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ZAMBIA 2 010
FOREWORD .............................................. 2
By the Minister of Commerce, Trade and Industry
INTRODUCTION ........................................ 4
Social, Historical & Economic Overview
TRADE & INVESTMENT .......................... 12
Trade Agreements, Investment Incentives & Opportunities, Privatisation Programme Published by Directory Publishers of Zambia Ltd PO Box 30963, Lusaka, Zambia Tel: +260 211 257133 Fax: +260 211 257137 FRONT COVER The Royal Livingstone Express Other photography - Courtesy: René Hartslief MARKETING Marie Gibbons PHOTOGRAPHY René Hartslief, Marie Gibbons, ZNTB
BUSINESS & FINANCE ........................... 18
Business Support, Banking & Financial Services, Taxation, Stock Exchange
MINING & COPPERBELT INDUSTRY ..... 35
Mineral Resources & Policies
AGRICULTURE ........................................ 50
Products, Programmes & Prospects
MANUFACTURING .................................. 64
Strategic Sectors & Export Growth
FORESTRY & TIMBER ............................ 74
Plantations, Forestry Products & the Timber Industry
PRODUCTION Creative Solutions - René Hartslief
DESIGN Creative Solutions - Michel Gribben EDITORIAL RESEARCH & CONTENT Louella Morgan-Jarvis
The publishers gratefully acknowledge the assistance of the Ministry of Commerce, Trade and Industry and Zambia National Tourist Board (ZNTB) in coordinating the supply of certain material. While every care has been taken in the preparation of this publication, the publishers can accept no liability for any errors or omissions that may occur. This publication is the exclusive property of the publishers and no part of the contents may be reproduced in any form without prior written permission of the publishers.
TOURISM ................................................. 80
Attractions & Game Reserves, Development Programmes
PHYSICAL INFRASTRUCTURE .............. 89
Construction, Transport, Communications, Water & Energy
EDUCATION & TRAINING ..................... 100
Primary, Secondary & Tertiary Education, Vocational Training
Health Services, HIV/AIDS Programmes
USEFUL INFORMATION........................ 105
Facts & Figures, Government & Business
MAP ........................................................ 107
Zambia & Surrounding Areas
INDEX TO ADVERTISERS..................... 108
Macroeconomic objectives aim to overcome the current challenges and restore growth to pre-crisis trend levels and beyond. For 2010, these goals are to exceed 5 percent growth, reduce end-year inflation to 8 percent, and limit domestic borrowing to 2 percent of GDP. To achieve these aims, government is to focus on consolidating the recovery of the domestic economy, which will continue to be driven by the mining, construction and agriculture sectors, along with a recovery in tourism, and wholesale and retail trade, and continue with our economic diversification programme, thereby laying a solid foundation for higher sustainable growth and building resilience to external shocks. During 2010, we are also beginning implementation of the second phase of the Financial Sector Development Plan, an initiative which is expected to improve access to credit and reduce the high cost of borrowing. Diversification is being driven by targeted fiscal interventions as well as structural reforms to remove the constraints to doing business. Already, business licensing procedures have been reviewed and a legal framework for Public-Private Partnerships introduced to boost infrastructure development. Electricity tariffs have been revised to enhance investment in the energy sector while ensuring improvement in service delivery levels by Zesco. International telecommunication gateway licensing fees are being reduced to regional averages and, with the arrival of fibre optic connectivity, the cost and standard of services is expected to improve substantially. Zambia has many positive attributes to attract potential investors, including a democratic Westminster-style government and a liberal economic framework combined with an investmentfriendly and export-oriented business incentive package. The Ministry of Commerce, Trade and Industry regards the Zambia Review as an important tool for the international business community to learn more about the country and identify opportunities for productive investment. Therefore I encourage investors, as well as business and industry leaders, to read the 11th edition of the Zambia Review. I trust they will find it both interesting and informative.
Zambia has come a long way in the past two decades. Economic reforms in the period since 1991 have included a free currency exchange regime, privatisation of many state-owned enterprises, financial market developments such as the stock market, and the pursuit of structural reforms backed by the International Monetary Fund (IMF) and World Bank, such as the removal of consumer subsidies and price controls. Zambia boasted a real Gross Domestic Product (GDP) above 5 percent per annum between 2002 and 2008. This is testimony to the success of government’s macroeconomic programmes, backed by sound fiscal policies and good governance. Marketoriented policies, focusing on sustainable economic growth and private sector development, have created an enabling climate for business. This has seen international confidence in Zambia grow, along with higher levels of foreign direct investment. The most recent World Bank ‘Doing Business’ report indicates that Zambia’s position has risen by ten places, putting it ahead of a number of major economies. This reflects the MMD government’s commitment to reducing the cost of doing business and promoting financial sector development. The ravages of the global economic recession notwithstanding, Zambia continues to enjoy respectable economic growth. The robust growth of the past decade has by and large remained intact, with the IMF’s projected growth of 4.5 percent in 2009 an admirable achievement when compared with global and regional economies. Despite a stronger performance in the second half of 2009, the IMF estimates that world output contracted by 0.8 percent during the year, compared to growth of 3 percent in 2008. However, there are signs that the global economy is emerging from the recession, with the help of substantial stimulus packages launched by the United States of America (US), China and some European countries. The IMF thus anticipates growth of 3.9 percent during 2010, led by the Asian economies. The global economic crisis has not spared Sub-Saharan Africa, with growth expected to drop sharply from 5.5 percent in 2008 to 1.3 percent in 2009. However, a recovery is anticipated in 2010 with growth in the region projected to rise to 4.1 percent. At home, the international crisis saw Zambia’s external trade position decline, as buying power in industrialised countries shrunk and commodity prices fell. It was thus encouraging to see the prices of most major commodities rebound towards the end of the first quarter of 2009, with copper prices expected to average US$ 4 190 per metric tonne against initial estimates of US$ 3 500, a development which should boost the country’s foreign exchange earnings.
Hon. Felix Mutati, MP Minister of Commerce, Trade and Industry
The peaceful and democratic country of Zambia has for many years enjoyed both social and political stability, as well as a healthy macroeconomic environment, with economic growth averaging close to 6 percent per annum since 2003.
Backed by rich natural resources such as copper and cobalt, the minerals sector has for many years been at the forefront of Zambia’s expanding economy. Agriculture is another important sector, thanks to the country’s good soil and large tracts of fertile, arable land. There is also an abundant hydropower resource to be found in the numerous lakes, dams and rivers. Efforts to further diversify the economy mean that increased attention is being given to the manufacturing and tourism industries, with Zambia’s abundant wildlife and scenic beauty having great potential for further development. In recent years, economic growth has brought about huge improvements in the country’s physical infrastructure, and the government is committed to creating an enabling environment to attract further investment and stimulate private sector activity. These efforts are reflected in the World Bank’s most recent ‘Doing Business’ report, where Zambia’s ranking rose from 99 to 90 between 2008 and 2009, putting it ahead of a number of major economies and second only to South Africa in the Southern African Development Community (SADC) region. Economic growth has also had an effect on social indicators, with the United Nations Development Programme’s 2009 Human Development report acknowledging a general improvement in the welfare of Zambians in terms of life expectancy, education and income, since 2007. To build upon these gains, government is continuing to invest significant resources in infrastructure such as schools, health facilities, roads, water supply and the rehabilitation and expansion of electricity networks. Zambia has recorded a respectable level of economic growth since 2003 of just below 6 percent per annum; growth which has by and large remained intact in spite of the global recession. TOPOGRAPHY Zambia has a surface area of 752 612 square kilometres, and ranks among the smaller countries in the region. A landlocked nation, she is bordered by Angola to the west, the Democratic Republic of Congo (DRC) to the west and north, Tanzania to the northeast, Malawi to the east, and Mozambique, Zimbabwe, Botswana and Namibia to the south. Zambia’s most elevated areas include the Copperbelt Highlands as well as the Nyika Plateau on the border with Malawi, where Mwanda Peak, at 2 150 metres, forms the country’s highest point. Covered by deciduous savannah, small trees, grassy plains and marshland, the north and northeast of the country form a broad, undulating plateau, which slopes away to the south where Zambia’s main river, the Zambezi, forms a natural border with Namibia, Botswana and Zimbabwe. Other important rivers comprise the Luangwa, which joins the Zambezi from the northeast, and the Kafue, which flows from Zambia’s northwestern highlands. One of the natural wonders of the world, the spectacular Victoria Falls is the region’s foremost tourist attraction. CLIMATE Zambia is on average some 1 200 metres above sea level, and this high altitude combined with the country’s geographical position has produced both temperate and sub-tropical ecosystems. Temperatures range from about 15 to 33 degrees Celsius and the climate is generally pleasant, with extreme heat limited to the southern valleys around the Zambezi River. The mean annual rainfall is around 1 400 millimetres in the northern region and 700 millimetres in the southern, eastern and western provinces. The country has three distinct seasons: • May to August is cool and dry, with temperatures ranging from 16oC/60oF to 27oC/81oF • September to October is hot and dry, and brings temperatures from 27oC/81oF to 32oC/90oF • November to April is warm and wet with temperatures between 20oC/68oF and 27oC/81oF.
progress, with government refocusing its economic policy and strategy to encompass poverty alleviation and attainment of the United Nation’s Millennium Development Goals (MDGs). Economic planning was reintroduced, with the overriding macroeconomic policy objectives of attaining high and sustainable growth in real Gross Domestic Product (GDP), maintaining low and stable inflation, achieving external sector viability and reducing poverty. The performance of the economy has subsequently been extremely encouraging. Zambia’s judicious management of financial and monetary resources and exceptional performance under economic reform programmes saw the country qualify for debt relief under the Heavily Indebted Poor Countries (HIPC) initiative as well as the Multilateral Debt Relief Initiative (MDRI). As such, some 90 percent of debt was cast off, with the resources released from debt savings channelled into the development of the Zambian people. Despite the ever-present challenges of HIV/AIDS, poverty and an over-reliance on copper mining, Zambia continues to enjoy macroeconomic stability. This is evidenced by real GDP growth of over 5 percent per annum since 2002, at least 5.9 percent per annum over the last five years, and an average of 6.2 percent over the last three years (2007-2009) despite the knock-on effects of the world recession. Growth has been driven by factors such as investment in the private sector supported by sound economic policies, with favourable external sector developments including debt relief in 2006 and high copper prices until the third quarter of 2008. Other achievements include the reduction of inflation to single digits, a stable exchange rate, declining interest rates, a secure financial system and a substantial build-up in foreign exchange reserves. Although the global financial crisis of 2008 saw a temporary set-back to this trend, the economy regained its positive momentum during 2009. While international commodity prices have largely recovered since the crisis of 2008, Zambia continues to focus its efforts on enhancing competitiveness and diversifying the economy away from dependence on mining. As a result, the theme for the 2010/11 National Budget remains ‘Enhancing Growth through Competitiveness and Diversification’. Attaining a resilient and diversified economy with the capacity for sustained and rapid growth is indispensible if Zambia is to achieve the Millennium Development Goals by 2015, and to surpass them thereafter to become a middle-income country by 2030, as articulated in the Vision 2030 document. The Zambian economy in 2009 and beyond The performance of the economy in 2009 was largely influenced by the economic turmoil of 2008. While Zambia was not directly affected, the ensuing global recession saw reduced revenue earnings from mineral resources; job losses, particularly in the extractive industry; lower foreign capital inflow (both foreign portfolio investment and foreign direct investment); loss of foreign exchange reserves; rising domestic inflation driven by the pass-through effects of the depreciation of the Kwacha against major currencies; and declining numbers of foreign tourists. The tax and expenditure measures instituted in the 2009 national budget went a long way toward safeguarding mining operations as well as saving jobs, not only in the mining industry but in related sectors as well. These measures, together with improvements in metal prices, saw most mines reopening during the year, while others that had been threatened with closure continued to operate and even invested further in operations to increase production capacity. That Zambia has shown some resilience in the midst of the global economic crisis is further evidenced by improvements in
Aloe - Photo Courtesy: René Hartslief
THE ZAMBIAN ECONOMY Following the structural adjustment programmes and stabilisation policies introduced in the early 1990s, market liberalisation, deregulation and privatisation have transformed the Zambian economy. Once exhibiting a highly regulated command-type economy, Zambia has become more closely integrated with international markets, with the focus on trade liberalisation and the promotion of exports against a stable macroeconomic backdrop. The role of the state has been considerably reduced. Private sector activity is encouraged through the provision of an enabling environment while investment is promoted through several attractive incentive schemes. These measures have enhanced competition, efficiency and openness in commerce and industry and attracted further foreign direct investment, not only in resource-based sectors but in transport, telecommunications and utilities as well. Zambia’s priority economic sectors of mining, agriculture, tourism and manufacturing serve as a foundation for further growth due to their strong backward and forward linkages, particularly with regard to employment creation and income generation. Reforms which have been enacted include the abolition of foreign exchange controls, the deregulation of interest and foreign exchange rates, removal of price controls and consumer subsidies, reform of land tenure, reduction of tariffs and embargoes to open up domestic markets, a programme of privatisation for many parastatals and the strengthening of financial markets through merchant banking and the stock exchange. After tax profit, dividends and capital may be repatriated up to 100 percent without restriction, and there is statutory protection of investments. The coming into office of the New Deal Administration in 2002 marked an important milestone in the country’s economic
macroeconomic indicators. GDP growth for 2009 is estimated at 6.3 percent, following growth of 6 percent in 2008, due to robust expansion in the mining, agriculture and construction sectors. Sectors that did not fare as well include manufacturing, due to the increased cost of imported raw materials (mainly due to the depreciation of the Kwacha in the first half of 2009) and a decline in export demand; and tourism, where the number of foreign tourists decreased in the wake of the global financial crisis. However, compared to the International Monetary Fund (IMF) estimates of a contraction of 0.8 percent in world output, and Sub-Saharan Africa growth projections of 1.3 percent, growth of 6.3 percent is indeed a commendable achievement. Zambia’s per capita GDP during 2009 was estimated at US$ 902.20. At the same time, inflation averaged 11.5 percent during 2009, declining from 16.6 percent in December 2008 to 9.9 percent in December 2009 and 9.6 percent at end January 2010. The fall in inflation during 2009 may be attributed to declining food prices, the relative strengthening of the exchange rate, stability in domestic fuel prices and transport costs, and the downward trend in lending rates. During the first half of 2009 the Kwacha depreciated against major international currencies in response to the continuing effects of the global financial situation. However, during the second half of the year, it began to appreciate as a result of improving investor confidence in the Zambian economy, and by the end of the year was showing some stability against major international currencies. There was a sharp drop in the level of international trade during 2009, with the value of imports and exports falling by 26 and 19 percent, respectively, during the first half of the year. The reduction in imports was largely attributed to the steep depreciation of the Kwacha during the first half of the year, while exports were affected by weaker global demand for metals. According to the Central Bank, in the fourth quarter of 2009, Zambia’s Balance of Payments position deteriorated to a deficit of US$ 113.1 million, from US$ 1 049.5 million in 2008. This was due to the unfavourable performance of both the current account (US$ 213.4 million deficit) and the capital and financial accounts, where the surplus fell by 64.8 percent to US$ 149.9 million in the fourth quarter. This is largely attributed to the decline in imports, and also reflects, in part, a slowdown in investment expenditure in the wake of the global recession. At the end of November 2009, gross international reserves had increased to US$ 1 887.1 million, equivalent to five months of import cover. This was mainly on account of the receipt of US$ 789 million in additional funds from the IMF. This is the highest level of reserves attained in the last 38 years.
Batik - Photo Courtesy: René Hartslief
Superb Starling - Photo Courtesy: René Hartslief
Export development Traditional exports grew by 8.5 percent in 2009 compared to 4.5 percent in 2008, while non-traditional exports (NTEs) increased by 41.6 percent in 2009 following a contraction of 10.6 percent in 2008. Metal products continue to contribute the most to total export earnings – some 83.1 percent in January 2010, while NTE earnings made up around 13.9 percent of total earnings in the same month. The Southern African Development Community (SADC) is Zambia’s leading trading partner and South Africa its single largest partner country, importing copper, electricity, tobacco, cotton and sugar. OECD countries, including the EU, Japan and the USA, remain another important market for Zambia’s exports. The five major destinations for Zambia’s exports in February 2010 were Switzerland (64.6 percent), China (10.1 percent), South Africa (7.2 percent), DRC (5.2 percent) and the United Kingdom (2.6 percent). These five countries collectively accounted for 89.7 percent of Zambia’s total export earnings. Regionally, SADC is the largest market for Zambia’s exports. Macroeconomic objectives for 2010 Macroeconomic policies in 2010 continue to focus on consolidating the recovery of the domestic economy, the rapid diversification of Zambia’s economic base, and the protection of key social expenditures in sectors such as education and health. Macroeconomic objectives in 2010 are to: • Exceed 5 percent growth • Reduce end-year inflation to 8.0 percent • Limit domestic borrowing to 2.0 percent of GDP It is anticipated that domestic growth in 2010 will continue to be driven by the mining, construction and agriculture sectors, along with a recovery in tourism and wholesale and retail trade. Growth from these sectors will be augmented by improved metal exports, leading to improvements in the balance of payments position. The medium-term economic outlook at the beginning of 2010 was that the Zambian economy would continue growing at a rate of more than 6.0 percent. HISTORY & POLITICS One of the cradles of humankind, the earliest evidence of homo sapiens in Zambia dates back some 100 000 years, with remains of human habitation having been found in the region of Kabwe. There is evidence that Bantu-speaking peoples reached the area around 800 AD, and that from approximately 1000 AD Arab and Swahili traders began exploring the region. However, the ancestors of most of Zambia’s current ethnic groups arrived
indigenous peoples experiencing increasing white domination, a rising tide of African nationalism led to strikes and protests. In 1948 the Northern Rhodesia African Congress was formed, giving a formal voice to the country’s disenfranchised majority, whose opposition to colonial rule continued to mount over the next decade. In 1953 the Federation of Rhodesia and Nyasaland, encompassing Northern Rhodesia (Zambia), Southern Rhodesia (Zimbabwe) and Nyasaland (Malawi), was created by the British government, to protests locally and abroad. The United National Independence Party (UNIP), formed in 1959 by Kenneth Kaunda, was at the forefront of calls to end British rule, and in 1964 the federation was dissolved. On 24 October 1964 Northern Rhodesia became the independent Republic of Zambia, taking its name from the Zambezi River. Kaunda was elected Zambia’s first president, and was re-elected in 1968 and 1973, eventually serving for a total of 27 years. The 1970s and 1980s were turbulent decades. Problems at home were exacerbated by falling copper prices and rising fuel costs. Together with much of the rest of the world, Zambia imposed sanctions on Ian Smith’s white-ruled Rhodesia in 1965, but not without consequences. Retaliation took the form of raids by the Rhodesian army, which targeted Zambia’s infrastructure, as well as the disruption of traditional trade routes through Rhodesia to the coast. These problems were alleviated somewhat by the building of a petroleum pipeline between Dar-es-Salaam and Ndola in 1968, and the opening of a railway line between Zambia and Tanzania in 1975. By the mid 1980s President Kaunda was forced to introduce economic austerity measures as a condition for aid. The ensuing food shortages and unemployment led to rioting and strikes, intensifying the mood for political change and the abolition of Zambia’s one-party state. In 1991 the constitution was amended, opposition parties legalised, and full elections held in October 1991. Zambia has been a parliamentary democracy since 1991, and the current ruling party is the Movement for Multiparty Democracy (MMD). Elections are held every ﬁve years, with the president serving a maximum of two ﬁve-year terms. A decisive victory was won by trade unionist Frederick Chiluba’s Movement for Multiparty Democracy (MMD) on the promise of both economic and political reform. The MMD set about reforming the civil service as well as privatising a number of government enterprises; moves which saw relations with the International Monetary Fund (IMF), World Bank and private investors improve substantially. Elected in December 2001, Chiluba’s successor Levy Mwanawasa of the MMD took over one of the most broadbased democratic parliaments ever seen in Zambia, with healthy opposition from other parties, including the United Party for National Development and United National Independent Party. President Mwanawasa ran for a second term in the 2006 elections, in which the MMD retained power. Important steps taken under President Mwanawasa’s New Deal Administration included the launching of a far-reaching anti-corruption campaign in 2002 as well as a comprehensive constitutional review process begun in 2005 in order to strengthen government’s political accountability. Levy Mwanawasa served as President of Zambia from January 2002 until his untimely death in August 2008 following a stroke. Mwanawasa’s Vice-President, Rupiah Banda, became acting President and, as the candidate of the governing MMD, narrowly won the October 2008 presidential election.
