Issue 22

ZDA Projects $3bn FDIRise

Zambia Records Gains

First Quantum to Invest 1bn in new Mine

ZDA signs MoUs withfour large companies

ZRA fires up to hit 2011target

2011 Investment climatereform agenda

Zambia charms foreigninvestors

Inside this issue:

The American Central Intelli-gence Agency (CIA) has

ranked Zambia‟s economic

performance at number fourin Africa in 2010 after CongoBrazzaville, Mozambique andEthiopia.

According to the latest CIAfact book on country ranking in terms of real growth ingross domestic product(GDP), Zambia ranked 21stin the world out of the 215countries monitored lastyear.

In Africa, Congo Brazzavilleemerged first, Mozambiquesecond with Ethiopia coming third while Nigeria took the27th slot, Malawi 30th, Tan-zania 32nd, Rwanda 38th,Liberia 40th, Angola 41st,Uganda 42nd and Gabon46th.On world rankings, Egypt

came out 48th, Burkina Faso49th, Mali 50th, Sudan53rd, Sierra Leone 54th,The Gambia 56th, Maurita-nia 58th, Djibouti 62nd,Ghana 64th, Cape Verde67th and Morocco 73rd. n Southern Africa, Namibiaemerged 75th, Zimbabwe79th, Lesotho 97th, Bot-swana 118th while the De-mocratic Republic of Congoemerged 120th in the world.In 2009, The CIA ranked

Zambia‟s economic perform-

ance at number 15 in theworld. According to the CIAfact book, which gives data

on all countries, Zambia‟s

6.3 percent growth rate in2009 was the 15th best inthe world.

Zambia‟s performance was

far much higher than that of regional economic giantSouth Africa, whose nega-tive one percent growth in2009 was ranked at num-ber 145. Zambia like manyother countries in the worldexperienced the effects of the global financial crisis,but still managed to registereconomic growth. Daily Mail

Zambia Ranked Fourth

January 2011

Dangote to Invest U$400m

Zambia Development Agency(ZDA) has signed an Invest-ment Promotion and Protec-tion Agreement (IPPA) with aNigerian Company DangoteIndustries worth US$400million (about K2 trillion)which will facilitate the es-tablishment of a cementprocessing plant in Masaitiarea on the Copperbelt Prov-ince.

The project to be undertakenwill create 1,600 jobs for thelocal people and was one of the largest investments inZambia in 2010 outside themining industry. Addressing members of themedia and the businesscommunity at the signing ceremony of the IPPA at Ho-tel Inter-Continental in Lu-saka in December 2010,Dangote Industries presidentand chief executive, AlikoDangote said prudent man-agement of macroeconomicpolicies by the Zambian Gov-ernment had facilitated hiscompany to establish a ce-ment processing plant. Mr.Dangote said the cementmanufacturing plant wouldhave an initial (

Cont‟d on P7)

Quote

“

Men who accomplish greatthings in the industrial worldare the ones who have faith inthe money producing power of

ideas”

Charles Fillmore

Points of Interest

“THE Zambia Development

Agency (ZDA) will this year focuson three key performance areas

to propel the country’s economy

further and has projected in-creased Foreign Direct Invest-ment (FDI) inflows of betweenUS$1 billion and $3 billion com-

mitments”.

Mr. Andrew Chip-wende

“The substantial increase in

investment inflows is largely dueto the favourable investmentclimate that Zambia has put inplace adding that these positivereforms have brought foreigndirect investment into the coun-

try.”

Dr. Caleb Fundanga s

“This programme of business

linkages is a good developmentand I am sure it will succeed. Weneed to join efforts in making this

programme a success,”

Mr.Gavin Udal.

ZambiaDevelopmentAgency

Mr. Avishay Dvir, chief executive officer of the Zambia BorderCrossing Company talking to a journalist. In the backgroundfinishing touches to the border facility. Story on Page 5

Zda Spotlight

PAGE 2 ISSUE 22

Zambia Records Gains

Zambia has registered a 419 million U.Sdollar increase in new equity investmentinflows. The 2009 equity investmentinflow is higher than 131 million U.Sdollars registered in 2007. This is ac-cording to phase three of the PrivateCapital Flows Survey for 2010.

“

Bank of Zambia Governor Dr. CalebFundanga says the substantial increasein investment inflows is largely due tothe favourable investment climate thatZambia has put in place adding thatthese positive reforms have broughtforeign direct investment into the coun-try. Dr. Fundanga however says the overallforeign direct investment inflows de-clined in 2009, due to low profits re-corded by enterprises, which was consis-tent with global developments. The Governor was speaking at a dis-

semination workshop dubbed „”Foreign

Private Investment and Investor Percep-

tions in Zambia 2010” in Lusaka.

