The Zambian government has assured Japanese investors that it will not reposes any foreign investment taken into the country, but will support every level of business to boost the country’s economy.
Commerce, Trade and Industry minister, Felix Mutati assured the Japanese business community that the Zambian government has put in place measures to protect foreign investment coming into the country through market support.
Mr. Mutati said through the Tokyo International Conference on African Development, TICAD 1V, Zambia will formulate an instrument that will support investment and minimize the perceived risks of coming into Zambia or Africa.
Speaking when he addressed the Japanese business community in Tokyo today, Mr Mutati added that Zambia had formulated some fiscal incentives such as tax corporate, customs suspension,and capital allowances to attract investors to Zambia.
He cited other non fiscal incentives as being stability measures and investment facilitation by Zambia Development Agency.
Mr. Mutati, however, called on investors and the business community in Japan to shift their support from development assistance to development of infrastructure.
He urged the investors to go beyond the supply of equipment and raise their involvement in Zambia and Africa in general.
Mr. Mutati observed that despite Japan being a strong country economically, its presence in terms of investment was small in Zambia.
Mr. Muati told the gathering that Zambia was rich in natural resources and challenged them to come to Zambia and explore investment opportunities in mining, tourism, energy and agriculture.
“As a country we want to move on and develop, but we are restrained because of lack of infrastructure, hence the need to expand the rail system, roads and routes to airports” said Mr. Mutati.
He cited other areas of investment as mobile service providers, soft ware, internet, manufacturing, vehicle assembling, consumer goods and agro processing.
In mining, Mr. Mutati called for investment in exploration and development of new mineral resources, mineral processing and down stream processing of minerals, especially iron and steel.
Meanwhile, Economic Advisor to the President, Dr Situmbeko Musokotwane assured the Japanese business community that Zambia‘s strongest asset was peace and stability.
Dr. Musokotwane explained that investors were safe in Zambia as the country has known no internal or external conflicts for more than 40 years.
He added that Zambia’s other strongest point was the GDP growth rate which has averaged over five percent in the past six years. He also explained that Zambia’s external debt has been cut to less than $ 1 billion from more than $ 7 billion.
Dr Musokotwane further said export earnings from the traditional copper exports and non copper exports have quadrupled since 2002.
On government policies, Dr Musokotwane said government has formulated more investor friendly policies such as the equity ownership which allows 100 percent foreign ownership for all promoted investment sectors.
He cited another policy as the liberal forex regime where investors are free to make profits and decide to repatriate capital or profits.
And Executive Director for Japan Oil, Gas and Metals National Corporation, JOGMEC, Hisamitsu Moriwaki said JOGMEC recognizes Zambia as one of the most promising countries with various minerals.
He said Zambia is one of the important resource countries which have high potential of various mineral resources.
He said JOGMEC would want overseas partners for the joint venture exploration project in order to facilitate mining investment from Japan to African countries.
[ZANIS]
“On government policies, Dr Musokotwane said government has formulated more investor friendly policies such as the equity ownership which allows 100 percent foreign ownership for all promoted investment sectors.”
Comment:
I have one problem with this statement. Providing 100% foriegn ownership will never build the much needed local entreprenueral skills. Govt ought to be saying its mandatory for MNC’s setting up base in zed to have 25% ‘indigenous’ ownership. The statement above fosters a dependency attitude which is prevelant in Zambia today. for instance, the majority traders are currently foreigners; we are spectators in our own economy and here is an advisor fanning the flames.
you are right #1 zambians are only shareholders in tuntembas at kamwala and soweto market.
There is nothing wrong with Zambians starting their own businesses. No one is stopping us. And in a free market economy that Zambia has adopted, their is also nothing wrong with foreigners owning 100% of their company. Let’s not stick ways that will hinder our economic progress
May I, without your kind permission, observe a typo in your above headline where you attribute the minister to saying government will not “reposes” …
That implies, in a quite insalubrious comportment, that GRZ will relax foreign investment in dziko la Zambia. Perhaps you could fire the copywriter and hire one with a bias towards using correct words, which in this case would be “repossess”.
ikankoni nzelu LT, this blog is getting too popular to be full of mistakes!
