It is pleasing to note that the commentary on the need to review the Labour Act posted on my personal website and captured by the media has generated controversy and intellectual debate. I certainly agree the costs associated with labour rank relatively low among the key determinants for attraction of Foreign Direct Investment (my dissertation on the same and posted on the website has the details).

In the Zambian case, competitiveness is generally in the resource extraction industries; and to an extent in the telecommunications sector despite problems associated with the international gateway and licensing. Whereas Zambian has attracted reasonable investments in the past ten years, the bulk of that has gone to mining. Investments in mining generally take place even in highly risky environments.

Within the region, Zambia’s competitiveness still ranks low, and is behind some frontrunner countries like Mozambique, Botswana and Mauritius. What put them in front are comprehensive structures and predictable systems. Investors in the skills sectors such as those in value addition will look for good infrastructure, low corruption levels, efficient licensing processes, and availability of (affordable) finance and limitation of entry hassles at the borders.

If you are not competitive in all these, you should offer more incentives that should seek to attract investments. But this comes at high cost. And this is what the Zambian government has sought to do in the past decade (and in the process, making very serious compromises at the expense of real gains). We have a low bargaining power than other countries within the sub-region mainly because investors have a unique time horizon (no urgency), they have comparable alternatives except for mining and government places too much value for investments more than the investors do. In the commentary, I also advised we compare what prevails in countries that compete with us with regard to redundancy packages.

By the way, the focus of the commentary was beyond investment competiveness. It highlighted the difficulties that parasatatals and local companies face in trying to restructure operations in the face of the existing Labour Act. Zamtel, for example, is highly uncompetitive for, as we understand, it should trim its manpower from the current 3,000 plus to 800. It will never implement this because, like any other parasatal, there are no contingency liability provisions. They have to carry on everyone (even those desperate for early retirement) while trying to cope with rising establishment costs. At the end of the day, tax-payers (the same workers) will foot the bill.

Within this context, my challenge to union leaders (without malice) is for them to anticipate changes, transform their strategies from serving short-term interests to a holistic and all-encompassing long-term strategy as investors will always be an edge above the needs of the worker; and government will have a wider ear to demands of the investors than those of the workers.