Current business reforms being undertaken by the Zambian Government have led to attraction of investment inflows amounting to US$3.4 billion from January to October 2010, exceeding the targeted US$3 billion for the whole year.

Commerce, Trade and Industry Minister Felix Mutati said the $3.4 billion worth of investments in various sectors of the economy has come because of the improved investment climate and stability in major macroeconomic indicators arising from prudent economic management and business reforms.

Last year, Zambia recorded in excess of US$1.8 billion worth of investments with the manufacturing sector leading in terms of investment recorded which exceeded $580 million.

In an interview in Lusaka yesterday, Mr Mutati said in terms of foreign direct investment (FDI) for the period under review, Zambia registered $3 billion.

Mr Mutati said about 25,704 jobs were created between January and October 2010 from sectors such as agriculture, construction, education, energy, engineering, financial institutions, health, Information Technology Communication (ICT), manufacturing, mining, tourism, real estate, service and transport.

He said the manufacturing sector attracted investment worth $1.2 billion with 13,786 jobs being created.

“This Government of Mr Rupiah Bwezani Banda shall continue providing a favourable investment environment by continuing to reduce the cost of doing business in order to attract additional domestic and foreign investment for wealth and job creation that will lead to the attainment of the Vision 2030 of transforming our country into a prosperous middle-income country,” Mr Mutati said.

Zambia’s incentive package was among the best in the region, if not the entire Africa.
Investment opportunities remain untapped in the manufacturing, agriculture, tourism, energy and mining sectors.

Mr Mutati said recently, the Government developed and approved the Commercial Trade and Industrial (CTI) Policy for the period 2010 to 2014.

The vision of the Government under the industrial sector in the CTI policy was to develop a competitive, export-led manufacturing sector that would contribute 20 per cent of the Gross Domestic Product (GDP) by 2015.

Mr Mutati said regarding the performance of the manufacturing sector during the Fifth National Development Plan (FNDP) period, the sector had continued to grow at an average annual growth rate of 3.25 per cent.

Its contribution to the GDP during the same period averaged at 10.2 per cent.
The major challenge in the sector remained the high cost of doing business, which the Government was addressing as evidenced by the 10 places improvement on the World Bank Doing Business Rankings.

“Our target in the next three years is to move up by 40 places. This indeed shall be accomplished taking into account the vigorous business and licensing reforms being undertaken by my ministry to further reduce the cost of doing business,’’ he said.

Mr Mutati said transformation of the industrial sector and sustaining its competitiveness was one of the major factors in determining the pace of economic activity in Zambia.

Despite the challenges in the manufacturing sector, new companies have set up base in Zambia, which include Varun Beverages, Universal Mining and Chemical Industries Limited, MM Mobile, El Sewedy Limited and MM Integrated Steel Mills Limited.

[Times of Zambia]

THE Bank of Zambia (BoZ) has projected that Zambia’s inflation rate will further fall to just above six percent at the end of 2010.

During the same period, the gross domestic product (GDP) is expected to grow by more than six per cent.

BoZ Governor Caleb Fundanga is on record as saying that Zambia will be able to achieve a low inflation rate because of sound policies and the impressive economic indicators being recorded.

But Mr. Hichilema said Zambia should project the inflation rate at 10 percent stating that the 6 percent projection is unrealistic.

The UPND leader added that the creation of jobs and improvement of the economy cannot also be achieved at the government projected rate.

Meanwhile Mr Hichilema said there is a great need for the PF/UPND pact to address the challenges it is facing.

Mr. Hichilema said the pact should address all the challenges it is facing before the 2011 elections to avoid divisions.

He was speaking on national television last evening on Frank Mutubila’s Frank talk.
[ QFM ]

TOURISM Council of Zambia (TCZ) chairperson Mark O’Donnell has said Zambia is currently experiencing economic boom because of the Government’s good economic management.

And the Private Sector Development Association (PSDA) has said that Zambia’s attainment of the status as one of the world’s Top 10 business reformers in the last one year is an indication the country is attractive to foreign investment.

Mr O’Donnell said in Lusaka yesterday that Government’s Private Sector Development Programme (PSDP) was now paying off.

“We know that this is an on-going reform programme and we are beginning to see results of the PSDP programme,” he said.

He said the reform programme would help boost the economy, as the private sector will easily do business in the country.

He said because of the reform programme employment opportunities would be created for Zambians hence developing the country’s economy.

“This is fantastic news, for the tourism sector, it is yet to benefit from the reforms. Otherwise economic management is extremely good and that is why we are seeing the boom in the economy,” he said.

On the central bank’s announcement that Zambia’s gross international reserves are expected to rise by the end of this year after accumulating about US$300 million from June to December, Mr O’Donnell said this would help the country become a credible trading partner.

“This is essential because it will help the country to become a credible trading partner,” he said.

On Monday, Bank of Zambia governor Caleb Fundanga announced that Zambia’s gross international reserves are expected to rise to about 4.3 months of import cover by the end of the year after accumulating about US$300 million from June to September.

Mr O’Donnell however, said Zambia still needed to do more to create more wealth for the ordinary citizens.

PSDA chairperson Yusuf Dodia said the reform programme was good for the country as this was an indication the country is attracting foreign investment.

“We recognise the ratings are from external and good for foreign investment but what are we doing domestically to encourage local investors in the economy?” he asked.

He said there is need for the Government to come up with deliberate measures to ensure that local investors also participate in the economy.

Zambia has attained the status of one of the world’s Top 10 business reformers in the last one year.

[Times of Zambia]

THE Government is evaluating all the remaining paratstal companies facing operational challenges with a view to privatise them, Secretary to the Treasury Likolo Ndalamei has said.

Mr Ndalamei told a parliamentary watchdog committee on public accounts chaired by Mbabala Member of Parliament (MP) Emmanuel Hachipuka (UPND) that it would not be prudent for the Government to continue recapitalising operations of struggling parastatal companies.

He said this in response to a question by Mr Hachipuka, who asked what usually compelled the Government to privatise most parastatal companies.

Mr Ndalamei said the Government pushed to privatise to save huge billions of money usually lost through recapitalisation.

“We are seriously examining the process of privatising remaining parastatal companies, especially loss-making ones.

“We would rather spend K40 billion to erect new two high schools instead of pouring this money into a ‘bottomless pit’ in the name of recapitalising struggling parastatal companies,” he said.

On whether the Government had plans to revive operations of the defunct Nitrogen Chemicals of Zambia (NCZ), Mr Ndalamei said the fertiliser making company was one of those struggling to remain afloat.

“I am glad to state here that some local and foreign investors have shown interest in taking over operations of NCZ and the Ministry of Agriculture and Cooperatives is handling this matter.

“We hope that soon rather than later, these developments shall take root to make sure the plant is effective in boosting the agriculture sector in Zambia,” he said.

He said the Government was working on a long-term solution for NCZ and leaving the company to operate under the private sector would enable it remain viable for the good of Zambia.

On the terminal benefits owed to former University of Zambia (UNZA) workers, Mr Ndalamei said the amounts were too huge for the Government to settle owing to the conditions of service that the former employees enjoyed.

The Government had since constituted a committee that is meeting with UNZA management to see how the issue could be resolved.

[Times of Zambia]