This Government is kidding itself. Mutati and Musokotwane must stop scratching their navels. We will repossess any entity that has been given away without transparency to the Zambian people. Secrecy and duplicity have been the hall marks of this regime. Any sensible government will work to unravel these dubious deals that have come to translate into enslavement of the Zambian majority by a few well positioned economic opportunists like Mutati and LPM.
why shouldn’t we reposses?we just have to!watch our space Mutati!
Tuka fipoka fyonse. We will also look at Teka Farm. We understand that Zambia Railway system has also spent some money on LPM’s farms.
Anything that has been abused that belongs to Zambian people shall be repossessed. I hope that Felix Mutati the chief arranger for fraud is reading this.
thank you His Lordship, i’m with you 🙂
people, stop being petty and jealousy, find capital and invest.
Although the fact that investors are coming into zambia should be good news,i am very much against it.Obviously,because these foreigners are goin to make billions off our cheap labour and compromising tax laws,exploiting hard working zambians in every way possible.yes,an economist will tell you that the economy will improve,but your average farmer wont tell the difference.Prices wont change,fuel deffinitly wont be anycheaper and the living standards of people wont improve.Again,this is obviously bcoz these investors are taking back all the profits to their countries,leaving nothing to the average zambian.i believe zambians should be the ones running companies,and the only way they can do so
…honestly is by the board owning majority shares of the companies so that isf they mess about and run the company into the ground,they themselves will lose money…its the only way
So Mutati, why make assurences instead of just creating laws that will benefit everybody, let them come, at a minimum of 50% indegenous ownership, how do these guys think great nations have been built, ni 50/50 bamwine ata. Ask them how they run their companies, tell me any company that has invested in japan with 100% foreign ownership!
Foreign investiment is common place everywhere even in developed countries like UK. Mazda, Nissan, Rover etc are all foreign investments thriving in UK and making its economy one of the strongest in the world. No currency is stronger than the pound. The difference is that there are govt controls on financial aspects of all these companies. Corporate tax must not be less than 35%. Investment brings jobs. No foreign investment is taking away already existing companies from locals. If any one has money the economy can absorb them, invest and you will reap rewards. Investment means using your own money to do business.
Bwana Mwaekwa (1),
We could be coming from opposing economic school of thought, but earnestly with dignity my views that” your economic theory is very faulty in the prevalent free market economy. The role of Government is to level the ground, develop economic safeguards, enforce them to accentuate national gain from every investment. This dogmatic mentality of wanting to socialize everything has no place in this dispensation.Today in the USA you can go in with your US $1million investment fund. They will give you all necessary immigration documents and subject you to their leveled business environment excerpt on strategic sectors bearing national security value.
The way to go is to cut on your politicized life time and vest it into tangible business lines.Come with serious business visions.Pair up with serious minds, research, plan, organize some resources and seize some economic lifeline head on. GRZ has a lot of incentives to support you while venture capitalists and investment banks around the Globe are sniffing for entrepreneurial teams with big dollar cash-cow projects.In hundreds of us your fellow Zambian you will find willing and sincere Zambian professionals to offer sound financial and risk management consultancy to foster your business growth.
The culture of investophobia will lock you into tuntemba class for life.Its time to think outside the box and aim big. The so called Foreign investors on our soil are consortium of integrated minds in their home countries.When they hear of opportunities, they team up, mobilize resources and travel where opportunities are to sell themselves as authentic investors with bottomless trunks of resources to handle anything in the economy. Access their credit lines and analyst the debt ratios they are in with some investment banks, venture capitalists and hedge funds power houses in the west. Then will you know.
#14
From opposing economic schools of thought indeed. I on the other hand do not find fault in your position on this but rather that you’re merely pushing an interest that’s all. Besides the so called free market ethos has its share of faults.
I should be the one accusing you of neo-liberal dogmatism which to this day cannot account for the proliferation of LDC’s hence millions of lost lives in pursuit of PROFIT.
It stands to reason that the playing field is not leveled; therefore my earlier comments suggest government provide a platform for the promotion of local entrepreneurs, that’s all. What’s so dogmatic about it?
Cont/
The ZDA policy document is tailored for foreign investors period. I’m currently belonging a consortium which is busy trying to make headway in the Zambian market but the obstacles are relentless, i dont need to elaborate further. Perhaps you have someone on the ‘inside’ and so things are smooth sailing for you.
