Adverse Impact of Multinational Agribusiness Enterprises on Small Local Agribusiness Enterprises. Case Study of Kapiri-Mposhi District in Zambia.

Abstract

The small local agribusiness enterprises are building blocks of the economy in both developed and developing nations. Their presence has been observed deep in rural towns and outskirts of most towns and cities.  However, the coming in of Foreign Direct Investment through Multinational Agribusiness Enterprises has adversely affected the small local agribusiness enterprises through competition. Several studies have been conducted on the impact of Foreign Direct Investments on the overall national economy. Nevertheless, there has been less attention on the adverse impacts the multinational enterprises have on the small local agribusinesses. Therefore, this paper assesses the adverse impact Multinational Agribusiness Enterprises have on small local agribusiness enterprises in Kapiri-Mposhi district in Zambia. A cross-sectional study was conducted using an interview-based questionnaire on 315 small local agribusiness enterprises. Purposive sampling was used on the registered small local agribusiness enterprises owners and sales representatives. The collected data was analyzed quantitatively using Statistical Package for the Social Sciences through descriptive and inferential statistics. Pearson Chi-square and degree of freedom were used to test the degree of association between the independent and dependent variables. The level of significance of ρ < 0.05 and confidence interval of 95% were considered as statistically significant. The results showed that 60% of respondents indicated that the Multinational Agribusiness Enterprises are present in Kapiri Mposhi. Of the 60% respondents, 86% experienced competition in terms of location and sales as Multinational Agribusiness Enterprises were well located and had more customers as they traded both in retail and wholesale. To alleviate the adverse impact, government should introduce policies that are favorable to small local agribusiness such as: restrict Multinational Agribusiness Enterprises to be selling products on wholesale only; introduce import tax exempt; and offer low interest loans for them afford strategic locations in the central business area.