The objective of the survey was to moni-tor and manage the capital flows. It wasconducted by the Bank of Zambia incollaboration with Zambia DevelopmentAgency (ZDA), Central Statistical Office(CSO) and other Balance of PaymentsStatistical Committee (BoPSC) memberinstitutions. At the same function, Macro-economicand Financial Management Institute of Southern Africa, Elias Ngalande com-mended the team for completing phasethree of the survey using best practices,which has put Zambia in the frontline.He noted that the surveys will assist inassessing the level of investment inflowscoming into Zambia. Dr. Ngalande says his firm will continueconducting foreign private capital sur-veys with the focus of harmonizing sur-vey mythologies, developing early warn-ing systems for crisis mitigation andincreasing the involvement of the privatesector. And closing the workshop Zambia Devel-opment Agency Director General, Mr.Andrew Chipwende, commended theprivate sector for their good response tothe survey saying the response rate of 86 percent indicated the good collabora-tion that exists between the private sec-tor and public sector. He said it was important to conduct thesurvey in order to come up with useful

ZDA Projects $3bn FDI Rise

THE Zambia Development Agency(ZDA) will this year focus on three keyperformance areas to propel the coun-

try‟s economy further and has pro-

jected increased Foreign Direct Invest-ment (FDI) inflows of between US$1billion and $3 billion commitments.

The targeted sectors are Small andMedium Enterprises (SMEs) develop-ment, national infrastructure develop-ment, FDI and trade promotion. ZDAdirector general Andrew Chipwendesaid the focus of the agency on SMEswould capture, nurture and developnew business ideas with potential tocompete in globalised competitiveenvironment. He said ZDA had planned to promote

„the one village one product initiative‟

while increasing the number of enter-prises translating from micro status tosmall enterprises by 10 per cent. Mr.Chipwende, who was accompanied bysenior ZDA officials, said this in Lusakaat Pamodzi Hotel during a media brief-ing on 2010 highlights and outlook for2011.

“ZDA has planned to increase the num-

ber of business linkages between Me-dium and Small Enterprises (MSEs)and large corporations by 20 per cent.We plan to increase the range andquality of goods and services producedby micro, small and medium sized

enterprises with export potential,” he

said. Mr. Chipwende said five domesticfirms would be linked with foreign busi-nesses through joint venture whilepromoting domestic investment byconnecting them to equity and debtfinancial institutions in order to pro-mote local investments. On FDI and trade promotions, he said,ZDA projected an actual FDI inflow of between $1.0 billion and $ 3.0 billioncommitments through the concept of one stop shop. The increased FDI

would contribute to the Government‟s

programmes efficiently and contributeto the central treasury.

ZDA also intends to increase the numberof exporters by 10 per cent and therange of goods and services for exportmarket by 10 per cent. On infrastructuredevelopment, he said ZDA would de-velop common user facilities for micro,small and medium sized enterpriseswhile securing commitment of $2.0 bil-lion investment in infrastructure.

information to formulate appropriatepolicies and improve the investmentclimate. Mr. Chipwende urged the Government,through the Ministry of Finance andNational Planning, Ministry of Com-merce Trade and Industry, and the Bankof Zambia to play a leading role in sup-porting the survey. He also called onMEFMI, COMESA and UNCTAD to con-tinue providing technical support. A total of 350 enterprises were enumer-ated, of which 303 responded, repre-senting a response rate of 86.6 percent.The survey was conducted in line withinternational best practice. It incorpo-rated the requirements for the IMF Coor-dinated Direct Investment Survey (CDIS)as well as the COMESA /UNCTAD re-quirements on Activities of Transna-tional Corporations TNCs.

State issues First oil ExplorationLicence

The Government has offered the first oilexploration licence to a Zambian com-pany called the Barotse Petroleum Com-pany.

And Mines and Minerals DevelopmentMinister Maxwell Mwale has advisedinvestors in Zambia not to get worriedabout the confusion that had rockedWestern Province over the BarotselandAgreement. Speaking when he signed the licence forBarotse Petroleum Company, Mr. Mwalesaid the Government would not allow

lawlessness in Zambia. “There are peo-

ple who just want to champion confu-sion, but the Government will not toler-ate this kind of situation to prevail. In-vestors should not be scared because

everything is under control,” he said.

Mr. Mwale said the Government ex-pected the exploration company tomove into the blocks as soon as therainy season was over. He said six com-panies - three Zambian and three for-eign - successfully bid for the advertisedoil and gas blocks in the first round.Mr. Mwale said two successful biddersin the second bidding round were Zam-bian companies, Majetu Block 15 inNorth-Western Province and Block 34 inthe Kafue Basin in Southern Province.He said the licensees' should adhere tothe guidelines of the strategic environ-mental assessment under the petro-leum exploration and production gen-eral regulations.

Vale to invest USD 90 million inKonkola

Brazilian Based and world's secondleading iron ore producer seeks to investmore than USD 90 million in its KonkolaNorth Copper Mine project in copper richnorthern Zambia this year for the devel-opment of the project which starts op-erations in 2013.

