • Promote diversification of financial services, and, • Promote the export banking services Table 14 SWOT Analysis for Financial Services STRENGTHS WEAKNESSES • Liberal policy environment • Low financial inclusion • Presence of legal and regulatory • Absence of reinsurance companies framework • Limited investment in insurance • Presence of public and private services investment in the sub-sectors • Lack of export trade financing and • Availability of skilled personnel insurance • Some banks not accepting letters of credit • Inadequate flow of information on availability of trade finance to both small and large scale exporters • High lending rates by banks to businesses OPPORTUNITIES THREATS • Growing demand for financial services • Risky undertakings in the region • Financial crisis • Signatory to international agreements • Cyber crime related to trade in services • Threats of capital flight • Competition Strategic Actions • Undertake policy reforms to improve financial inclusion and reinsurance; • Encourage service providers to deepen their services in rural and peri-urban areas to improve financial inclusion; 39 • Undertake a study to determine the actual cost structure of financial services with view to find remedies on how to reduce the cost of the services; • Promote diversification of financial services; • Encourage regular interactions between financial institutions and other relevant stakeholders to review the relevance of the products to the needs of the markets; • Promote investment in insurance services and stock markets with view create complementarity within the sector; • Encourage financial institutions to invest in innovation and reduce interest rates and charges • Encourage product diversification in the financial services sector; and, • Limited institutions offering access to finance.

3.2.6 Education Services Educational services include primary, secondary, tertiary education. Advancement in technology has created opportunities to liberalise educational activities which has witnessed an increase in private sector investment. Global trade in educational services is huge and is estimated to be between US$ 40 and 50 billion per annum. The potential to increase profitability in the global market is vast following the dismantling of barriers under the WTO General Agreement on Trade in Services (GATS) commitments. Global tertiary enrolments reached 170 million in 2009 and are forecast to grow by 21 million between 2011 and 2020. Collaborative research is also estimated to continue on their growth paths in years to come. Zambia has in the recent past increased net enrolments in secondary schools and institutions of higher learning and has improved pupil-teacher ratio at primary school level. In addition, the government has invested heavily in infrastructure for secondary schools and tertiary education. There has also been an increase in private sector participation in this industry. Many tertiary institutions are increasingly enrolling foreign students and are diversifying their product range; including the move towards distance-based learning arrangements. Strategic Objectives • To promote and maintain high standards in the education sector; and, • Promote exports of education and research services. Table 15 SWOT Analysis for Education Services STRENGTHS WEAKNESS 40 • Availability of skilled personnel • Limited funding to public institutions • Existence of both private and public • Frequent and abrupt closures of public learning institutions universities • Public and private sector investment in • Limited facilities education • Inadequate investment in research and technical institutions • Limited linkages in the sector OPPORTUNITIES THREATS • Increasing demand for good quality • Security education in the region and beyond • Restrictions on qualification • Ease mobility of natural persons in the recognition region • Study/work permit restrictions • Restrictions on the online transmission of course materials • Competition from other learning institutions. Strategic Actions • Encourage hosting of annual education management conference with innovative themes in areas such research, business development and international marketing etc; • Streamline the procedures of acquiring study and work permits; • Devise programmes to facilitate extensive IT upgrades and online courses; • Initiate exchange programmes with reputable universities for broader knowledge and skills acquisitions for students and lecturers; • Standardise the national education system so as to develop a common marketing brand that targets international students; • Undertake market surveys to understand the perception and needs of foreign students; • Design and implement research partnership programmes between universities and Government and private sector so as to make educational services relevant to market needs; • Develop a compendium of research publications (both applied and academic) and reposit them both online and in key public libraries; • Facilitate investment for development quality infrastructure for educational services; • Promote investment in product diversity and related activities; and, • Encourage financial institutions to diversify and relax interest rates to support growth of the sector. 41

3.2.7 Tourism Sector Tourism offers great potential for economic growth and job creation. International tourism accounts for 30 percent of global trade in services and about 10 percent of global gross domestic product (GDP). Accommodation, transport, food and beverages, entertainment and leisure are major components of this sector. Other closely interlinked sectors include education, infrastructure, customs, communications, agriculture security, health, immigration and culture. The Government has identified tourism as one of the priority growth sectors of the national economy, because it has the potential to be a major contributor to socio- economic development.The Tourism Sector continued to record positive growth during the period 2009 to 2016, in terms of the international tourist arrivals. In 2016 there was an increase of 2.6 percent from 2015 in tourist arrivals. This section of the Strategy will focus on the aforementioned major components of the sector. Strategic Objectives • Promote consumption of tourism products by foreign nationals; • Address bottlenecks affecting the competitiveness of the sector; and • Diversify the tourism products in order to enhance export revenue. Table 16 SWOT Analysis Tourism Sector STRENGTHS WEAKENESS • Abundance of natural touristic • Lack of national airline endowments • Inadequate marketing of Zambia as an • Conducive weather conditions attractive tourist destination • Availability of hotels and lodges • Poor accessibility to some tourism sites • Political and economic stability • Limited support infrastructure and facilities • Inadequate qualified human resource OPPORTUNITY THREATS • Availability of natural, historical and • Dependence on nature based tourism cultural attractions • Climate change • Demand for tourism services • Poaching • Increased investment in the sector • Competition in the sector • regional level collaboration • Security issues Strategic Actions • Undertake policy and legal reforms on key bottlenecks (e.g. loopholes in tax remittances etc) facing the sector; • Provide and establish an incentive scheme to encourage more charter services targeted at tourists; • Design and implement culture based tourism programmes; 42 • Provide incentives to the private sector to increase the accommodation capacity to carter for all tourist classes; • Design and implement programmes to increase the number of quality stop- over places for food and drinks and with modern facilities; • Revitalise the curriculum of tourism training programmes and related subjects so as to improve the quality of service provision among the existing and new players in the sector; • Promote programmes to deepen e- booking , ticketing, payments and marketing among players in the sector; • Undertake market intelligence studies for specific market segments including Adventure tourism (for backpacker/over-lander markets, EU market, USA market, South African market, Asian markets (China and Japan especially) and regional tourism • Attract foreign investments (or through a Public Private Partnership Arrangement) to address key challenges of basic infrastructure faced by players in the tourism sector; • Mobilise funding from national, regional and international finance corporations to facilitate development of quality support infrastructure for tourism sector; and, • Encourage financial institutions to diversify and relax interest rates to support growth of the sector. 43

