Question & Answers
African Mayors ask about LED
Which LED strategies in times of global recession?
In a context of global recession and companies close down, which strategies for economic regeneration can be put in place?
Anthony M. Katongo (Zambia)
Mayor of the City of Ndola
Economic Re-generation
This is a tough question. The City of Ndola has faced this challenge even before the global recession. I for one, recall how the city was an industrial hub at one time. However, the poor performance of the mining industry had a negative effect on demand for various industrial products such as tyres. Having said this -- I think that the answer lies in how Ndola for instance can use other opportunities to create wealth. For instance, I have been reading a quite a bit about "green jobs". Is there an opportunity for using solar power in Ndola? I would think so. Farming is another area that can be promoted. We have heard time and time again on the need for Zambia to diversify from the copper industry, yet the situation though improved, has a long way to go. What would be Ndola's contribution to this effort? There is a budding copper industry now in the North Western Province, is Ndola able to piggy back on that (e.g. even through supplying agricultural goods, agro-processing)? All in all, I am glad that you are asking the question. Some of the answers may also be found through talking to your people in Ndola. Good luck
An LED Strategy is based on local potential
The LED strategy should be essentially based on the valorisation of the economic strength and potential of the locality. In this process, local authorities namely the municipal council and the Mayor, play the central role generally in two respects: a role of promoter of the local private sector and a role of local economic actor. The role of local economic actor which all local governments naturally play can be more efficient if it inscribes itself within the broader role of promoter of the local private sector. As local economic actor, the local government gives subsidies to cooperatives, NGOs and associations within its territory. It equally issues tenders for the private sector for its investments as well as for the implementation or management of certain local services; this in the framework of public private partnership. Well targeted and organised subsidies can allow the social economy actors, namely associations, NGO and cooperatives, to structure themselves, grow and offer more services to the local populations. As to local tenders, they can be allocated in priority to local businesses (having equal capacities with other companies outside the locality) or under certain conditions allow small local companies to benefit from these tenders in order to structure themselves and grow. It is imperative that this be done in a rigorous and transparent environment in conformity with the national legal framework for public tenders. The action of the local government for the development of local businesses will usher in a virtuous circle of economic development where local businesses prosper, pay taxes to the local government which on its part offer them the opportunity to participate in local investments as well as in the provision of local public services. For the development of the local private sector, the onus is on the local government, as well as on the state at the national level, which must be the key actor for promoting the local private sector by taking advantage of all the competences of institutions that exist at the national level for that effect. The elaboration and implementation of a municipal plan for the promotion of the private sector and job creation in harmony with plans of other bigger localities is the solution.
Diversifying Ndola's economy!
The question which the Mayor of the City of Ndola has raised is critical. The City of Ndola is among several cities in Zambia which have undergone severe decline of the local economy, especially in the 1990s and 2000s due to many factors, both external and internal. In attempting to answer this question from the Mayor, I wish to make reference to the various planning documents which have been formulated in order to improve the local economy of Ndola and the regional economy of Copperbelt Province. At the Provincial level, a planning document was formulated in 2002 entitled “Deepening Economic Diversification in Zambia: Towards Transformation of Copperbelt”. Several opportunities are identified in this document to diversify the economy and move away from heavy reliance on copper mining and focus on other sectors. These opportunities include, among others agriculture, tourism and non-copper mining activities. Unfortunately, this plan was never fully implemented. The City of Ndola has had several LED initiatives meant to improve the economy of Ndola focusing on LED activities/strategies including enterprise development and locality development. However, these plans have rarely been implemented due to a variety of reasons. The community has also responded to the economic decline in Ndola by engaging in a variety of ways including urban agriculture which the City of Ndola is currently trying to promote. There are other community initiatives which need support from the City Council such as trading. Provision of ‘modern’ markets to traders for example, would be a great leap forward. In conclusion, it should be stressed that majority of the industries in Ndola were linked to the copper mining industry. Hence, when this sector almost collapsed during the period 1990-2000 in turn adversely affected other sectors as well that had linkages with the mining sector. Therefore, in order to minimize the negative impact of the global recession and other related economic problems, it important to have a diversified local economy.
LED in times of global recession
Global recession and the international crisis is leading to new challenges for economic stability (not even to mention growth) all around the world and affects national and local economies at all levels of development.For local governments or municipalities in this situation it is more than ever important to provide the right framework conditions that are conducive for economic development. It is absolutely key that the public sector ensures the basic locational factors so that businesses can keep on working, new businesses can get started and established businesses can expand. The necessary infrastructure has to be maintained (e.g. roads, electricity, water supply) so that the locality stays in a workable condition. This contra-cyclical fiscal policy is necessary to equilibrate the difficulties that businesses face these days. It is obviously not easy for municipalities to provide the resources for maintaining the framework conditions for businesses in times of low tax income. But if the structures for the businesses are not in place anymore, the delcine will lead to a vicious circle.It is therefore even more important to spend the limited resources of the local governments very wisely. Before any investment the local private sector should be consulted, as they are the experts of the local economy. Business people usually have a much better understanding of the strengths and weaknesses of a locality than the public sector. In these economically hard times it is more than ever important for public and private sector to cooperate.
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