By Choolwe Chibomba, Spokesperson – Zambia Is Back
Zambia sits on a fountain of untapped potential. Home to over 376,000 square kilometres of arable land, as well as some of the highest-grade copper deposits in the world, the country is a treasure trove of natural resources. Added to this, 54% of Zambia’s population is of working age (15 – 64), while business have access to a market of some 406 million inhabitants via the Common Market for Eastern and Southern Africa (COMESA).
Tragically, and in a pattern seen all too often across Africa, successive governments have failed to tap into this potential. Instead they saddled Zambia with unsustainable levels of debt while allowing a culture of corruption and venality to proliferate throughout its society.
The election of President Hichilema and the UPND government is therefore rightly heralded as a ‘new dawn’ for Zambia; allowing people and businesses to finally realise Zambia’s abundant potential.
Since this New Dawn government was elected, Zambia’s credit rating has been upgraded to a CCC+ (up from CCC-) by the S&P ratings agency, with GDP growth expected to accelerate to 3.7% in 2023. Having negotiated a $1.3 billion extended credit facility from the IMF, as well as a $275 million loan from the World Bank, the government is now tantalisingly close to agreeing a debt renegotiation plan with its external creditors, freeing up vital funding from interest payments to be invested into infrastructure, healthcare and education.
Businesses are already waking up to the opportunities that this proactive, forward-thinking government is unlocking for them and for the Zambian people. In May, the CEO of Canadian mining giant Barrick Gold, Mark Bristow, described President Hakainde Hichilema as a “breath of fresh air” at the Investing in African Mining Indaba in Cape Town. The company has credited the New Dawn government’s pro-business attitude and progressive tax reforms – including an end to the double tax trap on mining royalties – with plans to potentially extend the life of the company’s Lumwana mine until 2060.
This kind of continued investment would not only sustain jobs at the Lumwana mine but also create opportunities throughout the value chain as the company contracts Zambian firms to provide machinery, equipment and services to the mine. Furthermore, it would result in significant upskilling for Zambian workers as the mine invests in training and educating its employees.
It is not just mining companies that are taking note. In July Zambian Breweries, which is owned by Belgian drinks company AB InBev, announced it would be investing $80 million into expanding its Lusaka factory, creating 5,000 new jobs in the process. The brewery again cited the “pro-business and pro-investment climate” which President Hichilema’s government has cultivated since coming into office.
These developments represent just the tip of the iceberg, as the government has promised to use its 2023 budget to make Zambia the most attractive investment destination on the continent. This will in turn provide Zambians with the access to capital and financing they need to set up and grow their own businesses.
In manufacturing, the government is promising a 50% suspension on excise duty for clear beer, as well as concessions geared towards stimulating investments in corn starch production. Meanwhile, telecoms companies will benefit from an abolishment of the two-tier tax system in favour of a single corporate income rate of 35%, and betting shops will see their presumptive tax reduced by 10%.
These plans to drive investment also include measures to waive visa requirements for visitors from the EU, United Kingdom, United States and China. This will not only help foster increased tourism but also allow potential investors from wealthy countries to visit Zambia more easily and witness its potential first hand.
To help promote the breadth of Zambia’s investment potential, government is supporting the efforts of the Zambia Is Back campaign through the Zambia Development Agency (ZDA). The Zambia Is Back campaign works to publicise the opportunities being unlocked by the New Dawn government and match up promising Zambian businesses with interested investors around the world.
We are excited to meet with growing businesses in Zambia, as well as investors looking to get involved in this exciting chapter in our nation’s history. In particular, we are looking forward to meeting with investors that want to make a positive impact in Zambia and support the country’s development by promoting education, entrepreneurship, and value-chain addition. You can find out more at www.zambiaisback.com