“Forced Local Ownership Will Scare Investors, Hurt Economy – Top Economist Warns
Prominent economist Yusuf Dodia has issued a stern warning against renewed calls for local content legislation that would force foreign investors to cede equity stakes to Zambians, describing the proposal as a threat to the country’s economic stability.
Speaking at a business forum in Lusaka, Dodia argued that such measures would undermine investor confidence, trigger capital flight, and derail Zambia’s fragile economic recovery.
“Legislating ownership in a free-market economy is not just misguided,it’s dangerous,” he said. “Zambia abandoned state-controlled business models decades ago for a reason. We cannot now demand foreign investment while simultaneously creating an environment of uncertainty.”
The push for local content laws has gained traction in recent months, with some advocacy groups and trade unions arguing that Zambians are not benefiting enough from foreign-owned enterprises, particularly in mining, agriculture, and retail.
However, analysts caution that similar policies in the past led to economic stagnation. In the 1980s, Zambia’s reliance on parastatal companies resulted in inefficiency, debt accumulation, and eventual collapse, prompting the shift toward liberalization in the 1990s.
“We must learn from history,” Dodia said. “Countries like Nigeria and Malaysia implemented local content rules within heavily regulated economies. Zambia no longer operates that way. Forcing equity transfers now would send entirely the wrong signal to investors.”
With regional competition for foreign direct investment (FDI) intensifying, economists warn that aggressive policy shifts could make Zambia a less attractive destination. Neighboring countries such as Tanzania and Mozambique have been actively streamlining regulations to attract capital.
“Investors have options,” Dodia noted. “If Zambia introduces unpredictable ownership rules, businesses will simply take their money elsewhere. The consequences—job losses, reduced tax revenue, and slower growth would be severe.”
Rather than imposing equity requirements, Dodia proposed a more sustainable approach to economic inclusion:
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Enhancing skills development to prepare Zambians for high-value roles in foreign firms
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Encouraging public-private partnerships that facilitate knowledge and equity transfer without coercion
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Improving the business environment through stable policies, tax incentives, and regulatory clarity
“Empowerment should come from capability, not confiscation,” he said. “If we want Zambians to own more businesses, we must first equip them with the skills and capital to compete.”
The debate has sparked sharp disagreements among citizens. Some argue that foreign firms exploit Zambia’s resources without adequate local benefit, while others fear that aggressive policies could backfire.
“These companies profit from our land and labour Zambians deserve a fair share,” said a trade union representative.
But a Lusaka-based entrepreneur countered: “Ownership without expertise is meaningless. We need partnerships, not forced takeovers.”
As the government weighs its options, Dodia urged policymakers to prioritize long-term stability over short-term political gains.
“The choice is clear: either we embrace policies that attract investment and create jobs, or we chase away capital with populist demands,” he said. “Zambia’s future depends on getting this right.”
With economic recovery still uneven, the decision on local content laws could determine whether Zambia moves forward or repeats the mistakes of the past.
We need investors for sure to involve themselves in running this country, the private sector can take care of itself, surely 60 years of anxious anticipation is enough ??
We dont want and dont need are investors be they local or foreign that after they make millions of dollars they extranalize that money causing high demand for Forex leading to high exchange rates. The country is better without such investors because all they do is suck the economy dry.
We want investors that are here to stay and reinvest whatever amount, big or small back into Zambia, that is how development comes about not you make money then send it away.
We need to be honest with ourselves if we are to come up with lasting solutions to our investment challenges. Look at the failures of DBZ, poor collateral, being overwhelmed by politically exposed persons (PEPs) borrowing who later failed to honour their obligations.
The “investors” can go to hell. We don’t need foreigners to own our economy. Better to die poor, but free, than to live as a rich slave! Let Zambians own Zambia.
In any case we have the capacity to develop our own economy. We don’t need foreigners. China has shown that reality. We just need patriotic, visionary leadership. Not the HH sort.
We are poor at everything because we’ve been told to invest less in our health and education sectors. We need a strong and disciplined public sector to drive growth. We should not rely on a private organisations whose interests are to rip us off and treat us like second class citizens in our own country. The private sector is failing in most developed nations. The rich are getting richer and the poor are being left behind. Zambia need to follow the Chinese model to bring it’s people out of poverty.
Why local quality might harm the quality and expectation of investor? The local lacks specialised modern technology and specialised international orientation to meet world class standards. Hence, local content might be too far to meet world class standards.
Standards are set and created locally first. You can not expect someone else to bring and set standards for you. It’s for this very reason why we can’t maintain any of the infrastructure built by the Chinese. You might be exposed to the latest technology but if you don’t know what to do with it then it’s a waste of time. Our government need to invest heavily in quality education and local industries for us to stand a chance.
Zambia might be one of the few countries where top businesses aren’t owned by locals — and that should concern us all.Just compare flights: Harare to/from Nairobi or Dubai, business class is full of black Zimbabweans. But on Lusaka routes, it’s mostly Chinese, Indian, or Lebanese passengers. Local Zambians? Usually government officials or people working for international organisations — not business owners.This isn’t normal, not anywhere else in Africa.
We can’t keep punishing ourselves for past mistakes. It’s time to learn, adapt, and push local ownership forward. The government must step in and ensure Zambians have a real stake in their own economy. That’s how we secure all investment – local and foreign – for the future.
The Chinese example is ” China is wealthy because Chinese have been empowered to became wealthy by its own government”