THE Government has over the last five decades made remarkable strides to enhance efficient service delivery in local government; municipal and city councils.
To achieve these strides, the Government has made five phases of decentralisation which in 2012 ultimately culminated into the creation of 33 new district councils and an additional province all at once.
Following on, the Constitution of Zambia (Amendment) Act No. 2 of 2016 remarkably provides for the system of local government based on democratically elected councils.
The ultimate purpose of all this is to enhance local authority, responsibility and quality service delivery at community levels, municipal and city councils countrywide.
Notwithstanding these remarkable strides, local government; municipal and city councils face several insurmountable challenges.
These include being unable to come up with a sustainable strategy to create sufficient and adequate revenue to enable them meet costs of efficient service provision.
As alluded to in last week’s article, this has culminated into municipal and city councils going for as long as eight months without paying their workers’ salaries and wages- with Chipata and Lusaka city councils being the latest recent reference cases in point.
The one trillion kwacha question at this point is what strategies can Local Government adopt to arrest this quagmire?
In the recent past I stumbled into ‘Corporate leaders’ both locally and abroad who have had the opportunity to be have been trained in countries like China, Malaysia and Singapore, where particular developmental strategies that Zambia has been attempting to replicate has been successfully implemented.
I’m grateful too, to the United Nations Industrial Development Organization (UNIDO) Vietnam office, for their express permission ‘to use their research on Special economic zones for the benefit of this platform.
On February 24, 2016 the Government through the African Development Bank (AfDB) acquired K300 million for the implementation of industrial yards country-wide.
Following on, then Commerce Trade and Industry Minister Margaret Mwanakatwe announced that 16,000 jobs would be created across the country.
Additionally Ms Mwanakatwe stated that the monies were meant for implementation of industrial clusters in eight provinces and intensified commercialisation of cassava in five provinces.
This would enable business support centres to be established in all the provincial capitals country-wide.
On June 20, 2016 Jiangxi Federation of Industry and Commerce, President Lei Yuan Jiang announced the commencement of a US$30million construction of an industrial park in Chongwe.
The initial plans of this multimillion dollar industrial park were to construct a filling station, a milling plant, and beverage maker and construction material manufacturing plant.
This was expected to create an estimated 300 jobs for the people of Chongwe district.
The purpose of this article is to look at the underlying concept on which China developed her municipal and city councils.
This is the same model that Zambia has adopted as illustrated in the above case study.
The Government has over the past few years eagerly demonstrated a resolve to develop Local Government to the extent of sending professionals to China to learn how China successfully developed municipal and city councils using Special Economic Zones (SEZs).
Truth be told, SEZs are here in Zambia but why are Municipal and City Councils still facing insurmountable challenges?
Is there anything else that could be done to turn around this quagmire?
SEZs are zones intended to facilitate rapid economic growth by leveraging tax incentives to attract Foreign Direct Investment (FDI) and technological advancement.
China has been the most successful in using SEZs to attract foreign capital and has even declared an entire province, Hainan, to be a SEZ.
It is worth noting that, China has been able to use the SEZs; economic zones: Industrial Parks, Eco-Industrial Parks, Technology Parks, and Innovation districts as a way to slowly implement national reform through municipal and city councils rather than through the Central Government.
Conducting business in a SEZ usually enables a company to receive tax incentives and the opportunity to pay preferential or lower tariffs, and other incentives.
Chinese SEZ’s essentially dangled low wage rates to global manufacturers.
Of course, it’s an open secret that China’s population is one of the world’s highest.
Therefore, rather than being unemployed local Governments in China generally thought of allowing Chinese people to earn something rather than stay unemployed and earn nothing!
Thus, SEZs attracted large manufacturing companies from the United States and elsewhere to produce their offerings in China.
Strong commitment and support of the government to pilot market-oriented economic reforms.
The central government also tried to decentralize its power and help create an open and conducive legal and policy environment for the SEZs.
At the same time, the local governments made a great effort to build a sound business environment.
China also ensured that municipal and City councils had the legislative authority to develop municipal laws and regulations to govern these zones.
This unusual discretion allowed them more freedom in pursuing new policies and development measures deemed necessary to vitalise the economy.
China, too, harnessed the principle of the Chinese diaspora to play an important role in the success of the SEZs.
The Chinese Government has over the decades ensured that Chinese nationals after completing their secondary school are placed in top rated universities abroad in the United States.
Upon graduating, Chinese embassies abroad would ensure their nationals find jobs with global manufacturing companies and after serving for several years, these nationals would go back home with their skills and savings to invest and work in SEZs.
By bringing in their savings, technological and management skills; generating learning and spill-overs; and ultimately helping to build local manufacturing capacity in SEZs.
Wow! That’s a brainy strategy, isn’t it?
The foundational and primary purpose of development zones was primarily to attract inward industrial investment.
Municipal and city councils would hold periodical trade fair and commercial show exhibitions to compete against their rival Local Government counterparts from other parts of China.
In next week’s article, the discourse will look at recent developments in Municipal and city councils vis-à-vis SEZ model.
The discourse will further look at other aspects of strategy that the Local governments in Zambia may need to work on making their developmental strategies workable. Look out for this exciting article!
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The author is the Managing Consultant at G. N Grant Business Consultant, a Chartered Certified Accountant (ACCA), a Master of Business Administration (MBA) holder, with a Specialism in Strategic Planning, and a candidate for the Herriot Watt University (Scotland) Doctor of Business Administration (DBA)