Analyzing the Effects of Trade Incentives in Promoting Revenue and Business Growth in Manufacturing Firms in Kabwe, Zambia

This study examined the effect of trade incentives on revenue and growth of manufacturing firms in Kabwe. Despite the government being generous with trade incentives, there seems to be slower-than-expected growth of the manufacturing sector. A mixed-methods approach was used, involving surveys, interviews, and desk reviews; stratified sampling was used on a sample size of 32 firms. The results showed that 60% of firms indicated that trade incentives had a positive effect, while 40% indicated that they had no effect on firms’ revenue. Trade incentives had an impact on revenue, although they varied with the size of firms; larger firms benefited more from trade incentives than smaller firms (ANOVA: F = 10.34, p = 0.0031). Regression showed a significant positive effect on revenue for firms that received trade incentives (coefficient = 0.5297, p = 0.0031, R2 = 0.256). Results on the effect of trade incentives on growth showed that 56% of firms indicated that trade incentives had a positive effect, while 44% indicated that they had no effect on firms’ growth. Trade incentives had an impact on growth (ANOVA: F = 5.44, p = 0.0265). Regression showed a slightly significant positive effect on firms’ growth for firms that received trade incentives (coefficient = 0.4076, p = 0.0265, R2 = 0.154). The study concluded that while these trade incentives help manufacturing firms perform, there is a challenge arising from policy inefficiencies. The study recommends that the Government should expand, simplify, and streamline the process of accessing and utilizing these incentives.