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STABLE ECONOMY

Since the introduction of Multi-Party democracy in 1991, Zambia embarked on liberal political and economic reforms. Since then, the private sector has been the engine of growth while the government has created a conducive environment for private sector participation and growth. The Zambian economy has been transformed into a burgeoning free market devoid of price, exchange and interest controls. Zambia’s investment climate today is characterized by a stable macroeconomic environment and democratic political system, predictable laws and policies and unrestricted repatriation of after-tax profits.
Zambia is one of the most stable and open economies in Africa for investment having eliminated import controls, hence fostered an open trade regime supportive of export development and diversification.
In order to make the investment climate even more attractive, the government through the Private Sector Development Programme (PSDP) has removed administrative barriers to investment, e.g. reducing the time taken to register a company and clearing goods at the border points.
The Zambian government is a signatory to several declarations on human rights and sustainable development. Civil society in the country is growing both in stature and voice with many vibrant and committed groups devoted to social justice issues demanding greater government accountability and using the media for broad reach.
Fiscal and non fiscal incentives are offered to investors in priority sectors that include tourism and agro-processing while more additional benefits can be negotiated in the strategic sectors such as energy. Zambia is a member of the Multilateral Guarantee Agency (MIGA), hence the fear of nationalization is unfounded. Further, Zambia has signed several Investment Promotion and Protection Agreements (IPPAs) with many countries.
However, in line with the Vision 2030, Government of the Patriotic Front [PF] government has overarching goals to become a prosperous middle-income country, with a competitive and outward-oriented economy, where hunger and poverty are eradicated or significantly reduced to minimal levels.  The government has also embarked on the Anti-corruption drive aimed at eliminating the cancer to zero. A key objective of government over the next coming years is to reposition the economy with a view to take full advantage of the rebound in global economic activity and trade, resulting in improved living standards, enhanced public service delivery and provision of essential socio-economic infrastructure. This repositioning will, among other things, entail raising productivity in smallholder agriculture; adding value in the manufacturing sector; and promoting Zambia as a world class tourist destination.

TOURISM
It is clearly stated by the world that Zambia is a millennium destination because of its virgin beauty, yet to be explored.
The legendary African walking safari, world's biggest waterfall favorably described as ‘Mosi-O-Tunya’ [The Smoke that Thunders] or The Victoria Falls, wild Zambezi river, breath-taking lakes and wetlands, profusion of birds, abundant wildlife, pulsating wilderness, ... all in one country, Zambia
Construction of vital infrastructure in tourism areas continues to be the main focus of the President Micheal Sata’s government in the tourism sector. Construction of access roads to and within national parks and development of the Kafue National Park spinal road network is on the cards. Because of the his attachment to tourism, President Sata has so far designated Livingstone City solely as tourism capital, and that Livingstone Tourism Zone is being developed into a major global tourism and adventure destination. Zambia will be co-hosting the 2013 UNWTO conference.

 

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MINING
The mining sector has been the prime mover of economic development in Zambia for many decades. Zambia’s rich mineral resources, in particular its copper and cobalt mines, have brought much-needed foreign exchange earnings to the country. High demand for copper and soaring international commodity prices has attracted increasing investment in the sector and expansion in mineral production, with the establishment of new mines in the recent past and the recapitalization of existing ones. Because of the favourable investment climate, the government has continued to encourage foreign investors to come and invest in this ever booming sector.

 

AGRICULTURE
Agricultural development and support for agro-based industries is a crucial component in Zambia’s current economic development plan which seeks to promote diversification and enhance national competitiveness. The overriding objective is to achieve food security and poverty alleviation.
Maize is Zambia’s main food crop and is produced by the majority of farmers both at small-scale and commercial levels, with larger agricultural productivity accounting for cash crops such as cotton, sugar, tea and tobacco etc. Agriculture has a huge impact on the Zambian economy, and providing jobs and a source of livelihoods than any other sector.
The Agricultural sector is an important source of raw materials for the manufacturing industry, thereby adding value to primary produce. As such, bolstering agricultural activities and development has been declared one of Government’s priority areas.

 

Zambia’s favourable climatic conditions have continued to sustain production in the agriculture sector. Fertilizer prices also continue to remain stable, resulting in reduced production costs. In addition, the favourable floor price of maize provides impetus for increased production of maize in the short term. Every year, Zambia produces pumper harvest.
Despite the country’s vast potential, arable land is under cultivation, mostly by small-scale farmers, with commercial agriculture being confined to a small number of large and medium-size farms. Challenges to agricultural development include limited access to credit, input and extension services; high cost of inputs; low labour and land productivity; poor infrastructure (especially in rural areas); limited market access by small-scale farmers; poor livestock management; failure to attract adequate private investment in the sector. The country has more water resources which can support irrigation farming all year round. It is in this line that the government of President Sata calls on local and foreign investors to take advantage and invest in this sector.

 ENERGY
Improvement of supply and access to electricity remains a key strategic focus for the PF Government. To this end, a number of electricity projects have commenced.  Currently work is ongoing at the Kariba North Bank Extension Project and feasibility studies have been completed at the Kafue Gorge Lower and Itezhi Tezhi. Energy supply, however, still remains a major constraint to the growth of the Zambian economy.
In order to improve electricity supply in the furthest areas of the country, government is looking for foreign investment in this sector. Given the great expense of infrastructural development in the energy sector, government is actively seeking private sector participation though the public private partnerships (PPPs) framework.

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MANUFACTURING
In recognition of the vital role that this sector plays in the national development agenda, Government will continue to support the construction of arterial infrastructure and investment facilitation through the Zambia Development Agency (ZDA). Substantial progress has been achieved in the development of the Chambishi Multi-Facility Economic Zone (MFEZ) with over 11 manufacturers already operating in the zone and five more expected to come on board in 2010.
Government is promoting the establishment of these MFEZs by providing fiscal incentives, quality infrastructure and a favourable regulatory environment to developers of these zones.

 

TRADE AND INVESTMENT ENVIRONMENT
Zambia is a member of the United Nations (UN), the World Trade Organisation (WTO), the Commonwealth of Nations, the African Union (AU), and the Common Market for Eastern and Southern Africa (COMESA), African Caribbean Pacific (ACP) countries, the Southern African Development Community (SADC), African Development Bank (AfDB), Non Aligned Movement (NAM), International Monetary Fund (IMF), among others.
The promotion of trade is integral to the country in its efforts to find additional regional and international markets for its products, and Zambia is a key player and pioneer of various regional initiatives on the continent.  In this regard, Zambia is an active member of the COMESA Free Trade Area (FTA.
Zambia is also part of the Economic Partnership Agreements (EPAs) negotiations between the European Union (EU) and the ACP countries. The country is participating in the negotiations under the Eastern and Southern Africa (ESA) configuration, which comprises all COMESA countries (with the exception of Angola, Egypt and Swaziland), with the aim of ensuring that ESA countries continue to receive the benefits enjoyed under the Cotonou Agreement.
In summing up, it is true to say that Zambia is a hybrid of Africa.

 

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