Cheetah - Photo Courtesy: René Hartslief
from present-day Angola and the DRC between the 16th and 18th centuries. Trade with both the Atlantic and Indian Ocean coasts was fruitful, and brought the first European visitors to the area sometime during the 18th century – Portuguese explorers following the trade routes from the coast into the interior. The first half of the 1800s saw successive upheavals in southern Africa, with many refugees resettling in Zambia. These included the Nguni, who fled Shaka and the mighty Zulu nation’s ‘difaqane’ (forced migration). At much the same time the Kololo arrived in Zambia and settled in Lozi territory on the Zambezi River. In 1851 David Livingstone, the celebrated Scottish doctor, explorer and missionary, first arrived in the region now known as Zambia, searching for a route into the interior. A fierce critic of the slave trade, Livingstone’s efforts attracted other missionaries, who were later followed by a stream of European prospectors and hunters. In the scramble for control of Africa in the late 19th century, Zambia eventually came under the jurisdiction of the British South Africa Company (BSAC), which administered the region after signing treaties with several African leaders, including Lewanika, the Lozi king. The area became Northern Rhodesia in 1911. In 1924 the British took over the administration of the protectorate. Massive copper ore deposits were discovered in the northcentral region in the 1920s, and the large-scale mining of copper and lead began in earnest over the following two decades. Mining operations in the Copperbelt area attracted a variety of European administrators, technicians and skilled labourers. However, it was largely local Africans who worked the mines, often under appalling conditions, in order to pay the ‘hut tax’ introduced by the colonial administration. By 1910 some 1 500 Europeans had settled in the country, and by 1958 this number had grown to about 72 000. With the
country, approximately 100 kilometres from the border with Zimbabwe and 1 300 metres above sea level, the city enjoys a pleasant climate, with clear, mild winters and warm and sunny summer days. Lusaka is a city of contrasts, encompassing modern high-rise buildings, a bustling central business district, tree-lined streets with colonial architecture, dusty markets and sprawling informal settlements. At the centre-point of the country’s road, rail and air network, Lusaka beckons visitors from across Africa as well as the globe. Over the past few years the city has witnessed a sweeping programme of refurbishment and repair. While many shops – including banks and bureaux de changes – may be found along Cairo Road, there are a number of good shopping malls such as Manda Hill along the airport road, the popular Arcades (which includes cinemas), the Downtown Shopping Centre on Kafue Road, Crossroads in Leopard’s Hill and Kabulonga situated at the corner of Kabulonga and Chindo roads. Other amenities include five-star hotels, conference centres, nightclubs, restaurants and fast food outlets, and the Lusaka Playhouse in the centre of town. The city’s two main markets are Kamwala Market on Independence Avenue and Lusaka’s largest market, the colourful New City (‘Soweto’) Market along Lumumba Road. Here visitors will find vegetables, fresh and dried fish, new and second-hand clothing, as well as curios. There’s also a good arts scene, with exhibitions of local art and handicrafts at the Henry Tayali Visual Arts Centre and Namwane Art Gallery. Original artworks and souvenirs may also be found at Northmead Market, Kabwata Cultural Centre, the Dutch Reformed Church Market, and at specialist stores such as Ababa House, Kubu Crafts and Optimana.
Protea Hotel, Lusaka - Photo Courtesy: René Hartslief
THE PEOPLE Zambia is known as one of the safest countries in Africa and is proud of its friendly and hospitable people. At the time of the 2000 census, the country had a total population of 10 285 631. The Central Statistics Office puts the projected mid-2010 population figure at 13 272 533 with a population growth rate of 2.8 percent. Presently just over a third of Zambia’s people live in urban areas. About 98 percent of the country’s inhabitants are African, the main ethnic groups being Bemba, Nyanja, Lozi, Luvale and Tonga, with the remaining 2 percent comprising those of Asian and European origin. English is the official language and is widely spoken throughout the country. There are 70 indigenous languages, including Bemba, Nyanja, Tonga, Lozi, Kaonde, Luvale and Lunda. While Zambia is a Christian country (around 60 percent of the population), there are also a number of indigenous beliefs as well as religions such as Islam, Buddhism and Hinduism, although these are in the minority. MAIN CENTRES Zambia has one of the lowest population-to-land ratios on the continent – some 13.27 million people in a country half the size of Europe. It nevertheless has a large urban population due to migration from rural to urban areas as a result of greater employment opportunities in the mines and other industries post independence. Population density is highest in the urban and industrial centres, particularly Lusaka in Lusaka Province, Ndola and Kitwe on the Copperbelt, and Livingstone in Southern Province. LUSAKA: Boasting a lively atmosphere and a genuine African feel, Zambia’s vibrant commercial, administrative and financial centre of Lusaka is one of the fastest growing cities in central Africa. Situated in Lusaka Province in the southern part of the
Some of the city’s other attractions include the Lusaka National Museum, Munda Wanga Environmental Park with its wildlife sanctuary and botanical gardens, Kalimba Reptile Park and Family Centre, and the water theme park and recreation centre of Adventure City. There are game drives, hikes or horseback trails through nearby game farms such as Lilayi Game Ranch or the excellent Chaminuka Private Game Reserve. LIVINGSTONE: Situated about 300 kilometres southwest of Lusaka and 11 kilometres northeast of the Victoria Falls, Livingstone was established in 1905 following the bridging of the Zambezi Gorge, and takes its name from the Victorian missionary and explorer, David Livingstone. This growing tourist centre continues to attract visitors from around the world, and has expanded rapidly in the past few years as more and more travellers choose to visit the Victoria Falls from the Zambian side of the river. A trip to the falls is a must-see for anyone travelling to the southern African region, and Livingstone makes an excellent
Knife Edge Bridge, Livingstone - Photo Courtesy: René Hartslief
base from which to explore the surrounding countryside. The town has two main business areas concentrated along Mosioa-Tunya Road, its principal thoroughfare. There is some lovely colonial architecture, characterised by spacious wooden verandas and iron roofs. Livingstone is also witnessing a great deal of construction and development, and there are new hotels and restaurants, shopping and entertainment centres, and casinos and nightclubs, which cater to budget and luxury travellers alike. The impressive Zambezi waterfront complex is becoming one of the most exclusive destinations in southern Africa. Accommodation options range from budget to extremely luxurious. Adventure activities include game drives and elephant-back safaris as well as white-water rafting, bodyboarding, microlighting and bungi jumping. A more sedate option is a sunset cruise on the Zambezi River, or a helicopter flight over the falls. Many companies offer guided sightseeing tours, which take in everything from the falls and game parks to local markets, museums and cultural villages. The Livingstone Performing Arts Foundation is a nonproﬁt foundation which is promoting and preserving Zambian culture through excellence in the arts. There is an acclaimed collection of steam locomotives at the Railway Museum, and fascinating archaeological and historical items at the Livingstone Museum, which also houses a collection of David Livingstone’s memorabilia. The Victoria Falls Field Museum adjacent to the Falls Craft Village explores the geology and early history of the area. Other places of interest include cultural villages such as Mukuni, Somonga and Songwe, which offer a slice of traditional Africa. The colourful Maramba Market is the largest in Livingstone and sells the widest and most interesting variety of goods. There is a crocodile park to the south of Livingstone as well as a reptile park. NDOLA: This is Zambia’s third largest town and the bustling commercial and industrial capital of the Copperbelt Province – the region with the highest population density in the country. Many manufacturers here operate in support of the mining industry, and the town’s refinery is the end point of the oil pipeline which runs from Dar-es-Salaam in Tanzania. The city is also home to the Copperbelt University as well as ‘The Times of Zambia’ newspaper. This pleasant town’s tree-lined suburbs and well-developed central business district belie its industrial roots. There is a variety of shops, plenty of restaurants and takeaways, and accommodation options consisting of a few hotels and a
Flamboyant trees, Ndola - Photo Courtesy: Marie Gibbons
growing number of guesthouses. Ndola has some low-key attractions, including the Copperbelt Museum, the Slave Tree in Makoli Avenue, and the Dag Hammarsköld Memorial site located 10 kilometres along the Ndola-Kitwe road. Wildlife and scenic attractions in the vicinity include Nsobe Game Camp, Lake Chilengwa and Lake Kashiba. KITWE: Centrally positioned on the Copperbelt some 59 kilometres west of Ndola, Kitwe is Zambia’s second largest population centre and owes its existence and present expansion to the copper mining industry. In addition to those associated with mining, secondary industries such as food processing and furniture, clothing and cement manufacturing have been established here. Kitwe has a wide variety of comfortable accommodation, as well as stores, restaurants and entertainment venues. While the main market is situated alongside the railway line, Chisokone Curio Market at the end of Obote Avenue sells a variety of curios and souvenirs, with the emphasis on copper handicrafts. Places of interest near Kitwe include Chembe Bird Sanctuary, which is set in a woodland reserve around a small lake, the popular boating and picnic spot of Mindolo Dam, and the crocodile ponds at Chililabombwe. CHINGOLA: Situated 50 kilometres west of Kitwe, Chingola is the site of the Nchanga open-pit mine. Accommodation comprises the new Protea Hotel, a variety of guesthouses and the Chimfunshi Wildlife Orphanage (just over an hour’s drive from Chingola), which is also a popular tourist attraction. Other places of interest include Hippo Pool, which is a national monument and popular picnic spot. SOLWEZI: This fast-expanding town is located in the NorthWestern Province near the Kansanshi Mine and 65 kilometres from Equinox Minerals’ open-pit Lumwana Mine (which contains one of the world’s largest copper deposits). Solwezi is benefiting from the huge infrastructure investments sparked by these copper mines, with Equinox’s investment of some US$ 762 million the biggest single investment in Zambia’s history. CHIPATA: Formerly known as Fort Jameson, Chipata was the capital of North-Eastern Rhodesia until 1911, and is today the capital of Zambia’s Eastern Province and the gateway to South Luangwa National Park. This busy town has around 320 000 inhabitants and is just 30 kilometres from the Malawian border and just an hour and a half from Lilongwe. Chipata has been a busy trading post for over a century, and today its colourful markets and ‘Down Shops’ sell everything from fruit and vegetables to clothing and curios. While the town itself holds few attractions, save the beautifully adorned Central Mosque, the cultural festivals of Ncwala (during February) and Kulamba (held during August) are a tourist drawcard. OTHER CENTRES: Situated 60 kilometres south of Kapiri Mposhi, Kabwe is a transit stop between Zambia’s capital and the Copperbelt; it is also an important heritage site, as the prehistoric human skull known as Broken Hill Man was found here in 1921. The industrial town of Kafue is situated some 50 kilometres south of Lusaka on the magnificent Kafue River, which is a focal point for tourism. The regional capital of Northern Province, Kasama is a busy town and a good base from which to explore the surrounding attractions, which include the Chishimba Falls and excellent rock paintings dating back some 2000 years. The town of Siavonga lies along the northeastern shore of Lake Kariba and is a popular destination for conference tourism.
Trade & Investment
Backed by strong macroeconomic fundamentals, including an average growth rate of 6.2 percent over the last three years, the resource-rich nation of Zambia offers enormous trade and investment opportunities.
The past decade has been one of significant economic growth and poverty reduction, brought about by job and wealth creation in the industrial, commercial and trade sectors. During this time, the investment climate improved tremendously, and despite the challenges of reduced investment inflows in the wake of the global recession, initiatives being implemented through the Zambia Development Agency are once more beginning to attract higher levels of foreign direct investment. The liberalisation of trade has been a key factor in supporting private sector growth and export competitiveness, with Zambia actively participating in regional and international trade fora. Notwithstanding the decline in global trade volumes during 2009, with the value of Zambia’s imports and exports falling by 26 and 19 percent respectively during the first half of the year, the rebound in commodity prices, international trade and global growth in the latter part of 2009 and early 2010 should assist Zambia in her efforts to further diversify the economy. Zambia’s principal export destinations include the United Kingdom (UK), Switzerland, Tanzania, Zimbabwe and South Africa. The country’s most successful exports are metals and minerals (in particular copper), a situation which looks set to continue due to a significant recovery in international commodity prices. The spotlight is also on expanding non-traditional exports (NTEs) such as cotton, tobacco and vegetables, as well as cement and textiles, in order to help diversify the economic base. In the first two months of 2010, metal products made up more than four fifths of total export earnings, while NTEs accounted for approximately 15 percent. The country’s most important import commodities include petroleum products, electricity, fertiliser, and machines and transportation equipment. Zambia’s main import partners are the UK, United Arab Emirates and South Africa. South Africa remains Zambia’s largest single investment and trading partner in the SADC region. Amid global economic challenges, Zambia’s economy was projected to grow by an enviable 6.3 percent in 2009 from 6 percent in 2008. This is due to robust growth in the mining (21.4 percent), agricultural (7.1 percent) and construction (15.5 percent) sectors. Government is committed to building on its enviable record of macroeconomic stability and fiscal discipline, while making the investment climate even more conducive to private sector activity and industrial growth. TRADE & INVESTMENT CLIMATE Zambia possesses all the necessary attributes for sustainable economic growth and development. It is centrally located in southern and central Africa, surrounded by eight neighbouring countries and in close proximity to the large market of South Africa. It enjoys preferential market access through active participation in the Southern African Development Community (SADC) trade protocol and the Common Market for Eastern and Southern Africa (COMESA) free trade area. Ports most frequently used include Durban in South Africa, Dares-Salaam in Tanzania and Walvis Bay in Namibia (the shortest route), with the route to the port of Beira in Mozambique being another option. Currently under development, the North-South Corridor is a joint COMESA-EAC-SADC initiative aiming to upgrade 8 000 kilometres of road and rehabilitate 600 kilometres of rail track to reduce the time and costs of surface transport and open up new business opportunities in Tanzania, DRC, Zambia, Malawi, Botswana, Zimbabwe, Mozambique and South Africa. A country with abundant natural resources and human capital, it is also one of Africa’s most peaceful, tolerant and democratic states, boasting a Westminster-style government and sound governance structures based on the rule of law and respect for private property. Zambia has an independent judiciary and strong anti-corruption measures have been instituted. Competitive production costs, incentives, and reforms have also enhanced the business climate for both local and foreign
investors. Steps have been taken to streamline the establishment of new businesses and the process of acquiring visa and work permits as well as land. The launch of the Zambia Development Agency has also helped to address these obstacles through the creation of a one-stop-shop for investors to obtain required authorisations. Government is working on developing world class infrastructure in designated areas known as MultiFacility Economic Zones (MFEZs) to facilitate the entry of businesses. There is no legal distinction between foreign and domestic investors, except in the case of the retail sector. Foreign investment on the Lusaka Stock Exchange (LuSE) is not restricted, and the privatisation process is likewise open to foreign bidders. While there are no requirements for local content, equity, financing, employment or technology transfers, companies seeking licenses or concessions, or investors bidding for privatised companies, are encouraged to commit to local participation. Investments are protected and private property rights guaranteed through the Zambia Investment Act, and investments are not adversely affected by any changes to the Investment Act for a period of seven years. Zambia belongs to the Multilateral Investment Guarantee Agency (MIGA), and investment in the stock market is protected by the Securities Act of 1993. Investors are free to repatriate capital investments as well as dividends, management fees, interest, profit, technical fees and royalties. Foreign nationals may transfer/remit wages earned in Zambia with ease. There is no exchange control in Zambia for anyone doing business as either a resident or non-resident. Additionally, there are no restrictions on non-cash transactions. Investment in the latter part of 2009 included: US$ 400 million in the cultivation and refinement of Jatropha in Northern Province, US$ 200 million in a major residential and commercial property development at Levy Junction in the heart of Lusaka, and more than US$ 3 billion in mineral exploration and development in the North-Western Province. Building competitiveness The drive towards economic diversification is being undertaken through targeted fiscal interventions as well as structural reforms to unshackle current constraints to doing business. Most recently: • The regulatory reform process has been accelerated through the review of business licensing procedures, with a number of bills being presented during 2009 and 2010. • A legal framework for Public-Private Partnerships has been developed to facilitate partnerships in key areas such as infrastructure development. • Electricity tariffs have been revised to enhance investment in the energy sector while ensuring improvement in service delivery levels.
• International telecommunication gateway licensing fees have been reduced to regional averages. • Regional transport networks are being enhanced, with projects such as the Kazungula Bridge and the Nacala Corridor, which are part of the North-South Corridor programme, set to reduce regional trading costs. ZAMBIA DEVELOPMENT AGENCY The Zambia Development Agency (ZDA) was established in 2006 under the ZDA Act No. 11 of 2006, and became operational on 7 July 2007. The agency comprises a merger of the Zambia Privatisation Agency, Zambia Investment Centre, Export Board of Zambia, Zambia Export Processing Zones Authority and the Small Enterprise Development Board. The amalgamation of these agencies was intended to make the ZDA a one-stop-shop for investment and trade matters. The ZDA is tasked with promoting growth and investment in Zambia. The institution is client-focused in order to create confidence in the public sector’s support for business. The agency facilitates overall private sector growth and investment attraction. Government, through the ZDA, has committed itself to creating a business environment that benchmarks Zambia as the best among dynamic developing economies. Such an environment is critical in attracting additional foreign and domestic investment. Business reforms have helped ZDA to make great strides in its mandate of investment promotion. Following the establishment of the agency, FDI rose drastically, and within the first two years of operation ZDA had attracted more than US$ 11.4 billion in FDI compared to the US$ 3.9 billion that had been brought in between 1993 and 2006. This inflow is projected to have translated into the creation of more than 52 000 direct and indirect job opportunities in various sectors of the economy.
Electricity - Photo Courtesy: René Hartslief
(WTO). This is to ensure that Zambian businesses take advantage of the opportunities generated by those offers. The agency promotes investment in order to strengthen the growth of domestic industries and thereby enhance export earnings. Accordingly, Zambia has formulated an industrial policy vision that embraces the promotion of investment into zoned areas for industrial parks. The ZDA promotes both FDI and DDI (domestic direct investment) in different sectors of the economy. Specifically, ZDA establishes Multi-Facility Economic Zones (MFEZs) to enhance FDI and DDI inflow. The MFEZ programme serves as a catalyst for Zambia’s industrial and economic development through facilitation of investment in these zones, with the objective of stimulating the manufacturing sector to enhance both domestic and export oriented business. The zones provide an environment that is competitive enough for a manufacturer to process within the borders of Zambia with relative ease, and are designed to give Zambia a robust and viable manufacturing sector in the region through increased productivity. The MFEZ initiative is crucial to Zambia in its quest for greater foreign exchange earnings, which flow in more easily when exports are value-rich. As Zambia is a member of various regional and international organisations, such as the WTO, COMESA and SADC, and signatory to a number of market access agreements, it has ready markets for the export of value-added manufactured products. The MFEZ programme has several incentives that are meant to attract investors in the zones. These include exemption from tax on dividends for five years from the first year of declaration, and a corporate tax of zero percent for the first five years from the first year profits are made, among many others. The ZDA principally furthers the economic development of Zambia by promoting efficiency, investment and competitiveness in business, as well as promoting exports. It also addresses the high cost of doing business in the country by simplifying the processing of various business formalities, such as licensing. It builds and enhances the country’s investment profile for increased investment inflows to be realised. It also promotes the growth of the MSE sector by providing incentives that can propel long-term domestic growth.
