“Zambia is a paradise in terms of investment,” Kenneth Konga, Zambia’s Minister of Commerce, Trade and Industry, said at a recent investment forum in London. The event brought a number of Zambia’s public sector and industry representatives to London to highlight business and investment opportunities.

The Zambia Investment Forum, supported by the Zambia High Commission, focused on the theme ‘Consolidating Economic Growth through Investment’ as it offered participants a detailed overview of the investment climate in Zambia and the range of industry sectors offering a high return on investment.

Hub of Regional Development

Zambia’s High Commissioner to the UK, Anderson Chibwa, welcomed delegates to the Forum, organised in association with Business Profile Intelligence.

“Many countries claim to be the hub of regional development,” he said in his introduction. “Few can make a stronger claim than Zambia, whose geographical location in SADC (Southern African Development Community) provides direct strategic connections by road, railways and telecommunications to eight of the fourteen countries in the regional body.” In the trade sector, he said, “the central position of Zambia in southern Africa, gives it the unique advantage of expanding markets to the north, east west and south where vast opportunities lie for various goods and services.”

In 1992, Zambia embarked on a series of market orientated reforms to liberalise the economy. With growing investor confidence, Zambia is entering a new phase where it seeks to consolidate the economic gains of the past five years and the country’s Minister of Finance, Hon. Ng’andu Magande, presented a paper outlining his Government’s efforts to strengthen the investment climate in Zambia.

Zambia’s Economy

High copper prices on the world markets throughout 2006, in addition to unprecedented debt cancellations, gave Zambia the stimulus needed to create opportunities for inward investment. The increased economic stability has served to reduce inflation in the country and to accelerate economic growth to nearly 6% from 5% recorded in 2005. The Zambian Government’s budget for 2007, while giving a measure of tax relief to lower earning Zambians, saw an increase in royalty and tax rates for new entrants into the mining sector as well as a new 3% advance tax on commercial importers.

Potentially one of Africa’s richest countries, Zambia’s economic outlook in 2007 remains very positive, with new investment in mining and infrastructure likely to create even more benefits for the country.

While the mining sector still holds a dominant position in the country, other sectors also offer good prospects for investment, including commercial agriculture, export processing and water management.

Investment Forum

The Forum included an impressive line-up of Ministers, while Managing Directors and senior representatives of leading banks in the country and of Zambia’s copper mining industry, farming, telecoms and tourism sectors also delivered presentations and case studies.

The country’s economy was described as ‘young, dynamic and evolving’ and on the verge of attaining middle-income status. The Zambian Government sees its role as fostering private sector development and creating a climate conducive to investment.

“Over the past 15 years, Zambia has moved from a closed planned economy to a liberal and open one,” Konga said. “The private sector is increasingly recognised as the engine of growth for Zambia’s economy and government has taken a shift in its policies accordingly.” Its objective of developing an open and competitive industrial economy was underlined by the Commerce, Trade and Industry Minister.

“Zambia has signed a number of treaties with other countries to protect investors,” he said. “This Government is pro-business and we want to assure all investors that your money is risk-free.”

Zambia’s geographical strategic advantage was a point also noted by Maxwell Mutale of Vedanta, a fast-growing FTSE 100 metals and mining group. “Zambia has plentiful labour with high levels of literacy and an expanding economy with generous incentives for investment,” he added

Agriculture

Economist John Fynn of the Zambia National Farmers Union outlined the investment potential of Zambia’s agricultural industry as it moves from traditional commercial farms based on maize, beef and tobacco.

“Infrastructure now provides scope for expanding exports of raw and processed products and there is an untapped demand and unfulfilled markets in Zambia and neighbouring countries,” he said.

Flowers account for a significant and growing percentage of Zambia’s exports and the country has comparable advantages in availability of land and water, making it well suited to compete in the growth of high quality Arabica coffee production. Cotton offers opportunities for seed production in the commercial sector, he said, while Zambian tobacco is highly regarded and in massive demand from China and the West.

Fynn pointed out that Zambia has the highest sugar yield potential in the world which, combined with available land, labour and water, offers high export potential for high-quality sugar production. Beef production, poultry and pork processing also offer significant investment potential.

With neighbours including countries like Botswana, Namibia, Mozambique and Angola, Zambia’s access to these markets, while offering one of the cheapest power tariffs in the region, place it high on the list of investment destinations. In the words of Fynn, “Zambia makes good business sense.”