Page 13 - Zambia Yellow Pages 2025

9
PROFILE OF ZAMBIA
Zambia is a large, landlocked and resource-rich nation situated in the
centre of Southern Africa. It shares its border with eight countries
(Angola, Botswana, Democratic Republic of Congo, Malawi,
Mozambique, Namibia, Tanzania and Zimbabwe) that offer an
expanded market for its goods. Independent from the United Kingdom
since 1964, Zambia traditionally has been one of the region's most
politically stable countries.
In addition to being the second largest copper producer in Africa,
Zambia is blessed with a variety of other mineral reserves as well as
abundant tracts of arable land and tourism assets such as the iconic
Victoria Falls. Although it has experienced robust economic growth in
the past decade and is today one of Africa's most urbanised nations,
much of the country remains wild, underdeveloped and unspoilt. A
large percentage of land is allocated to conservation projects, national
parks and game management areas, which are home to plentiful wildlife
as well as extraordinary birdlife. Zambia is also one of the most
water-rich countries in Africa, with five enormous lakes, three major
rivers and 17 waterfalls, which supply domestic and industrial needs as
well as providing hydroelectric power.
THE ECONOMY
Macroeconomic stability and sound fiscal policies saw Zambia's
economy register healthy growth in the 2000s, with the real gross
domestic product (GDP) growth rate strengthening to more than 10
percent in 2010. The country achieved middle-income status in 2011,
and growth of 6 to 7 percent per annum was recorded in the 2011-2015
period, despite an adverse international economic climate. Much of this
is attributable to economic reform supported by investment in the
mining industry, which had a knock-on effect on sectors such as
transport, construction, communications, wholesale and retail trade,
bolstered by high copper prices and improved intra-regional trade.
These positive economic developments have enabled the rollout of
massive infrastructure projects, such as roads and bridges, hospitals,
schools, water reticulation systems and other support infrastructure.
Following 15 years of significant socioeconomic progress, Zambia's
economic performance has slowed in recent years. Between 2015 and
2019, the average GDP growth rate dropped to 3.1 percent per annum,
largely due to falling copper prices and declines in agricultural output
and hydro-electric power generation as a result of insufficient rains. In the Lusaka Stock Exchange is protected by the Securities Act of 1993
2019, economic growth declined significantly, from 4 percent (2018) to
1.4 percent. The services sector - most notably the ICT and tourism
sectors - remained Zambia's key driver of growth, expanding by 3.5
percent in 2019. However, the primary and secondary sectors decreased
significantly. As is the case worldwide, the Coronavirus pandemic has
exacerbated the country's existing vulnerabilities.
Government has instituted specific health, fiscal and monetary policy
measures and proposals, detailed in the 2021 Budget, which aim to
stimulate economic recovery through practical and tangible support to
businesses as well as enhancing social protection. The medium-term
Economic Recovery Programme, a successor to the Economic
Stabilisation and Growth Programme which ended in 2019, provides
incentives to reinvigorate growth and build resilience while
safeguarding livelihoods and protecting the vulnerable. It also contains
measures to restore debt sustainability.
THE INVESTMENT CLIMATE
As one of the largest economies in Sub-Saharan Africa, Zambia attracts
considerable foreign interest as an investment destination. According to
UNCTAD's 2020 World Investment Report, foreign direct investment
(FDI) into Zambia increased from US $408 million in 2018 to US $753
million in 2019. In the same year, the total FDI stock was estimated at US
$19 billion. Investment remains dominated by large mining investments
from Canada, Australia, United Kingdom (UK), China and the United
States (US), in addition to large infrastructure and other projects
undertaken almost exclusively by Chinese companies.
Plentiful natural resources and human capital provide the potential for
growth and a variety of investment opportunities. Zambia is known as
one of the best investment destinations in Africa, and ranks 85th in the
world and 5th in Sub-Saharan Africa (just one place behind South Africa
and two places better than Botswana) in the World Bank's 2020 Doing
Business report.
The country enjoys preferential market access through active
participation in regional trade organisations, and duty-free access to US
markets through the African Growth and Opportunity Act (AGOA).
Zambia lies in close proximity to the large market of South Africa, and is
uniquely situated at the heart of two regional economic blocs. As such,
there are massive investment opportunities in communications and
transport. A recent key milestone has been the completion of the US
$298 million Kazungula Bridge linking Zambia and Botswana, which will
facilitate increased regional trade and reduce transit time for freight and
passengers.
Zambia's banking, financial, legal and insurance services are of an
international standard; the country has an independent judiciary, and
anti-corruption measures have been instituted. Investments are
protected and private property rights guaranteed through the Zambia
Investment Act, which states that investments may not be expropriated
unless parliament passes an act relating to the compulsory acquisition
of that property, in which event full compensation at market value and
free transfer of the funds in the currency in which the investment was
made is guaranteed.
The country belongs to the Multilateral Investment Guarantee Agency
(MIGA) and has signed multilateral, regional and bilateral investment
protection agreements with a number of countries, as well as Double
Taxation Agreements (DTAS) with the UK, Netherlands, Switzerland,
Germany, China and South Africa, among many others. Investment on
and enforced by the Securities and Exchange Commission.
Most of the previously state-owned enterprises have been successfully
privatised, and Public Private Partnerships (PPPs) allow foreign investors
to partner with local entrepreneurs on various projects. An
entrepreneurial culture is encouraged, and institutional reforms
continue to be undertaken to strengthen the private sector. In light of
rising FDI inflows, local businesses are urged to register with the Zambia
Development Agency for partnership opportunities with foreign
investors through joint ventures and business linkages.
Investment incentives
Government is working to create an investment climate that
benchmarks Zambia as the best investment destination among
dynamic developing economies in the sub-region, while deepening
regional economic integration and trade to promote export-led growth
and diversification. As the country largely depends on the mining
sector, efforts are being made to become less dependent on copper.
Several tax incentives are granted to foreign investors.
The Zambia Development Agency Act No. 11 of 2006 provides for