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Zambia Development Agency
Africa’s New Frontier for Investments and Profits
Zambia in the Region
Area: 752,614 sq km
Common borders with 8 (plus RSA)
Population: 12.1 mil (est. 2007)
Independence: 1964
Religion: 50-75% Christian, Muslim 24%, 1% indigenous
Africa’s New Frontier for Investments and Profits
Key Economic Indicators for 2009
GDP Growth
6.3 %
US $ Exchange Rate
4,600 – 4,800
GDP per Capita - 2009
US $ 1,181
Inflation December 2009
9.9 %
Total GDP in 2009
US $ 14.3 billion
Africa’s New Frontier for Investments and Profits
Selected input costsCosts
Fuel US $ 1.42 per litre
Electricity price of US $ 0.05 per kWh
Water US $ 0.76 per m3
Industrial Land Rates US $ 10 per annum Fixed Charge and US
$ 1.1 per hectare for land larger than 1 hectare
Competitive local Labour Costs
Wages, Minimum Annual Wage (40 hr
week)
US$ 2008 (PPP)
Zambia
1,043
RSA
2,560
Angola
1,755
Malawi
511
Tanzania
1,688
Africa’s New Frontier for Investments and Profits
Diversification from Copper Exports
Main thrust of diversification promotion of trade and investment
of non-traditional exports (NTEs)
NTEs account for 20 % of export
earnings
NTEs have grown by average 18 % in
last 5 years
Main NTE products are animal products,
agricultural, manufactured goods,
processed foods, gemstones,
horticulture/floriculture, chemicals &
pharmaceuticals, mining & engineering
products.
Non mining sectors contribute over 90% of
the country’s GDP. Major contributing
sectors are; agriculture, manufacturing
construction, wholesale & retail trade.
Africa’s New Frontier for Investments and Profits
Transport Infrastructure
By Road
Existing road network connecting
to all major ports in Southern
Africa. Dar-es-salaam , Durban,
Walvis Bay, Beira.
A five and ten year plan to
rehabilitate 38,763 km of roads
exists and will cost an estimated
US$ 1.2 billion
By Air
There
are
three
major
international airports.
• Lusaka International Airport
• Livingstone
• Ndola
By Rail
Two major rail lines link the
country to six major African sea
ports: Dar-es-salaam, Beira, East
London, Port Elizabeth, Durban and
Cape Town
Africa’s New Frontier for Investments and Profits
Political situation..and Stable Country
45-year strife free political stability with no ethnic division.
Democratic Rule
Positive and business friendly macro economic environment
Investment security and guarantee – no expropriation
Favorable business environment that benchmarks the best among LDCs
Efficiency of Government machinery
Access to regional and international markets
Infrastructure
Human resource quality of life
Africa’s New Frontier for Investments and Profits
Regionally Connected
International road highways link
Zambia
to
all
neighbours
including Durban and Dar-essalaam ports
Hub for central southern Africa
Regional market 600 million –
COMESA and SADC
R
Direct road network from Durban
to Cairo via Zambia
Direct road and rail network from
Durban and Dar-es-Salaam
Africa’s New Frontier for Investments and Profits
Zambia Reform Process
Doing Business, Reform process
Reforms
Transaction Costs
Infrastructure
Cost of doing
business
Full range of policy,
institutional,
regulatory
framework, and
business regulations
Road Sector
Investment Program
US$1.2 bn
Airport improvement
Power – Grid code
Rules, regulations
& procedures
Reducing complexity of
procedures
- tax, licences, customs,
incorporation, labor
Public
Diversification
Lands, ZRA,
Immigration,
PACRO, Chiefs
Trade & Investment facilitation; Customer facing
priority sectors, MFEZ &
Industrial Parks
Reform is on-going – Even if you on right track, if you not
move you will be run over
Benchmarking
Improve
investment
environment
Africa’s New Frontier for Investments and Profits
9
Pillars of Reform
5.0%
0.8%
0.4%
2.7%
1964-1974
1975-1982
1983-1990
0.6%
1991-2000
2001-2009
Restructuring the economy & Diversification
Ease of Doing Business / Investment climate
Macro economic / Fiscal stability
Economic Empowerment
Africa’s New Frontier for Investments and Profits
Zambia Ranking DB out of 181
Indicators
2008
2009
2010
Measures to Improve Rankings
Overall Ranking
116
99
90
Starting a Business
82
72
94
Dealing with
Construction Permits
148
146
151
Streamlining Exercise in progress
Registering Property
125
94
94
Computerization of Registering Property
Legislative amendment to register title deed
Getting Credit
97
68
30
Credit Bureau / CGS / Single Treasury
Protecting Investors
64
70
73
Paying Taxes
30
39
36
Trading Across Borders
160
157
157
