30 November 2007
editorial
Ndola — THE decision by Konkola Copper Mines to shortlist 30 local manufacturers to supply the mining firm with spares and other consumables is a demonstratively positive development for the economy.
KCM has shown what should be the ideal symbiotic relationship between enterprise and the environment it operates in.
We are aware of course that a number of local suppliers have been supplying various requisites to the mines for a while now.
However, in this case, the number of local suppliers involved, the type of products and the fact that KCM has come up with such an arrangement formally, makes it an important milestone, in the effort to support local manufacturing.
Forward and backward linkages in an economy are the basis upon which a sustained growth course can be charted.
While employment and wages are the primary gains that can be envisaged from a given enterprise, there is an obvious limitation. Formal employment can only be offered to a limited number of people at any given time.
This could even be adjusted downwards depending on circumstances.
Economic linkages that involve utilization of skills and exploitation of local resources have far much wider benefits. The exploitation of natural resources alone demands employment of labour and machinery.
The process of actual manufacture of the goods calls for additional employment of people, while support activities like packaging and transportation translate into work or business opportunities, bringing other additional players in the cycle.
A larger multiplier effect is attained because of the increased indirect beneficiaries which this widened cycle brings into play.
It is on such basis that the pursuit of development and poverty alleviation through improved income distribution can be achieved.
The example shown by KCM is one that in its variation could be replicated by various corporates doing business in Zambia.
The refrain in the past has been that local suppliers and manufacturers have not been up to scratch in meeting the volumes, let alone the standards, to supply firms that have international status.
This is undoubtedly true, technically speaking. However, as is in every situation where hurdles are encountered, there are always ways to surmount such obstacles.
One way would be to offer some of the local suppliers scaled down ranges of goods to be supplied at reduced volumes. They would then have to graduate slowly as they build up capacities.
On the part of the suppliers themselves they could pool resources to enable them set up bigger manufacturing bases to achieve volumes.
Linkages of this nature have the potential to generate thousands of jobs as artisanal craftsmen and skilled technicians build up into strong and bigger entities.
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