3.2.8 Creative Industries The creative industry is among the fastest-growing economic sectors with great potential for growth and economic prosperity, especially for countries with rich traditions of art, music, dance, literature, film, and other forms of creative assets. World exports in this sector, which, comprise the creation, production, marketing and distribution of products and services resulting from human creativity has grown exponentially to reach US$ 592 billion in 2008. Further, figures show that creative services exports jumped to $172 billion in 2011, up from $163.8 billion in 2010, and a near tripling in terms of value from the 2002 total of $62 billion. South-South trade of creative goods amounted to nearly $60 billion. Zambia's total trade on creative goods amounted to $2.3 million in 2008, yet the bulk of the resource in this sector remain untapped and not well documented. Recent development and expansion in technology has given rise to talented young people in the film, music and other forms of creative art works, which require to be harnessed for this sector to play an important role in Zambia’s economic development. This section of the Strategy will focus on film, music and literature, among others. Strategic Objectives • To promote the sustainable development of the creative sector and make the sector become a major contributor to Zambia’s economic development. Table 17 SWOT Analysis for Creative Industries STRENGTHS WEAKENESS • Rich historical and cultural heritage • Fragmented institutional frameworks to • Growing interest among youths in thegovern and coordinate the sector sector • Weak institutional capacities and production • Innovation infrastructure • Inadequate/lack • The developed film policy and digital of training migration policy facilities/promoters • Linkage with tourism. • Lack of data on the scope and depth of the creative sector in Zambia. OPPORTUNITY THREATS • Growing demand for creative works • Unfair competition • Large number of youths and rural • High rate of piracy population involved especially in crafts production and trade. • Technology advancement, such as digital migration, to support the growth of the sector Strategic Actions • Undertake national baseline survey to understand the scope and depth of the creative industry so as to development a database and tools that will be used to measure the performance of the sector; Support development of a policy and 44 strategic plan for the sector so as to profile the competitiveness and investment opportunities of the sector ; • Strengthen the regulatory framework governing the sector and support enforcement of existing IP laws; • Educate players and consumers on key existing legal instruments (e.g. IP law) to promote adherence to the law; • Support the adherence of the law on folklore and intangible heritage through conducting consumer awareness programmes; • Support the mass production of local content • Build capacity and provide assistance on how to market the products being developed; • Create coordinating structures for the development of creative industries so as to streamline interventions in the creative sector; • Undertake a capacity-building needs of for the sector in areas such as managerial skills, research, packaging and creative entrepreneurship; • Develop a national database for creative services to guide policy interventions and the development of the sector; • Facilitate triangular cooperation to increase product diversity and market coverage; • Facilitate investment to support both soft and hard infrastructure to promote export growth in the sector; • Encourage financial institutions to develop low interest sector specific financial products to support the sector. 45

4.0 Strategy Coordination and Management

4.1 Introduction The NEST is the culmination of a process involving consultations with various stakeholders, both public and private. The effective implementation of the Strategy is key to the achievement of the vision of the Strategy and indeed its contribution to the goals of the country’s development framework and the Vision 2030. The NEST, therefore, includes institutional and operational arrangements for implementation, communication and consultation.

4.2 Institutional Framework and Coordination The institutions involved in the coordination and management of the Strategy will be the Service Delivery Network and the Strategy Support Network, both composed of public, private sector non-governmental organisations.

4.2.1 Strategy Support Network The Strategy support network includes relevant government ministries, statutory bodies and agencies, private sector, associations and other cooperating partners. • Government ministries(MCTI, MCT, MoF, MoA, MMMD, MTENR) • Statutory bodies and agencies (ZRA, ZDA, ZABS, FRA, CSO, ERB, ZEMA, ZTA, CCPC, ZCSA, ZMA etc.) • Associations (ZACCI, ZCSMBA, ZNFU, ZAM, NGOs) • Exporters and Importers

4.2.2 Service Delivery Network The services delivery network in Zambia includes institutions that provide services to exporters e.g. telecommunication, banking, insurance, customs, immigration, transport networks, certification and standards bodies etc. There will be need for coordination among all these stakeholders.

4.3 Overall Coordination Among the institutions in the Strategy Support Network, the Ministry of Commerce, Trade and Industry, being in charge of trade policy formulation and monitoring, will take the lead in the coordination of the Strategy with Zambia Development Agency (ZDA) as the lead implementing Agency. Sector Specific interventions will be led by respective line ministries and agencies, with the Ministry of Commerce, Trade and Industry playing an oversight role. 46

4.4 Monitoring and Evaluation This Strategy shall be operationalised through an implementation plan. The Ministry will serve as the principle institution responsible for the monitoring and evaluation of the NEST on behalf of the Government of the Republic of Zambia. This Strategy will be subject to a mid-term review and final review after 2.5 and 5 years of implementation respectively. This is to ensure that implementation of the NEST remains focused to attain the desired results, deliver on strategic objectives and provide evidence based on research and knowledge required for more effective performance management.

4.5 Resource Mobilisation Resource mobilisation is critical for the successful implementation of activities in the Strategy. The NEST activities will be funded under the National Budget and linked to Zambia’s Aid for Trade agenda to ensure that resources necessary for the implementation of the NEST are available.