According to a company statement, ValeMining seeks to plough USD 93 millionin Zambia's Konkola Greenfield Mine inChililabombwe this year in addition tothe more than USD 400 million invest-ments earmarked in the Greenfieldmine. The miner said it would add the USD 93million to the USD 400 million it put inthe development of the Greenfield Mineon the Copperbelt Province and ensurethat the projected production of copperfrom the mine in the next two years isachieved. These include US$ 93 million in Zambiaat its Konkola North Greenfield Mine.Konkola North Copper Mine will be runas a joint venture between Vale andAfrican Rainbow Minerals which are inpartnership since August 2010 to de-velop the mine. The mine had during the commissioning of work at the new site pledged to investmore than USD 1 billion into the projectby 2015 in among other programmes,infrastructure development and ensureZambia succeeded in being one of themajor contributors of copper to the inter-national metal market. Zambia presently envisions to raise cop-per output to more than 700,000 ton-nes per annum spurred by massive in-vestment into the mining and coppersector by among other mining compa-nies; Vancouver based First QuantumMinerals, China Non Ferrous Metals andZambia's copper producing leader Ve-danta Resources, through its subsidiary,Konkola Copper Mines, among othermining giants operating in the SouthernAfrican nation. Steel Guru

ZDA Signs MoUs with Four LargeCompanies

The Zambia Development Agency (ZDA)has signed four business linkage agree-ments to enable Micro Small and Me-dium Enterprises (MSMEs) engage inbusiness with big corporate entities.

The companies that signed the Memo-randum of Understanding (MoU) wit ZDAwere National Housing Authority (NHA),Zambia Breweries, Konkola CopperMines (KCM), and Copperbelt EnergyCorporation (CEC). The MoU would pro-vide business opportunities and linkagefor the MSMEs and the four firms.Commerce, Trade and Industry MinisterFelix Mutati said the MoU would inte-grate the SMEs in more economic activi-ties and create more jobs and wealth for

citizens. “For SME‟s to grow they need to

interact with big businesses and I mustsay that I am happy that this MoU has

been signed this evening.”

The minister was speaking at the signing ceremony on 27

January 2011 atMoba Hotel in Kitwe. He said the Gov-ernment would deliver its promises of creating employment and business op-portunities to its citizens because it hasput in place policies that were practical.Speaking earlier, Zambia Breweriesmanager (North) Gavin Udal said hiscompany was happy that it was part of the business linkage programme.He said he was sure the business link-age programme would be successfuland urged other companies to come onboard.

“This programme of business linkages is

a good development and I am sure it willsucceed. We need to join efforts in mak-

ing this programme a success,” Mr. Udal

said.Mopani Copper Mine and LumwanaMine are also expected to join the busi-ness linkage programme to offer busi-ness opportunities to SMEs to createjobs and wealth creation and sustain-able livelihoods.

Zambia Charms Foreign Inves-tors

Foreign investors view Zambia as beingamong the countries with the most suit-able business environment particularlydue to its macroeconomic and politicalstability, which make investments safe.

The Zambian economy has been hailedas best suited to attract more ForeignPrivate Investments (FPIs) as it contin-ues to be one of the most preferredinvestment destinations in the world. The report on the survey conducted byZDA in conjunction with Bank of Zambia(BoZ) states that most investors hadfound the local economic climate wasfavourable and would positively influ-ence a would-be investor. Among thefactors that were highly praised as those

that would positively affect investors‟

decision to come to

(Cont‟d on Page 6)

PAGE 3ISSUE 22

First Quantum to Invest USD1bnin New Zambian Mine

Canadian group First Quantum Mineralswill invest $1 billion in a new coppermine in Zambia, its president Clive Ne-wall has revealed.

Clive Newall told reporters the invest-ment will include a copper smelter tohandle concentrate from a mine ex-pected to produce 300,000 tonnes of copper annually at peak production."The initial capital investment for theproject will be approximately $600 mil-lion, rising to $1 billion with constructionof a new 1.0 Mtpa copper smelter," Ne-wall said.Newall said an additional $400 millionwould be spent on future upgrades toTrident mine at Kalumbila in north-western Zambia."This investment is another endorse-ment of the Zambian government's pro-active policies to create an attractiveinvestment climate for capital invest-ment," he said.Newall said First Quantum also plannedto build a new town and a multi-facilityeconomic zone at the new mine whichwas expected to directly employ 2,000people. Reuters

Economic Growth Sustainable

–

BOZ

The Bank of Zambia has said Zambiawill be able to sustain the strong eco-nomic growth and high global ratingbecause of the consistent prudent eco-nomic management, among other fac-tors.

Increased activities in key productivesectors such as mining will also sustaingrowth for the country to remain highlyrated. Commenting on the Economistmagazine placing Zambia ninth on theladder of countries whose economieswould continue peaking in the coming five years, BoZ Governor Caleb Fun-danga said that economic activities andcontinued revision of failing policieswould spur Zambia further. Dr Fundanga said that increased mining activities and the high copper prices inaddition to the improved income in thenon-traditional exports (NTEs) were goodindicators for sustained growth in Zam-bia.

“Zambia was rated in the top 10 of not

only Africa but the world this is becausethe economy has performed well andwill continue to do so,