By Nawa Mutumweno – Despite the winds of the economic downturn having blown through the country recently, Zambia’s allure to attract investments in many sectors of the economy has not faded. With a magnetizing business environment in place, the country has continued to ‘beckon’ and retain various Greenfield investment ventures that are set to change its economic configuration.
Commerce, Trade and Industry minister Felix Mutati last November reiterated Government’s desire to continue reforming and improving the business framework in order to accelerate developmet.
Government has introduced programmes that support private sector growth as the engine to drive the economy to high levels of progress.
To continuously attract investment, Government has put in place stringent measures that are user-friendly, for instance limiting the number of licences required in some sectors (such as tourism) before a business could be up and running. The focus is now on the promotion of an enabling environment through better infrastructure and reforms aimed at reducing the cost of doing business so that investors could dwell on business operations as opposed to acquisition of licences.
Some of the major investments on the cards include Chayton Capital, an equity fund institution from the United Kingdom, which is setting up a $50 million agribusiness and related infrastructure venture. Investing under the company name Agrivision Limited, Chayton Capital expects to develop up to 10 000 hectares of annual production cropped twice a year which equates to about 120 000 tonnes of crops. It intends to employ about 1 639 Zambians.
The operation will produce 60 000 tonnes of wheat and 15 000 tonnes of soya beans. It would cover five primary production farms of 18 000 hectares, silo and elevator business, milling operation, soya extruding operation, fertilizer blending, among others.
One of the major investments is the Kafue Steel plant which has undergone successful trial runs as a prelude to full production soon. The Levy Junction, named after Zambia’s third president is one investment that will ‘stand tall’ on the Lusaka horizon encompassing both commercial and residential properties.
Varun Beverages is ploughing in $$40 million to establish a Pepsi bottling plant that would also bring on line fruit juices from home-grown raw materials.
Central Province whose economic fortunes had floundred in recent times with the collapse of mining, textile and rail firms is set to prosper with the $23 million Maosheng Leaching and Mining Processing Plant in Mumbwa and the $16 million Xing Xing Mineral Resources Limited that is currently exploring for cobalt and copper in Mumbwa and Chibombo districts.
The $160 million Copper City, a mixed use development venture in Kitwe between a Zambian and South African property firm will add to the picturesque scenery of Zambia’s mining province. A $11 million manufacturing plant – Steel Rolling and Mill Balls – is also being set up in Kitwe.
One of the projects lined up in Eastern Province is the $6 million Lundazi Tobacco project and the setting up of two ginneries in the provincial capital, Chipata, to support the growth of the cotton industry.
Not to be left out, Southern Province has the $420 million Kariba North Bank Extension Project and the proposed development of a 250 mega watts thermal power station at Maamba Collieries. The Zambia Sugar Expansion Project was completed recently. Western Province will soon have a beef processing factory.
The country’s fair investment climate was ushered in in 1991 through the transition from a one party to multiparty democracy. Since then, Zambia has endeavoured to promote a liberal market economy through the privatization of state owned enterprises (SOEs), commercialization and the removal of unnecessary controls.
Trade liberalization has been a pivotal component in Zambia’s macroeconomic dispensation, resulting in an open, competitive market economy. Barriers to trade have been substantially reduced, making the country one of the most rewarding destinations for investment on the continent.
Investors are free to repatriate capital investments as well as dividends, management fees, interest, profit, technical fees and royalties. There are no exchange controls in Zambia. The role of Government is simply to create an effective regulatory environment as well as provide the basic infrastructure to enhance private sector participation with public-private partnerships being encouraged.
Zambia is a member of both SADC and COMESA, two major regional bodies, thus according investors preferential access to a market of over 400 million people extending from South Africa in the south to Egypt in the north.
Attractive investment opportunities exist in the country’s rich array of natural resources, the majority of which remain under exploited. While mining has been the mainstay of Zambia’s economic growth, the country is today attracting investment in other sectors, including agriculture, construction, tourism, telecommunications, agro-processing, energy, information technology, finance and manufacturing.
To cap it all, the establishment of the Zambia Development Agency (ZDA) has facilitated a one-stop shop that has addressed the hitherto high cost of doing business in the country and simplifying the processes of various business formalities, including licensing.