Vice President Rupiah Banda has reaffirmed Government’s commitment to providing an enabling environment for increased local and foreign investment in various sectors of the country’s economy.
Officially opening a two- day Euromoney Zambia Conference in Lusaka today, Mr. Banda said Zambia has many investment opportunities hence the need for domestic, foreign direct and joint venture investment.
Mr. Banda said foreign investment would increase financial flows, internalisation of expertise from abroad and technology transfer as well as importation of good business practices that will assist Zambia become competitive at global level.
He explained that Zambia has since 2004 been implementing the Private Sector Development Plan which has reduced the process of registering a business from 21 days to three days in a bid to minimise the cost of doing business in the country.
He stated that Zambia continues to be a favourable investment destination because the country has maintained macro economic stability over a consistent period of time saying the direction and pace of the economy is predictable.
The Vice President noted that the country’s Gross Domestic Product (GDP) has consistently exceeded five percent over the past five years and inflation has reduced to single digit although it recently touched the double digit due to a rise in World oil prices.
Mr. Banda added that the Zambian government has significantly reduced borrowing from the local banking sector with the net domestic borrowing reducing to 0.1 of GDP in 2007 from 1.8 percent in 2005.
He said such a development meant there will be more money for more investment by the private sector in the banks.
He said the Zambian government placed emphasis on the stability of the financial sector to upgrade to the highest level of performance to boost investor confidence.
Mr. Banda said Government has therefore advised the Bank of Zambia as regulator to reform itself in order to deal effectively with the challenges of modern financial sector to ensure that pitfalls that have wrecked havoc in the financial markets of major economies are avoided.
On energy, the Vice President assured investors that Government was focusing on rehabilitating existing infrastructure to make it more efficient as an interim measure.
Mr. Banda further said electrical power energy is vital to the development of the economy and Government aims at creating more capacity through new investments.
Speaking at the same function, Finance and National Planning Minister Ng’andu Magande said regional integration is vital in attracting investment.
Mr. Magande explained that by promoting participation in regional markets such as the Common Market for Eastern and Southern Africa (COMESA) and the Southern African Development Community (SADC|)through greater openness to trade and investment, the market for firms investing in the country was large.
He said Zambia has a large pool of financial intermediaries from across the globe operating under a well functioning regulatory environment.
Mr. Magande however, said fears of a global recession due to the current turbulence in most western economies posed a serious threat to the domestic economy’s growth prospects.
He added that the current high oil prices which are around $130 per barrel also posed a serious threat to growth prospects of the Zambian economy due to the country’s inability to immediately substitute oil and related products for other energy sources.
The Conference has attracted among others world class investors, international business persons and consultants.
Before we soooooooooo investor/infestor happy, can we look at our infrastructure.I hear no concerns from our politicians.They are inviting pipo when our current infrastructure cannot even support the already little business we have in zed.Why not embark on a massive project like bridges, roads to parks, more airports, rail-lines, better telecoms network, etc.We will be caught pants down soon.
Already Celtel cannot cope with the little investment we have, their network is jammed. Miyoba agreed
There was blog running for a few weeks about Toyota investing $10M. Ford Motors will invest $3bn in MEXICO.As a result of this, it will create 34,500 jobs. How many jobs will Toyota bring??
And we when we we look at figures that the investors promise us, Its all change. Some of it not even worth a dime.
There is no doubt that the New Deal administration has made some significant political and economic strides towards stability and prosperity long aspired by citizens. As a nation-state degraded in value over 10 unabated Chiluba years, reforms shaping the country have come with worrisome flaws but gains are evidently many with some strong fundamentals. It’s time to foster economic development than being a politically orientation nation. To enjoy our gains, never overlook JMC. Keep them active and in resourceful exchange. Deal with the challenges of tariffs & value addition to all our assets locally.
Every reformer knows the challenges of our national development. To foster these pro growth policies, we must never overlook the fact that infrastructure development was indispensable for economic development. We should be looking forward to a day when real Development specialist, economists & urban planners will start debating developing some “Aerotropolis Cities”to best serve the good initiatives of “economic zones”.
We could make Ndola & Lusaka our “Aerotropolis Cities” irrespective of what the ever opposing World Bank/IMF& their dictating proxies say. Our Japanese and Chinese friends are very good at offering unconditional infrastructure development support where approached. They built Tazara when the West blatantly opposed it, 1975 we put up Mwembeshi Earth Station one of our biggest national assets equally opposed yet today they ask use to subscribe to their systems for international routing. In situations where there is a commitment by certain private sector businesses to locate or expand in the country and to create or retain jobs for Zambians, infrastructure must be prioritized & expedited.
The challenge is on the citizenry that give the Governing mandate to Political parties to be their national custodians. Citizens must stay vigilant and make sure that these gains and reforms are embraced and fine tunned by future administrations post the New Dealers.In future choices, we cannot overlook the fact that as responsible citizens we deserve another administration that will be fully vested in these economic models with an enhanced Zambian centric vision 2030 leadership.Collectively lets start vetting for tested patriots to serve this country with some strong economic orientation than a culture of politics & appeasements only.
