Zambian horticulture industry sheds jobs as exports slump

Zambia’s horticulture exports have declined, leading to a loss of more than 10 000 jobs, says the Zambia Export Growers Association (ZEGA).

According to ZEGA, industry revenue declined from US$60 million last year to US$25 million due to high production costs. The industry makes a significant contribution to the country’s non-traditional exports (NTE’s) with Europe as the main market.

“Import taxes and surcharge costs imposed on critical goods and seasonal inputs have made the cost of production high,” said ZEGA Chief Executive Officer Luke Mbewe.

By contrast, country’s like Kenya, Ethiopia and Uganda enjoy a tax free regime for their exports, giving them an edge over Zambia.
Mbewe says high production costs make Zambia’s horticultural products, including fresh cut flowers, fruit and vegetables, less competitive on the global market.

“Buyers buy produce at their fixed prices which does not take into account the high cost of inputs we incur. This results in losses on our side,” he says.

ZEGA says the underperformance of the industry resulted in a loss of 10 000 jobs from 15 000 in 2003.

The development does not resonate with government’s drive to make agriculture the centre of diversified, economic growth. Agriculture is an important contributor to Zambia’s GDP, currently estimated at 35%. In addition, the Seventh National Development Plan streamlined agriculture to be the main stay of the economy, with particular emphasis on crop diversification and the livestock sub-sector.

ZEGA says suspending tax on inputs will help reserve the decline of the industry.

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