Eucalyptus trees - Photo Courtesy: René Hartslief
Lion - Photo Courtesy: René Hartslief
The ZDA mainly promotes development by providing effective and comprehensive business facilitation and aftercare services. It also provides business development services and market information in order to promote Zambian exports efficiently and in a competitive manner. The agency additionally supports greenfield investment through joint ventures and partnerships between local and foreign investors, as well as ensuring speedy approval of licences by all government agencies. It further assists in obtaining land for economic projects and helps expatriate staff to obtain work permits. ZDA is also mandated to support the growth of the Micro and Small Enterprises (MSEs) sector, which cuts across all sectors of Zambia’s economy and is one of the most prolific sources of employment, serving as a fibre of wealth creation for most Zambians and a breeding ground for industries. This emphasis on MSEs aims to shift Zambia’s economic development direction, which had hitherto been geared towards the promotion of medium and large-scale enterprises, mainly in the mining and manufacturing sectors. Current development trends show that MSE involvement in the economy has become essential. Thus, ZDA creates market linkages for MSE players with trans-national corporations to enable them to realise meaningful profits from their economic activities. Export earnings are another crucial stimulant in propelling Zambia’s economic development, and the agency thus markets Zambia’s exports abroad to increase earnings from the sector. It promotes exports and competitive international trade, and assists Zambian businesses and entrepreneurs in accessing new markets and expanding existing ones for their products within the region and beyond. The agency also helps entrepreneurs to source inputs at competitive rates. The ZDA undertakes research on what different markets offer Zambian exporters, and subsequently advises the Minister of Commerce, Trade and Industry on matters relating to International Trade and Development through the export of goods and services. The agency largely utilises market access offers received from trading partners under COMESA, SADC, the European Union (EU) and other regional trading blocks, as well as national initiatives and the World Trade Organisation
Foreign Direct Investment in 2010 In the first quarter of 2010, the Zambia Development Agency recorded US$ 1.344 billion in FDI, compared to US$ 194.548 million during the same period in 2009. The approved investment applications came from 59 applicants and represent a potential total of 5 943 new job opportunities once implemented. The Zambia Development Agency attracted more than US$ 1.3 billion in FDI in the ﬁrst quarter of 2010, surpassing the projected US$ 1 billion FDI inﬂow for the year. These approvals came from the following sectors: manufacturing, services, health, education, energy, tourism, agriculture, mining, real estate and construction. The mining sector recorded the largest investment of US$ 500 million, followed by manufacturing with about US$ 89.1 million. OPPORTUNITIES FOR INVESTMENT Zambia is an attractive investment destination and possesses a rich array of natural resources, the majority of which remain underexploited. While mining has been the anchor of the country’s economy since the privatisation of the industry some years ago, efforts are being made to diversify the economic base, focusing specifically on the agricultural, manufacturing and services sectors, with FDI inflows through privatisation and Public-Private Partnership (PPP) arrangements. The restructuring of the economy has opened up new horizons for investment, with an increasing number of sectoral and privatisation investment opportunities being generated every year. Inflows of FDI complement the opportunities created by ‘home-grown’ multinational and local corporations. A prime example is the local company ZAMBEEF, one of the largest cropping operations in Africa. Prime growth sectors for investment include manufacturing, agriculture and agro-processing, tourism and mining. Investment opportunities are also available in construction, transportation, energy, telecommunications and IT services. Investment incentives Zambia’s investment incentives are aimed at establishing a climate for greater domestic industrial growth and Foreign Direct Investment (FDI), promoting exports and developing the private sector. The Investment Act of 1993, as amended in 1996, regulates matters such as investment incentives and investment guarantees. The standard corporate tax rate is 35 percent. The mining of base metals is taxed at a rate of 30 percent, while income from farming is taxed at 15 percent, as is income originating from the export of non-traditional products. Tax incentives relating to investments on the Lusaka Stock Exchange (LuSE) include a
Lusaka Stock Exchange - Photo Courtesy: René Hartslief
Floriculture - Photo Courtesy: René Hartslief
reduction of corporate income tax to 30 percent, no restrictions on foreign ownership and shareholding levels, and no capital gains tax. There are also various incentives available under the Multi-Facility Economic Zone (MFEZ) programme. Priority investment sectors have been set up to enhance the attainment of national development targets, with the following sectors attracting fiscal incentives: • Floriculture • Horticulture • Processed foods • Beverages and Stimulants • Textiles • Manufacturing of engineering and other products • Beneficiation of phosphates and any other related material into fertiliser • Beneficiation of rock materials into cement • Production and processing of raw timber into wood products • Production and processing of hides and leather products • Building of mini hydropower stations • Information and Communication Technology (ICT) • Health • Education and skills training • Tourism • Processing of agricultural products, forest products, gemstones and non-ferrous metals PRIVATISATION Zambia’s privatisation programme, which began in the early 1990s under President Chiluba’s MMD government, is acknowledged as being one of the most successful in terms of the World Bank’s Poverty Reduction Growth Facility. The privatisation process has involved selling shares in state-owned companies to the private sector in order to improve the running of these companies as well as to procure the required capital injections. Privatisation methods have differed according to the type of company being sold, with smaller companies going under public tender and some larger organisations being publicly floated. Other options have included the Management Buy-Out (MBO) system. The establishment of the Zambia Privatisation Trust Fund (ZPTF) paved the way for ordinary Zambians to invest in state-owned enterprises by buying shares on the stock exchange, with some 60 percent of companies and units having been sold to Zambians. Positive outcomes have included increased production capacity as well as improved standards of production, with companies capturing new export markets and thus earning increased foreign exchange. The programme has also led to an influx of major international investors who have in turn invested in other large projects outside the privatisation programme, with local companies also benefiting from the existence of strong
The COMESA Free Trade area (FTA) came into being in the year 2000, whereafter intra-COMESA trade expanded enormously due to the removal of tariffs among member states. The launch of the Customs Union in June 2009 should deepen integration in the region, harmonise policies regarding external tariffs, classification and regulations, and enable the creation of more effective trade agreements. Economic Partnership Agreements (EPAs) are being negotiated between the EU and the African Caribbean Pacific (ACP) countries. Zambia is participating in negotiations under the Eastern and Southern African (ESA) configuration, which comprises all COMESA member states 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, which expired at the end of 2007. It is anticipated that the interim EPA process between the EU and the ESA region will be concluded during 2010. As a Least Developed Country, although Zambia already has duty-free access to the European market under the EU’s EBA trade arrangement, the new EPA will provide a more comprehensive agreement. Zambia is also a member of the Southern African Development Community (SADC), a grouping of 14 countries with a combined population of over 247 million and a cumulative GDP of US$ 431 billion. Other members of SADC include South Africa, Zimbabwe, Tanzania, Malawi, Botswana, Mauritius, Angola, Democratic Republic of Congo, Namibia, Lesotho, Swaziland, Seychelles and Mozambique. SADC launched a Free Trade Area (FTA) in 2008 involving zero tariff levels for 85 percent of all goods traded among member states. Liberalisation of tariffs on the remaining 15 percent of goods, considered to be sensitive products, is expected to be completed in 2012. Outstanding issues in the implementation of the SADC FTA, such as the review of the rules of origin and elimination of non-tariff barriers, are also being addressed. This is one of the first milestones of the SADC Regional Indicative Strategic Development Plan, and is to be followed by a Customs Union and Common Market. At a Tripartite Summit in October 2008, COMESA, SADC and the East African Community (EAC) decided to harmonise their trade arrangements with a view to creating a common free trade area.
Processing of hides & leather products - Photo Courtesy: René Hartslief
Gemstones - Photo Courtesy: René Hartslief
foreign players. Furthermore, privatisation has served as an employment creator and has prevented the liquidation of many enterprises. The process of privatisation in a country such as Zambia, in which some 80 percent of the economy was once stateowned, has had far reaching consequences and has been integral to private sector development. From a modest start, which focused on local investment, Zambia’s privatisation programme expanded to attract international companies from Europe, Asia, South Africa and the United States. Initially involving the divesture of approximately 150 state-owned enterprises, this number increased to 284 as many of these enterprises were split and their operating units sold independently. A total of 262 companies have so far been privatised, with some parastatals undergoing a process of commercialisation as opposed to outright privatisation. The privatisation programme was initially overseen by the independent Zambia Privatisation Agency (ZPA), and has subsequently been taken over by the Zambia Development Agency (ZDA). In 2009, government announced its intention to divest up to 75 percent of its equity in the Zambia Telecommunications Company Limited (Zamtel), and may consider divesting the remaining 25 percent through the sale of shares on the Lusaka Stock Exchange. This is a historic move and will also go a long way toward improving the quality of service and reducing high costs in the telecommunications sector. TRADE AGREEMENTS The promotion of trade is crucial to the country in its efforts to find additional regional and international markets for its products. While Zambia is a key player and pioneer in various regional initiatives, there is a need for Zambian products to achieve further penetration in global markets such as the USA under the African Growth and Opportunity Act (AGOA), the EU under the Everything but Arms (EBA) Initiative, as well the Chinese, Canadian and other markets. Zambia is a member of the Common Market for Eastern and Southern Africa (COMESA), which promotes regional economic integration through trade and investment. In 2008, COMESA’s 19 member states had a population of 430 million, annual import bill of around US$ 152 billion and export bill of over US$ 157 billion, making it a major marketplace for both internal and external trade.
Business & Finance
Zambia’s business climate has improved markedly in the past decade, driven by privatisation, market liberalisation and deregulation, supported by macroeconomic stability.
Further development within the private sector is central to unlocking Zambia’s vast potential. Government’s Private Sector Development Reform Programme, which aims to reduce the cost of doing business, is already yielding results. Among its many achievements are the creation of the Zambia Development Agency (ZDA) and the Citizen Economic Empowerment Commission (CEEC), and the introduction of a policy on Public-Private Partnership (PPP) to speed up the pace of development in large infrastructural projects. The subsequent investment inflows are a testament to high investor confidence in the economy. In the World Bank’s ‘Doing Business’ survey, Zambia recorded a significant improvement, and was rated 90th in 2009 (from 99th the previous year) out of 183 countries assessed for ease of doing business. In the SADC region, its ranking is second only to South Africa’s. Despite the setbacks brought about by the global recession, it is expected that once most reforms currently in the pipeline have been fully implemented, Zambia’s business climate will improve even further. Considerable growth has been seen in the financial sector following its liberalisation in 1991, while the establishment of the Lusaka Stock Exchange and the repeal of the Exchange Control Act have strengthened capital markets. The Financial Sector Development Plan (FSDP), which has entered its second phase, aims to achieve a stable, sound and marketbased financial system that supports the efficient mobilisation and allocation of resources necessary to achieve economic diversification, sustainable growth and poverty reduction. The Zambian financial sector was not immediately affected by the credit crunch, as was reflected in the continued stability of the banking sector, with most banks being adequately capitalised and the inter-bank market operating normally. This was mainly due to the sector’s limited integration with international financial markets. Further, the country’s financial sector had no exposure to the toxic assets which led to the crisis in most developed markets. However, the subsequent global economic recession did lower foreign capital inflows and bring about a loss of foreign exchange reserves, while domestic inflation rose as a result of the Kwacha’s depreciation against major currencies. THE BUSINESS ENVIRONMENT Zambia is one of the more attractive investment locations in sub-Saharan Africa, and both local and foreign companies are able to take advantage of the many and varied benefits to doing business here. Investors face no restriction on the amount of interest, profit, dividends, management fees, technical fees and royalties that they are allowed to repatriate. Income earned by foreign nationals may also be externalised without difficulty. There is no distinction in law between foreign and domestic investors, and while companies seeking licenses or concessions, or investors bidding for privatised companies, are encouraged to commit to local participation, this is not compulsory. Businesses setting up in Zambia now enjoy faster company registration, which has been reduced to just one day, while registration for VAT can now be completed in three days. Business development institutions The first Zambian chamber of commerce and industry was established in Lusaka in 1933. Since then there has been a national body of chambers of commerce and industry under a variety of names. The Zambia Association of Chambers of Commerce and Industry (ZACCI) is a national body representing the interests of the private business sector in Zambia. The mission of ZACCI is the promotion and development of trade, commerce and industry, and the association acts as a link between like organisations, the private sector and government. Among ZACCI’s many successes are improved advocacy programmes with members of parliament and government ministries, the introduction of cleaner production to local industries and the training of over a thousand small and medium business entrepreneurs in various business skills.
An autonomous corporate body under the Ministry of Commerce, Trade and Industry, the Zambia Competition Commission (ZCC) was established in May 1997 under the Competition and Fair Trading Act. The act was developed in order to encourage competition within the economy, protect consumer welfare, strengthen the efficiency of production and distribution of goods and services, secure the best possible conditions for the freedom of trade and expand the base of entrepreneurship. The ZCC has a wide range of powers of enforcement and investigation under the act, and the commission has achieved success in dealing with a variety of market distortions, protecting the competition process and thereby rendering the Zambian market more attractive to investors. Continuing the work of the Small Enterprise Development Board (SEDB), following its amalgamation under the Zambia Development Agency, the Small and Medium Enterprises (SME) Division is charged with analysing the needs of businesses and developing products and services, particularly for small and medium sized enterprises, to be delivered nationally and at regional level. It also monitors the overall effectiveness of local business programmes and manages programmes such the Trade and Industrial Development Fund. Close liaison is maintained with relevant partners, including small business associations and NGOs involved in the SME sector. The importance of the SME sector to job creation and wealth distribution cannot be overemphasised, and government continues to work diligently with institutions supporting business management and entrepreneurship skills in order to ensure that Zambians are sufficiently qualified to undertake business ventures at small-scale level. Economic empowerment The Citizens’ Economic Empowerment Act of 2006 established the Citizens’ Economic Empowerment Commission (CEEC) and the Citizens’ Economic Empowerment Fund, with a view to promoting the economic empowerment of citizens. Particular focus is on those who have been marginalised or disadvantaged and whose access to economic resources and development capacity has been constrained due to factors such as race, sex, educational background and disability. The National Savings and Credit Bank (Natsave) has adopted a group lending micro financing scheme as a pilot
project in Luanshya and Petauke. The programme is meant to promote accessibility to finance by SMEs, which usually face challenges in raising collateral and difficulties in the preparation of financial statements. A K 349 million loan portfolio has been created, with no delinquencies recorded. Customers undergo an eight-week training programme on fundamentals in business management prior to being granted a loan. During 2010, the programme is being rolled out to Natsave’s 27 other branches across the country. TAXATION Significant progress has been made over the past few years in modernising tax policy and administration. Government remains committed to establishing a broad-based tax structure that is more predictable, simple, fair and efficient in an effort to deliver lower taxation levels while securing additional resources to finance development programmes. Established in 1994, the Zambia Revenue Authority (ZRA) assesses and collects taxes and duties on behalf of government, facilitates international trade and advises government on aspects of tax policy. General information on taxation is available from the ZRA Advice Centre. All individuals receiving an income from a source within Zambia, whether they are resident or non-resident, are liable to pay tax. A foreign resident business undertaking pays tax only if business is conducted in Zambia through a permanent establishment. A company is resident in Zambia for tax purposes if the company is incorporated or formed in Zambia or the central management and control of the company’s business or affairs is exercised in Zambia. Companies are taxed on trading profits as well as interest and dividends, if those dividends are paid in Zambia. For 2010, there are no changes in annual tax bands or in the standard rate of corporate tax. In order to reduce the tax burden, government has revised Pay-As-You-Earn (PAYE) by increasing the non-taxable monthly threshold income from K700 000 to K800 000. • K 0 – K 800 000 per month (zero percent) • K 800 001 – K 1 335 000 per month (25 percent)
• K 1 335 001 – K 4 100 000 per month (30 percent) • Above K 4 100 000 per month (35 percent) Corporate tax rates are as follows: • Standard rate – 35 percent • Mining (base metals) – 30 percent • Farming – 15 percent • Non-traditional exports – 15 percent • Banks: Income not exceeding K250 million – 35 percent; Income exceeding K250 million – 40 percent Value Added Tax The Value Added Tax (VAT) system was introduced in July 1995 to replace a manufacturing and retail Sales Tax. VAT is invoicebased and operates on the destination principle, where goods and services are taxed in the country of consumption and not of origin. The VAT standard rate was reduced from 17.5 percent to 16 percent at the beginning of April 2008. Special tax refunds are granted to tourists and commercial exporters, and a range of favourable incentives to investors. Qualifying goods do not pay import VAT, and the VAT Deferment Scheme on capital goods and specified raw materials allows the payment of import VAT to be deferred and offset against input tax due on those items. It is possible to recover tax on capital purchases before trading commences through monthly VAT returns, and excess input tax over output tax is not held as a credit against future liabilities but is repaid. The VAT Act is to be amended to make it a legal requirement for taxpayers to have valid tax invoices in order to claim input tax. 2010 tax amendments As regards direct taxes, in addition to increasing the exemption threshold by K 1 200 000 per annum (14.29 percent), the tax credits for persons with disabilities have been increased from K 660 000 to K 1 560 000 per annum – an increase of 73 percent. In future, it is planned that the tax year, which currently runs from 1 April to 31 March, will be the same as the fiscal year, which commences on 1 January. The following changes have taken place in indirect taxes: • Sale of commercial properties to be subject to VAT to broaden the tax base. This is likely to encourage further development of commercial properties and related infrastructure and reduce the cost of buying and leasing commercial property in the longer term. • Insecticide-treated curtains to be zero-rated to help in the fight against malaria. • Amending the VAT Act to provide clarity on financial and insurance services/charges that will be exempt for VAT purposes. VAT on lease finance charges was removed in 2007, and the interest component on lease finance in 2008.
FNB in Ndola - Photo Courtesy: Marie Gibbons
MONETARY & FINANCIAL DEVELOPMENTS Broad money growth in 2009 is projected to decline to 10.7 percent, from the 21.8 percent recorded in 2008. This is mainly due to a decline in domestic credit growth, which is projected to slow down to 12.3 percent from the 37.8 percent recorded in 2008. This is mainly attributed to weaker domestic demand and stricter lending conditions by commercial banks. During the first three quarters of 2009, interest rates on government securities were generally stable. The monthly average interest rate on treasury bills decreased marginally to 16.8 percent by end-September 2009, compared with 17.1 percent recorded in December 2008. The monthly average interest rate on government bonds was at 19.5 percent in September 2009 compared with 17.6 percent in December 2008. The average commercial banks’ lending rate, however, increased to 29.6 percent in September 2009 from the 26.8 percent recorded in December 2008. Despite the global financial crisis and its adverse impact on banking systems globally, the overall financial condition of the banking sector (including NBFIs) in Zambia as at endSeptember 2009 was satisfactory, and all banks remained adequately capitalised. The performance of the Lusaka Stock Exchange’s all-share index is showing recovery. However, the quality of loan performance declined, with the percentage of non-performing loans projected to rise to 13 percent by the end of 2009, compared with 7.2 percent in December 2008. This decline was somewhat mitigated by the adequate capitalisation of commercial banks. More positively, five new commercial banks were granted licenses to operate, comprising First National Bank Zambia Ltd; United Bank for Africa Zambia Ltd; Ecobank Zambia Ltd; International Commercial Bank Zambia Ltd; and Access Bank Zambia Ltd. This is a clear demonstration of confidence that investors continue to have in the Zambian economy and government policies. Monetary and ﬁnancial sector policies Monetary policy in 2010 will continue to focus on sustaining macroeconomic stability and maintaining the single-digit inflation reached at the end of 2009. In light of recent experiences with the global economic crisis, it became evident that the current framework, based on monetary aggregates, provides little room for monetary policy to counter adverse cyclical conditions through lower interest rates. In this regard, the Bank of Zambia (BoZ) is reviewing its monetary policy framework with a view to shifting from the strict use of monetary aggregates to short-term interest rates as the anchor for monetary policy. With regard to the development of financial markets, BoZ, in consultation with stakeholders, was to introduce an overnight lending facility to commercial banks in December 2009. This will increase liquidity in the money market and improve the effectiveness of monetary policy. Another innovation will be the introduction of a framework to facilitate secondary market trading of government securities and other debt instruments. This will provide additional liquidity to investors and provide information that will assist in improving the efficiency of financial market operations. To promote financial stability and safeguard the economy against the lagged effects of the global financial crisis, BoZ is revising the lender of last resort policy. The policy will be aligned with accepted international standards to ensure that it
remains effective and relevant under prevailing circumstances. In addition, government is working on a financial sector contingency plan, which will deal with problems of a systemic nature. Furthermore, during 2010 government is to commence implementation of the second phase of the Financial Sector Development Plan (FSDP). This is expected to improve access to credit and reduce the high cost of borrowing. In order to hasten the detection and prevention of financial irregularities, increased resources are being made available to the offices of the Auditor-General and the Anti-Corruption Commission. In addition, the government is introducing a Financial Intelligence Unit to enhance the fight against financial crime. BANKING & FINANCIAL SERVICES The financial sector in Zambia comprises banks and nonbank financial institutions (NBFIs) which are regulated and supervised by three agencies; namely, the Bank of Zambia (BoZ), the Pensions and Insurance Authority (PIA), and the Securities and Exchange Commission (SEC). The Banking and Financial Services Act was amended in 2005. According to 2010 BoZ figures, there are 17 commercial banks in Zambia, which currently dominate the financial system. NBFIs comprise the leasing and finance companies (12), building societies (three), microfinance institutions (23), development finance institutions (one – Development Bank of Zambia) and savings and credit institutions (one – the National Savings and Credit Bank). There are also 44 Bureaux de Change, as well as a new entrant to the financial sector: Credit Reference Bureau Africa Limited. Bank of Zambia Zambia’s banking and financial system has undergone a
Bank of Zambia - Photo Courtesy: René Hartslief
process of modernisation and streamlining, with the country’s central bank, the Bank of Zambia, having improved both supervision and regulation of the sector. This has included revoking licenses of insolvent banks, denying bailouts, limiting deposit protection, strengthening loan recovery efforts and upgrading the training and incentives of bank supervisors. These measures have resulted in a financial sector that is reasonably efficient, sound and profitable. A draft Bank of Zambia Act, which aims to give more operational autonomy to the bank, has been ﬁnalised, and was to be submitted during the ﬁrst quarter of 2010 for consideration. The Bank of Zambia recognises that financial stability is essential for strong macroeconomic performance and execution of monetary policy. This entails ensuring that financial service providers are adequately capitalised and have appropriate risk management systems. In 2006, the Capital Adequacy Regulations of 1995 were amended to provide for a tiered capital structure to encourage entrants into the financial sector. The review was aimed at ensuring that banks are adequately capitalised at commencement, and as they operate. The bank has over the years made progress in modernising the payment system in line with improvements in information technology. The National Payment Systems Act No.1 (NPSA) enacted in 2007 has enabled BoZ to develop and implement the national payment systems, with the bank designating players wishing to provide payment services such as money transfer services and mobile banking. It has also seen the introduction of a tax payment stream on the Real Time Gross Settlement (RTGS) system. These developments have strengthened the capacity of BoZ to monitor transactions and to ensure that only safe and efficient institutions are allowed to provide payment services. In order to improve the credit culture in the country, BoZ issued the Credit Data (Privacy) Code and the Credit Reference Services (Licensing) Guidelines to facilitate the establishment of credit reference bureaux. Subsequently, the first credit bureau – Credit Reference Bureau Africa Limited (CRBAL) – was formally launched in January 2007. This is allowing for increased credit extension because of better risk profiles; reduced credit processing costs and times as well as loan write-offs; lower borrowing costs; and an enhanced credit culture. All commercial banks have since signed the Service Level Agreement (SLA) with CRBAL. The Banking and Financial Services Act (Provision of Credit Data and Utilisation of Credit Reference Services) Directive was issued on 10 December 2008. All banks and NBFIs are required to use the services of the credit reference agency before granting credit to a customer.