4.6 Public Sector

4.6.1 Governance Mandate and Policy Instruments There are various public policy instruments which this Strategy is aligned to. These include among others: • Seventh National Development Plan (7NDP) • Commercial and Trade Policy • Private Sector Development Reform, Industrialisation and Job Creation • Fiscal Policy • Monetary Policy • Agriculture Policy • Tourism Policy • Engineering Policy • Timber Export Policy • TEVETA Policy • Citizens Economic Empowerment (CEE) Act 47 • ZDA Act • Vision 2030 48

5.0 Implementation Plan IMPLEMENTATION PLAN FOR THE NATIONAL EXPORT STRATEGY A. TRADE IN GOODS LEGUMES AND CEREALS Action Area Existing Proposed Indicators of Implementation Budg Imp agency challenge intervention Achievement/ YR YR YR YR YR et Output 1 2 3 4 5 Indicator/Targ et Capacity Limited capacity Undertake series At least two ZIM, MCTI development for cereal and of trainings on trainings held legume cereal marketing annually for producers to i.e. cereal cereal producers effectively production, participate in entrepreneurial Ten trainings marketing skills etc. held by end of arrangements the Strategy implementation cycle Limited • Undertake value • Study reports MCTI, ZDA, knowledge and chain analysis produced CCPC, IAPRI understanding 1 on the of the cereal • Studies challenges and sector, undertaken opportunities including input and that exists (both supply and how recommendati upstream and downstream) on this was ons of the cereal affecting reports production and competitiveness implemented trade and trade for the sector • Review production and marketing arrangements for cereals Limited capacity • Support annual • At least one MCTI, ZDA of public trainings training for institutions to facilitated by marketers and manage and national, industry monitor marketing regional and players arrangements international organised marketing annually institutions to build a resilient carder of • At least five marketers for annual cereals trainings for 2 marketers and industry players organised • Review • Capacity capacity and assessment strengthen produced and agriculture number of associations so institution’s as to promote capacity built better and effective policy dialogue • Promote • At least two triangular visits cooperation organised between annually for Zambian the players in producers with the seed others (in the industry west and south) to promote • Cooperation skills among players development, nationally and knowledge internationally 3 transfer strengthened • Encourage • At least two formation of cooperatives and or formed and strengthen the two of existing capacities of ones cooperatives/far strengthened mer groups to (through engage in cereal institutional production development) through annually formation of At least ten incubators cooperatives formed and ten of existing ones strengthened (through institutional development) by the fifth year • Encourage • Hold at least regular four annual meetings of the meetings of Grain Stock the Grain Monitoring Stock Committee at Monitoring 4 Ministry of Committee at agriculture Ministry of • agriculture • Assess the • At least 20 capacities of meetings for ZARI and other the of the research centers Grain Stock on seed Monitoring production and Committee certification held with a view to strengthening their operations • Strengthen/esta • Capacity blish seed assessment inspection reports frameworks for undertaken quality control and number of in key existing research institutions e.g. institutions’ ZABS, ZARI, capacity UNZA etc. improved 5 • % increase in quality of seeds produced Absence of an • Procure • At least four MCTI, MoHE integrated branding equipments TEVETA branding infrastructure at procured and infrastructure at key institutions installed at key institutions of learning e.g. of learning e.g. key learning TEVETA TEVETA institutions institutions to institutions to promote skills promote skills development development Limited • Post-harvest • At least one appreciation of survey not post-harvest smart regularly being survey production carried out to conducted methods and how to minimize validate the after every post-harvest crop focus harvests losses to enhance trade competitiveness • At least one MoA, MCTI, post-harvest ZDA CSO survey 6 conducted after every harvests Review causes of Post-harvest post-harvest loses decreases losses and by 50% institute measures to minimize Post-harvest loses decreases by 80% Develop an Tracking system integrated developed and a tracking system model to support for cereal and strong vertical legume trade and horizontal sells (both formal partnerships and informal) developed Tracking system developed Undertake studies Study on the current undertaken production practices to ascertain how cereal and 7 legumes producers are employing environmentally friendly methods; Market Absence of Conduct At five ZDA, ZIPAR, requirements/ production consumer consumer UNZA, conditions processes perception perception MCTI, MoA, informed by surveys to guide survey CSO consumer production and conducted priories, needs trade annually and demand levels Promotion of Limited value Enhance capacity Level of value addition addition of solar mills capacity and export interventions to across the improvement of competitivene support and countries through solar mills ss sustain export procurement of diversification equipment and Level of introducing capacity sustainability improvement models that will and in turn sustain sustainability production of models value added developed products Establish quality Quality control control and and monitoring monitoring mechanism mechanisms of established 8 products from solar mills for export Promote value Level of MCTI, MoA, addition (i.e. increase in Zambia production of cereal and Cooperative bran and other legume by- Federation cereal by- products ,(ZCF) products) Horticulture And Floriculture Action Area Existing Proposed Indicators of Implementation Budg Impl agency challenge intervention Achievement/ YR YR YR YR YR et Output 1 2 3 4 5 Indicator/Tar get Capacity Absence of • Strengthen the • Level of MCTI, MoA development effective capacity of capacity institutional ZDA to monitor improvement framework that and consolidate • Improved promotes strong vertical and trade data for database and horizontal the sector monitoring linkages to of the sector promote and coherent and consolidate sustainable 9 actions on key trade data for challenges the sector facing the sector. • Build capacity • At least three of farmer groups groups/ farmers cooperatives in trained the sector annually and through intense equipment training and procured procurement of relevant equipment • Establish • Systems for quality control at least three systems for key farmer producers using groups existing established institutions i.e. annually ZABS, ZCSA, ZMA etc. • Quality control systems for fifteen farmer 10 groups established Absence of • Undertake an • Inventory MCTI, ZIPAR empirical inventory of undertaken IAPRI, ZEGA knowledge on standards and number the effects of requirements of existing challenges in the for the sector sensitizations sector on trade and carryout performance sensitization on conformity requirements • Undertake an • Inventory inventory of the undertaken sector’s production and export capacity with a view to facilitating the resolution of challenges 11 • Undertake • Inventory inventory of out undertaken grower schemes and develop capacity building programmes with a view to strengthen them • Assess • Report infrastructure detailing capacity gaps infrastructure and engage capacity gaps partners to undertaken address the gaps • Strengthen the • Institutional institutional capacity for capacity for ZEGA ZEGA through strengthened procurement of software infrastructure and development of 12 a sustainability model for the sector. Lack of • Promote • % increase in effective