Solwezi is another one we could eventually develop into an “Aerotropolis City”
I see Zambia playing a major role in sustaining the international market on horticultural products.Kenya is struggling after the civil strife. Its time to take over their position. Tourism need take the direction of target marketing internationally and at home lets see expedited infrastructure development, irrigation and mechanization of our agriculture system while our Zambia National service should intensify putting up bridges and feeder roads across the country besides expanding their farming portfolio.The army’s engineering department must take a commitment in research and design as their focus in times of peace.
#1 Miyoba, thats the talk man. You are just hitting the nail on its head. Its my worry,too the way the govt ignores its prelequisites (or preambles) responsibilities. I really, don’t know what our leaders are made of. Miyoba, you have said it whole. And I don’t need to repeat what you have said. All I can say is what you have just pin-pointed is the way forward. Keep it up.
Planners must start thinking of expanding Lusaka in either Lilayi or Lusaka East. Buy off properties and land there from current owners for city expansion. The city should also start thinking of a future with networks of intercity transit systems in the wider Lusaka, lobby Government to start gradually choking off the matatu business as a measure of environment and crime control, public safety, roads congestion costing man hours to the productive class and of course the energy challenges. Aspiring politicians henceforth must show that they have a vision of promoting in the country a future of “smart cities”.
pragmatist your lingo sure reads and rhymes very well………. i think you need to stand up for state house in the next election….. i will give you my vote… put your ideas to work……. you talk like someone whos got direction.
#3 PUTA
Its difference in markets. mexico borders the USA. The cars will be going to the USA n its obvious they’ll be in Mexico for cheap labour.
cont
Zambia is in Africa bordering poor countries (FYI, Africa is known for bad political policies, civil unrest, wars and cannibalism), it does not need a big plant. $10 million is enough.
Crazy_Zambian # 14,
You are no different from your mother in madness and lies.Who told you that Africa is poor? Is lack of vision and theft a justification of being poor.Where did you do your basic economics and at what level?
I doubt Western companies will be rushing to invest in Zambia given the mining tax debacle. While everyone, including the mining companies, would have agreed to a reasonable tax increase, the amount and the manner in which the tax has apparently been imposed will scare off many, many Western companies and investors. Why would I, as an investor, or why would any company invest in a country that signs agreements, allows the company to invest millions or billions of dollars on the basis of those agreements, and then change or cancel the agreement after the money has already been invested? Quite frankly, very few Western companies are stupid enough to make such bad investment decisions.
cont’d
Yes, you may have Chinese companies investing in Zambia, but everyone knows that those companies are less concerned about their employees, the community, the environement, or the future of Zambia. I need say no more on that.
As evidence of what is going to happen, witness First Quantum’s decision to purchase a company in Europe (a Scandinavian company I think), not in Zambia; Phelp’s recent decision not to participate/finance a smaller company’s drilling in Zambia (can’t remember the name); and Vendata’s recent decision to buy a U.S. copper company and its statement that it intends to spend 15 billion or so in India. You get the picture….
#15 ANONYMOUS.
If africa is so rich, why cant it feed its own people, why is there mass unemployment and starvation, why is it those that can afford dont hesitate to leave the continent.
I will take my level of economics and make my contribution because it seems more reliable than yours.
Africa only contributes 3% in the global economy. is that a sign of a rich continent. You sir are in denial.
foreign companies are not interested in risking money in country where agreements can unilaterally be broken. Remember, I’m for a tax increase, but the amount and manner (most troubling) is what is troubling. As to the amount, why would I invest in Zambia, with its wealth tax that reaches 75 percent after 3.50 per pound of copper, when I can invest in a country that doesn’t have such a tax and that has more stability? The whole situation could have been handled in a manner that maintained foreign views of Zambia as a place to invest. Handled properly, over the long term Zambia could have potentially ended up with a greater net take from its resources. Alas, it appears to late! 🙁
Crazy Zambian, its not about the markets Puta was indicating. I think its the level of investment.
Just so you know, Mexico’s labor is not cheaper than Zambia’s. Mexico had a much higher GDP than Zambia. Mexico has also better stable business markets than Zambia. So if you are talking Markets, I think better do a little more research.
Meant to say Mexico has a much higher GDP
#20 Winner
Here is the deal. Ford has invested all that money in Mexico because the labor in Mexico is cheaper compared to the labor in the USA.
Mexico is a neighbor to the USA. Meaning, it’ll be easier and cheaper to set a $3bn dollar plant in Mexico and just export the cars to the USA (Place of market) as opposed to setting up a $3bn dollar plant in Zambia, putting the cars on a locomotive diesel train (another cost) and then putting it on a ship (another cost).
They can just put them on a truck in Mexico and take them to the USA. Thats what i mean in markets. The market for the plant in Mexico is the USA.
cont…
The level of investment that Toyota has made is justified. There is no big market for the cars, hence the level of investment. Mind you, only 5% of Zambians own cars and I’m sure the numbers are either slightly higher or slightly lower with Zambia’s neighbors. Not forgetting poor infrastructure.