INDUSTRIAL CREDIT COMPANY
“The pioneers of leasing in Zambia”
Ndola Office Loita House, 44 Buteko Avenue PO Box 70742, Ndola, Zambia Tel: +260 212 611233-5 Fax: +260 212 618621 E-mail: firstname.lastname@example.org Lusaka Office Exchange Building, Cairo Road PO Box 35405, Lusaka, Zambia Tel: +260 211 227474/71 Fax: +260 211 236173 E-mail: email@example.com
COMMERCIAL BANKS Zambia’s commercial, investment and merchant banks offer a wide range of financial services. Almost all commercial banks now have Automated Teller Machines (ATMs) and Point-of-Sale (POS) terminals. The roll out of the E-switch is underway. The Zambia National Commercial Bank – now known as Zanaco – was established by government in 1969 to foster national development. It is the country’s largest bank in terms of outreach and, according to findings in the FinScope survey, it also has the largest market share in terms of accounts held. Zanaco partnered with Dutch bank Rabo Bank, a highly credible bank with a triple A rating, in April 2007. Under this partnership, Zanaco has designed broad-based, affordable banking services for its retail customers and structured innovative financial solutions for large corporations, agri-business and the public sector, and has invested substantially in a versatile banking information technology platform. With its empowerment profile, extensive national presence of 56 branches and agencies nationwide, and development of new and exciting e-commerce products, Zanaco is well placed to respond to the diversity of Zambian society. Finance Bank Zambia (FBZ), one of the leading and largest private banks in Zambia, has operated in the country for almost 22 years. During this time it has registered strong performance and growth, from an initial single branch operation in Lusaka to an impressive network of over 50 outlets strategically positioned in major commercial and agricultural centres across the country. Key directorates and divisions are: finance, operations, credit, institutional/corporate banking and marketing, treasury, international banking and products, information systems, and audit and compliance. 2008 saw the successful completion of the acquisition of 40 percent of the issued capital of FBZ by Credit Suisse. This partnership has speeded up the bank’s expansion programme, and Finance Bank has recently applied for a banking license in the Democratic Republic of Congo to establish Finance Bank DRC. Negotiations with the Reserve Bank of Zimbabwe are also well advanced in terms of securing a licence to commence banking operations in that country, and a wholly owned subsidiary of Finance Bank (Micro Finance Zambia Ltd) has been registered.
Zanaco - Photo Courtesy: René Hartslief
Ecobank Zambia is a full-service bank, providing a broad range of products and services to government, financial institutions, multinationals, international organisations, SMMEs and individuals. The bank aims for a balanced business mix of retails, wholesale and investment banking activities. Ecobank’s parent company, Ecobank Transnational Incorporated (ETI), was incorporated in 1985 and has its headquarters in Lomé, Togo. Ecobank’s vision is to build a world-class pan-African bank and to contribute to the economic and financial integration and development of the continent. Owned by more than 180 000 local and international, institutional and individual shareholders, Ecobank has over 11 000 employees from 29 different countries in over 700 branches. Ecobank Zambia opened its doors to the public on 24 August 2009. Its head office and first branch are located at the Arcades roundabout in Zambia’s capital, Lusaka. More branches are planned for 2010. Investrust Bank Plc is a listed bank on the Lusaka Stock Exchange and has branches in Lusaka, Chipata, Luangwa, Kitwe, Chililabombwe, Solwezi and Livingstone. Furthermore a branch has been opened in the mining town of Lumwana, making Investrust the first wholly indigenous bank to establish a fully fledged branch here. NON-BANK FINANCIAL INSTITUTIONS Non-bank financial institutions (NBFIs) include all financial institutions that are not classified as commercial banks, and include leasing and finance companies, housing financial institutions (building societies), savings and credit institutions, development finance institutions, microfinance institutions and bureaux de change. NBFIs present an opportunity for transforming the financial sector in Zambia through their role in long-term lending and provision of financial services to underserved rural consumers and small businesses often ignored by traditional banks.
Development Finance Institutions (DFIs) were originally established and funded by government under separate statutes. The only remaining DFI is the Development Bank of Zambia (DBZ), which provides medium to long-term development finance. DFIs were brought under Bank of Zambia (BoZ) supervision after the amendment to the Banking and Financial Services Act (BFSA) in 2000, with DBZ restructured in 2002. The DBZ is currently governed by the Development Bank of Zambia (Amendment) Act of 2005. DBZ has recently relaunched its Enterprise Development Project’s multi-purpose credit facility. Originally launched in 2003, it comprises an investment credit line for supporting capital investments and a short-term credit line for financing export pre-shipment activities. The fund has grown to US$ 52 million from the original US$ 40 million, and is expected to grow even more as financial institutions come forward to participate in the initiative. Under BoZ supervision since the early 1990s, leasing companies are commercial ventures established under the Companies Act, and their principle activity is the provision of asset-based finance. Industrial Credit Company (ICC) Zambia was established 45 years ago and is the largest independent leasing company in Zambia, with a trusted brand. Being independent brings with it both opportunities and challenges, the two biggest challenges being access to liquidity and cost of funding. However, the bank is discovering that being indigenous provides a significant competitive advantage over the international banks, which tend to centralise operations and take a ‘one-size-fits-all’ approach to emerging markets. The business has just finalised a strategic partnership with an East African investor that will bring US$ 20 million into the operation in the first half of 2010. ICC feels that indigenous banks will be the way of the future and that international banks will struggle to adapt to the culture and ethos that more and more Africans are demanding. The bank is very proud of its heritage, what it has achieved and where it has come from. Housing Finance Institutions (HFIs), which traditionally provide banking services and mortgage lending, have tended to take two major forms – namely, building societies and
employer-sponsored housing loan schemes. Building societies are governed by the Building Societies (Amendment) Act of 2005. The country’s three building societies are deposit-taking institutions and include Finance Building Society, Pan African Building Society and Zambia National Building Society (ZNBS). Rural banking and microﬁnance institutions deal directly with the public, take deposits and make loans to individuals. Established under various pieces of legislation, such as the National Savings and Credit Bank (NSCB) Act, Cooperatives Act and Societies Act, the NSCB and microfinance institutions were brought under BoZ supervision following amendments to the BFSA in 2000. In 2005, amendments were made to the NSCB Act. BoZ has reviewed and submitted to government reports on the review of the revised ZNBS Corporation Strategy Plan (CSP) and the NSCB Institutional Development Plan. Based on these reports, government is expected to recapitalise the institutions accordingly. Bureaux de change deal in foreign exchange, particularly the British Pound, US Dollar and South African Rand, although those established by major banks transact in many other convertible currencies. The sector is governed by the Banking and Financial Services (Bureau de Change) Regulations, which were amended in 2006. Pension funds Pension scheme management has become more challenging in view of the recent global financial crisis, with the decline in stock market valuations having negatively affected the provision of pensions worldwide. Pension funds in Zambia have not been spared the crisis, with a total holding of more than 70 percent of the total market capitalisation on the Lusaka Stock Exchange. There are several types of pensions on offer in Zambia – personal pensions, group occupational pensions and public pensions. Unlike the National Pension Scheme, which is compulsory and is designed to provide social security in the form of a basic pension, occupational group pensions are supplementary schemes sponsored by private sector employers and employees. The National Pension Scheme is run by the National Pension Scheme Authority (NAPSA). Other major pension funds
comprise the Public Sector Pension Fund (PSPF) and Local Authorities Superannuation Fund (LASF). The Association of Pension Fund Managers (APFM) represents the combined interests of these pension funds, as well as some smaller ones. The cumulative number of NAPSA members registered since its inception in 2000 is slightly above 900 000, with about 600 000 active members and 18 000 employers registered. Under the Financial Sector Development Plan (FSDP), pension scheme legislation is being updated and harmonised. The Pension Scheme Regulation Act of 1996, which provided for the administration and regulation of all pension schemes with the exception of the National Pension Scheme (governed by the National Pension Scheme Act), has been replaced with the Pension Scheme Regulation (Amendment) Act, which came into effect during 2006. Draft legislation to harmonise the industry was submitted to the Ministry of Finance and National Planning in October 2009 for consideration. The FSDP also recommends enhancing tax incentives for pension funds; effecting consumer education programmes; conducting a study on viability of personal pension plans; training local actuaries and establishing investment guidelines. Measures to build capacity at the Pensions and Insurance Authority (PIA) have been put in place, with the programme having included setting up systems and manuals as well as seminar participation. PIA has been involved in the formulation of the National Social Security Bill under the Ministry of Labour and Social Security, which seeks to bring NAPSA under the supervision of the Registrar of Pensions and Insurance at PIA. Proposals to amend the provision in the Pension Scheme Regulation Act, which exempts NAPSA from supervision, were submitted to government and were under consideration in 2009. Government has since issued a letter of intent for NAPSA to be supervised by PIA. The insurance industry The insurance industry consists of insurers, re-insurers, brokers, assessors, adjustors and policy-holders. In 1970 the Government of Zambia formed the monopoly Zambia State Insurance Corporation (ZSIC) in order to provide low cost insurance to indigenous Zambians. This state of affairs existed until the liberalisation of the industry in 1992.
The Insurance Act of 1997 is the principal piece of legislation governing the supervision and regulation of the insurance industry. As an insurance supervisor, the Pensions and Insurance Authority (PIA) is tasked with maintaining an efficient, fair, safe and stable insurance market for the benefit and protection of policyholders. A number of local insurers have since emerged and competition has increased; however, the market is still relatively small. The ZSIC currently has the broadest distribution network, which covers all nine provincial centres and some critical districts. The corporation has launched an aggressive marketing drive to promote its agricultural products in rural areas. The Insurance Act was amended in 2005 under the FSDP to include: • Compulsory local shareholding in insurance companies • Exhaustion of local capacity prior to carrying out reinsurance • Fostering investment of insurance funds in Zambia • Revisiting insolvency requirements and investment guidelines Asset Management Madison Asset Management Company Limited (MAMco) is a newly established investment management company licensed by the Securities and Exchange Commission to provide investment advisory and fund management services. MAMco is a 100 percent subsidiary of Madison Financial Services Company Limited (MFSL), which is a respected financial services group in Zambia, having 100 percent shareholding in leading insurance companies Madison General Insurance Company Zambia Limited and Madison Life Insurance Company Zambia Limited. FINANCIAL SECTOR DEVELOPMENT PLAN The financial sector in Zambia is considered relatively underdeveloped and has had limited success in reaching all sectors of the economy. A 2005 study by Finmark Trust revealed that only 33 percent of the total population in Zambia had access to financial services. The survey also indicated that most Zambians prefer to invest in non-financial instruments, such as a businesses, livestock, land or agricultural equipment. In recognition of the strategic importance of the financial sector to the country’s development and poverty reduction efforts, the Zambian government launched the Financial Sector Development Plan (FSDP) in 2004 to address weaknesses that had been identified in the financial sector. The FSDP is a
comprehensive strategy aimed at achieving a financial system that is sound, stable and market-based, and able to support the resource mobilisation necessary for economic diversification and sustainable growth. A key motivator behind the plan was the changing profile of the financial services sector and a pressing need to develop effective means of supervising the different sectors, with large financial conglomerates and integrated product development serving to blur the traditional boundaries between banks and non-bank financial institutions. A number of activities have already been undertaken under the FSDP, such as the establishment of a Credit Reference Bureau. Similarly, policies and legal and regulatory frameworks have been developed to take into account the evolving financial environment. These developments have resulted in a considerable increase in the number of banks and other financial service providers in the country. Furthermore, the Bank of Zambia Strategic Plan 2008-2011 has made financial inclusion one of its strategic objectives. A Deposit Protection Scheme (DPS) is being established for all eligible banks and deposit taking financial institutions. The draft Deposit Protection Scheme Bill has been developed and a meeting for stakeholders was convened in December 2009. Legislative drafting was expected to be undertaken during the first quarter of 2010. A policy on rural banking is being developed under the Rural Finance Programme, and a scoping study was finalised in December 2009. The next phase was due to begin in January 2010 and will involve conducting a study on existing policy gaps, identifying key issues and carrying out research into the adequacy of the policies. Phase II of the FSDP Following the Financial Sector Assessment Programme (FSAP) report of November 2008, the World Bank and IMF proposed that the FSDP Phase II Project document be expanded to take into account implementation of the policy recommendations from the FSAP. In view of the issues currently outstanding from FSDP I, as well as new short to medium-term financial sector reform recommendations arising from the 2008 FSAP, the FSDP implementation period has been extended for a further three years to December 2012.
FSDP II proposes three project components; namely, market infrastructure, increasing competition and access to finance. The focus of the programme will include implementing the following project activities: • Consumer awareness on the cost of banking services • Obtaining approval on investment guidelines for public and private pension funds • Facilitating adoption of good corporate governance principles by institutions investing in companies that observe good corporate best practices • Finalisation of the Sovereign Credit Rating for Zambia • Dissemination of findings of the second FinScope Consumer Survey • Finalisation of the proposed modernisation and harmonisation of financial sector legislation under the law review exercise • A study on reforming the financial sector tax regime • Development of a framework for channelling long-term funds through a wholesale or apex financial institution Data collection for the second FinScope Consumer Survey commenced in September 2009 and was concluded in December 2009, with dissemination of the ﬁnal results expected to take place in the ﬁrst quarter of 2010. LUSAKA STOCK EXCHANGE Established in 1993 and opened on 21 February 1994, The Lusaka Stock Exchange (LuSE) has played a key role in fostering economic transformation in the country. The formation of the LuSE was part of the Zambian government’s economic reform programme to develop the financial and capital markets in order to support and enhance private sector initiative. The LuSE is made up of stockbroking corporate members and is incorporated as a non-profit limited company. Currently the member brokers are Stockbrokers Zambia Limited, Intermarket Securities Limited and Pangea/EMI Securities. Listed companies currently cover banking, retail trading, oil marketing, manufacturing, property, agricultural processing, hospitality and investment. The exchange has been set up as a modern stock exchange based on the most current international standards and practices. These include use of a central depository system, trade for trade clearing and settlement process, rolling settlement three days after trade date (T+3), and meeting G30 recommendations for clearing and settlement system design and operation. The Lusaka Stock Exchange’s automated trading system went live in November 2008.
Performance of LuSE from Jan to June 2009
Equity Trades Volume Turnover K billion US$ million Bonds Trades Turnover (K million) Market Capitalisation In K million In US$ million Market Cap / GDP Ratio % Turnover / GDP Ratio % Turnover / Market Cap Ratio % All Share Index June 2009 3,268 418,254,835 114.48 20.89 June 2009 4 25,871.53 June 2009 20,718,712 3,902 37.33 0.82 2.19 2,744.57 June 2008 5,090 1,432,618,582 481.32 132.23 June 2008 2 2,050.64 June 2008 25,476,048 7,779 60.03 0.92 1.54 4169.05 % Change -35.80% -70.80% -76.22% -84.20% % Change 100.00% 1,161.63% % Change -18.67% -49.84% -37.81% -0.11% 1.38% -0.34%
Trading activity slowed down during the period compared to the first half in 2008. Number of trades reduced by 35.80% from 5,090 in 2008 to 3,268 in 2009. The volume traded was 418,254,835 shares 70% below 1,432,618,582 shares in 2008. Turnover also dropped by 76.22% from K481 billion to K114 billion in 2009. Although the percentage growth indicates 100% increase and 1,161% for trades and turnover respectively, the activity was very marginal. In 2009, only 4 trades occurred compared to 2 in 2008. The value in 2009 was K25.8 billion compared to K2.0 billion in 2008. In terms of market capitalization, the market shrunk by 18.67% in Kwacha terms closing June 2009 at K20.71 trillion from K25.47 trillion in June 2008. The decline in Kwacha terms can be attributed to investor uncertainties about the stock markets caused by the global financial crisis. Most of the investors exited the market at very low prices. Although the total number of companies on the market remained the same, 2 companies which were on the quoted tier managed to move to the listed tier. Zanaco listed on 27 November 2008 and Bata on the 30 March 2009. The listed tier now has a total of 21 securities.
Tel 0211 228537 • Fax 0211 225969 PO Box 34523, Lusaka • 3rd Floor, Exchange Building, Central Park, Cairo Road, Lusaka
The LuSE has a unified market, comprising bonds and equities. From its inception the exchange offered trading in equity securities and in March 1998 became the official market for trading in government bonds. Trading activities at the Lusaka Stock Exchange during 2009 reflected the effects of the global financial crisis. Like many global equity markets, the LuSE’s all-share index recorded a decline, particularly during the first four months of the year. However, the index had recovered from a low of 2 096.7 in April 2009 to close at 2 807.3 at end-September 2009. Market capitalisation, which had fallen to K18 583.4 billion in April recovered to K22 651.0 billion by end-September 2009. A common technical interconnectivity platform being developed will allow investors to trade stocks across securities exchanges in the Southern African Development Community (SADC). Investment incentives Several measures have been put in place to ensure investor confidence and protection within the LuSE. The market is regulated by the 1993 Securities Act and enforced by the
Securities and Exchange Commission. The act is specifically designed to ensure adequate investor protection and support the operation of a free, orderly, fair, secure and properly informed securities market. There is also a compensation fund established under the act, designed to compensate persons who suffer pecuniary loss occasioned by the default of a licensed dealer or licensed investment advisor. The LuSE offers several incentives to investors to promote rapid development of the capital market in Zambia. In addition to the absence of restrictions on shareholding levels and foreign ownership, these include: • No capital gains tax • No withholding tax on dividends paid by listed companies to individuals • Corporate income tax discount of 2 percent for companies listed on the LuSE for the first one year of listing • A further 5 percent discount if offer results in at least 33 percent uptake by Zambians • No property transfer tax on listed securities For further information, log on to www.luse.co.zm.
MINISTRY OF MINES & MINERALS DEVELOPMENT
REPUBLIC OF ZAMBIA
In September 2003, the Government of the Republic of Zambia borrowed in excess of US$ 55 million from the World Bank and Nordic Development Fund to finance the clean-up of historical mining environmental liabilities arising from past mining operations from both parastatal Zambia Consolidated Copper Mines Ltd (ZCCM) and a number of other earlier private mining operators that were active on the Copperbelt and in Kabwe. Therefore, new mining companies formed post privatization, are expected to make provisions for their environmental liabilities from the profits they make.This is in accordance with the polluter pays principle and ensures that mine operators do not abandon mine sites whose clean-up finally will fall on the government. To avoid this and in line with international practices under similar circumstances the Zambian government enacted a law to require mine operators make such financial provisions. The Environmental Protection Fund (EPF) which falls under the Ministry of Mines and Minerals Development (MMMD) was made operational in 2008 as a way of compelling mining operators to make financial provisions for their mining environmental liabilities as well as encourage “greener” behaviour. The Minister appointed the members of Environmental Protection Fund Committee, and additionally appointed the Environment Management Facility (EMF) of the Copperbelt Environment Project (CEP), as the Fund Committee secretariat. The Environment Management Facility is currently responsible for rehabilitation of historical environmental liabilities at mine sites and facilities relating to ZCCM-IH and Government. The EPF will henceforth address liabilities attributable to the new mining investors under the mandate of MMMD as provided for under the repealed Mines and Minerals Act, CAP 213 of the laws of Zambia of 1995 and the subsequent Mines and Minerals Development Act of 2008. The objectives of the Fund are: • To provide assurance to the Director Mines Safety Department (MSD) that a person who holds a licence or permit issued under the Mines and Minerals Act, shall execute the Environmental Impact Statement in accordance with the Mines and Mineral (Environmental) Regulations, 1997; and • To provide protection to the Government against the risk of having the obligation to undertake the rehabilitation of a mining area where the holder of a mining licence fails to do so. The EPF Committee consists of the Permanent Secretary of the Ministry of Mines and Mineral Development, Director of Mines Safety Department, one member representing Environmental Council of Zambia (ECZ), one member from the Ministry of Finance and National Planning, seven members from developers contributing to the Fund who are appointed in consultation with the Chamber of Mines of Zambia. Mining activities by their nature usually occur in green field areas where people are either resident or have an interest e.g. farming. It is important that these local communities do not simply become victims of these mining investments through displacement or environmental degradation such as air pollution, water pollution, residential houses cracking, deforestation, soil contamination, and other adverse effects - thus the importance of the EPF. The EPF is intended to inﬂuence private mining sector to ensure mineral resource exploration and exploitation are performed in a sustainable manner. The EPF is intended to provide protection to Government against the risk of having to rehabilitate mining areas where holders of mining licences fail to do so. Making tax payers foot the bill to clean-up environmental liabilities abandoned by developers after they have benefited from the profits of mineral extraction is morally wrong. By establishing the Environmental Protection Fund government is ensuring that mining developers address environmental issues; ensure public safety e.g. capping open shafts; protect the Government against environmental liabilities in the event of premature closures e.g. economic insolvency; limit accrual of public debt; encourage progressive rehabilitation (reclamation) and help to identify mitigation contingencies from the determination of rehabilitation costs. The EPF therefore plays an important role in attaining mining sector long-term targets, as well as reinforcing the efforts of the other Environment Regulation Agencies (ECZ and MSD), which have had limited enforcement capability. The EPF is to a great extent a tool through which MSD will be able to undertake some of the rehabilitation in the event that a developer fails to do so, and bill the works against the developers’ contribution to the Fund. The Fund contributions by each developer will only be used exclusively for the liabilities of the contributor. In the short period that the Fund has been operational, thirty one major mine sites were audited. A total of 25 sites complied by submitting audit reports which were assessed, and the estimated closure cost was established at US$ 189.8 million and annual cash contribution was finally established at US$ 4.95 million per year. The same amount has also been established for the 2009 contributions which are now due. Payment request notices were first sent to Fund Contributors in June 2008.To date nineteen major mine sites (representing 76%), paid the 2008’s cash contributions in the amount of US$ 2.06 million. However, in terms of cash contribution value, the contributions represent only 42%. It is important to acknowledge and thank the underlisted mining companies that have contributed to the Fund: Mopani Copper Mines Plc (Nkana and Mufulira), African Explosives Limited (Kafironda Factory), First Quantum Mining Operations (Kansanshi Mine and Bwana Mkubwa Mine), Chambishi Metals Ltd, Chambishi Copper Smelter Ltd, Grizzly Mining Ltd, Kagema Mining Ltd, Luanshya Copper Mines Ltd (Luanshya & Baluba - Operating), Luanshya Copper Mines Ltd (Luanshya & Baluba - Non-operating), Muliashi Mining Project, Metorex Ltd (Chibuluma South Mine & Chibuluma East & West Mines), NFCA Mining Plc (Chambishi Mine), Orica Mining Services, Sable Zinc Kabwe Ltd, Sino Metals, Lafarge (Lusaka & Ndola Plants), Ndola Lime and Munali Nickel Mining Project. A further several small scale mine sites were also compliant. These included the following: Collum Coal Mining Industries, Aggregates Ltd, Hi-Qualime Mining Ltd, EM Storti and Scirocco Enterprises Ltd. Sadly, it is also important to raise concern on non-compliance from major mining companies who have failed to remit their contributions for 2008 and these include: Konkola Copper Mines Plc - Konkola Mine, Konkola Copper Mines Plc - Nampundwe Mine, Konkola Copper Mines Plc - Nchanga Open Pit, Konkola Copper Mines Plc - KCM Smelter Co, Maamba Collieries, and Gemfields Mining Ltd. The grant or renewal of a mining right is subject to meeting conditions for the protection of the environment and human health, a main tenet of which is, compliance with the Environmental Protection Fund. In addition to making recommendations for the non-renewal of mining licences of defaulting developers, the Fund reserves the right to take legal action to compel mine developers to pay their statutory obligations. The Ministry is intent on implementing its sector long-term vision of sustainable social economic development in the mining sector. Tel: 0211 221854 • Fax: 0211 221852 • PO Box 50369, Lusaka, Zambia Website: www.cepzambia.org.zm • E-mail: firstname.lastname@example.org
Mining & Copperbelt Industry
The mining industry continues to be the Zambian economy’s primary source of earnings, having slowly recovered during 2009 from the worst effects of the economic slow-down.
