Sugar, Cotton and Coffee Key to Zambia Economy Diversification

zambia economy diversification

Sugar, cotton and coffee sub-sectors have the potential to diversify Zambia’s economy and contribute significantly to its growth.

This was indicated in a recent study by the International Growth Centre (IGC), a London based research institute.

According to the study, Zambia is well endowed with natural resources that are suited for the competitive production of the three crops.

The prospects for equitable wealth and income distribution are most available in the sugar and cotton subsectors, which already have a significant number of small-scale producers in the value chain.

The report indicates that the sugar sub-sector holds the greatest potential for growth and exports, while the cotton sector holds the greatest potential for small holder involvement and hence income equality.

The coffee sector emerges as the least attractive among the three sectors because of the capital intensive nature of the sector.

The report suggests that the key factor which will support the growth of Zambia’s coffee sector is the development of programs to ease access to finance for coffee growing.

Zambia Sugar

The research indicates that sugar is one of Zambia’s most important economic sub-sectors and one of the most successful non-traditional exports sectors.

The sector accounts for 3–4% of Zambia’s GDP and 6% of the total national exports. The sugar industry provides employment for around 11,000 workers, with total number of dependents exceeding 75,000.

The sugar industry generates over USD45m in gross exports annually, which has almost doubled from the mid-1990s when export earnings stood at around USD25m.

“Growth in the sugar sub-sector holds great prospects for Zambia to diversify the economy, which has previously been copper dependent, offering great opportunity for agricultural growth, diversification and employment creation.”

Zambia Cotton

According to the study, the cotton sector is an important sector for the country’s economy as it directly and indirectly supports an estimated 21% of the Zambian population while also accounting for 19% of the national GDP and 32% of the value chain of the main agricultural exports.