ZAM Calls for Urgent Policy Review as Duty Suspension Reduction Raises Industry Concerns
The Zambia Association of Manufacturers has raised serious concerns following the enactment of the Customs and Excise Suspension Manufacturing Inputs Amendment Regulations 2025, contained in Statutory Instrument Number 76 of 2025.
The amendment adjusts the 2020 Regulations by limiting duty suspension on manufacturing inputs to only fifty per cent of the applicable customs tariff rate.
ZAM President Mohammed Umar stated that while the Association recognises the Government’s intention to align fiscal measures with broader national development goals, the new restriction arrives at a very difficult time for the manufacturing sector.
He noted that manufacturers are still battling high production costs, especially due to the ongoing energy challenges, and remain heavily dependent on imported inputs because of gaps in local supply chain capacity.
According to Mr Umar, the previous duty suspension system offered essential relief which allowed manufacturers to remain competitive, maintain operations and steadily invest in local production capacity.
He added that reducing this relief risks reversing recent progress at a time when the sector had started to stabilise and contribute more meaningfully to import substitution and industrial growth.
Mr Umar further warned that the increased cost of imported inputs will push up production expenses and weaken the competitiveness of Zambian manufactured goods. This challenge is intensified by the availability of duty free imported finished goods from SADC and AfCFTA member states under regional trade agreements.
He explained that taxing raw materials while allowing duty free access for finished goods creates an uneven playing field that discourages local production.
Mr Umar also highlighted concerns about policy predictability. Manufacturers have made long term plans based on the previous framework. Sudden policy shifts can disrupt investment decisions, delay expansion projects and undermine confidence across the sector.
The potential impact extends beyond individual companies, affecting employment and the broader network of suppliers and service providers that rely on a thriving manufacturing industry.
ZAM is urging the Ministry of Finance and National Planning to review the amendment and engage in comprehensive consultations with industry stakeholders. The Association is proposing a more balanced approach such as a phased transition or linking any reduction in duty suspension to clear progress in building domestic capacity for raw materials.
ZAM believes such measures would protect the growth of local manufacturing while still supporting Government revenue objectives.
Mr Umar reaffirmed ZAM’s commitment to partnering with the Government in building a resilient and competitive manufacturing sector that plays a central role in Zambia’s economic development.
He emphasised the Association’s readiness for constructive dialogue to ensure a policy direction that supports both national goals and the sustainability of local industry.