Zambia is the largest producer of copper in Africa, as well as being a major source of minerals such as cobalt, zinc, lead, uranium and precious metals and stones. The Copperbelt is the epicentre of the mining industry as well as the vast majority of the country’s industrial activity, and has been one of the major drivers of growth in recent years. Zambia’s rich mineral resources, in particular its copper and cobalt mines, have brought much-needed foreign exchange earnings to the country. Privatisation of the formerly stateowned mines, along with many years of high demand and commodity prices for copper, has seen a great deal of investment in the mining industry and an expansion in mineral production, with the establishment of new mines and the recapitalisation of existing ones. While rising copper prices over the past several years saw copper soaring to a record high of US$ 8 980 per tonne in July 2008, the crisis on global financial markets in the second half of that year sent prices tumbling to just US$ 2 812 per tonne by December 2008. This dramatic drop in the price of copper led to reduced earnings from copper exports by mining companies and subsequently reduced earnings for the government from mineral royalties and corporate taxes, as well as lower levels of investments and production. Further, some mining companies discontinued exploration activities, while Luanshya Copper Mine and Munali Nickel Mine were placed under care and maintenance.
, Materials Evaluation (ME)
Tel: +260 212 226433 Fax: +260 212 226306 E-mail: Zambia@zm.ahkgroup.com.on
and just over 200 000 tonnes in the year 2000. Rising output is expected to come from the start of production at the Konkola Deep mining project, the resumption of production at Luanshya and ramped up production at Lumwana, as well as investments at KCM, MCM and Chambishi Copper Smelter that are increasing production capacity. The overall contribution of metal products to Zambia’s total exports earnings was 83.9 and 83.1 percent in February 2010 and January 2010, respectively. First quarter 2009 copper exports rose to 173 421 tonnes versus 153 306 tonnes in the corresponding period during 2008. Copper prices jumped to a 20-month high in April 2010 of US$ 7 939.75 per tonne after reports indicated that manufacturing expanded in China, India, the USA and Europe. Cobalt output in the three months to 31 March 2009 increased to 1 921 tonnes from 1 081 tonnes in the first quarter of 2008, while exports of cobalt rose to 1 905 from 1 251 tonnes. Cobalt production is on the rise as Chambishi Metals has started producing once more and increases in the cobalt price serve as an incentive for cobalt producers to expand their output. MINING REGULATIONS & INVESTMENT The Ministry of Mines and Minerals Development enacts mineral policy with the assistance of the departments of Geological Survey, Mines Development and Mines Safety. Government adopts a purely regulatory and promotional role with regard to mining activities. Minerals in the ground are vested in the President on behalf of the state, with the right to explore or produce minerals authorised by a licence granted under the Mines and Minerals Act. In promoting the growth and diversification of the mining industry during 2010, the Zambian government is committed to continue: • Promoting exploration in the hope that more new mines will be
Open pit mining - Photo Courtesy: René Hartslief
Although a number of factors challenged the industry during 2009, various others have supported its growth, particularly the commencement of commercial copper production at Lumwana mine and improving metal prices in global markets, with copper prices increasing from US$ 3 100 to US$ 6 000 between January and October 2009. As a result, the mining and quarrying sector recovered significantly during the year, from growth of just 2.5 percent in 2008 to 15.8 percent in 2009. Mining sector prospects in 2010 Economic diversification efforts notwithstanding, the mining sector is still considered by government to be crucial to national development. Furthermore, despite the setbacks experienced following the crisis in global markets, Zambia remains a favourable destination for investment, with its abundance of minerals and exceedingly rich copper deposits rendered even more attractive by the country’s political and macroeconomic stability. Copper production is projected to increase to 800 000 tonnes in 2010 from 676 000 tonnes in 2009, 575 000 tonnes in 2008
The Scaw Metals Group (Scaw) is an international group, manufacturing and or distributing a diverse range of steel stranded and wire products. Its principal operations are located in South Africa, South America, Canada and Australia. Smaller operations are in Namibia, Zimbabwe and Zambia. Scaw’s Specialist cast products manufactured for mining, railways and engineering industries include: • Lifting equipment • Reliance attachments • Rolled steel • Wire rope and strand • Chain products • Cast alloy iron products • Forged and cast steel grinding media • Steel and alloy castings • Fibre products • High tensile wire products • PC strand and wire products • Mild steel commercial wire and products KITWE Tel: Fax: +260 212 212174 +260 212 216468 Scaw supplies globally and also offers nationwide distribution in South Africa through its strategically located branches throughout Southern Africa. Scaw has produced these products for these industries since 1921 and is a technological leader in this ﬁeld and manufactures to national and international standards.
E-mail: email@example.com Website: www.scaw.co.za
NFC AFRICA MINING PLC CHAMBISHI MINE
Chambishi Mine has been in operation since 1965 under different ownerships. It originally consisted of an open pit, an underground mine, a concentrator, a cobalt plant, an acid plant and associated infrastructure. The open pit mine was closed in 1978, whilst the underground mining and concentrator operations were suspended in 1987 and placed on care and maintenance owing to high production costs and low copper price. On privatization, the former Chambishi Mine License area was sold in parts to NFC Africa Mining PLC, Chambishi Metals PLC and to private concerns. NFCA took over the mine, concentrator and associated facilities as well as the larger part of the mine license area. NFCA Chambishi mine is located in the middle of the Copperbelt Province, approximately 28 km north-west of the city of Kitwe in Kalulushi District on the Kitwe-Chingola Road.
The mine at Chambishi is owned by NFC Africa Mining Plc (NFCA), a company owned by China Non-Ferrous Metals Corporation (group) (CNMC) and Zambia Consolidated Copper Mines Investment Holdings (ZCCM-IH). CNMC has an 85% shareholding, whilst ZCCM-IH holds the remaining 15% of the shares, on behalf of the Government of the Republic of Zambia (GRZ). The registered head office for NFCA is Chambishi in Kalulushi District. The acquisition of Luanshya Mine by CNMC has seen the reorganization of the Management team. Below are the new senior Management Team Members:
Mr. Wang Chunlai Chief Executive Officer
Mr. Xu Ruiyong Deputy C.E.O
Mr. Pan Jin Cheng Deputy C.E.O
Mr. Zhang Jinjun Deputy C.E.O
Mr. Zhang Dong’hong Deputy C.E.O
Mr. Jilowa Nelson Assistant Manager Corporate Affairs
Mr. Mhango Malaika Assistant Manager Finance and Budgeting
Rehabilitation of Chambishi mine
After taking over the mine in 1998, NFCA began a process of refurbishment of the key mining facilities in 2000. The initial total investment for the reopening of the mine was over US$150 million. Trial production of copper concentrate began in October 2002.
The mine was officially commissioned on 28th July 2003. The design capacity of the mine copper concentrate production facilities is 6,500 tons of copper ore per day. With extending deeper downward and adopting backfilling mining, current production levels stand at about 4500tpd with more copper. Concentrates produced at NFCA are processed at Chambishi Copper Smelter, a sister company. Production has improved steadily at an average rate of 20% every year since commencement of production amid new massive investments in developing the existing No. 3 Shaft and the New West Orebody (WOB) mine. When the WOB is fully operational NFCA is expected to achieve a capacity of 6500-7000 tonnes of ore per day by the
PO Box 22592, Kitwe E-mail: firstname.lastname@example.org Tel: +260 212 721619 (Chambishi) • +260 212 721977 (Kitwe) Fax: +260 212 721520 (Chambishi) • +260 212 721 979 (Kitwe)
year 2012. Further development of the South East Orebody (SEOB) will result in doubling of the production output. Exploratory work is currently underway at the SEOB.
Safety, Health and Environment (SHE)
In order to guide its management of Health, Safety and Environment, NFCA has put a policy in place as summarized below: NFC AFRICA MINING PLC is committed to invest in the development of mineral resources and accelerate the development of the economy and society. NFCA will provide attractive returns to shareholders and contribute to the wider social and economic well-being of Zambia. In fulfilling these commitments NFCA will provide and maintain a safe and healthy work environment as required by the national regulations and acceptable international business practice. • Over the years NFCA has improved its compliance with statutory legal requirements and has enjoyed a good working relationship with relevant government agencies such as the Environmental Council of Zambia (ECZ) and the Mines Safety Department (MSD). • As part of a programme to promote HSE awareness promotion activities are conducted frequently at the mine. The safety performance of the mine has improved over the years due to the various activities being conducted at the site to improve the safety situation on the mine. • The Environmental Impact Statement (EIS) is in place following approval by ECZ on 26th October 2006. Implementation of the same is underway. • NFCA has so far contributed over $200, 000 to the Environmental Protection Fund (EPF) administered by the Ministry of Mines & Minerals Development.
Socio-Economic Impacts of NFCA’s Operations
In relation to the socio-economic impacts of NFCA’s operations the following positive impacts have been identified: • Initial financial investment amounting over US$ 150 million to refurbish the mine, concentrator and associated facilities to allow for the resumption of mining operations and the extension of the expected mine life. • Positive impact on the local economy through the generation of jobs and mine-related business. NFCA and its two major contractors and other companies within the Chambishi Mine area employ around 3000 employees. The highest number of employees ever recorded at Chambishi Mine during the ZCCM era was 1378 employees in 1989/1990. • NFCA has over 150 local suppliers and contractors doing business with the mine. In terms of revenue NFCA pays over 75% to local companies in comparison to the foreign companies. • Income tax paid to the Zambia Revenue Authority and Local Authority contributes to the funding of government services and programmes. • NFCA is supporting health care service provision to its employees at the plant site clinic and to residents of Chambishi Township at its Sinozam Clinic. It has input US$ 700,000 to update facilities of the Sinozam Friendship Hospital, formerly Nkana Mine Hospital in Kitwe. • NFCA has continued to provide raw water to Nkana Water and Sewerage Company Ltd which provides potable water to Chambishi Township at a compassionate charge rate. • The reopening of the Chambishi Mine has laid the foundation for attracting more Chinese investments into Zambia including the now famous Multi-Facility Economic Zone in which 50 to 60 companies are expected to set up businesses creating tens of thousands of jobs.
Corporate Socio Responsibility
NFCA strongly believes in a “common beautiful home” as it executes and interacts with the society in which it operates. The company’s social responsibility aims at developing the enterprise and plough back tangible benefits into the local community. Between 2008 and 2009 only the company has spent about US$ 1,000, 000 towards its corporate social responsibility in Chambishi Township, Kitwe and Kalulushi towns through various projects and partnerships. Among other projects in which NFCA is involved in are the Indoor Residual Spraying of households in Kalulushi District, rehabilitation of roads in Kitwe and Chambishi towns, provision of health care for employees and the general public through Sinozam Friendship Hospital and playparks for recreation of children in the district. Various Educational materials have been donated to some community schools in Chambishi Township. The company also sponsors NFCA Table Tennis club and the Chambishi Dragons Football team who will soon make their debut in the Football Association of Zambia (FAZ) Division Two league in 2010.
CASTLE LEAD WORKS
LEAD ANODES Caste Lead Works Zambia Limited is the sister company of Castle Lead Works (CLW) in Krugersdorp, South Africa, a wholly owned division of Zimco Group (Pty) Ltd. This division was established in 1933 & is Africa’s leading manufacturer of lead anodes. Castle Lead Works carries out its own research & development in anodes through an associated company, Quemetco Metals Inc. in Dallas, Texas.
MINING OPERATIONS Large-scale mining is widespread, with existing prospecting licences and new applications encompassing roughly 50 percent of the Zambian land mass. World-renowned mining companies are involved in mining and prospecting operations on the Copperbelt as well as in Central, Western and NorthWestern provinces. One of the principal players in the Copperbelt mining industry, Zambia Consolidated Copper Mines (ZCCM) Limited was formed in 1982 with the merger of Roan Consolidated Mines and Nchanga Consolidated Copper Mines. Until 31 March 2000, ZCCM Ltd was a 60.3 percent state-owned mining company in which Zambia Copper Investments Ltd (ZCI), an associate company of Anglo American Plc, held 27.3 percent of shares, with the balance of 12.4 percent of shares held by private investors. As part of the privatisation process, ZCCM’s mining assets were unbundled and sold off as separate entities or business packages to the private sector in order to promote diversity of ownership and minimise political and economic risk. Its successor, ZCCM Investments Holdings Plc (ZCCM-IH), is an investments holdings company with the majority of its investments held in the Zambian copper mining sector. The company’s shareholders are the Zambian government with 87.6 percent and private equity holders with 12.4 percent. Created from the privatised assets of ZCCM, consisting of the Konkola and Nchanga divisions and the Nampundwe pyrite mine, Konkola Copper Mines (KCM) is one of the largest mining and metals companies in Zambia. KCM is a subsidiary of Vedanta Resources Plc, a London listed FTSE 100 metals and mining group, with shareholding comprising Vedanta with 51 percent, ZCCM-IH with 20.6 percent and ZCI with 28.4 percent. The first of KCM’s two major expansion projects, the US$ 500 million Konkola Deep Mining Project (KDMP) is expected to increase production capacity at Konkola from 2 million tonnes to 6 million tonnes of copper ore per annum by accessing the underlying rich ore body. Commissioning of the mid-shaft loading (MSL) station is set to take place during 2010, with the rest of the project to be completed by the end of 2012.
Subsidiary of Zimco Group (Pty) Ltd PO Box 22385, Kitwe, Plot 1308, Chibuluma Rd, Zambia Tel: +260 212 217552 / 217553 • Fax: +260 212 217551
opened in the next five years • Creating a special status for non-traditional mineral exports, such as nickel, uranium, gold and platinum, and declaring them priority minerals under the Zambia Development Agency Act • Promoting large investments in the mining sector which have a transformational impact on Zambia in terms of job creation, export earnings, supply and contracting by the Zambian business community • Encouraging value addition within Zambia, mainly involving copper, cobalt and gemstone products In order to encourage Zambian ownership of part of the operating entities, government is working out measures to ensure that, where possible, mining companies operating in Zambia list their shares on the Lusaka Stock Exchange (LuSE); companies work closely with the Citizens’ Economic Empowerment Commission (CEEC) so as to maximise benefits to Zambians through targeted joint ventures; local communities benefit through a high level of corporate social responsibility; and mining companies promote further training of employees, both at home and abroad.
AAC Mining Executors Ltd. is a Mining Development and Production Contractor with successful experience in the Mining Industry with 13 years of Experience in South America and 7 years in Africa, in Mining and Maintenance of Underground Mining Equipment, with African Operations in Zambia and DRC.
AAC is ready to support and boost your mining operations with quality and at competitive cost. AAC Divisions: - MINING - MAINTENANCE - TRADING Plot 4966, Lyoneno Rd, Heavy Industrial Area, Kitwe PO Box 21143, Kitwe, Zambia Tel: +260 212 212036 (26), (27) Fax: +260 212 212029 E-mail: email@example.com, Website: www.aacmining.com.zm
Nchanga Mine near Chingola consists of a number of open pits, with mining currently concentrated on the main Nchanga pit as well as an underground mine that accounts for around 45 percent of the total copper produced at Nchanga. The Nchanga process plants consist of two concentrators, which separately treat ore from the open pit and the underground mine, as well as a tailings leach plant producing copper cathodes. The sulphur based acid plant at Nchanga, with a production capacity of 500 tonnes of sulphuric acid a day, started production in 2007. KCM’s second major expansion project has seen the construction of a state-of-the-art smelter at Nchanga with a capacity of 300 000 tonnes per annum. The smelter was built to handle not only the increased output from KDMP but also concentrates from other mines in Zambia. KCM produced 41 958 tonnes of finished copper in the third quarter of the 2009/10 financial year. This figure includes 13 641 tonnes from purchased concentrates and is significantly higher than the 25 472 tonnes produced in the third quarter of 2008. The increase has been due to additional capacity at Nchanga Smelter. Glencore International AG and First Quantum Minerals (FQM) Limited acquired the Mufulira and Nkana divisions of ZCCM through Mopani Copper Mines (MCM) in 2000. Shareholding is 73.1 percent Glencore, 16.9 percent FQM and 10 percent ZCCM-IH. Production capacity at Mopani is 255 000 tonnes of copper metal and 2 200 tonnes of cobalt. Mopani’s operations consist of four underground mines, a concentrator and a cobalt plant in the town of Kitwe and an underground mine, concentrator, smelter and refinery in the town of Mufulira. The capacity of the Mufulira Copper Smelter
Workshop at Chambishi Mine - Photo Courtesy: NFC Africa Mining Plc
is being expanded in a phased approach to 870 000 tonnes of concentrate by the end of 2010. The current capacity with the new Isa smelt furnace is 650 000 tonnes of concentrate. The company also has four SXEW plants (Solvent Extraction and Electrowinning), two at Mufulira and two at Nkana. The feed is sourced from in-situ leaching, vat leaching and heap leaching. First Quantum Minerals (FQM) owns and operates the Bwana Mkubwa copper mine located south-east of Ndola. Having exhausted its original source of ore, Bwana Mkubwa draws its feed stock from the Lonshi mine, located 30 kilometres away in the DRC. The mine remained on care and maintenance during 2009. The Bwana Mkubwa copper SX/EW plant was restarted in January 2010 to process the stockpiled ore from the depleted Lonshi open pit mine. Grade ‘A’ copper cathode production at
an average rate of 800 tonnes of copper cathode per month is expected to continue until the end of 2010. FQM owns 80 percent of the Kansanshi open pit copper mine in Solwezi, North-Western Province. Gold is also produced. Following an expansion programme and the setting up of a multimillion dollar pressure leach system, copper production has increased tremendously. Kansanshi has the capacity to continue producing oxide until about 2035. Copper production at Kansanshi came to 61 300 tonnes during the third quarter of 2009, up from 53 400 during the same period in 2008, with production for the first nine months standing at 182 500 tonnes against 153 300 tonnes in the previous year. Gold production increased significantly in 2009, rising to 99 936 ounces compared to 54 252 ounces in 2008 due to increased ore throughput and plant upgrades. Gold production at Kansanshi is expected to improve further during 2010 as a result of the commissioning of additional gravity concentrators early in the year. FQM posted a gross operating proﬁt of US$ 969 million at the end of 2009, with the Kansanshi copper and gold operation contributing US$ 610 million. FQM’s 2010 exploration programme includes a drilling programme to delineate the extent and geometry of a new prospect identified approximately 2 kilometres from the main pit at Kansanshi. An intensive drilling programme for copper is also planned at the Kalumbila exploration project and includes the Kawako nickel and Kawanga uranium prospects. Equinox Minerals Limited owns the Lumwana open pit mine in North-Western Province, situated some 220 kilometres northwest of the Copperbelt and 65 kilometres from the provincial capital of Solwezi. Lumwana comprises two major
deposits, Malundwe and Chimiwungo, which combined represent one of the world’s largest copper deposits. Other metals such as gold, cobalt, silver and uranium are also present. Lumwana, which started commercial production at the end of 2008, is the largest copper mine to have come on line internationally in the past two years, and will make Equinox a top-20 copper producer when it reaches full production. Lumwana has a 37-year mine life. Equinox’s investment of some US $762 million in the project is the biggest single investment in Zambia’s history. Over 2 500 jobs were created during the construction phase, and more than 1 000 permanent jobs now production has begun. Following on from its steady growth through 2009, when a total of 109 413 tonnes was produced, copper in concentrate output at Lumwana totalled 30 471 tonnes in the first quarter of 2010, representing a 37 percent increase over the fourth quarter of 2009. The mood is thus optimistic for Lumwana to meet its full-year production target of 135 000 tonnes of copper metal in concentrates in 2010, which should increase to between 150 000 and 170 000 tonnes by the end of 2011. Thereafter, the Phase 2 expansion plan will push up production to more than 200 000 tonnes of copper in the next three to five years. Equinox has opened up negotiations with possible partners for the construction of a uranium agitated acid leech plant at Lumwana. The uranium project was placed on hold at the end of 2008 until financial markets recovered sufficiently to raise the approximate US$ 200-million preproduction capital required. The company has been mining certain high-grade uranium zones from its Lumwana Mine, and uranium ore stockpiles are being built up on site.
