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Zambia has a significant funding gap for Small Medium Enterprises (SMEs) amounting to a total of K30 billion in project opportunities, authorities say.
Special Assistant and Advisor to President Hakainde Hichilema on Economic, Investment and Development Affairs, Jito Kayumba, emphasised the need for financial institutions to take advantage of this situation.
Kayumba said this during a panel discussion at the 2024 Impact Capital Africa Summit held at Ciela Resort in Lusaka Province’s Chongwe District on Tuesday.
He highlighted that only K350 million was being allocated annually to the Citizens Economic Empowerment Commission (CEC) and that this showed the large funding gap.
“However, it’s also impressive to note that the CEC has dispersed more money to Zambian SMEs in the last two and a half years than in the previous 15 years combined,” Kayumba boasted.
He stated that this indicates a positive trend and a commitment to supporting SMEs in Zambia by the new dawn administration led by Hichilema.
Kayumba said it was important to, however, recognize both the progress made and the remaining challenges to be addressed.
“The emphasis on the need for greater funding and support for SMEs is well-taken, and it’s crucial to continue advocating for increased access to capital and resources for these businesses,” he stated.
Kayumba noted the need for government to continue creating an environment that attracts capital and the need for a comprehensive approach to improving the ecosystem, including entrepreneur capacity building, governance, and policy.
He also highlighted the importance the National Pensions Scheme Authority plays in domestic savings and pension funds in accumulating capital.
“The need for strategic thinking and deliberate action in policy and investment strategies. The importance of revising investment strategies and asset allocation to optimize returns,” Kayumba stated.
Additionally, Kayumba noted the need to address the high cost of capital and risk premiums associated with investing in Africa.
He said there was need for entrepreneurs to structure their companies to attract investors while emphasising the importance of demonstrating Zambia’s potential and stability to foreign investors.
“The role of credit rating agencies and the impact of default status on attracting funds, the importance of effective governance and policy in creating a stable environment for investment can not be overlooked,” Kayumba stated.
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