investment in investment investments in the sector levels the sector that through steer effective trade packaging (domestically) better incentives and export and use of competitiveness embassies abroad TEXTILES AND GARMENTS Action Area Existing Proposed Indicators of Implementation Budg Impl agency challenge intervention Achievement/ YR YR YR YR YR et Output 1 2 3 4 5 Indicator/Tar get Capacity Limited capacity • Undertaken a At least MCTI, MoA, development of industry full-fledged seventy SMEs ZCSMBA, players to capacity trained CAZ produce building in at annually competitive and 13 tradable least three products due to categories a) limited skills core skills and and knowledge knowledge in on key contemporary machinery issues. building, product At 250 SMEs development, trained and manufacturing operations; b) professional skills and knowledge in operations and market development; and c) specialist skills and knowledge in Environmental, Social and Governance compliance and management, and 14 entrepreneurshi p and organisation development • Support the Cluster-based development a centre of cluster-based excellence centre of developed excellence to Cluster-based facilitate access centre of to production excellence facility, where operational ginners, weavers and fashion designers could tap into common utilities and services 15 • Promote south % increase in to southsouth to south cooperation to cooperation support theventures collaboration ofresulting the textile and strengthened garments value interface chain actors among value chain actors Increased south to south cooperation ventures resulting strengthened interface among value chain actors Support Number of improvement of farmers trained crop production by cotton farmers Improvement through intense training in crop production among the farmers 16 Provide % increase in incentives to Government support and funding for enhance extension participation of cotton grower services farmers so as to increase cotton Improvement production in extension services • • CDT Increase revitalized Government funding for extension services to support cotton production • Strengthen institutional collaboration among all players in the sectors including Cotton 17 Development Trust (CDT), CAZ, the Cotton Board of Zambia (CBZ) and nongovernment al organisation (NGOs) through bi-annual meetings; 18 • Support the • Cotton revitalization of pricing the Cotton mechanism Development developed Trust (CDT) • Improvement through in value increasing addition Government activities and cooperating partners’ funding so as to enable it reclaim its role as a centre of excellence for cotton research and technology generation • Support the CBZ to develop and prepare a pricing mechanism for cotton that benefits and protects both 19 groups of players • Promote establishment of backward and forward linkages (value addition) in cotton sub- sector in order to maximize the export potential of the sector; Absence of • Undertake a • Report MCTI, IAPRI empirical study to assess detailing ZIPAR UNZA knowledge on effects of disease status the effects of climate change of the sector existing 20 challenges in the on cotton undertaken sector on trade production and performance trade – given that cotton production in Zambia is rain fed. Lack of • Promote % increase in ZDA, MCTI effective investment in investment investments in cotton farming levels on fish the sector that and production farming and steer effective trade value addition (domestically) • Promote and export investment in competitiveness value addition LEATHER AND LEATHER PRODUCTS Action Area Existing Proposed Indicators of Implementation Budg Impl agency challenge intervention Achievement/ YR YR YR YR YR et Output 1 2 3 4 5 Indicator/Tar get 21 Capacity Limited capacity Development of Curricular MCTI, MoA, development of industry additional developed CAZ,ZCSMBA players to curriculum on produce animal husbandry competitive and as relates to trade tradable issues for existing products due to training limited skills institutions and knowledge on key Capacitate SMEs At least twenty contemporary to participate in SMEs issues. regional and participate in global value regional and chains in order to gain exposure on global value best practices and chains easy access to inputs; At least one hundred SMEs participate in regional and global value chains Organise At least one Exhibitions for exhibition held the sector to annually 22 promote business linkages and consumer At least five awareness exhibitions held Facilitate the Number of formation of associations associations at formed and every stage of the operational leather value chain Facilitate and Apex Council coordinate of the leather vertical value chain collaboration by formed forming an Apex Council of the leather valueApex Council chain of the leather value chain functional Absence of Assess the impact Impact MCTI, MoA, empirical of the Zambian assessment ZALIA, ZDA knowledge on Tariff regime on undertaken the effects of the performance existing of the leather challenges in the value chain 23 sector on trade Identify and Inventory of performance develop and agents inventory of undertaken agents at every segment of the leather value chain Lack of Attract foreign % increase in ZDA, MCTI effective investors in the investment investments in tanning sector by levels on fish the sector that establishing farming and steer effective clusters of trade tanneries so as to value addition (domestically) reduce production and export cost competitiveness Promote investment in value addition ANIMAL PRODUCTS Action Area Existing Proposed Indicators of Implementation Budg Impl challenge intervention Achievement/ YR YR YR YR YR et agency Output 1 2 3 4 5 Indicator/Tar get 24 Capacity Limited capacity Build capacity of Level of MCTI, development of industry selected farmers capacity MoA players to on a series of improvement produce integrated competitive and subjects including Improved tradable quality/standards database and products management, monitoring of grading technics, the sector and (HACCP, ISO, consolidate SPSs), animal trade data for husbandly the sector practices Undertake At least 80 training on farmers trained residue limits for annually the aquaculture sector At least 400 farmers trained • Building Number of capacities of equipment training centers procured and for animal quality of the husbandry curricula (through produced procuring 25 equipment and improve their curricula) with a view to enhance the operations and training being offered; • Strengthen Level of institutional improvement engagement in between MCTI collaboration and Ministry of between the Livestock in two ministries mainstreaming Trade of trade mainstreamed concepts in in disease free disease free zones zones to support the growth of export sector; Absence of Undertake an Report empirical assessment of the detailing knowledge on status of the disease status the effects of sector’s of the sector existing challenges challenges in the including diseases produced 26 sector on trade and their effect on performance trade, and enter into collaborative arrangements with partners to address challenges in the sector; Undertake an Inventory inventory of produced and animal breeding sensitizations centers with the undertaken view to enhancing operations and increase animal stock to improve trade Assess capacity Assessment of of abattoirs and animal feed facilitate capacity production building report programmes to produced improve sanitation and product quality 27 Undertake Level of capacity capacity development for developed sub-sector players (i.e. aquaculture, poultry, ruminant etc) through provisions of specialised training and procurement of equipment to the sub-sector’s export competitiveness; Develop cold Number of storage facilities cold storage and enhance facilities and transports system transports system