The company has grown to become the biggest transporter of 98% sulphuric acid on the copperbelt and in Zambia as a whole. Gomes currently operates 105 trucks, tankers and trailers. Of these, 95 are acid trucks and tankers which transport acid to various clients in Zambia, Malawi and the DRC. This fleet is planned to increase to 105 tankers by May 2010 and to 150 tankers by June 2011.
Gomes is aiming to become the preferred construction company on the copperbelt province in Zambia. Our construction business has rapidly expanded over the past four years. We now handle various construction assignments including but not limited to: road construction, civil structures construction, various earth works and earth works and mining construction works. We have constructed various gravel and asphalt roads on the copperbelt province. Our equipment base is very strong and includes asphalt plants, mobile crusher plants, concrete plants, excavators, graders, pavers, dump trucks, tippers, water bowzers, bulldozers, TLBs, various types of compactors, cranes, and low loaders among others.
We are currently constructing a multimillion dollar shopping mall in Mitengo residential area of Ndola. The mall is projected to cost US$15m and will offer excellent family entertainment and shopping facilities. The mall will include a 5 screen cinema, a superstore, fast foods, restaurants, gym and health club, clothing shops and boutiques, sports bar, DIY shop, and various shops and entertainment facilities. It is scheduled for opening in April 2011. Shop rentals are being handled by *Knight Frank Zambia Ltd*.
MITENGO SHOPPING MALL, NDOLA
Equinox Minerals, owner of the Lumwana Mine, has doubled its exploration budget for 2010 to US$ 10 million on its mining licence in North-Western Province. Luanshya Copper Mines (LCM) comprises the Luanshya and Baluba copper and cobalt mines and was originally operated by the now defunct Roan Antelope Mining Company of Zambia (RAMCOZ). Reopened in 2004, Baluba Mine has a lifespan of over 20 years and contains cobaltiferous ore and total reserves estimated at 32 500 000 metric tonnes grading 2.48 percent copper and 0.17 percent cobalt. LCM also operates Chambishi Metals Plc, the country’s largest cobalt producer, which is situated in the Copperbelt capital of Kitwe. The company treats slag from the large surface dump at Nkana, containing 20 million tonnes of slag, and produces copper and cobalt. The plant also treats copper and cobalt sulphide concentrates arising from Baluba mine. LCM recorded a total turnover of over US $300 million between 2002 and 2008. Following the sharp drop in commodity prices, LCM halted all operations in December 2008 and closed when former owners Enyo Holdings placed it under care and maintenance in January of 2009. LCM was subsequently taken over by China NonFerrous Metal Mining Company (CNMC) in June 2009, and copper production resumed at the end of 2010. CNMC has invested US$ 38 million in rehabilitating mining equipment and machinery, and will increase investment up to US$ 400 million in the next few years. Chambishi Mine, which has copper reserves of approximately 33 million metric tonnes, is operated by NFC Africa Mining Plc (NFCA), a joint venture between CNMC, with 85 percent shareholding, and ZCCM Investment Holdings Limited (15 percent). With proven reserves of 5.01 million tonnes at an average grade of 2.19 percent copper, the mine began
production in 2006 and by the middle of 2007 had produced 180 000 tonnes of copper concentrates and provided 2 028 jobs. Investment totalling US $100 million during 2007 to exploit the west ore body is expected to produce one million tonnes of copper ore per year and provide 1 000 additional jobs. Some US $300 million has been invested in the Chambishi Copper Smelter, which is owned by CNMC (60 percent) and Yunnan Copper Industry (Group) Co. Ltd (40 percent), the latter being China’s third largest copper producer and smelter operator. The smelter has the capacity to process 400 000 metric tonnes of copper concentrate annually with an output of 150 000 metric tonnes of copper. The Chambishi Smelter is part of the US$ 900 million investment in the Multi-Facility Economic Zone, which is expected to house 50 to 60 enterprises with the capacity to employ 6 000 Zambians by 2014. A number of other companies mine Zambia’s rich copper and cobalt reserves. Owned 85 percent by Metorex Limited, the Chibuluma Mine is situated on the Copperbelt near the town of Kalulushi. It consists of the Chibuluma West and Chibuluma South sites, with ore treated at the Chibuluma South concentrator. Increased production from the new mine at Chibuluma South has replaced the depleted Chibuluma West mine. The mine produces approximately 16 000 tonnes of copper per annum. Production at Chibuluma South has increased steadily, from an initial output of 25 000 tonnes a month of ore in December 2005. From 2006, when 363 311 tonnes of copper was milled, tonnage rose to 503 880 in 2007 and further to 568 187 in 2009, with the full impact of the expansion programme becoming apparent and the copper head grades having also improved, from 2.7 percent in 2006 to 3.1 percent in 2009.
Morganite is a member of Omnilyne
Manufacture Carbon Brushes for Electric Motors & Machines for use in:• Mining Industry • Light & Heavy Industry • Farming Industry • Domestic Industry Manufacturing of Electric Switchboards
BUILD ZAMBIA BUY ZAMBIAN
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Product List:• Distribution Boards - 110/240/380/415/550 & 1000V • Starters & Starter Control Panels - 110/240/380/415/550 & 1000V • Gulley Boxes - 63/100/160 & 250A (Plug in type) • Boomer Boxes - 100/160 & 250A • Feeder Panels • Feeder Pillars • Motor Control Centres, etc. Brand Names:• Schneider Electric We also supply loose spares:• Circuit Breakers • Contactors AC/DC • Control Relays AC/DC • Protection Relays • Overload Relays • Distribution Components • Motor Control Components • Wiring Accessories
Brand Names:• Morganite • National • CPO • Schunk Builds switchboards up to 1000V for use in all applications:• Mining Industry (Open Pit & Underground) • Heavy & Light Industry • Farming Industry • Domestic use
Tel: +260 212 611297/8 / 212 615058 • Fax: +260 212 615072 PO Box 70543, Ndola, Zambia
Chibuluma is an efficient operation with a high grade ore body and an estimated mine life of seven years. Sites with the potential for further exploration are being identified in the vicinity of the mine with the aim of extending the life of mine. Also owned by Metorex, the Sable Zinc operation located near the town of Kabwe in Central Province was commissioned in 2006. The plant comprises a modern solvent extraction electrowinning plant and an acid plant, and processes third party ores from various suppliers in Zambia as well as Ruashi in the Democratic Republic of Congo (DRC). It has a capacity of 12 000 tonnes of copper cathode a year and 1 100 tonnes of cobalt carbonate. In the 2008/09 financial year, Sable’s profits were hit by the drop in both cobalt and copper prices. In addition, revenue was materially impacted by a lack of ore supply following the collapse in global demand. Copper cathode production of 4 889 tonnes during this period (10 767 tonnes in 2007/08) was based on Ruashi’s oxide concentrate feed, coupled with some locally sourced ore. This supply was suspended in December 2008 when operations in the DRC were placed on care and maintenance. In March 2009, Sable secured an off-take agreement for the period to December 2009. From an average copper production of just 183 tonnes per month in the second quarter, copper cathode tonnage improved to 678 tonnes in June 2009, while sales for the year totalled 5 588 tonnes. Cobalt produced fell from 565 tonnes in 2007/08 to 151 tonnes in 2008/09. Going forward, Sable is confident of being able to source suitable ore tonnages and grades from both the DRC and the local market well into 2010. The terms under which these ores are sourced are such that Sable should operate profitably for the year provided copper prices remain robust.
Munali Nickel Mine in Mazabuka was officially re-opened on 26 March 2010, after having been put under care and maintenance in 2009. This follows an investment of US$ 37 million in Albidon Zambia Limited by Jinchuan Mining Group of China. An upgrading programme is to increase production at the mine from 900 000 to 1 200 000 tonnes of ore per annum by 2012. Furthermore, the number of employees is to be increased from the current 345 to 450 by the time the mine is fully upgraded in 2010. Emerald mining is concentrated in the Ndola Rural Protected Area, with several large open-pit mines actively worked by
international companies. London-listed Gemfields Resources, which is part of Pallinghurst Resources, owns a majority stake in Kagem Mining Limited, the largest emerald mine in Zambia and one of the most attractive emerald assets in Africa. While Kagem’s licence area is extensive and includes five emeraldbearing belts, production to date has focused on a single open pit lying on the Fwaya-Fwaya belt. Gemfields also owns the Mbuva-Chibolele and Kamakanga emerald mines, which lie on the same Fwaya-Fwaya belt. Zambian emeralds comprise 20 percent of the world supply and are much sought after because of their unique deep green colour. Pallinghurst Resources is focusing its production and marketing efforts on the coloured gemstone market in order to create a steady and ethical supply of coloured gemstones. The global market for gemstones deteriorated markedly in 2008, and Pallinghurst decided in March 2009 to reduce the scale of mining at Kagem and to write down the mine’s value to zero. In 2009, emerald production at Kagem dropped by 46 percent owing to a 28 percent decline in grade as well as a 28 percent decline in the ore mined. Gemfields has narrowed its loss in the six months ended 31 December 2009 to £ 6.4 million, compared to a loss of £186.6 million in the first half of the previous financial year. Revenues from emerald sales increased by £ 12.1 million, compared with £ 344 000 in 2008, despite its total emerald and beryl production having declined by 47 percent to 7.82 million carats compared with 14.7 million carats the previous year. While there are encouraging signs of a sustainable increase in demand for emeralds across all key markets (such as India, China and the Middle East) in 2010, Gemfields continues to limit its capital, project development and exploration expenditure to key projects only. The company also intends to continue expanding the underground mining operations at Kagem by including new target sites, while at the same time expanding open cast mining activities to new target sites. Gemfields has also announced its intention to establish a trial cutting facility in Kitwe, and plans to open a rough gemstone trading business at Kagem. In February 2010, gemstone producer Gemﬁelds Resources announced the discovery of a massive 6 225-carat rough emerald in its Kagem mine.
EC MINING LIMITED
EC GROUP OF COMPANIES consists of: • EC Mining Limited • EC Grifo Zambia Limited • Sulphuric Acid Solution Limited Represents and suppliers of: • Zest / Weg • David Brown • Chas S Lewis • Mess • Alfa Laval • Condra Cranes • Voith
View of ofﬁces and workshops
EC Mining Ltd ofﬁce and workshops
“Ongoing training on the maintenance and care of the Grifo pumps at the mines”
Contact us at: Plot No. 5293/5294, Tanganyika Road Heavy Industrial Area, Kitwe, Zambia PO Box 23357, Kitwe Tel: +260 212 210642 Fax: +260 212 210645 E-mail: firstname.lastname@example.org email@example.com Website: www.ecmining.com
Electric motors in warehouse
The Chief Executive, Mr Tom Anderson - slight in the workshop
THE EPITOME OF GEMSTONE MINING
Grizzly Mining Ltd is Zambia’s leading gemstone mining company. Incorporated in 1999, Grizzly Mining has in its decade long existence, built a reputation for being the major purveyor of quality gemstones in the region. Grizzly mines ‘A-grade’ emerald and beryl in vast quantities for export to markets in America, Europe, the Middle East and Asia. The company commands considerable attention on the world stage owing to the exceptional quality of its gemstones which have been rated as some of the best in the world. Our vast experience in the industry has raised our profile, guaranteeing us a significant share of the world gemstone market. The bountiful receipts from our returns have enabled us to diversify into numerous areas of business, and our tentacles stretch well beyond Zambia. Grizzly Mining Ltd is located 50 km south west of Kalulushi in Lufwanyama District which is also known as Ndola Rural.
INVESTMENT & EXPANSION
Director of Administration Mr Abdoul Ba
Our mining venture has continued to grow at an annual rate of 10% since inception. Last year we acquired neighbouring Chimpundu Mine in order to further our expansion prospects and maximize production.
Jobs: Grizzly has been in the forefront in empowering the locals by providing them with gainful employment. Half of all miners are drawn from the immediate community in which we operate. Roads: The once impassable roads of the area have now been graded and are frequently maintained by Grizzly Mining Ltd. Security: Grizzly has helped to improve security in the area. It also maintains houses of the
paramilitary police in the area. The presence of law enforcement officers has made the area much more secure.
CORPORATE SOCIAL RESPONSIBILITY
Director of Corporate Affairs Mr Oumar Samba Ba
Schools: Grizzly Mine has constructed 2 schools in the area, one of which has been taken up by
Government. The school at Pirala is fully sponsored by the company. All the uniforms and books are provided.
Washing Plant: Grizzly Mining has invested in an extension to their washing plant. The old plant
was capable of washing approximately 35 tons per hour, but after the extension it has been increased to 120 tons per hour. This is a great improvement on the old washing plant. A new workshop was built this year. This now enables the maintenance and repairs to all the machinery.
Mine Manager Mr Langson Mukuma
For a company that has witnessed 10% annual growth since inception a decade ago, Grizzly Mining Ltd has had to deal head on with the effects of its mining activities on the environment. As a company we have had to balance our needs for sustainable growth with those of the environment. We can confidently state that it is possible to maximize production and still care for the environment. We as a company have kept the degradation of the natural environment at a minimum.
General Manager Ms Carolyne O Maphenduka
Mr. Ndiaye Abdoulaye Chairman & Chief Executive Officer
Tel: +260 212 210894 / +260 212 222736 (home) • Fax: +260 212 210896 Cell: 0966 782616 E-mail: firstname.lastname@example.org
Human Resources Manager Ms Barbara N Shilengwe
of US$ 26 million. MCL is being redeveloped at an estimated cost of US$ 108 million, with a new coal handling and washing plant to be built. A further US$ 500 million is being invested in a 300-MW coal-fired power plant. Targeted production at Maamba is 2 million tonnes of washed coal per annum. COPPERBELT BUSINESS Synonymous with Zambia’s mining industry, the Copperbelt is where most of country’s mineral wealth and the majority of its mines are situated. Their location here is hardly surprising, as the Copperbelt has the world’s highest-grade copper and cobalt deposits, with tailings dumps often containing grades greater than those of most hard rock mines. The region has historically received the bulk of investment in the mining industry, and is worked by numerous international mining companies. It is also the location of several industries involved in the downstream processing of minerals, and attracts further exploration for new mineral deposits. The only major copper mines outside the Copperbelt comprise Lumwana and Kansanshi in North-Western Province. In addition to the processing of copper and cobalt, production on the Copperbelt comprises wood products, chemicals, bricks and tiles, pipes, tyres, soap and sugar. Ndola is the centre of many important industries and manufacturing concerns, with activities including cement and lime production, cotton spinning, and the refining of petrol. A number of manufacturers operate in support of the mining industry, and are involved in construction, gas supply, explosives, engineering, energy and transportation, as well as producing heavy machinery. The newly-commissioned Chambishi Smelter has the capacity to produce fertiliser, and this may be considered in future if there is enough market for the commodity. Other new Copperbelt industries include Mukuba Breweries, which received K 480 million in funding from the CEEC.
Heavy machinery - Photo Courtesy: René Hartslief
Amethyst - Photo Courtesy: René Hartslief
Other emerald producers on the Copperbelt comprise Grizzly Mining, which is located about 50 kilometres south-west of Kalulushi. The company, which has grown at a steady rate of 10 percent per annum, owns the largest facility for washing gemstones in the mining area, and in 2008 employed over 400 workers. More than US $10 million has been invested in modern machinery as well as human resources since starting operations in 1999. In 2009 Grizzly acquired the neighbouring Chimpundu mine. In addition to emeralds, Zambia possesses a number of other precious stones, such as amethyst, of which the country boasts the largest deposits in Africa, producing an estimated 700 tonnes of material annually. There are also deposits of tourmaline, spessartite garnet and aquamarine. Pink and bicoloured tourmaline is mined in the Mkushi pegmatite region at the Jagoda Mine, while tourmaline is mined at the Kumanga Mine in the Mkushi area. Zambia’s only producer of lime, the Ndola Lime Company (NLC) on the Copperbelt, produces limestone, quicklime and hydrated lime. Most of its market demand comes from the mining industry, followed by the construction sector. Ndola Lime’s production costs range between U$ 70 and US$ 100 per tonne, but with the introduction of new technology this could be brought much lower. The US $74 million recapitalisation programme at NLC is set to increase production capacity of quick lime from the current 400 000 tonnes to 800 000 per annum by 2013. The anticipated increase in production capacity will improve export prospects of lime products to markets such as the DRC, Angola, Malawi and Tanzania, where there is a growing demand for hydrated lime. The firm is currently studying lime deposits in the NorthWestern Province. Maamba Collieries Limited (MCL) is Zambia’s largest coal supplier and currently mines two open cast mines in the Kanzize and Izuma basins in Southern Province. The mine boasts 80 million tonnes of coal deposits; with production of 8 000 tonnes per month, this translates into a lifespan of more than 50 years. Maamba produced about 600 000 tonnes of coal per year during the 1980s; however, years of under-capitalisation led to operational constraints following the breakdown of mining equipment and machinery, with a subsequent fall in production. In January 2008 the Zambian government transferred its 100 percent stake in MCL to ZCCM-IH Plc in order to revamp operations at the coal mine, transform it into a viable business entity and improve coal supply for industrial production. At the end of 2009, equity partner Nava Bharat Singapore Private Limited purchased a 65 percent stake in MCL at a cost
Agriculture is viewed as one of the cornerstones of Zambia’s economic diversification programme and is an important source of raw materials for the manufacturing industry as well as being an essential tool in reducing poverty and narrowing the rural-urban divide.
Zambia has good arable land for both extensive and intensive cultivation of crops, with some 58 percent of the total landmass considered suitable for agricultural production. The country also has a pleasant climate and contains around 40 percent of the water resources of the southern African region, thereby creating huge irrigation potential. Maize is Zambia’s dominant food crop and is produced by the majority of smallholder farms, with larger agricultural concerns given over to cash crops such as cotton, sugar and tobacco. While small-scale production for subsistence is widespread, some of the smaller farms focus on both food and cash crops. Although maize is the main staple crop, rice and wheat are becoming increasingly important foods, particularly in urban Zambia. The livestock sector, while not as important as arable farming, has expanded in recent years. In view of aims to diversify agricultural production, it is hoped that Zambia may, like some of its neighbours, successfully develop a vibrant livestock industry to supply both the domestic and export markets. Agriculture contributes around 16 percent to the Gross Domestic Product (GDP), and is the source of more jobs than any other sector in the country, providing employment for some 85 percent of the country’s workforce. Moreover, agricultural activities are the main source of income for rural Zambian women; a group that not only constitutes nearly two-thirds (65 percent) of the rural population, but is also among Zambia’s most impoverished and vulnerable inhabitants. Bolstering agricultural activities and development has thus been declared one of government’s priorities, fitting squarely into the 2010 Budget theme of ‘Enhancing Growth through Competitiveness and Diversification’. In the same year, the proportion of National Budget allocated to the agriculture and livestock sectors increased to K 1 139.0 billion from the 2009 allocation of K1 096.3 billion. Agriculture is also a key component of Zambia’s Vision 2030 and the Sixth National Development Plan (SNDP) 2011-2015, with funding levels targeted to rise to 9 percent of the domestic budget. FOOD SECURITY Positive developments in agricultural growth over the past several years have seen Zambia’s food security position improve due to robust increases in maize output as well as increased production of other crops such as soya beans, rice and cassava. As a result, Zambia became a net exporter of food, with exports of cash crops such as tobacco and cotton lint, as well as food crops such as maize, rising substantially. Furthermore, efforts at diversification saw non-traditional agricultural, horticultural and floricultural exports rising significantly, along with foreign exchange earnings. The Food Reserve Agency (FRA) plays an active role in the purchase of various crops from small-scale farmers, particularly those in remote areas, guaranteeing a stable and ready market. In addition, the agency has in the past been able to supply disadvantaged households with relief food through the Disaster Management and Mitigation Unit and the World Food Programme. As a result, most farmers are presently part of the agricultural marketing network, with further improvements to focus on enhancing the capacity of the cooperative movement and developing strategies to increase Public-Private Partnerships (PPPs). For the 2010 financial year, K 100 billion was allocated to the FRA to augment its ability to purchase grains, while an extra K 10 billion has been set aside for the Food Security Pack initiative designed to protect vulnerable households from high food prices. As an additional food security measure, silos in Lusaka have been rehabilitated with the aim of improving grain storage. This programme is continuing in 2010 through the rehabilitation of silos in Kabwe and Ndola.
