Guest blogger Brian McBrearity will be reporting from time to time about his experiences working in Zambia on SME and financial services development. His Zambia Journal posts will appear about once a week here on NextBillion.net. This is the second in the series; read his previous post here.

I spent the last week traveling north of Lusaka to the Copperbelt Province, near the Congo (DRC) border. This is the heart of industrial Zambia—rather, was at one point.

To put it bluntly, the manufacturing industry has collapsed. The southern side of Ndola—once the largest city in the country—is a ghost town of abandoned factories and industrial buildings. Not one seemed to be occupied, nor showed any signs of recent life. All of the ancillary businesses have disappeared as well. The normal entrepreneurial sights in Africa—local produce stands, variety shops, taxis, “Talk Time” purveyors—were noticeably absent from the roadsides and alleyways.

Apparently, Chiluba (Zambia's second president) embarked on a program to encourage foreign investment and open markets to foreign goods. He granted tax concessions on imports, which correspondingly increased competition for the local manufacturers. Thus began the downturn of Ndola’s economy, as well as the other industrial areas in the north of Zambia. For reasons unknown to me, the local manufacturers could not compete with the imports. This would be understandable, if the imported goods were coming from countries with a lower wage base, or lower cost structures than Zambia. However, Zambia’s costs are on par, if not lower, than other economies within the region. I have yet to determine why Zambia’s own manufacturers could not compete. Zambia is a country rich with resources, a low wage base, and a population willing to spend. The increased competition should have encouraged Zambian manufactures to produce more appealing and innovate goods. Why were imports so much more attractive than local alternatives?

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