enhanced 28 Assess the Assessment existing capacity undertaken for animal feed production with a view to ascertain production levels against the growing demand; WOOD AND WOOD PRODUCTS Action Area Existing Proposed Indicators of Implementation Budg Impl challenge intervention Achievement/ YR YR YR YR YR et agency Output 1 2 3 4 5 Indicator/Tar get Capacity Limited capacity • Build capacity • Level of MCTI, development of industry and collective capacity MoEn, players to actions on improvement ZDA produce afforestation and number competitive and tradable and of collective products reforestation actions among players employed in the industry 29 Promote At least 80 competitiveness farmers trained through providing annually specialized training in value addition, At least 400 standards and farmers trained quality requirements and how to strengthen systems to meet required accreditation requirements Build capacity Number of through procuring equipments high specialized procured equipment for SMEs to support mass production of wood products Strengthen market % increase in access and trade volumes penetration through promotion of market linkages among the players 30 Strengthen Number of capacity of players on key established wood market processing requirement companies on key skills market requirements Promote the Number of utilization of the players on key existing MFEZs market as a means to requirement support skills competitiveness companies of the sector investing in MFEZs Create platforms for dialogue Platform among players in developed the value chain so as to strengthen linkages Absence of Undertake an Report MCTI empirical audit on the detailing the ZIPAR knowledge on related costs at costs the effects of every level of the undertaken existing supply and value 31 challenges in the chain and based sector on trade on the findings performance institute remedial actions BUILDING MATERIALS Action Area Existing Proposed Indicators of Implementation Budg Impl challenge intervention Achievement YR YR YR YR YR et agency /Output 1 2 3 4 5 Indicator/Tar get Capacity Limited capacity Support and Number of MCTI, development of industry encourage alternative MoE players to investment in energy sources produce alternative energy developed competitive and generation among tradable industry players products due to and provide limited skills incentives and knowledge on key contemporary issues. Promote skills Curricula development strengthened through and number of strengthening the candidates curricula and 32 provisions of offered opportunities for opportunities training to acquire training Promote export Level of diversity through diversity and encouraging quality of innovation steered products by intense linkages produced programmes export product diversity Number of Build capacity players among the importing industry players through goods under provisions of the new incentives on high incentive 33 cost of clean regime technology Consolidate % increase in established market access markets through opportunities promotion of business linkages and consumer interactions sessions Absence of Undertake an Audit MCTI, empirical audit of the type undertaken on MWS, knowledge on of non-tariff NTBs and ZALIA, the effects of barriers and other ZDA anticompetitiv existing anticompetitive challenges in the practices e practices sector on trade emerging in undertaken performance potential markets and define practices solutions to them ENGINEERING PRODUCTS Action Area Existing Proposed Indicators of Implementation Budg Impl challenge intervention Achievement/ YR YR YR YR YR et agency 1 2 3 4 5 34 Output Indicator/Tar get Capacity Limited capacity Develop industry At least three MCTI, development of industry clusters to support clusters MoF, players to the remaining developed MMMD, produce foundry cluster on EIZ , competitive and the Copperbelt, so MHE, IDC tradable as to support products due to exporting limited skills companies and to and knowledge create synergy on key effects which will contemporary help future issues. exporting companies develop Build capacity of %increase in some industries to industries start producing producing key key materials materials such as copper sheet, zinc ingot, and ferrous raw materials including DRI which are missing or in short supply in the local supply chain 35 Promote business %increase in linkages markets being programmes in accessed both old and new markets for further growth of the existing and new exporting companies Develop systems Number of for quality and players standards importing adherence among goods under players in the industry so as to the new help incentive manufacturers regime establish a brand image in the regional markets. Educate players Number of in the industry on players national and educated international quality standards for engineering products 36 Accelerate the Extent of increase of reforms production undertaken capacities of the existing exporting companies through undertaking reforms to address existing constraints (both soft and hard infrastructure) Regularly Number of disseminate information business packages information and produced and help build the business network. disseminated via electronic and print media Provide avenue Number of for exporting information companies and packages local supporting produced and industries to exchange disseminated business via electronic 37 information. and print media Absence of Undertake an Audit MCTI, empirical audit and compile undertaken ZDA, knowledge on non documented ZIPAR, the effects of needs of the target CSO, EIZ existing sectors as well as challenges in the related industries sector on trade performance Lack of Attract foreign % increase in ZDA, effective investments (or investment MCTI investments in through a Public levels the sector that Private steer effective Partnership trade Arrangement) to (domestically) address key and export challenges of competitiveness basic infrastructure faced by exporting companies • Support and encourage investment in alternative 38 energy generation among industry players and provide incentives GEMSTONES AND OTHER SEMI-PRECIOUS STONES Action Area Existing Proposed Indicators of Implementation Budg Impl challenge intervention Achievement/ YR YR YR YR YR et agency Output 1 2 3 4 5 Indicator/Tar get Policy, Legal Absence of a Develop Guidelines MoJ and regulatory supportive legal guidelines for the published and MCTI, framework and regulatory gemstone enforced MMMD framework to sector/gold retain and mining support export growth Capacity Limited capacity Promote skills At least eighty MCTI, development of small industry development players trained MoF, players to among SME annually MMMD produce producers and competitive and traders tradable 39 products due to limited skills and knowledge on key contemporary Facilitate the Number of issues. development lapidaries lapidaries through developed collaborative arrangements with countries that have experience in the sector Address health Health and and safety issues safety related among SMEs challenges decrease by % Develop Mechanisms mechanisms for developed and mineral implemented beneficiation for SMEs Absence of Undertake an Audit MCTI, empirical inventory of mine undertaken ZDA, knowledge on based ZIPAR, the effects of cooperatives with CSO 40 existing a view to organize MMMD challenges in the and train artisanal sector on trade miners performance Lack of Attract foreign % increase in ZDA, effective investments (or investment MMMD investments in through a Public levels the sector that Private steer effective Partnership trade Arrangement) to (domestically) address key and export challenges of competitiveness basic infrastructure faced by exporting companies Support and encourage investment in alternative energy generation among industry players and provide incentives B TRADE IN SERVICES 41 TOURISM