Whilst all the economic challenges in Zambia are making the scaling up of entrepreneurial startup companies very difficult, it is evident by their continued success that it is not impossible.
Zambia exports goods to the value of approximately $8 billion a year however over 68% off the country’s population continues to live below the official poverty line. This is more evident in the rural parts of the country than in the urban areas, however across the country as a whole, both underemployment and unemployment continue to be a serious problem.
Historically Zambia’s primary export and as a result a key part of the country’s overall economy, has been the copper mining sector. Low metal prices, in particular low copper prices have however put serious pressure on the country’s economy, in fact there are now more people employed in the agricultural industry than there are in the mining industry.
Economies across the world are continuing to struggle as the price of global commodities continue to drop or at best stagnate, and Zambia is no different. Zambia’s economy has been severely knocked as a result of the drop in the price of copper, with some mines actually having to close. This is resulting in a weakening currency and an increasing cost of living, the impacts of which are being felt by both small businesses and big industries alike.
Amidst these struggles there is a ray of light as a number of entrepreneurs based in and around Lusaka, the capital city of Zambia, are bucking the trend and actually producing good levels of growth.
Tapera Industries, originally a laundry service, is now a successful soap factory following the realization by the owner that the soap he was producing to use in his laundry, was actually significantly better quality than anything else available locally. Armed with this knowledge Tapera Industries started to focus its attention on soap production which it now sells daily in local markets. All the raw materials he uses to make his soap are sourced locally and all his staff are both local and trained on site. To ensure continued growth he has also had to find a way of working around the country’s current power shortages and consequential rolling blackouts. He has achieved this by becoming reliant on alternative power sources, such as solar lighting and diesel generators, allowing him to continue around the clock production even when the power is off in surrounding areas.
Another local entrepreneur who is managing to buck the downward trend is the owner of Java foods, a small cereal & noodle producer. Whilst the owner admits that growth is difficult due to a lack of willingness from banks to investment and currency fluctuations, she is still managing to scale up her business. She does however continue to worry about sustaining her current success due to the weakening economy, the failing currency, high borrowing costs (often over 30%) and an apparent unwillingness from the government to support small startup business, instead preferring large industries.
Photo: Mutoba Ngoma, founder of Tapera Industries