ZAMBIA NATIONAL FARMERS’ UNION
ZNFU – AT A GLANCE
Founded in 1905, ZNFU is historically one of the oldest associations in Zambia. The Union has existed under various names almost since the ﬁrst large-scale farms were established in Zambia in the early 1900s. While it has changed names, about three times, the Union has remained steadfast in adhering to its mission statement which is to promote and safeguard the interests of its members as individual farmers, corporations/companies, and other organizations involved in the business of agriculture in order to achieve sustainable economic and social development. A banana plantation ZNFU has remained as the only member organization in region that has united both small and large scale farmers under one umbrella. This is envied in the region and serves as a shining example. With the Union Agribusiness Chamber in place, ZNFU has now assumed a role of representing the entire agricultural industry in Zambia. Currently the Union boasts of a nationwide foot print, with a total of 60 District Farmers’ Associations; 17 Commodity/Specialized Associations; 39 corporate members; and over 21 Agribusiness Chamber Members. ZNFU is an apolitical institution, which cornerstone has seen it thrive for well over 100 years. The Union’s policy has been strict and clear-cut and has required members to resign any leadership position within the ZNFU upon entering the national political arena. Principal functions of ZNFU include: lobbying and advocacy; member services provision and outreach; and information dissemination and communication. Out of these core functions comes out, a ZNFU renowned and respected for its strong and objective lobby and advocacy, and a farmers’ Union with immense reputation for independence and lack of bias. ZNFU Head Ofﬁce, Farmers’ Village Tiyende Pamodzi Road, Showgrounds PO Box 30395, Lusaka 10101, Zambia Tel: 0211 252649/255769/257958/254431 • Fax: 0211 252648 E-mail: email@example.com • Website: www.znfu.org.zm
Irrigation at Kasama coffee plantation
A group of farmers at a farm security meeting
Coffee almost ready for picking
Mr Jervis Zimba President of ZNFU
Mr Ndambo Ndambo Executive Director ZNFU
agriculture and increasing the efficiency of irrigation techniques, as well as expanding markets. This entails: • Increased investment in rural development, and in rural infrastructure in particular, from both the public and private sectors to boost productivity and link farmers to markets • Targeting of support to small-scale producers of food • Improved incentive measures and subsidy schemes for provision of inputs, accompanied by an effective and efficient agricultural extension service and robust adaptive research services that accelerate smallholder farmer adoption of appropriate technologies to boost productivity • Better terms of trade at both regional and global level for agricultural produce and inputs • Formulation and implementation of national policies and international cooperation agreements that enhance productivity for the majority of small-scale farmers • Provision of inputs at affordable cost • Development of irrigation, especially for small-scale farmers • Facilitation of evidence-based decision making by strengthening monitoring and evaluation systems, capacity of agricultural statistics as well as information communication technologies (ICTs) to provide wider access to data and information The agricultural sector in 2009 Agriculture recovered strongly to grow by 12.4 percent in 2009 compared to just 1.9 percent in 2008. This growth is on account of a bumper harvest, with maize, tobacco, soya beans, sunflower, sorghum and wheat improving significantly in the 2008/9 farming season. In particular, maize production rose by 26.7 percent to 1.9 million metric tonnes, following output of 1.5 million metric tonnes in 2008. This is the largest harvest Zambia has recorded in the past ten years. The country is currently experiencing a modest food surplus arising from the 2009 crop harvest. Notable contributions were received from small-scale farmers supported by the Farmer Input Support Programme (FISP) and marketing services. As such, government will continue providing assistance through the FSIP to enable such farmers to attain even higher production in future. CURRENT PROGRAMMES & INITIATIVES During 2010, government is focusing on: • Stabilising fertiliser prices while making fertiliser more widely available through the Farmer Input Support Programme (formerly the Fertiliser Support Programme) • Improving credit availability in rural areas in partnership with donors • Encouraging increased investment in the sector by both small and large-scale farmers through the development of infrastructure to support farm blocks across the country • The introduction of an Agricultural Marketing Bill that will allow small-scale farmers to market their produce directly to buyers Farmer support programmes Government has for some years encouraged food production by subsidising farming inputs like fertiliser, seeds and chemicals for small-scale farmers under the Fertiliser Support Programme (FSP). A review of the FSP – renamed the Farmer Input Support Programme (FISP) – was undertaken in 2009 and some recommendations have been implemented for the 2009/10 farming season. This has seen the distribution of fertiliser and seed for small-scale farmers rationalised. As a result the number of beneficiaries has doubled to 534 000 eligible farmers, thereby increasing the programme’s coverage. Furthermore, the efficiency of distribution has been improved through using institutions at the agricultural camp level rather
Maize, Zambia’s largest crop - Photo Courtesy: René Hartslief
CHALLENGES TO AGRICULTURE Despite large and fertile tracts of arable land and a climate that is conducive to agricultural development, the sector faces numerous challenges. Lack of long-term investment in agriculture, poor rural infrastructure and generally underdeveloped rural areas have eroded productivity, while current yields of staple crops need to increase significantly if food security is to be ensured. Less than one-sixth (14 percent) of total arable land is under cultivation, mostly by small-scale farmers, and commercial agriculture tends to be confined to a small number of large and medium-size farms. Specifically, obstacles facing the agricultural sector in Zambia include limited access to credit, inputs and extension services; fluctuating cost of inputs; low labour and land productivity; limited market access for small-scale farmers; poor livestock management; weaknesses in the Fertiliser Support Programme (now the Farmer Input Support Programme); failure to attract adequate private sector investment; and the seasonal nature of agricultural production. AGRICULTURAL POLICY Government’s main priorities are to maximise the contribution of the agricultural sector to GDP by facilitating and supporting the development of a sustainable and competitive industry that ensures food security at national and household level, facilitates poverty reduction through employment and income-generating activities, and contributes to sustainable industrial development. While intent on ensuring that the existing agricultural resource base is maintained and improved, the National Agricultural Policy 2004-2015 also focuses on crop diversification and the opening up of new agricultural production areas, providing agricultural support services, reducing dependence on rain-fed
than at the district level, and through the increased participation of community organisations. Farmers receiving fertiliser will be targeted for support from agricultural extension workers to ensure that their fertiliser is applied correctly and efficiently. With these interventions, government expects crop yields to improve significantly. As such, a total of K 430 billion has been allocated to the FISP in 2010. Infrastructure development In order to boost investment and productivity in the sector, the development of farm blocks, typified by large and smallscale operations coexisting in a symbiotic relationship, is being stepped up. The 155 000-hectare Nansanga Farm Block in Serenje District is expected to be a model of agricultural development in Zambia. When fully populated, it will resemble Nakambala Sugar Estates – although ten times the size – with large estates and small-scale farmers located in close vicinity to one another. Nansanga farm block was nearing completion at the end of 2009, and in 2010 the remaining works – relating to the construction of additional roads and bridges – were due to be completed. An additional K3.0 billion has been allocated for the construction of dams. Nansanga is being vigorously marketed to investors, and substantial interest has already been expressed in the block. In 2010 similar infrastructure development is taking place in Luena Farm Block in Kawambwa district. This is an area with vast potential for the development of the sugar industry, and K 3.4 billion has been provided for preliminary work. Improving market access Increasing crop yields alone is not sufficient to improve the incomes of farming populations. While the FRA is a major marketing agent for small-scale farmers, it is important that an effective and sustainable crop marketing institution is established in order to enhance earnings. Government is presently introducing the Agricultural Marketing Bill, which is intended to enhance the access of small-scale farmers to markets and ensure that transactions take place in a fair manner. The Bill will also include provisions for warehouse receipting, thereby allowing farmers to access finance against the value of their produce and enable them to purchase inputs for the subsequent farming season.
Good results from conservation farming - Photo Courtesy: NFU Conservation Farming Unit
Irrigation and water conservation technology Zambia’s crop production is largely rainfall dependent with a distinct production season running from November to April. Rainfall is the major determinant of crop performance in any given year, and with changing weather conditions more likely in the face of global warming, government is emphasising decreased dependence on rain-fed agriculture. The focus is therefore on developing water conservation and irrigation technologies. The scaling up of conservation agriculture could serve the twin purpose of increasing food production and mitigating the effects of climate change. Government is to spend US$ 50 million on an Irrigation Development and Support Project (IDSP) in Southern, Copperbelt and Central provinces, with the bulk water infrastructure being financed through a loan from the World Bank. The second phase of the project will look at developing the Lumwana and Kasama irrigation sites in North-Western and Northern provinces. The project is being executed under a Public-Private Parnership (PPP) agreement. Furthermore, a number of initiatives have begun to investigate means of conserving water. Through its Conservation Farming Unit, the Zambia National Farmers’ Union (ZNFU) is helping farmers dig water harvesting basins, a simple and cheap
technique for collecting excess water for drinking or irrigation. The water is usually retained in small dams, manually-dug basins or huge underground storage tanks. In southern Zambia, the Water Harvesting Project is encouraging livestock farmers in Choma to dig ditches that collect rain runoff from roofs and result in water reservoirs. Another technology, sand dams, is being advocated by the nongovernmental organisation Sahelian Solutions. Sand dams are created by blocking a dry river bed through the construction of a concrete dam. Over time sediment accumulating in the bottom of the dam helps catch rain water during the rainy season and prevents evaporation during the dry season. Conservation farming Some of the benefits of conservation farming include reduced soil erosion and better rainfall infiltration as well as improved timeliness of land preparation. The aim is for 50 percent of all farmers in Zambia to have access to conservation agriculture technology by 2015. The European Union (EU) has provided about € 7.5 million to support conservation farming in Zambia from 2009 to 2011. The funding covers 12 districts and is targeting 58 000 farmers. For the 2009/10 season, with the support of the Norwegian government, 189 000 farmers are using conservation agriculture technology according to programmes under the Conservation Farming Unit of the ZNFU and 42 000 farmers under the Ministry of Agriculture. About 7 000 farmers are also supported under Community Markets for Conservation (COMACO). Livestock and ﬁsheries initiatives The livestock and fisheries subsectors play an important role in improving the livelihoods of not only small-scale farmers but the population at large. The recent creation of a specialised Ministry of Livestock and Fisheries Development will ensure that this vital subsector receives focused attention. The potential of the livestock subsector is immense, and is being supported through targeted interventions aimed at controlling animal disease and improving veterinary services. The tackling of livestock diseases is given priority to enable Zambian meat products to meet demand in local markets as well as satisfy the stringent requirements of export markets such as the European Union and elsewhere. Through these interventions, it is hoped that beef will become second only to copper as a foreign exchange earner. Under fisheries development, the key strategy is to ensure compliance with fisheries regulations so as to reduce the depletion of fish in Zambia’s main water bodies. Aquaculture development, especially by women, is being encouraged, and aquaculture centres are being constructed for the breeding of fingerlings that will be used for restocking.
Healthy cattle - Photo Courtesy: René Hartslief
Good crops from hoe-minimum tillage; good conservation farming - Photo Courtesy: NFU Conservation Farming Unit
To support the livestock subsector, government will continue with the creation of disease-free zones to facilitate livestock exports. The first zone is expected to cover Central Province, Lusaka Province and parts of the Copperbelt Province. Work has commenced on the renovation of a number of laboratories, the construction of checkpoints in the proposed disease free zone, and the establishment of breeding centres. This work is continuing in 2010, with an allocation of K 12.5 billion for disease-free zone programmes. The disease burden around these zones will also be targeted through the establishment of extension service centres in the disease-prone areas of Western, Southern, and Eastern provinces. For this, and other livestock and fisheries activities in the provinces and districts, a total of K 95.2 billion has been allocated. The Zambia National Farmers’ Union (ZNFU) promotes and protects the interest of its members – farmers, individuals, corporations/companies and other organisations involved in the business of farming – in order to achieve sustainable economic and social development. INVESTMENT OPPORTUNITIES Of all of Zambia’s economic sectors, agriculture is thought to hold the most promise for growth and development, as well as the potential to reap significant foreign exchange earnings. Production must be stepped up to meet the growing demand in expanding local, regional and international markets. This calls for substantial private sector investment to transform uncultivated arable land, privatised state land and traditionally cultivated farmlands into productive commercial concerns. Arable assets One of Zambia’s most important natural resources is its arable land, with over half the country’s land classified as having medium to high potential for agricultural production, and a substantial percentage of the land available for agriculture situated near urban areas. Rural areas possess arable land for cultivation as well as pastureland for livestock farming. Another plentiful resource is water, with Zambia’s mean annual rainfall around 1 400 millimetres in the northern region and 700 millimetres in the southern, eastern and western areas. In addition to rivers and lakes, there are groundwater resources. Untapped potential exists in the irrigation of farmland, with tax incentives for producers who invest in such equipment. Climatic factors, such as rainfall, temperature, sunshine and the different types of soils, provide the country with three major agro-ecological zones suitable for a wide range of crops, livestock, fish and forestry products. The different zones
range from a vast, temperate plateau region to the north, to subtropical valleys around the Zambezi River to the south. Areas for investment Favourable investment opportunities exist in: • Horticulture & ﬂoriculture – The production of cut flowers, wheat, soybean, cotton, tobacco and sugar. • Livestock – Non conventional livestock farming, such as crocodile or ostrich farming. • Poultry products – Hatcheries for the production of chicken for both domestic and regional markets. • Fisheries – Zambia’s abundant fresh water and rivers provide vast fishing and fish farming potential. • Agricultural support services – This includes the construction of dams and boreholes, installation of irrigation systems and extension services. • Agricultural inputs – Fertilisers, farm equipment and animal feed also have significant potential, as does the packaging of agricultural produce for export. While tobacco is increasingly seen as a lucrative cash crop, its production countrywide – especially in the dryer Southern region – can be increased threefold with appropriate infrastructural development. Increases in coffee and cotton production have similar potential. Furthermore, both traditional and non-traditional agricultural exports have historically been exported in their raw, unprocessed form, and there is a great deal of potential in the downstream processing of agricultural produce. Private enterprise is able to take advantage of the gap that exists in the market through investment in processing plants, either as stand-alone units or in conjunction with agricultural initiatives. In addition to a reduced tax rate of 15 percent on income from farming, government provides a number of incentives and allowances for agriculture. These include 50 percent depreciation allowance per year for the first two years on machinery used for farming; 20 percent capital expenditure allowance per year for the first five years on farm improvements; 10 percent development allowance per year, up to the first year of production, on capital expenditure incurred for the purpose of growing coffee, tea, bananas, citrus fruits or similar plants; and 100 percent farm work allowance for expenditure on farmland, such as for stumping, land clearing, water conservation and the like. Major job creation developments during 2009 include a Memorandum of Understanding with Man Ferrostaal for a US$ 400 million investment in the cultivation and refinement of Jatropha in Northern Province. AGRICULTURAL SUBSECTORS Zambia produces a variety of crops, livestock, fish and agroforestry commodities. In addition to maize, the staple food, other crops produced include wheat, cassava, millet, sorghum, rice, soybeans, groundnuts and mixed beans. Cash crops such as cotton, tobacco, sugar cane, coffee, tea, seeds, flowers and high-value horticultural produce are becoming increasingly important as foreign exchange earners. Cattle are the predominant livestock, while pigs, poultry, sheep and goats are also farmed. Fresh water fish production occurs around areas with rivers and lakes. Cassava: One of Zambia’s staple crops, cassava is produced in Northern and Luapula provinces, which contribute about 70 percent to national output, followed by Western Province at 16 percent and Southern Province at less than 1 percent. As part of its emphasis on decreasing dependence on rain-fed crops, Zambia’s government has spotlighted cassava production
as a means to improve food security. It is hoped that as cassava production increases it will offset the country’s heavy dependence on maize as the primary food crop. Wheat: Two crops per annum of wheat are produced due to rotation with cotton and soybeans. Greater focus is being given to the production of irrigated ‘winter’ wheat, with national consumption having increased tremendously in recent years, from 140 000 metric tonnes in 2007 to 195 000 in 2008 and 210 000 in 2009. Millet: A staple food grown mainly by small-scale farmers for subsistence, millet is also used locally in the brewing of beer. Northern Province accounts for over 50 percent of national production. There is presently limited demand for millet and production levels have thus remained low. Sorghum: Sorghum is grown in Southern, Western and NorthWestern provinces. Like millet, production levels remain low due to low demand. Rice: About half of Zambia’s rice is produced in Northern Province, followed by Western and Eastern provinces. Production levels have increased greatly along with area planted, and national consumption of rice has risen from 31 248 metric tonnes in 2007 to 37 249 in 2008 and 54 000 in 2009. Nuts and beans: Peanuts (groundnuts) are predominately produced in Eastern and Northern provinces. Due to their great popularity on the export market there is ample room to expand local production and processing of this lucrative product. There are also opportunities to increase production of cashew nuts, which are presently grown in Western Province. Around 60 percent of soybeans are produced by commercial farmers in Central, Lusaka, Copperbelt and Southern provinces.
Storage facilities - Photo Courtesy: René Hartslief
of sugar annually, and is planning a US$ 8 million expansion which will increase production to 40 000 tonnes. Cotton: Since the initiation of major agricultural reforms and privatisation of the industry in the early 1990s, cotton production and processing has grown rapidly. Some 80 percent of Zambia’s cotton is produced in Eastern Province, with Central and Southern provinces accounting for 11 percent and 8 percent respectively. As cotton is largely a smallholder crop its potential role in poverty alleviation and food security is huge. Cotton now ranks as one of the most important sources of crop income among small-scale farmers and agribusiness firms. Production is largely undertaken by out-growers and the subsector is led by two companies. Dunavant is Zambia’s leading cotton ginner while Cargill, which acquired Clark Cotton in 2006, has around 500 employees based in Chipata. Tobacco: Zambia produces as well as processes both Burley and Virginia tobacco, with Central and Eastern provinces being the most favourable for the crop. Some 83 percent of Burley tobacco is grown in Eastern Province. Zambian tobacco has received a grade of high quality and flavour, and increased demand has seen substantial increases in production. This is being fuelled to some extent by a reduction in cultivation in Zimbabwe, with Zambian tobacco being similar to that grown in Zimbabwe and therefore being able to fill the gap. Out-grower schemes have increased commercial production, and there is scope for small, medium and large-scale production. According to the International Tobacco Growers’ Association, tobacco production in Zambia is currently 7.5 times more profitable per hectare than maize production and 14 times more profitable than cotton. The techniques used to grow quality tobacco help to improve other crops, and the residual fertiliser effect for farmers that practice crop rotation cannot be underrated. Coffee: Coffee is grown in the Zambian highlands. The main markets are Japan, the United Kingdom (UK), South Africa, USA, Dubai and Germany. While the country is a relatively small producer, demand has been increasing due to the high quality of Arabica coffee produced, and there is scope to increase production to service niche markets in Europe. Horticulture and ﬂoriculture: Both floriculture and horticulture do exceedingly well in Zambia’s temperate climate. Production of fresh vegetables and flowers, mainly for the export market, recorded significant growth during the early part of the decade, when floriculture became one of Zambia’s leading NTEs. As both subsectors are highly labour intensive, they are promoted as part of government’s poverty reduction programme in agriculture.
Floriculture, one of Zambia’s leading NTEs - Photo Courtesy: René Hartslief
Sugarcane - Photo Courtesy: René Hartslief
Oil from processed soybeans and sunflower seeds is in demand both in the local market and further afield. The main production area for mixed beans is Zambia’s Northern Province, which is responsible for around 70 percent of national output. Sugarcane: Sugar is one of the country’s most valuable export commodities, and is processed for the domestic market as well as being exported to regional and international markets, in particular the European Union (EU). The local sugar industry has been successfully privatised, an initiative led by Zambia Sugar Plc, which is majority-owned by South Africa’s Illovo Ltd. By far the largest manufacturer in the country, Zambia Sugar is also among the least expensive producers of refined sugar in Africa and is listed on the Lusaka Stock Exchange. Zambia Sugar mills and refines its own sugarcane from its Nakambala Estate, as well as sugarcane from a number of out-growers, at its refinery in Mazabuka. The company produces and markets sugar and molasses, as well as other value-added products such as icing sugar, castor sugar and a range of syrups. Zambia Sugar exports sugar to eastern African nations in the Great Lakes region, and to the European Union. Zambia Sugar plans to more than double output in the year to end-March 2010 after expanding its plantation and factory and buying a new farm. With factory capacity having increased by 60 percent, it is anticipated that sugar production will rise to more than 420 000 tonnes in the current season from 192 186 tonnes in the year ended March 2009. Other Zambian sugar producers are Kafue Sugar Company near Lusaka and Kawambwa Sugar. Owned by Consolidated Farming, Kafue Sugar currently produces around 28 000 tonnes
Livestock: The livestock industry includes the production of beef, poultry, pork, mutton and lamb. A large proportion – some 80 percent – of the industry remains at the smallholder level, with many beef and dairy cattle raised solely for domestic use. While grazing conditions suit a variety of livestock, distribution is uneven and some areas are subject to tsetse fly. The eradication of livestock diseases is a top priority, and steps have been taken to educate farmers about the dangers of moving animals from one area to another. The restocking of affected herds is ongoing. Zambeef Products Plc is a regional leader in cropping operations, production, processing, distribution and retailing of beef, chicken, pork, eggs, milk, dairy products, edible oils, leather and industrial footwear. The company credits it success to ensuring that every stage of the food production process – including retail – is controlled by the company itself and that all production steps remain within Zambian borders rather than being contracted out to organisations outside the country. Other beef producers include Keembe Meat Corporation, Realmeat and Galaunia Holdings. The poultry subsector has grown tremendously in the past decade, although a shortage of day-old chicks has constrained to some extent further expansion in the market. In addition to Zamchick, producers include Hybrid Poultry Farms, Ross Breeders, Nulaid and Yielding Tree. Dairy: Dairy farming is carried out by commercial, semicommercial and traditional farmers, and is a subsector with considerable growth potential. Over 90 percent of processed milk is produced by commercial dairy farmers. This is usually pasteurised and packaged, as well as being made into yoghurt, cheese and fermented milk. Processors in Zambia include Zam Milk, which is part of the Zambeef group, Finta, Parmalat and Diamondale, among others. Fisheries: Fish is a major source of protein for many Zambian households on the subsistence level and is also able to provide cash income. Commercial production of fresh water fish occurs in the northern, western and southern parts of the country as well as along major rivers and lakes. Development programmes are focused on conservation and research in order to improve yields, with private sector involvement comprising fish farming, marketing and distribution. While fish is traditionally sold in its dried form, large amounts are now being frozen due to improvements in transportation and refrigeration facilities. While the contribution of fish farming is relatively insignificant, exports of fish products to regional markets have been on the increase.