SERVICES Action Area Existing Proposed Indicators of Implementation Budg Impl challenge intervention Achievement/ YR YR YR YR YR et agency Output 1 2 3 4 5 Indicator/Tar get Policy, Legal Absence of a Undertake policy Reforms MoJ and regulatory supportive legal and legal reforms undertaken MCTI, framework and regulatory on key MTA, framework to bottlenecks (e.g. ZTA retain and loopholes in tax support export remittances etc.) growth facing the sector; Provide and Incentive establish an scheme to incentive scheme developed to encourage more charter services targeted at tourists Capacity Limited capacity Design and Increase on MCTI, development of industry implement culture community MoF, MoF, players to based tourism tourism MoTA, produce programmes MoLG programmes; competitive and tradable services 42 due to limited Provide Range of skills and incentives to the tourist support knowledge on private sector to facilities in key tourist areas increase the contemporary issues. accommodation Adequate capacity to carter accommodatio for all tourist n and facilities classes; along tourist routes Design and Number of implement quality stop- programmes to over places for food and increase the drinks and number of quality with modern stop- over places welfare and for food and recreation drinks and with amenities modern facilities; developed Revitalise the Curriculum curriculum of revitalised tourism training programmes and related subjects so as to improve the Improved the quality of 43 quality of service service provision among provision the existing and new players in the sector; Promote Number of programmes to tourists coming deepen e- in through e- ticketing and booking , payment ticketing, methods payments and marketing among Over 40% of players in the the total sector; tourists coming into the country use e- payments Over 50% of payments by tourists done by credit cards and other e – forms 44 Absence of • Undertake • Study MCTI, empirical market undertaken ZDA, knowledge on intelligence ZIPAR, the effects of CSO studies for existing MoTA, challenges in the specific market UNZA and sector on trade segments other performance including Universitie Adventure s tourism (for backpacker/ove r-lander markets, EU market, USA market, South African market, Asian markets (China and Japan especially) and regional tourism Lack of • Mobilise % increase in ZDA, effective funding from investment MoTA investments in national, levels the sector that regional and steer effective trade international 45 (domestically) finance and export corporations to competitiveness facilitate development of quality support infrastructure for tourism sector; EDUCATIONAL SERVICES Action Area Existing Proposed Indicators of Implementation Budg Impl challenge intervention Achievement YR YR YR YR YR et agency /Output 1 2 3 4 5 Indicator/Tar get Policy, Legal Absence of a Revise and Revised MoJ and regulatory supportive legal enforce national standards MCTI, framework and regulatory standards MoHE framework to retain and support export Encourage Annual growth hosting of annual Conference education hosted management conference with innovative themes in areas such 46 research, business development and international marketing etc. Capacity Limited capacity Devise Number of MCTI, development of industry programmes to universities MoF, players to facilitate investing in MoHE produce online extensive IT competitive and education tradable services upgrades and online courses; Upgrades done due to limited at key major skills and Universities knowledge on key Initiate exchange Number of contemporary programmes with exchange issues. reputable programmes universities for broader knowledge and skills acquisitions for students and lecturers; Standardise the Common national education marketing system so as to brand develop a developed 47 common marketing brand that targets international students; Absence of Undertake market Survey MCTI, empirical surveys to undertaken ZDA, knowledge on understand the ZIPAR, the effects of perception and CSO existing needs of foreign MoHE challenges in the students; sector on trade performance Design and Number of implement partnerships research formed partnership programmes between universities and Government and private sector so as to make educational services relevant to market needs; 48 Develop a Compendium compendium of Developed and research number of publications (both publications applied and reposited academic) and reposit them both online and in key public libraries; Lack of Facilitate % increase in ZDA, effective investment for investment MoHE investments in development levels the sector that quality steer effective infrastructure for trade educational Progress (domestically) services; towards and export improving competitiveness quality infrastructure made Promote Number of investment in diversified product diversity products and related produced activities; Increased diversified products being offered 49 CREATIVE INDUSTRIES Action Area Existing Proposed Indicators of Implementation Budg Impl challenge intervention Achievement/ YR YR YR YR YR et agency Output 1 2 3 4 5 Indicator/Tar get Policy, Legal Absence of a • Strengthen the • Reforms MoJ and regulatory supportive legal regulatory undertaken MCTI, framework and regulatory framework MoTA framework to governing the retain and support export sector and growth support enforcement of existing IP laws • Educate players • Number of and consumers players and on key legal consumers instruments educated governing the sector (e.g. IP) to conjure adherence to the law 50 • Support the • folklore and adherence of intangible the law on heritage folklore and laws intangible enforced heritage through conducting consumer awareness programmes; Capacity Limited capacity • Support the • Increased MCTI, development of industry mass Production MoTA, players to production of ZTA, produce MoHE local content competitive and • Build capacity • Number of tradable services due to limited and provide players skills and assistance on trained knowledge on how to market key the products contemporary being issues. developed; • Create • Coordinatin coordinating g structures structures for developed the 51 development of creative industries so as to streamline interventions in the creative sector; • Support • Strategic development of plan a strategic plan developed for the sector so as to profile the competitivenes s and investment opportunities of the sector; Absence of • Undertake a • Needs MCTI, empirical capacity- assessment ZDA, knowledge on building needs undertaken ZIPAR, the effects of CSO of for the sector existing MoTA, challenges in the in areas such as ZTA sector on trade managerial performance skills, research, packaging and creative 52 entrepreneurshi p; •Undertake • National national Baseline baseline survey Survey to understand undertaken the scope and depth of the creative industry so as to development • Database a database and developed tools that will be used to measure the performance of the sector; • Facilitate • Level of triangular increase in cooperation to product increase diversity and product market diversity and coverage market coverage; 53 Lack of • Facilitate % increase in ZDA, effective investment to investment MoTA, investments in support both levels ZTA the sector that soft and hard steer effective trade infrastructure to (domestically) promote export and export growth in the competitiveness sector; FINANCIAL SERVICES Action Area Existing Proposed Indicators of Implementation Budg Impl challenge intervention Achievement/ YR YR YR YR YR et agency Output 1 2 3 4 5 Indicator/Tar get Policy, Legal Absence of a • Undertake MoJ and regulatory supportive policy reforms Reforms MCTI, framework policy to improve undertaken MoF, BOZ framework to financial support financial inclusion and inclusion and reinsurance reinsurance • Undertake further