#17,
Promotion or conservatism of local enterprises cannot be in the form of condoning socialized enterprise economic policies that prescribe investment ownership ratios. That defies the free market principles under competition. Such policies catastrophically failed Chairman Maos’ PRC Cultural & economic revolutionary vision 1949-1976 aimed at modernizing his country. It was until Deng Xiaoping who had to alter the CCP strategy of modernizing the present successful China that things started happening.
Nation-State building is economically successful where countries with good economic safeguards open up to competition skewed to enhance internal capacity but not protectionist policies. Protectionism can only start emerging following major economic strides & evidence of strong fundamentals resistant to some externalities. There is no other way out but earnestly embracing the prevalent political, economic, social, and cultural reforms if we have to realize long & lasting gains. From Japan post 1945 under General Douglas MacArthur following defeat of its Triumvirate to South Korea, none initially started their economic prosperity with protectionism.
FYI, Japan and South .Korea economically emerged strong from the gains of the US Containment policies and the Vietnam War. They produced and supplied heavily for the containment wars even as late as 1979 during the 10 years Afghanistan War that ended into Russia massive defeats. Stop thinking its advancing neo-liberal interests when the truth is put forward.
Organize yourself and we will meet on the ground as entrepreneurs pushing our respective different business visions for the Zambian good. Incentives are abundantly there to establish and realize your investment gains. There is no reason whatsoever for “Sterile Investment”- An investment that does not provide dividends or interest to the investor. Opportunities & incentives for the local are real and generous to capitalize. Waiting for a socialized system is a life-time nightmare that you may have to wait for 20 more years.
Good lucky & peace.
5. Development specialist,
” We will repossess any entity that has been given away without transparency to the Zambian people. Secrecy and duplicity have been the hall marks of this regime. ”
I agree completely. The government cannot sign away the nation’s resources in secrecy. Any foreign investor should know that up front. Unless any agreements are run by parliament, future government will always have the option of overriding them. Security of investment is something that has to be earned by the investor, and government transparancy is part of that.
13. Disgusted spectator,
” Foreign investiment is common place everywhere even in developed countries like UK. Mazda, Nissan, Rover etc are all foreign investments thriving in UK and making its economy one of the strongest in the world. ”
The one does not necessarily follow the other. What is crucial are the terms of investment. Is the company obligated to use local suppliers? Do they pay taxes? Is there a future possibility of transfer of ownership to Zambian nationals? Do they obey labour and environmental laws? In too many cases in Zambia, the answer was no to all of the above.
I disagree with the Pragmatist.
Toyota, Mazda, Nissan etc are all Japanese giants that are part of Japan. Their investments abroad have not been to the detriment of those nations into which they have gone.
KCM has been ruthless with our environment. In case you do not know, the KCM holding company, Vedanta are banned from doing business in Sweden because of their poor environmental practices.
I find your attitude to foreign investment immature and unmatched by the ruthless treatment these companies give to our fellow citizens. The only beneficiaries are Mutati and LPM. We will have to reopen all the contracts signed by Mutati and LPM and expose their duplicity so that decency prevails
#24 & 25
The problem is not foreign investment but the usual corruption of our people. It is up to govt to check the credibility of the companies coming in; in all aspects and ensuring that the CVs are clean and palatable and their background is known. It is therefore not the investor to blem but the host govt. An investor does not come in with the view of handing over his business to anybody but to make a profit. It is up to the host to ensure that they do so fairly and pay tax. RSA has developed to where it is because of foreign investment. By the way do we know anything about the Nigerian bankers? #18&19 please keep up the debate. I’m enjoying it, at last sober intellectuals debating.
Development specialist # 25,
I cannot see what is childish about what I have said on investment & protectionism here. Instead you have lamentably failed to intellectually nail down any policy argument worth reflection on. FYI, to disparage reformers for their courageous policy decisions tailored for the common good, is to advance a poor discourse, as so many modern revisionists are doing short of smart alternatives. I’m not being in denial that the free market reform times have developed a class gap without sign for immediate compromise or implicit social contracts as hoped.
Yes, the process of nation-state building has been reversed, and the social fault-lines that the compromise glossed over are once more emerging. But the answer is not protectionism in the early years of nation-state building. The way to go is fostering effective economic safeguards, which ultimately promote resourceful, internal economic activities with tangible benefits on aggregate to all Zambians.Japan or any other successful nation did not start with protectionism following their defeat and take over by the Macarthur administration.
