Enhancing forward linkages in Zambia’s investment landscape: proposing legal provisions within the ITBD framework.
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Date
2024
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University of Lusaka
Abstract
This study delves into the current state of forward linkages in Zambia's investment environment, emphasizing the need for a comprehensive examination. Despite significant strides in attracting both domestic and foreign investments, various sectors face challenges in realizing the full potential of foreign direct investment (FDI) due to limited local value addition and technology transfer. Many foreign investors in Zambia predominantly rely on imported inputs and services, hindering the integration of local businesses into the value chain. The absence of robust forward linkages prevents the optimal spillover effects of FDI, such as job creation, knowledge transfer, and the growth of local enterprises. Recognizing the critical role of investment in fostering sustainable economic development, Zambia has implemented the Investment, Trade, and Business Development (ITBD) framework. However, the existing legal provisions within the ITBD Act lack clear guidelines and directives for effectively promoting forward linkages. This study advocates for legal reforms within the ITBD framework to enhance forward linkages, ensuring that investments contribute more comprehensively to the country's overall development. By analyzing the current legal landscape and gaps within the ITBD Act, the study proposes clear guidelines and standards to encourage and facilitate forward linkages. The objective is to create sustainable value chains, promote job creation, facilitate technology transfer, and stimulate local entrepreneurship. Addressing these legal gaps is crucial for reducing dependency, fostering economic growth, and ensuring that investments positively impact the broader Zambian economy.