reforms with a view of reducing the cost of doing business 54 Capacity Limited capacity • Encourage % increase in MCTI, development of industry service decentralized MoF, BOZ, players to providers to services BAZ produce deepen their competitive and exportable services in rural services due to and peri-urban limited product areas to diversification improve financial inclusion; Promote deeper % increase in financial consumers inclusion both national and international accessing financial services Address high % decrease in lending rates by lending rates banks to businesses 55 Encourage use of Number of letters of credit in banks transactions accepting letters of credit Undertake Number of awareness awareness programmes to programmes improve undertake information on access to finance Absence of Undertake a study Study MCTI, empirical to determine the undertaken ZDA, knowledge on actual cost ZIPAR, the effects of structure of CSO existing financial services MoTA, challenges in the with view to find UNZA sector on trade remedies on how performance to reduce the cost of the services 56 Lack of Promote % increase in ZDA, MoF effective investment in investment BAZ investments in insurance services levels the sector that and stock markets steer effective with view create trade complementarity (domestically) within the sector and export competitiveness TRANSPORT SERVICES Action Area Existing Proposed Indicators of Implementation Budget Impl agency challenge intervention Achievement/ YR YR YR YR YR Output 1 2 3 4 5 Indicator/Targ et Policy, Legal Weak Enforce and Laws enforced MoJ MCTI, and regulatory enforcement of complement MoT, framework supportive legal existing standards RTSA, and regulatory for passenger TEVETA, framework to transport in terms association retain and support of type, seating of export growth capacity and transporters comfort of bus; access provision for the physically challenged; each service provider 57 having departure and arrival schedules Capacity Limited capacity Introduce and Number of development of industry conduct training for players trained players to produce bus crews in competitive and customer relations, tradable services courtesy, luggage Improve the due to limited handling, enroute quality of skills and information service knowledge on key dissemination, care contemporary for the elderly and issues. unaccompanied minors, care for the physically challenged, care for ailing travelers, among others Introduce Differentiated differentiated fare fare charts for charts for ordinary ordinary passengers, for passengers senior citizens, for introduced school-going children (Grade 1 Improve the to Form 5 with quality of school IDs, service excluding college students) & for minors (children 58 aged between 2 and 12) Introduce and Passenger rights publicise, at all charter buses stations, in publicised buses and related public places, a Passenger Rights Quality of Charter regarding infrastructure right of fare refund, remedies for late departure and/or Improve the late arrival, unruly quality of conduct by crew; service right to lodge complaint to % increase of service provider or new markets station manager acquired Improve bus station and bus stop infrastructure by constructing proper, modern stations on Public- Private Partnership and/or Build- Operate-Transfer (BOT) basis 59 Expand passenger transport services to new destinations in foreign markets Absence of Undertake market • Study MCTI, empirical and competition undertake ZDA, knowledge on the assessment in key ZIPAR, effects of existing markets to CSO MoT, challenges in the determine key UNZA and sector on trade impediments in other performance both domestic and Universities foreign markets for operators Lack of effective • Leverage % increase in ZDA, investments in the investment for investment MoTA, sector that steer support levels effective trade infrastructure (domestically) and export (both soft and competitiveness hard) for transport services 60 CROSS CUTTING ISSUES – TRADE IN GOODS Action Area Existing Proposed Indicators of Implementation Targets Budget Imp agency challenge intervention Achievement/ YR YR YR YR YR Output 1 2 3 4 5 Indicator/Targ et Improve Absence of • Feasibility • Study MCTI, MoT, trade commercial study to produced ZRA, ZRL facilitation to logistics and establish support distribution commercial export centres for competitivene Zambian traders logistics and ss distribution Study produced centres for and number of Zambian locations traders in recommended strategic locations Limited OSBPs Replication of At least three OSBPs concept at OSBPs key border areas established at key borders operational Number of OSBPs and reduction of clearing time Absence of Dry Establishment of Number of dry ports in key Dry ports in key ports established strategic strategic countries and utilisation countries and and improve increased by limited utilisation of utilisation of 50% existing ports existing ports 61 Limited utility Develop and E-certificate of of e-certificate implement the use origin developed mechanisms of e-certificate of and origin implemented Absence of a Develop and NTB database national NTB operationalize a developed reporting national Non- mechanism Efficiency in Tariff Barriers which deals disposal of cases with national Monitoring System improved by X NTB related % challenges Limited Undertake inter- Level of business country business increase in linkages linkages business programmes programmes to linkages being promote market created cooperation and integration; Improvement in markets access and conditions in countries engaged Absence of Ensure certifying Certifying decentralised institutions are institutions services of decentralized 62 certifying decentralized and institutions and e-licensing e-licensing procedures are E-licensing procedures for procedures implemented cross border implemented traders Weak utility of Single window Single window single window mechanism fully mechanism fully mechanism by operationalized operational cross border Single window traders operational and time to clear at borders decreased by 70% Weak Ensure Coordinated coordination ratification of border among border coordinated management bill agencies due to border ratified absence of a border management Bill Coordinated coordination bill border management operational 63 Limited Increase Non- participation of participation of discriminatory Zambian fleet in Zambian fleet in practices and regional regional trucking common trucking through engaging with neighbouring standards countries on adopted and adopting non- proportion of discriminatory Zambian practices and registered trucks common in border traffic standards increased by 70% Limited use of Increase the role Volume of rail services for railways to goods traffic trade facilitation facilitate moved by rail purposes international trade increased by through 60% prioritizing quality of service to major shippers and offer incentives for cooperation between ZRL and TAZARA Limited/weak Improve the STR reformed operational operation of the and Charter 64 efficiency of the Simplified Trade piloted at key Simplified Regime and borders Trade Regime increase transparency at borders to reduce discrimination against small traders Promote Lack of • Mainstream Trade MCTI, ZDA utility and mainstreaming trade information accessibility trade information issues addressed of trade information in key policies issues in information related issues in and strategies as a means to key sectoral relevant sectoral enhance policies and policies and predictability strategies strategies and in trade define how trade information will be coordinated Absence of a Develop a National Trade National Trade National Trade Portal developed Portal which Portal which will and functional should act as a act as a key repository for repository for trade related trade related