Abstract:

The global value chain approach has become a useful strategy to reduce poverty in the mining area by forming linkages among various players. This approach gives an opportunity to all stakeholders to participate in any suitable activity along the value chain. Once SMEs enter the value chain, they supply and earn sustainable income. Unfortunately, the mining value chain in Zambia has become restrictive due to many public sector barriers such as tax, registration, standards, financial and licensing protocols. The main objective was to determine the impact of public sector barriers on SMEs participation in the mining value chain. The global value chain literature focusing on barriers of entry was reviewed to give insight on how these barriers affect SMEs participation. A random sampling was conducted among the SMEs from the mining area to determine the extent to which tax, registration, financial, technology, standards and licensing barriers impact on SME participation in the mining value chain and which barrier ranks highest. The findings show that public sector barriers greatly affect SME inclusion in the mining chains. In the hierarch, registration processes, followed by financial, technology, and tax barriers respectively affect SMEs inclusion. The study concludes that public sector barriers greatly affect SME participation while specifically licensing and standards have a lesser effect. The study recommends a review of government policy and enhance economic empowerment to SMEs for them to participate in selling to the mines.

Keywords: Barriers of entry in the mining global value chain, Mining Global Value chain, small and medium enterprises.

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