Zambia’s long-term vision is universally accepted and is directed by medium-term plans. The current National Development Plan (7NDP) for the period 2017- 2021  aims to make Zambia  “a diversified and resilient economy for sustained growth and socioeconomic transformation driven, among others, by agriculture, tourism, manufacturing and mining” 

Sectors 

Mining – Zambia is the world’s seventh largest producer of Copper that produced 861,946 metric tonnes in 2018 and holds six percent of the world’s known Copper reserves. Copper and Cobalt, the Country’s traditional exports, account for well over 70 percent of export earnings. Zambia’s Copper mines are concentrated in the Copperbelt Province, though the past decade has witnessed the establishment of mines in other parts of the Country such as the North-Western Province. Other mineral endowments include Gold, Zinc, Lead, Iron Ore, Manganese, Nickel, Feldspar, sands, Talc, Barite, Apatite, Limestone, Dolomite, Uranium, Coal, and gemstones (e.g. Diamonds, Emeralds, Aquamarine, Topaz, Opal, Agate and Amethysts). Notably, Zambia produces over 20% of the world’s Emeralds with unutilized capacity to increase its production.   This extensive range of mineral resources, including a variety of industrial minerals and energy resources such as Uranium, Coal and hydrocarbons present excellent investment opportunities especially in the area of extraction and processing of these minerals

Agriculture  – Zambia is endowed with a large arable land resource base of 42 million hectares of which only 1.5 million hectares is cultivated every year.   It has abundant water resources for irrigation, as shown by the Country accounting for 40 percent of the water resource in the SADC region. Given its vast resource endowment, Zambia has huge potential to expand its agricultural production. Its climate follows a similar pattern to that of most Southern African countries, experiencing rainy seasons between the months of November and April. The dry season is characterized by low humidity between the months of May and November. The average temperature in the summer is 30°C and gets as low as 5°C in the winter.

Despite the availability of vast arable land, transport infrastructure, availability of water, cheap labour, as shown by the fact that the Agricultural sector employs more than half of the total labour force, only 10 percent of the arable land is under cultivation. In that regard, the Government has established farming blocks to facilitate investment in Agriculture.

Energy – Of the installed 2,898 MW electricity generation capacity of Zambia, hydro power is the most important energy source with 2,398 MW (83%), followed by diesel and Coal. Zambia has about 6,000 MW unexploited hydro power potential due to abundant water resources, providing an opportunity for investment in hydro power generation. The demand for electricity has been growing at an average rate of 3% per annum, mainly due to increased economic activity in the Country, especially in the Agriculture, Manufacturing, and Mining sectors, respectively. The Country’s growing population has also led to an increase in the demand for other sources of energy such as petroleum and solar energy for transportation and domestic use especially in rural areas, respectively.   The state-owned ZESCO Ltd is the only entity that generates and transmit power, while companies such as the Copperbelt Energy Corporation (CEC) procure power from ZESCO for sell to the mines. The energy sector is regulated by the Energy Regulation Board (ERB)

Manufacturing – The manufacturing sector accounts for nearly 8% of the country’s GDP and has been consistently growing due to growing investment in the sector. Engineering, Textiles, Wood & Wood Products, Building Materials, Processed Foods, Chemicals, Leather and Leather Products, Electric Vehicles, Chemicals, Pharmaceuticals, Rubber, Plastic, paper, Tobacco, and Handicrafts are sub-sectors that offer the most opportunities for investment. Currently, the main manufacturing activities in Zambia are the: 1) Food and beverages ; 2) Textile and Leather Industries; 3)  Wood and Wood Products; 4) Paper and Paper Products 5) Chemicals, Rubber and Plastic Products 6) Non-metallic mineral products; 7) basic metal products; and 8) Fabricated metal products. The top destinations for Zambian exports in 2016 are China (USS$ 2.14 Bn), India (USS$719 M), South Africa (USS$486 M), United Arab Emirates (USS$ 392 M), and Belgium-Luxemburg (USS$ 297 m)

Tourism – The tourism industry has grown over the past years, with the establishment of hotels in the major tourist centres such as Livingstone and Lusaka. There is vast potential in the Tourism sector in Zambia due to its natural beauty (including the Victoria Falls, which is one of the most renowned beautiful transcendental Seven Natural Wonders of the World) and its wealth of wildlife that have not yet been fully exploited.  Other waterfalls include Kalambo, Ngonye, Chishimba, Chipempe, and Ntumbachushi, to mention a few. Zambia has 20 national parks and 34 game management areas with a total of 23 million hectares of land set aside for wildlife conservation. Also, the Country has numerous museums that house priceless historical artefacts such as Lusaka National Museum, Moto-Moto Museum, and Livingstone Museum. Zambia also boasts of various traditional ceremonies that take place at different times of the year where its rich cultural heritage is displayed.

Investment Incentives

Fiscal Incentives  – These are Investments of US$ 500,000 and above in a Multi Facility Economic Zone, an Industrial Park, a Priority Sector and investment in a Rural Enterprise under the ZDA Act. Investors who invest not less than US$500,000 in the Multi Facility Economic Zones (MFEZ) or a priority sector or product under the ZDA Act, are entitled to the following fiscal incentives:  (i) Zero percent import duty rate on capital equipment and machinery including trucks and specialized motor vehicles for five years. (ii) Accelerated depreciation on capital equipment and machinery including trucks and specialized motor vehicles for five years.

Non -Fiscal Incentives  –  These are Investments of not less than US$250,000 in in a Multi Facility Economic Zone, an Industrial Park, a Priority Sector and investment in a Rural Enterprise under the ZDA Act, are entitled to the following non-fiscal incentives: (i) Investment guarantees and protection against state nationalization; (ii) Free facilitation for application of immigration permits, secondary licenses, land acquisition and utilities

Investment Laws  

“There are no laws or practices that discriminate against foreign investors by prohibiting, limiting or conditioning foreign investment in any sector of the economy” (Zambia Investment Climate Statement, U.S. Department of State, 2017) 

 Law and regulations on investments –  Zambia’s judicial system is based on the British common law system. Besides the Zambian Constitution Act, the Zambia Development Agency Act (2006, as amended) is the main law governing investments. Other texts are: the Companies Act (Chapter 388), the Investment Act (388) and the Public-Private Partnership Act (2009). 

100% foreign ownership – Foreign investors can own 100 per cent of an enterprise registered in Zambia. Nevertheless, it is worth mentioning that international firms operating a domestic cellular telephone network have to offer ten percent of shares on the Lusaka Stock Exchange. Investors are allowed to invest in any sector open to the private sector. Only the production of arms, coins, dangerous substances and security documents require specific approvals.

 Investment certificate –  In order to be able to take advantage of benefits provided by the ZDA Act, the foreign investor has to obtain an investment certificate. The certificate is valid for ten years from the date of issue, and may be renewed. Subject to an investment board approval, it is possible to transfer an investment certificate from a given company to a new owner.

Taxation

 The Zambia Revenue Authority a body under the Ministry of finance is in charge of collecting taxes on behalf of the Zambian Government.  Income in Zambia is taxed on the source principle or deemed source basis in some instances. Residents are taxed on domestic source of income and certain types of foreign income, non-residents are normally taxed on Zambian source of income. Zambia has the following direct taxes: Company Income Tax, Personal Income Tax, Withholding Tax, Presumptive Tax and Property Transfer Tax.

 

Zambia Development Agency

nfo@zda.org.zm

pr@zda.org.zm

(+260) 211 222858

(+260) 211 220177