information information Lack of Promote and Investment in 65 investments in facilitate trade trade investment in infrastructure information trade information facilitated infrastructure infrastructure Promote Low utility and Increase the Number of ZABS utility and uptake of coverage of Standards uptake of standards by product standards developed standards private sector to sectors where among the players standards do not Number of private sector exist Standards players developed and operational Build Management management systems for key systems for sectors industry players developed through using Products meet existing national, institutions i.e. regional and ZABS,ZCSA, international ZMA and other standards and quality accreditation management requirements institutions through intense training; Enhance the Capacity and capacity and competence of competencies of quality quality assurance assurance bodies 66 bodies enhanced Promote Number of harmonization harmonised and adaptation of standards Standards at Regional level Promote Mutual Number of MR Recognition (MR) agreements of standards signed and joint actions undertaken Sensitize the Number of consumers and sensitization private sector on initiatives the importance undertaken for quality Number of products sensitized consumers employing quality principles Scale up efforts Effectiveness of towards having in the quality place a more infrastructure in place responsive national quality infrastructure 67 Support Limited support Improving Increase in MoF, MCTI, Trade towards trade funding for trade funding levels ZDA, MoF Research and research and and export (audit) allocated to Development development research for key R&D existing and new sectors Compile a Complied compendium of compendium current and potential centres of R&D in Zambia Develop Degree of inter strategies to country enhance collaboration in collaboration R&D between R&D centres working on trade and other economic issues with a view to promote knowledge Support High interest Encourage Interests rates export rates affecting relaxation of drop by 20% Finance to export interest rates and access to support competitiveness among banks and finance increase export financial by 30% competitivene institutions to ss increase access to 68 finance for support cereal and legume producers; Limited utility Popularize and Increase in of the Zambia increase utility of exporters Export the ZEDF among accessing Development exporters finance Fund Promote Limited Support Export credit development availability of development of risk insurance of export export insurance export credit risk products credit risk insurance developed insurance products by Increase in products by insurance exporters’ insurance companies access to export companies insurance Support trade Limited trade Conduct Market Market research MCTI, ZDA promotion promotion Research in conducted related related activities priority markets activities as a for key products Facilitate Number of means to with export participation of Trade promotion promote potential key players in events export identified sectors undertaken and competitivene in trade volume of ss promotion events export orders in priority markets Development of Inter country 69 inter country trade centres trade centres developed in at least five countries Organise annual At least one (national) exhibition Exhibitions for organised key products with annually export potential Strengthen Weak and Strengthen the Existence of a MCTI, ZRA, the legal fragmented legal legal and strengthened MoF, MoA, regime for and institutional institutional legal and MoTA, MoFL, key sector to regime on trade capacity on trade institutional MoT, MoHE, support remedies in remedies framework MMMD. export Zambia Codified and competitivene strengthened ss legal and institutional framework for trade remedies in place Weak and Review and Existence of a fragmented streamline streamlined policy, legal and policies, laws and policy, legal and regulatory regulations regulatory regime on affecting the framework promotion and identified sectors; facilitation of exports Strengthen Weak uptake Increase the Number of TEVETA, MCTI 70 uptake and and utility of private sectors private sector utility of technology usage of ICT players using technology to resulting in low tools through ICT support exports public awareness exports Strengthen the Quality of the ICT cluster decisions made working group by the working and TEVETA group and TEVETA Strengthen Absence of Develop sector Export Councils coordination, export councils specific export established in collaboration, in each sectors councils to each sector and that promotes promote exports At least three networking growth of the Export Councils among export sector Operational players (exporters, policy makers etc.) in order to promote implementati on coherence that results growth of the export sector 71 C. Cross Cutting Issues CROSS CUTTING ISSUES – TRADE IN SERVICES Action Area Existing Proposed Indicators of Implementation Budg Imp agency challenge intervention Achievement YR YR YR YR YR et /Output 1 2 3 4 5 Indicator/Targ et Strengthening Weak regulatory Strengthen the Efficacy of the MoF, MCTI, ZRA, the policy, and institutional domestic regulatory and Sector Regulators – institutional framework for regulatory and institutional BOZ PIA and services institutional framework and governance framework for mechanism services trade quality of the for trade in through reviewing reviewed and services to and harmonised promotes harmonisation of regulation competitivene the regulations 72 ss of the Absence of a Undertake a base- Baseline survey sector baseline for line survey for produced services trade services trade so as to document the present policy, regulatory and institutional status of the sector. The baseline should also produce an inventory of the inventory of measures affecting the growth of the services sector in general and trade in services in particular, sector by sector and in relation to target markets, to underpin dialogue and negotiations. Absence of an Devise Mechanized integrated mechanism to devised and mechanism that periodically systems monitors trade monitor services harmonised 73 in services trade through Coherent linking systems statistics being and mechanisms produced in of different government Government reports institutions that deal with services Weak Domestication Number of domestication of and enforcement regional and key regional of regional and multilateral commitments on multilateral commitments trade in services commitments on domesticated services to stimulate competition and attract investment Limited Increase Degree of stakeholder transparency and transparency engagement on predictability of and level of key reforms reforms in the predictability of undertaken in services sector by the reforms the sector engaging undertaken. stakeholders in Level of consultations and engagement and avoiding reversal buy-in of of reforms and or stakeholders negotiated commitments Absence of a Develop a Strategic plan national national strategic developed and 74 strategic plan for plan for the quality of the trade in services development of interventions the services sector proposed (i.e. to guide negotiations and reforms in the sector) Limited skills on Build and Number of services trade enhance capacity strengthened negotiations and and promote institutions with implementation skills adequate skills of policies and development in strategies services trade and knowledge negotiations and implementation of policies and strategies Absence of a Establish a Council council that Council or body developed and monitors and to monitor and the quality of coordinates the coordinate sector monitoring and sector developments for coordination of developments policy guidance sector and to work in developments close collaboration with sector bodies 75