Zambia has to move away from over- protecting the local economy if it is to remain competitive, the Bank of Zambia governor has said.

The local newspaper The Post on Thursday quoted Caleb Fundanga as saying in Midrand of South Africa that the manufacturers who are not able to adjust will not survive.

Responding to the local manufacturing sector's call for measures to assure their competitiveness in light of the appreciation of the local currency kwacha, he said Zambia is not doing very well because there is too much protection of the local economy against foreign competition.

The manufacturing sector has complained about the loss of competitiveness to cheap imports flooding the country because of strong kwacha.

Fundanga said on Wednesday that contrary to the concerns, the strong kwacha should make the local industries competitive by affording them an opportunity to import capital equipment that will make them improve their quality.

He said South Africa is faced with a similar situation but it does not kill the local manufacturing sector.

"We can't continue to export in an inefficient way. Those who can't do it (import cheap capital equipment) will not survive because you cannot remain with one technology all your life. It is an opportunity to learn from South Africa how they manage with the appreciation of their currency," he said.

Commenting on the recent depreciation of kwacha about 10 percent, he said it is a result of the availability of foreign exchange on the market as a result of auctioning agricultural produce such as tobacco.

Source: Xinhua