Highlighting Zambia’s ample investment potential, Henry Ngilazi, Political and Administration Councillor and current Chargé D’affaires within Zambia’s Embassy in Brussels, discusses the Embassy’s priorities, the country’s competitive advantages and investment opportunities.
European Times: What are the Embassy’s priorities?
Henry Ngilazi: The Embassy of Zambia’s main priorities and activities are aligned to strengthen bilateral relations with other countries, focusing on seeking economic diplomacy as an integral part of country’s foreign policy and national development agenda. The shift from political to economic diplomacy comes at an opportune time, when Zambia strives towards developing and diversifying its economy. Therefore, the Zambian Mission in Brussels will continue engaging other countries and the international community in order to promote and increase the country’s FDI, which will result in economic growth and job creation.
The Embassy also prioritizes the implementation of the 7th National Development Plan, which acts as a blueprint for Zambia’s development agenda 2017 – 2021.
European Times: What are Zambia’s competitive advantages?
Henry Ngilazi: Zambia is a multi-party democracy and provides a free market liberalized economic environment in a stable strife-free and multicultural society. The Zambian Government welcomes investors across sectors and the laws relating to investment provide investment incentives and protection, in order to attract increased investment and international trade, as well as increased domestic economic growth.
The country’s land-linked and central location in the region, complemented with a combination of several key strengths, make Zambia a superb investment destination. These key strengths include: an abundance of natural resources and manpower; political stability; no controls on prices, interest rates, foreign exchange rates; free repatriation of debt repayments; 100% repatriation of net profits; guarantees and security to investors with legislated rights to full and market value compensation; duty free access to regional, wider African and the USA markets under SADC, COMESA/FTA and AGOA; banking, financial, legal and insurance services of international standard as well as a Stock Exchange; double taxation agreements with a number of European, North American, African and Asian countries; etc. Furthermore, Zambia is an excellent place to work and live in, with sub-tropical climate and vegetation with plenty of water, friendly, well-educated English-speaking population with high literacy rate and strong religious values. The country offers an open-air lifestyle with nature reserves, game parks, rivers, lakes and waterfalls. Zambia also has a thriving private sector and the Government has successfully privatized most of the previously state-owned enterprises, thus encouraging an entrepreneurial culture.
Furthermore, the Zambia Development Agency (ZDA) Act of 2006 and amended in 2014 offers a wide range of incentives in the form of allowances, exemptions & concessions for companies. The Act provides for investment thresholds to qualify for fiscal and non-fiscal incentives.
European Times: Please elaborate further on the Zambia Development Agency Act.
Henry Ngilazi: Under the ZDA Act, investments are classified in two categories. Category 1 includes investments of US$500.000 and above in a Multi Facility Economic Zone, an Industrial Park, a Priority Sector and investment in a Rural Enterprise. This category is entitled to the following incentives: zero percent tax rate on dividends for five years from year of first declaration of dividends; zero percent tax on profits for five years from the first year of operation; zero percent import duty rate on capital goods, machinery including specialized motor vehicles for five years. In addition to fiscal incentives, the above category of investors is entitled to the following non- fiscal incentives: investment guarantees and protection against state nationalization; free facilitation for application of immigration permits, secondary licenses, land acquisition and utilities, etc.
Category 2 are investment of not less than US$250.000 in any sector or product not provided for as a priority sector or product. This category of investors is entitled to only non-fiscal incentives, including investment guarantees and protection against state nationalization and free facilitation for application of immigration permits, secondary licenses, land acquisition and utilities.
European Times: Which sectors are most attractive for foreign investors?
Henry Ngilazi: Zambia enjoys both social and political stability as well as a healthy macroeconomic environment, with economic growth averaging 6% per annum since 2003. Backed by rich natural resources such as copper and cobalt, the mineral sector has for many years been the backbone of the country’s expanding economy. However, with the growing population and increased demand for development, the Government has been making commendable efforts in diversifying the economy and this has led to some sectors being given more attention to increase value action.
Zambia is the world’s eighth largest producer of copper and holds 6% of the world’s known copper reserves. Copper and cobalt, the country’s traditional ex-ports, account for well over 70% of export earnings. Other minerals include gold and gemstones (emeralds, aquamarine, topaz, opal, agate and amethysts). Zambia produces over 20% of the world’s emeralds. This extensive range of mineral resources, including a variety of industrial minerals, and energy resources including uranium, coal and hydrocarbons, presents excellent investment opportunities in the extraction and processing of these minerals in the country.
Zambia is endowed with a large arable land resource base of 42 million hectares, of which only 1.5 million hectares is cultivated every year. It has abundant water resources for irrigation, and the country accounts for 40% of the water resources in the SADC region. Given the vast resource endowment in terms of land, labour and water, Zambia has huge potential to expand its agricultural production. The country’s total land area of 75 million hectares is divided into three major agroecological regions, each suitable for investment opportunities in the production of various crops. Since only 10% of the arable land is under cultivation, the Government encourages investment in commercial farming and has established farm blocks to facilitate investments in agriculture.
The manufacturing sector accounts for nearly 11% of the country’s GDP and has been consistently growing, offering numerous investment opportunities for the production of a wide range of high quality value added intermediate and final products for the export markets, including: engineering, textiles, wood & wood products; building materials; processed foods; chemicals; leather and leather products; handicrafts, etc.
The tourism industry has grown over the recent past years, with the establishment of hotels in the major tourist town of Livingstone and the city of Lusaka. The vast potential in the tourism sector in Zambia, with its natural beauty (including the Victoria Falls, which is one of the most renowned beautiful transcendental Seven Natural Wonders of the World) and the wealth of wildlife have yet to be fully exploited. Zambia has 20 national parks and 34 game management areas with a total of 65.000 sq km set aside for wildlife conservation.
The Government is reaching out and encouraging private sector engagement in the infrastructure and construction sector. Specifically, the Government proposes that the private sector undertakes a large portion of Link Zambia 8000 Road Project. This priority government project envisions building 8.000 km (5.000 miles) of high quality single and dual lane roads throughout the landlocked country.
With its vast water resources and coal reserves, Zambia offers abundant investment opportunities for hydro and thermal electricity power generation, supply and distribution. The country has well over 1.890 MW of hydroelectric generating capacity. There is massive potential for private sector investment in hydroelectricity power generation, transmission and distribution, and supply of petroleum products, including bio-fuels.
All these sectors, as well as other sectors such as health and education, offer abundant investment opportunities. I invite all interested investors to come to Zambia and explore the country’s investment potential.