Tuesday, June 18, 2024

Minister of Finance Emphasizes the Importance of Teamwork and Alternative Investments in African Economic Recovery

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Minister of Finance Dr. Situmbeko Musokotwane has highlighted the importance of teamwork among different stakeholders in building the economies of African countries.

Dr. Musokotwane said Africa and Zambia needs to push so much for productive investment in driving full-scale economic recovery.

When officially opening the inaugural Zambia Institutional Investors Forum in Lusaka, Dr. Musokotwane said Zambia and many other African countries need to harness alternative investments to set their economies on a higher growth
trajectory given the multiple crises arising from Covid-19.

“This forum being hosted by MNCapital Group and co-hosted by NetCom Business Solutions Zambia Limited is part of MNCapital Group’s continental drive to provide emerging markets with a platform to best fitting solutions for the specific country immediate challenges. I am therefore happy to note that the theme for this forum is “Harnessing Alternative Investment to Drive Economic Recovery”. The theme is timely, as many countries need to harness alternative investments to set their economies on a higher growth trajectory given the multiple crises arising from Covid-19 pandemic, the Ukraine-Russia conflict, climate change and the debt burden. As the Zambia Institutional Investors Forum 2023 gets under way today, I wish to state the importance of team work among different
stakeholders represented here in building the economies of African countries. This Forum is convened at such a time when Africa and Zambia in particular, needs to push so much for productive investment in driving full scale economic recovery,” he said.

Dr. Musokotwane reflected on some of the opportunities for investment in key sectors identified in the Eighth National Development Plan.

“In the agricultural sector, Government wishes to expand the production capacity of the sector and promote economic diversification, sustainability and create employment opportunities. Given that Zambia is endowed with a large arable land resource base of 42 million hectares, a lot of opportunities exist for crop farming and breeding of livestock. The country is also endowed with large freshwater bodies that can support irrigation and aquaculture including cage fish farming.Government has already provided incentives to the agricultural sector. These include lower corporate income tax rates in the agricultural sector; suspension of customs duty on machinery, equipment and other goods; and zero-rated Value Added Tax (VAT) rate for most agricultural products,” Dr. Musokotwane said.

“There are various opportunities in the tourism sector ranging from the establishment of hotels to the development of recreational facilities. Government focus in this regard, is on developing the enabling infrastructure that will unlock opportunities for investment and support to surrounding communities. Specifically, we are in the process of securing resources to develop prerequisite infrastructure at Kasaba Bay, Liuwa and the source of the Zambezi river that will attract private sector investment into these areas.

Some of the incentives provided by the Government include the suspension of customs duty on the importation of safari vehicles and reduced corporate tax rate from 25 percent to 15 percent in the sector. Government is also working on a number of measures to reduce the cost of doing business in the sector,” he said.

On mining, Dr. Musokotwane said Zambia has mineral endowment that remains untapped.

“Apart from copper, there are other minerals such as Gold, Zinc, Lead, Iron ore, Manganese, Nickel, Feldspar, sands, Talc, Barite, Apatite, limestone, Dolomite and Uranium among others. Therefore, we wish to woe investors to invest in the mining sector to increase exploration and develop green field projects. Such move will indeed support Government’s strategy to diversify within the
mining sector; and will increase the country’s net foreign earning apart from improving the living standards of the surrounding communities and the whole nation. To encourage investment in the sector, Government has restructured the Mineral Royalty tax regime to align with international good practice and in our effort to make the sector more attractive for investment. The mineral royalty is also deductible for corporate income tax purposes; and the Property Transfer Tax rate on the transfer of mining rights held by exploration companies has also been reduced,” he said.

Dr. Musokotwane added that the Government aims to expand the manufacturing base by promoting value addition in the country.

“One key strategy is the use of Multi-Facility Economic Zones and industrial parks.The Zones and industrial parks come with a range of tax incentives for companies that are established in these designated areas. Government recognises the critical role the energy sector plays as an enabler of economic development. Given the growing demand for energy due to increased economic activities in the various sectors, the sector is much a priority. To increase electricity generation, a key policy reform is to make tariffs cost reflective to attract investment into the sector. Let me state that I have just given a sample of some of the opportunities that exist in our country.

More detailed information on the opportunities and incentives can be obtained from the Zambia Development Agency (ZDA),” Dr. Musokotwane said.

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