To improve the economic position of the bottom four-fifths will require that the strong & fortunate fifth in the world share their wealth and invest in the wealth-creating capacities of other citizens free of protectionism. Earnestly, as the super rich become ever more linked with the global economy, they become less passionate to transfer opportunities into protected economies. The less fortunate compatriots end up the losers.
I’m a realist let face it, there are two opposite trends in the world today and Zambia is no exception on social development: one group is going up, reflecting elite politics; and one going down, a group increasingly disenfranchised and caught in structural unemployment, whose political aims have no (or diminishing) outlets in the traditional parties and the changing nation-state.
If not careful and bold enough to face realities of the Global imbalances with wisdom, the trend will worsen on our watch. Only the archipelago of the connected classes that reside in every megacity from Bornbay to Sao Paulo, will prosper from the new capitalist (global) order if we turn protectionist junks in our early years of nation-state building reforms. The rest of the ever swelling ranks of the lumpen planet from Cairo to the xenophobic Cape risk facing a fate worse than colonialism that closed its heart to a shared vision of Global prosperity for all.
Our politics as Africans on the ground or here should be smart based Alliances of social movements on real issues reflective of educated voices for those regarded as losers or irrelevant in this new elite rearrangement of the world economic irrelevance.
Pragmatist:
You have failed to understand that Privatization to be respects by all sides, the following must be in existance:
1. Free access to information. The GRZ and its privateers have ensured that all agreements are black boxes, and the facts are under closely guarded secret. LPM and his GRZ have refused to enact a law to open up information to Zambians. If you are really serious, why have they fought to keep things secret?
2. Disclosure of all negotiations at all levels. The GRZ and its tools have kept all negotiations a preserve of the few. This is dangerous as all matters under discussion are NOT privately owned assets and resources to be treated as a private matter.
3. Presentation of all true costs and benefits to the nation, and not a chief or a tribe. There has been a serious lack of effort to make a follow up by timely evaluations on costs and benefits to the country by independent bodies. It is foolish to expect the ministry of commerce to present the tru picture of the situation when Mutati was party to signing secret agreements.
4. Lack of serious action on poor yielding agreements. Zambia Railways is a clear eye sore to any serious Zambian. It is clear to me that the motive for concessioning the firm was far from economic development or improved performance since the railway company has utterly failed to achieve any of the above during a period where its services should have taken it to the moon in profitability and infrastructural development.
5. Absence of direct benefits to the vast majority of citizens. Why should agrrements be entertained when their sole objective is to extract all resources from Zambia without any quantified benefits to the vast majority of our citizens? It is unacceptable that the whole nation is held to ransom by agreements which are deemed to be beneficial to Zambia by those that were at the negotiation table backed by LPM, and yet there is no quantifiable proof of anything seriously beneficial to the vast majority of Zambians. Building a ramshackle clinic here or there by a mining giant is not what we should be looking for. Public goods and Infrastructure is what governments are out there for.
6. A serious effort to empower citizens with quality education. This is a critical task if the investments into Zambia are going to be sustainable. We need engineers of all types. It is disheratening to note that spending on higher education is peanuts. LPM and his GRZ are not serious with taking Zambia to a better level than KK achieved. We have mediocrity in all institutions, and foreigners are supposed to come here and do whatever they want WITHOUT any informed brains to check on their excesses and abuses of their agreements. It is a shame that LPM seems to be fixated on law and not the the real development needs of Zambia. At this stage we need technical skills more than lawyers.
7. The quick run to LUSE as a way to empower Zambians. This route is one sided. It only rewards those close to LPM and his power line as they have access to money to buy shares. This route also is blind to the fact that stock markets are not 100% secure as a route to save for one’s future. STaock markets are speculative and it is clear that building a nation of speculators is one way of building a nation based on hype, anticipation and not production of real goods and services. This route is ill-concieved as most of our people are still facing the lowest levels of needs on Maslow’s hierarchy of needs.
8. Poor education of Zambians by GRZ is a clear sign that this governement does NOT want to eradicate poverty. Privatisation requires transparency and increased education of the people so that they can be active and intelligent participants in the process. Right now, the vast majority are passive by-standers while Mutati and LPM are busy easing Chou Mein with various investors and busy keeping the documents of their agreements open only to themselves and their wives. This is trash and all transactions done under these conditions MUST BE AUDITED by independent professional auditors and report to two bodies – parliament and an independent public prosecutor for action.