One Stop Border/ Border Facilities - PPP
Employing Workers
121
129
116
Greater flexibility – Protect Workers not
Jobs
Enforcing Contracts
86
88
87
Commercial Court - strengthen
Closing a Business
84
83
83
Companies Act - Insolvency Provisions
SADC Countries comparison DB…
World Bank Country Manager, Kapil Kapoor. “This progress is a result of sustained effort
by the Government to improve the regulatory environment for businesses and
positions Zambia ahead of many African economies”. “However, it is important to
recognize that reducing the ease of doing business is a beginning and a starting point
to reducing the cost of doing business and increasing competitiveness”. He encouraged
the Government build on these good results by pressing ahead with effective reforms in
other key areas such as transport, telecommunications, energy and the financial sector
in order to improve the broader business environment, which is crucial to achieving the
Vision 2030
Limitless Opportunities…
Prioritisation of Sectors
High
Priority 3 Priority 2
Priority Sectors
Priority 1
Industrial Minerals
Engineering products
Energy
Retail and
Value Addition
trade
(minerals & agro)
Mining
Tourism
Horticulture
Agriculture
Investment attractiveness
Gemstone
Urban Infrastructure
Medical / Health
Education and Skills
Financial &Service
Rural Infrastructure
High
Low
Developmental impact
1. Value addition – agro/mining
2. Fertilizer & cement
production
3. Timber
4. Leather processing
5. Agro processing
6. Tourism
7. Heavy / Engineering Industry
8. Energy
9. Telecommunications, ICT
10.Electronics, assembly
11.Pharmaceuticals
12.Non metallic mineral
products
13.Health / medical / education
Africa’s New Frontier for Investments and Profits
Zambia Export Response
Export Growth
6000
5000
US$ million
4000
NTEs
3000
Metals
Total Exports
2000
1000
0
Since 2000 2001
Copper > 101%
NTE - trippled
2002
2003
2004
2005
Year
2006
2007
2008
2009
Africa’s New Frontier for Investments and Profits
Exports by Products, 2008
0.0%
10.0%
Copper Wire
50.0%
8.0%
3.8%
Electric Cables
Cotton yarn
40.0%
6.5%
Burley Tobacco
Fresh Flowers
30.0%
17.6%
Cane Sugar
Cotton Lint
20.0%
5.9%
2.6%
0.8%
Fruits & vegetables
2.9%
Gemstones
3.5%
Others
Africa’s New Frontier for Investments and Profits
48.4%
60.0%
FDI Annual Trend
Source: BOZ, CSO, ZDA – FDI & Investor Perception Survey 2007/08, and WIR 2009
FDI by Economic Sector, 2007
US$ million
Other
145.3
Construction
9.2
Real Estate
2.9
Agriculture
3.8
Tourism
12.7
Wholesale & Retail
80.4
Transport & communication
67.8
Manufacturing
108.7
Bank & Non Bank
111.5
Mining
781.6
0
100 200 300 400 500 600 700 800 900
Source: BOZ, CSO, ZDA – FDI & Investor Perception Survey 2007/08, and WIR 2009
Framework for Investment
ZDA Act
Fiscal Incentives –
 0% corporate tax, first 5 years, graduated thereafter
 0% import duty on capital items
 Deferment of VAT
Facilitation services –




Primary and other secondary licenses
Land
Utilities
Work Permits
Selection of local Joint Venture partners
Large Projects – Investment Implementation Agreements
 Mutual obligations of parties
 Incentives, approvals and waivers
 Protection against nationalisation
Legal & regulatory environment constantly improved upon
Main Business Taxes
Corporate tax
General
Mining
Agriculture & NTE
35
30
15
Withholding Tax
15 Percent
Value Added Tax
16 Percent
Import Duties
Priority Sectors
(corporate tax New
investment)
Capital Goods &
Raw Materials
Intermediate
Finished products
0 – 5%
15 %
25%
0 – 5 yrs =0%
6 – 7 yrs = 50% of rate
8 – 9 yrs 75% of rate
Africa’s New Frontier for Investments and Profits
Portfolio investment via Lusaka Stock Exchange –
Dual listing on JSE – 17 companies,
US$ 52 millionNanga
Africa’s New Frontier for Investments and Profits
Indirect routes via listed entities with significant
Zambia operations on other exchanges
Africa’s New Frontier for Investments and Profits
Joint ventures with existing Zambian businesses
Oil Exploration, Mining, Construction,
Tourism
Africa’s New Frontier for Investments and Profits
Top Investors in Zambia..
www.zda.org.zm
A-to-Z information on the Zambian market
Guidance through the entire investment
process and aftercare
Provision of matching Zambia partners and
building contact networks
Global export market information & product
development
SME & business development services
Contact Details:
Zambia Development Agency
Privatisation House
Nasser Road
P.O. Box 30819
LUSAKA
Tel: +260 211 220177
Fax: +260 211 225270
Email: [email protected]
Africa’s New Frontier for Investments and Profits