In Zambia, corporate social investment has for decades been a feast-or-famine affair, with many hit-or-miss efforts not always delivering on communities’ greatest needs. Now, reeling from the economic blow of the COVID-19 pandemic, they would greatly benefit from a recalibrated CSI narrative highlighting the need for a concerted effort from business in targeting specific community needs.
During the pandemic, Zambia’s socio-economic indicators deteriorated. The poverty rate was 18% in the cities and 59% in the rural areas, while youth unemployment reached 26%. Food insecurity increased and more than a third of Zambians now suffer from chronic malnutrition. The country faced a growing government debt and the economy entered a deep recession. Right now, reaching sustainable development goals seems more daunting than ever.
Despite the generous CSI of the mining industry – notably Zambia Consolidated Copper Mines (ZCCM) – in the previous century and the initiatives of many other companies over the past 20 years, visible, sustained changes are not evident everywhere. In rural Zambia, unemployment, poverty, hunger, healthcare and education deficits, and inadequate provision of energy, water, sanitation and infrastructure are still barriers to a better life and future for all. These are the issues that should be prioritised in corporate CSI policies.
It is also necessary that specific communities, especially in rural areas, be targeted and mining companies can play a key role. ZCCM, for example, aims to create value for communities by going above and beyond national expectations, and further than the local communities. In the 12 months ending in March 2019, ZCCM spent ZMW1,52 million (ZAR1,23 million) on CSI.
Konkola Copper Mines, part of UK-based Vedanta Resources, uplifts the communities where it operates. Since 2005, it has spent over US$150 million (ZAR2,2 billion) on health, education, sustainable livelihoods and sports development initiatives.
The CSI spend of the mining industry – the backbone of the Zambian economy – is supplemented by many South African-based companies willing to apply the South African code of practice in Zambia. Absa Bank Zambia Plc has invested over ZMW15 million (ZAR12 million) since 2019 and received the Best CSR Award in Zambia from International Business Magazine in 2020.
Shoprite Holdings, inspired by its South African mandate, also invests in programmes which build long-term resilience and create shared value, including education and training as well as community food gardens and vast soup kitchens.
Shoprite’s “proudly Zambian” counterpart, Melisa, has a smaller footprint with a 4:18 branch ratio, but has a unique opportunity as a popular home-grown retailer to provide significant socio-economic benefits to loyal communities, thereby boosting its customer base. Sourcing products such as fresh produce from local suppliers would also be beneficial to both parties.
An in-depth study on customer loyalty in Zambia has, in fact, shown that targeted CSI in communities does not go unnoticed and significantly increases loyalty. The retailer studied was Amsterdam-based SPAR, which invests in education, healthcare, government infrastructure development and the support of orphanages, amongst others.
It is, however, not only foreign-based companies which are a force for good in Zambia. One of Absa’s local counterparts, the Zambia National Commercial Bank (Zanaco), focuses on sustainable development initiatives to make positive changes in society and contribute to inclusive economic growth. Zanaco places a strong focus on community engagement and support through strategic partnerships.
Clearly, Zambian companies are not averse to CSI. A survey has shown that the prime motives for CSI in Zambia are largely ethical and moral. Businesses should, however, not neglect to view CSI as part of their value chain and ensure full annual reporting of their activities.
Furthermore, as in several other African countries where reaching SDGs is an immense challenge, Zambian businesses need to focus less on momentary causes and more on identifying SDG-aligned, sustainable projects. Open dialogue with community representatives, enabling them to voice their actual needs, participate in decision making and experience a sense of ownership, will ensure positive relationships and effective needs assessment. This is where the success of a project begins.
The first benefit for businesses will be the assurance that their CSI spend will not have just a short-lived impact, but will, in fact, be a catalyst for sustainable development. This holds true not only for large corporates, but also for local entrepreneurs including small and medium enterprises.