The Mining Industry and Local Content Policy in Zambia

Local content policies (LCP) are often depicted as a useful policy tool for tackling the conundrum in many resource-rich economies of the Global South of great mineral wealth and pervasive inequality, poverty, and lack of structural transformation. Therefore, many African heads of state perceive LCPs to be an important tool in turning non-renewable commodities into broad-based development. This is also the case in Zambia where the Zambian government has worked hard to introduce LCPs. In spite of this, LCPs have not led to structural transformation. This chapter seeks to explain why. It argues that several interrelated factors account for this, including an inability among domestic firms to supply goods and services of a sufficient quality to the multinational mining corporations; LCPs characterized by too high hopes; too little attention to demand capacity and intersectoral in LCPs (and related policies); and inadequate finance to back the LCPs.