Would you honestly expect Toyota to make an investment above $50 million with such a low market for automobiles??? Is such an investment feasible??
I think you are overestimating the automobile market in Zambia. The investment Toyota is trying to make/has made is justified.
What makes you that the $10M Investment toyota will make is justified? What is the added value??
#24
The added value is it’ll bring in employment. Even though the employment will be small, it will however make a difference for those few Zambians that’ll be working for the company. Second, it’ll add value to the copper. The copper is not going to be loaded on a train and sent to Asia but it’ll be used in Zambia, right here in Zambia. Third, the employees will be paying taxes as well as the company (if it wont be on a tax free zone) which will let govt earn revenue for infrastructure development. Fourth, for aids to trade (e.g insurance, banking, communication, transport, etc), you cannot expect them to use Japanese comp. for all these, they’ll have to use Zambian companies.
cont…
Now im going to make another analysis for you. Lets talk about India’s investment in the Zambian sugar industry.
Now lets look at Zambia/SADC’s situation. It is estimated that Africans use about 80% of there income on Food. Obviously sugar is probably included in the 80%. That makes the investment feasible since such a huge investment will mean at least some sort of safety net that the investment will yield profits given the figure that Africans spend on food consumption (in this case sugar). Now compare that to automobile, only 5% (5 percent) of Zambians own cars. Would you honestly expect a huge investment in the Zambian automobile industry.
cont..
Put yourself in the investors shoes. After seeing such a figure (in this case 5%), would you (honestly) make a huge investment in the automobile industry or are you better off starting with a small investment and it gets larger as the economy gets better.
Hoping Toyota will put up a huge plant at Zambia’s/SADC’s current economic situation is unrealistic. In the long run if the economy gets really better, the plant will get bigger.
I CLOSE MY CASE ON THE TOYOTA ISSUE. I WILL NO LONGER COMMENT ON THAT TOPIC UNLESS OTHERWISE.
You have some good points, but I think you are missing the whole investment in its entirety. You have addmited that employment would be small. That is just one item I can pick on from many others.
I would be surprised if that created 100 jobs or more. Taxes of 100 would not be a significat number to help our over-taxed employees or even lower income tax rates.
How long has that company been in Zambia?? How does Government earn revenue from infrustructure development as you have indicated? What is that anyway??
#28 Winner
I will try to answer your questions in the best way i can.
How long has that company been in Zambia??
– I cannot answer that but at the time it has been in Zambia, it was just in the RETAIL business, now it wants to go into the manufacturing business. Tell me, whats bad about that???
How does Government earn revenue from infrustructure development as you have indicated?
– Infrastructure development means more companies will find it easier and cheaper to do business in the chosen field that infrastructure has been developed in. More companies, more jobs, more govt revenue through taxes, more buying power, resulting in even more companies (I hope you get my point from that).
cont…
What is that anyway??
– If you mean infrastructure i mean (like Dr Fudanga stated) switching diesel locomotive trains with electric ones, power plants, fibre optic communication cabales, roads, airports, etc.
Listen Winner, you don’t have to agree with what i have to say. You are also entitled to your own opinion. If your opinion is that Toyota should keep there money and stay in Japan and keep doing the retail business they are doing in Zambia then fine. I’m not here to change people’s minds. I’m just clearly showing the other side to things to people can think more closely before just criticizing from without. Not everyone is out to get Zambia you know.
Africa has about 52 states. There is a reason they chose Zambia.
Whether that reason is genuine or not is up to the Zambians to decide. But we just cannot decide on generalizations or experiences from other investors. We have to critically analyze the situation and why that particular investment which they have chosen to invest in Zambia has been chosen and why they have put that much in that investment.
My point is don’t just criticize. Look at the situation also. Look at the good and bad and see which outweighs the other.
Am off,
Good day. 🙂
sentence correction: “…I’m just clearly showing the other side to things so people can think more…”
I hope u guys are not argueing coz u are all right.Be it employment, tax, manufacturing, infrastructure, etc.We need all this stuff to make zed a better place.Come Toyota whether only to build the 200 cars a year, its better than none.I was just a bit concerned a week ago as I could not believe that $10M would build a plant and machinery in this time of age.But some convinced me and I accept, I did think beyond and far.
And #32 come back please u have been enlighting on this issue.I guess we have debated the Toyota issue at length.The issue at hand is the “investment environment” created by GRZ.And well done LPM and boys, but look at sustainability.How can zed sustain all this investmt?
THis fuel increase is very serious. For GRZ to salvage anything of the situation, they need to immediately relook at the recent mining Tax measures. Given the current Kwacha/dollar levels I shudder what will happen by the time fuel reaches the $200.00/ barrel mark. As it is our exports are too expensive meaning that our current export earnings are not reflective of possible potential output. For current production levels to be sustained it is either expand (though this implies increased overheads and inputs other associated costs) or lower the costs of Production. This is not necessarilly sufficent but will allow for a rethink/time.
Our current mining tax have a terrible effect on economic viabillity on the part of investors. I believe Tripleg has put it fair and square.
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