Fish - Photo Courtesy: René Hartslief Dairy farming has considerable growth potential - Photo Courtesy: René Hartslief
Growing of fresh vegetables - Photo Courtesy: René Hartslief
Development in the subsector has been marked by investment in year-round irrigated production by medium and large-scale farmers, as well as expanding out-grower schemes. Zambia produces more than 60 varieties of cut flowers, with one of the prime areas of expansion being the growing of roses, which are exported to the EU, in particular the Netherlands. Other important markets are the UK, Germany and South Africa. Tropical fruits and fresh vegetables also feature prominently, and the UK, South Africa, Germany, the Netherlands, Australia, New Zealand, Norway and France are the main importers of Zambia’s horticultural produce. The pre-packing of vegetables adds value to exports. Seeds: Encompassing all public and private activities in plant breeding, variety development, seed production and distribution, the seed industry in Zambia includes formal and informal sectors. The Seed Control and Certification Institute (SCCI) is the seed certification authority in Zambia, providing seed quality control services to private seed companies, seed programmes, NGOs, seed traders and farmers. The Zambia Seed Trade Association (ZASTA) is the national seed association that looks after the interest of all players in the country’s seed trade. The seed industry has registered increased participation by the private sector, with research being concentrated on maize, soybeans, wheat and cotton, and the emphasis on commercial crop production. While seeds once had to be imported, an increasing number of companies have set up in Zambia and are developing and producing local varieties. These include Seed Co International Zambia Ltd, MRI Seed and Zambia Seed Company.
Zambia’s future economic development is contingent upon moving away from its traditional dependence on raw materials export and embracing the huge potential of value-addition production.
The manufacturing sector accounts for nearly 11 percent of the country’s Gross Domestic Product (GDP) and is one of the most attractive sectors for investment, having all the vital elements in place, such as raw materials, labour force, abundant land and a good banking and financial system. The expansion of manufacturing activities will, over the medium term, improve Zambia’s growth prospects and competitiveness and reduce its dependence on imports through a wider base of locally produced goods and services. However, the sector has at present a relatively narrow base, which needs further diversification to produce a wide variety of high-quality, value-added intermediate and final products, principally for the export market. In addition, the high cost of doing business and lack of supporting infrastructure continues to impede the development of the sector and its ability to create more jobs. Currently, the core objectives in the manufacturing sector include reducing the cost of doing business in Zambia and developing Multi-Facility Economic Zones. For this reason, government continues to place emphasis on the construction of arterial infrastructure and the development of Multi-Facility Economic Zones (MFEZs). Furthermore, the processes and procedures for doing business in the manufacturing sector are being enhanced through regulatory and other reforms relating to the cost and conduct of business, with the Zambia Development Agency (ZDA) helping to facilitate investment. Manufacturing performance in 2008 and 2009 Despite the many challenges raised by market liberalisation, such as stiff competition from imports, the manufacturing sector has performed relatively well over the past decade, becoming an important catalyst for private sector development in Zambia. However, the events of the global economic crisis in the latter part of 2008 resulted in a slow-down in manufacturing, which grew by just 1.8 percent in 2008 and 2.5 percent in 2009. This was on account of factors such as the increased cost of imported raw materials (due to the depreciation of the Kwacha), a decline in export demand and continued stiff competition from cheaper imports. INSTITUTIONS & POLICIES The legal and regulatory framework for investment and the production of manufactured goods is provided by the Ministry of Commerce, Trade and Industry, which formulates enabling policies, programmes and incentives in the manufacturing sector. The ministry liaises with other private and public sector organisations and statutory bodies on the implementation of industrial, commercial and trade policies. Sustainable growth is encouraged through an industrial policy that supports small and medium-scale businesses, with the focus on quality control and standardisation of industrial products. There is renewed emphasis on value-added linkages that will maximise the use of local materials and develop intersectoral relationships, with particular interest in the contributions of small-scale businesses. The Zambia Development Agency (ZDA) came into being at the beginning of 2007. Institutions within the ZDA assisting in the development of the manufacturing sector include the Multi-Facility Economic Zones Division, Investment Promotions and Guarantees Division, Export Promotions Division, State Enterprise Restructuring, Monitoring and Privatisation Division and the Small and Medium Enterprises Division. The ZDA is discussed in greater depth in the Trade & Investment chapter. The Zambia Bureau of Standards (ZABS) publishes national standards, operates a limited metrology laboratory and provides product certification services, offering assistance to both producers and consumers. The objectives of ZABS are to improve the competitiveness of Zambian products in local and international markets through the creation of standards in
commerce and industry, as well as through quality awareness programmes, which help to improve manufacturing processes, products and materials. MANUFACTURING INCENTIVES Manufacturing incentives are extended in order to foster a strong manufacturing sector with the intention of achieving broad-based economic growth and reducing dependence on imports. Over the past few years, government has increased its efforts to provide an enabling environment for growth, and offers manufacturers a number of incentives. Specific incentives are detailed on the Zambia Development Agency’s website: www.zda.org.zm. Of import to the manufacturing sector in Zambia’s 2010 National Budget was the abolishment of the penal bond system applicable to manufacturers of excisable goods, which should reduce the cost of doing business. In addition, customs duty on the fertiliser micronutrients of sulphur, zinc, iron, bentonite pastilles, and manganese used in the blending of fertiliser has been removed. The supply of paste and liquid polymers, which are used in the manufacture of polypropylene bags, has been exempted from VAT. Multi-Facility Economic Zones Exhibiting the best features of Free Trade Zones, Export Processing Zones and Industrial Parks, Multi-Facility Economic Zones (MFEZs) comprise specific geographic areas for both export and domestic-oriented industries with high quality physical and social infrastructure in order to attract investment in the manufacturing sector and act as engines of economic growth. Zambia’s MFEZs accommodate not only industries but a variety of other amenities such as recreation centres, shopping malls, centres of excellence for higher learning and health facilities.
Business regulations inside the MFEZs are sufficiently flexible to provide an investment environment comparable to the best in the world. The ZDA’s Multi-Facility Economic Zones Division leads the implementation of MFEZs in Zambia and is responsible for ensuring efficient government approval procedures to streamline the setting up and administration of new businesses in these areas. Speciﬁc incentives include: • Zero percent tax rate on dividends for companies operating in the priority sector and/or MFEZ under the ZDA Act for a period of five years from the year of first declaration of dividends • Zero percent on profits made by companies operating in the priority sector and/or MFEZ for a period of five years from the first year profits are made. For years six to eight, only 50 percent of the profits should be taxed and for years nine and ten, 75 percent of profits should be taxed
Some of the products produced by Parmalat - Photo Courtesy: Parmalat
SUPPLIERS TO LARGE AND SMALL-SCALE ZAMBIAN INDUSTRY
INGREDIENTS FOR FOOD AND BEVERAGE MANUFACTURERS INCLUDING:
The Beverage, Baker y, Dair y, Ice-cream, Confectionery, Sauce and Meat Sectors, Flavours, Colours, Acids, Thickeners, Cocoa Powder, Starch, Enzymes, Stabilisers, Preservatives, Sweeteners, Bread Pre-Mix, Juice Concentrate, Vitamins & Minerals, Aluminium Foil Packaging, Beverage Machinery, Dried Fruit, Orange Cells, etc.
• Zero percent import duty rate on raw materials, capital goods, machinery including trucks and specialised motor vehicles for five years for enterprises operating in the MFEZ • Deferment of VAT on machinery and equipment including trucks and specialised motor vehicles imported for investment in MFEZ and/or priority sector Presently, two MFEZs are under development; one on a 2 000-hectare plot in Lusaka and another in Chambishi on the Copperbelt, while a further zone is planned for Lusaka East. There has been substantial progress in the development of the US$ 900 million MFEZ in Chambishi, where 11 manufacturers began operating in 2009 and another five are expected to do so in 2010. Chambishi has the capacity for around 60 enterprises, with a job creation potential of 6 000 by 2014. Development of the Lusaka South MFEZ commenced in 2009, with some K 30 billion allocated to support the construction of access roads to the zone. In 2010, a further K 20 billion has been provided to complete infrastructure development here. Furthermore, construction of the Lusaka East MFEZ is expected to start in 2010. EXPORT DEVELOPMENT There is a need for value-added in Zambia’s exports, and downstream processing is seen as one of the best methods of achieving this.
TEL 211 272120 • 211 272122 • CELL 0977 770409 TEL/FAX 211 272121/22 • CELL 0977 770409 • 0974 003417 FAX 211 274460 E-mail: firstname.lastname@example.org Kafue Rd, PO Box 33614, Lusaka
The work of the Export Board of Zambia (EBZ) was taken over by the Zambia Development Agency’s Export Promotions Divisions in 2007 with the aim of expanding Zambia’s export industry through product and market development. The new division will supply the necessary support and trade information services to business enterprises about international markets,
Paper & Board and Liquid Packaging Divisions
Tel 021 1 243616 • 247525 247315 • 242753 Fax 021 1 247199
Manufacturers of litho-printed folding cartons & wet glue labels, corrugated cartons & trays, HDPE plastic bottles and conical cartons
Packaging Excellence “Proudly Nampak, Proudly Zambian”
A subsidiary of the most diversified packaging company in the world
Metal Packaging Division
Tel 021 2 655001 • 655002 655304-7 Fax 021 2 655709
Manufacturers of crown corks (bottle tops), steel drums from 60lt to 210lt, food cans and a wide range of general line cans suitable for packaging paint, oil, adhesives, etc. Full colour printing and drum spraying available
Plot 8212, Mungwi Rd Heavy Industrial Area PO Box 30413, Lusaka
Plot 415 A/O Kavu Rd Bwana Mkubwa Industrial Area PO Box 71564, Ndola
• Cotton yarn, fabric and garments • Leather and leather products • Wood and wood products, paper products and packaging • Processing of metals, including the smelting and refining of copper • Machinery, iron and steel products • Electrical and electronic products, including ICT and transport equipment • Processing and polishing of gemstones and jewellery making • Plastic, glass and rubber products • Pharmaceuticals and related products • Professional medical and scientific products and measuring devices • Chemicals and petrochemicals • Cement and explosives Processed and reﬁned foods and beverages One of the most successful subsectors in the manufacturing industry, food processing and refining covers both large and small-scale industries. The premier export earner in this sector is the sugar industry, with other important industries involved in grain milling (both maize and wheat), carbonated soft drink production, clear and opaque beer brewing and the production of cooking oil. The growing and processing of oilseed is becoming increasingly important, and the production of seed oil has been stepped up in view of the current high demand on the local market. Adding value to locally produced products, the agro-processing sector is a key linkage to primary sectors like agriculture. Crops such as tobacco, coffee, tea, soy beans and maize require large processing plants to be made into finished commodities that have more value added to them, while import substitution for edible oils such as butter, margarine, sunflower and cottonseed also offers attractive opportunities for investment. Fresh produce currently being processed includes tomatoes, beans, pineapples, sweet corn, onions and mangoes, among others. The production of tropical fruit juice through the processing of locally grown tangerines, mangoes, pineapples, oranges, papaya, guavas and bananas, is another potentially lucrative avenue. Products access regional markets, such as Zimbabwe, Democratic Republic of Congo (DRC) and South Africa, as well as European markets. Small-scale agro-processing is considered with regard to supplying the domestic market, with farmers able to increase the value of their produce by processing at the farm level. While large-scale processing facilities are usually limited to urban centres, creating employment only in those areas, small-scale industries are able to provide services and employment in rural areas. With small-scale processing, transaction costs are low as there is no need to transport crops to urban areas for processing and then back to rural areas for consumption. Additionally, since
Manufacturing of beer at Zambian Breweries - Photo Courtesy: René Hartslief
Processing of cotton - Photo Courtesy: René Hartslief
liaise with trade associations, provide training for exporters and give government input on market access offers and the challenges and opportunities these pose to Zambia. Held in Lusaka, the internationally-recognised Zambia Agricultural and Commercial Show exhibits agricultural equipment, produce and manufactured goods, while Ndola’s Zambia International Trade Fair has an impressive variety of products and draws exhibitors from the region as well as abroad. Non-Traditional Exports The significance of non-traditional exports (NTEs) to Zambia’s economy cannot be overstated. Reducing the economy’s reliance on traditional mineral exports such as raw copper and cobalt, NTEs are vital in increasing economic diversification and promoting growth. Zambia’s most important NTEs include tobacco, flowers and cotton. According to 2010 CSO International Trade Statistics, while NTE earnings dropped from US$ 958 million in 2007 to US$ 935 million in 2008 as a result of reduced global demand for commodities as well as supply constraints, earnings rose once more in 2009 to reach US$ 976 million, with a weaker Kwacha offering improving export competitiveness. NTEs accounted for 23 percent of all exports in 2009 compared with 18.3 percent in 2008 and 20.7 percent in 2007. In 2010, NTE earnings increased by 25.6 percent between January and February. However, in terms of percentage contribution to total exports earnings, NTEs made up only 16.1 and 13.9 percent in February and January 2010, respectively, due to the resurgence in traditional (metal) exports. Special incentives are offered to exporters of non-traditional products, such as reduced corporate tax of 15 percent. Exemption from duty and sales tax on imports and machinery is offered to exporters of non-traditional products with net foreign exchange earnings. PRIORITY INVESTMENTS Investment opportunities in the manufacturing sector are presently centred on the production of engineered products and agro-processing, which includes crops such as tobacco, coffee, tea, soy beans, maize, sunflower and cottonseed. Another particular area of interest is the recycling of waste and the production of steel suitable for manufacturing equipment. Opportunities are available in the following priority areas, which also attract fiscal incentives: • Agro-processing, including fertilisers, soil conditioners, pesticides and herbicides • Processing of food, beverages and forest products
small-scale processing plants are less complex, they can be easily installed, allowing processing to be done at, or near, the point where the product is required. The downstream processing of livestock produce has potential, particularly in the beef and dairy subsectors. There are also indications that fish processing could gain momentum, provided refrigeration and storage facilities are expanded, or further processes such as canning developed to add value to the fish product. The processing of grocery items such as cold meats, biscuits, tinned food, jam and cheese is also largely underexploited. Textiles and clothing Cotton is grown, ginned and spun in Zambia at industrial sites boasting state-of-the-art spinning, weaving and processing factories as well as warehouses. Products include cotton yarn and grey cloth of world-class quality, as well as garments. Cotton seed is exported to COMESA member countries such as Namibia, Malawi, Zimbabwe and the DRC as well as the SADC countries of South Africa and Botswana, while cotton is exported to the SADC region (South Africa and Lesotho) as well as the European Union (Belgium, Germany, Switzerland and the United Kingdom) and the People’s Republic of China. The textile industry in Zambia has historically been one of the principal contributors to economic growth in the manufacturing sector, producing internationally competitive products from abundant raw material. However, the competition brought on by the liberalised economy has seen the industry dwindle in size. Nevertheless, as a labour-intensive industry, the production of textiles and clothing has the potential to contribute greatly to the Zambian economy by way of employment creation and increased export earnings. Modern processing technologies allow for increased production capacities and the variety of products which are able to meet additional demand for capacity and range in the international market. Mineral processing Government incentives support new businesses that process copper rather than exporting raw copper bars. Copper wire and other copper products, such as copper plate and tubing, are an area of growth, with copper rod and cables generating a sizeable proportion of Zambia’s non-traditional export earnings. The small-scale cutting and polishing of gemstones as well as local jewellery manufacture is gaining ground since the establishment of the gemstone exchange and a number of government initiatives supporting minerals sector diversification. Chemical products Zambia’s substantial resources of agricultural minerals such as peat and limestone deposits are used to manufacture soil conditioners, while phosphates are used in the production of fertilisers. Nitrogen Chemicals of Zambia manufactures explosive grade ammonium nitrate, chemical fertilisers and industrial chemicals. Government is presently looking for a local partner from the private sector to help run the company. The recently commissioned Chambishi Smelter also has the capacity to produce fertiliser. Ndola Lime Company Limited produces limestone, quicklime and hydrated lime, with copper mines presently accounting for over 90 percent of the sales volume. With the company’s production capacity set to double by 2013, export prospects for lime products to markets such as the DRC, Angola, Malawi and Tanzania should increase.
Minerals are also used in the development of other chemical products, such as cement, adhesives and glass. Products manufactured for export include argon gas, sulphuric acid, detonators, automotive batteries, paints, cosmetics, soaps and detergents. Lafarge Cement Zambia Plc, formerly Chilanga Cement Plc, is engaged in the manufacture and sale of cement, and has two operating facilities: Chilanga Plant near Lusaka and Ndola Plant in Ndola. The company’s profit before tax increased by 103 percent to K 255 billion in 2009, driven by higher cement volumes and greater efficiency at the new Chilanga plant, which was commissioned in March 2009. Lafarge also owns 14 percent of Mbeya Cement Company Limited. Cement is also produced by Zambezi Portland Cement (ZPC), which operates a US$ 40 million cement plant in Ndola’s light industrial area and has a capacity of 330 000 tonnes of cement per year. ZPC is confident of attaining its full production capacity of 1 000 tonnes of cement per day during 2010. Engineering Supplying the copper mines with mining equipment, the manufacturing of engineering products also comprises metal items such as window frames, doors and roofing materials, as well as nuts and bolts. Light engineering products include copper wire, cable and rods, alloys and ingots, cable carbon brushes, switchgears, pipes and rail sleepers, among many others. Leather products By-products of the livestock industry include large quantities of hides and skins, which find both regional and international markets, as well as finished leather products such as bags, footwear and leather garments. While predominantly cattle hides are tanned, the industry also utilises hippopotamus and crocodile skins.
Bag-making machine - Photo Courtesy: Lamasat International
Hon. Felix C Mutati (Minister of Commerce, Trade and Industry) during a visit to the plant with the Chairman of Lamasat International, Mr Mohammed Ahmed - Photo Courtesy: Lamasat International
Forestry & Timber
Forestry products comprise mainly soft and hardwood timber harvested from natural forests and commercial plantations. Small quantities of honey and beeswax are also produced.
Forests in Zambia consist of both indigenous and exotic timber. Indigenous trees comprise Mukusi (also known as Zambian Teak), Mupapa, Muwaka, Musompa, Kayimbi, Mululu and Mukwa. Hardwood trees, such as Mukusi, Muwaka and Kayimbi, are used to make railway sleepers, while Mukwa is the main wood used in furniture and is found predominantly in Western Province. Indigenous hardwoods are also used in building and construction, as well as bee keeping, the collection of forest products, and traditional medicines and herbs. Exotic softwood trees, which are used in construction, mining and furniture-making, comprise tropical pine and gmelina. Plantations may be found near Ndola, Kalulushi, Mufulira, Choma, Samfya, Kabwe, Chisamba, Lusaka and Chipata. Most commercial plantations are located on the Copperbelt and support the mining industry. The privatisation of Zambia Forest and Forestry Industries Limited (ZAFFICO) has opened up the market for softwood, while the privatisation of Zambezi Sawmills has seen increased private sector participation in the hardwood sector. Adding value to exports, processed timber is promoted ahead of raw timber produce, with export products including plywood, furniture, carvings and curios. The Forestry sector grew by 3.6 percent in 2009 compared to 3.7 percent in 2008. Compared to the rest of the economy, the performance of the forestry sector shows a consistent but slow progression. There has been a marked increase in the production of wood and wood products as well as paper and paper products, underlining the growing importance of timber processing to Zambia’s nontraditional exports. Certification of Zambia’s forests is vital if forest products are to penetrate the lucrative markets of the European Union. Forests also play an important socioeconomic role in supporting the livelihoods of rural communities. Wood fuel is critical for domestic energy needs, particularly in rural areas. Furthermore, farmers depend on local woodlands for the gathering of foods, bushmeat, medicinal plants and household materials, often obtaining significant income from non-wood forest products such as honey, beeswax and edible caterpillars. Economic contribution At the outset of the Fifth National Development Plan, the Forestry Department, with donor support, commissioned a study to measure the direct financial contributions of the sector and its potential to reduce poverty in order to improve the basis for decision-making and raise the profile of forestry. The report concluded that estimates of forestry’s contribution are low, and that the potential of forest industries to reduce poverty depends on their capacity to provide employment which, in turn, depends on reforming forest administration and establishing a climate conducive to private sector investment. The National Forest Programme Facility is providing funds to the Forestry and Environmental Vision Consultancy (FEVCO) to conduct a more in-depth study on the sector’s contribution to the economy and to poverty reduction, in addition to examining Zambia’s forest revenue and concession systems. FEVCO is working closely with the Central Statistical Office to validate and analyse data collected. THE FOREST RESOURCE By Sub-Saharan African standards, Zambia still has a relatively large proportion of its land under forest cover. However, deforestation and forest degradation, soil erosion and fertility loss, watershed degradation and loss of biological diversity are ever-present challenges. Zambia’s forests face immense pressure from the extensive practices of shifting cultivation and slash and burn, ever-increasing demands for wood-based energy (firewood and charcoal), unsustainable commercial utilisation of indigenous tree species, overgrazing and forest fires. According to the Forestry Department of the Food and Agriculture Organisation (FAO) in their Global Forest Resources Assessment 2010, almost two-thirds of Zambia is covered
in forests. Zambia’s total land area is 74 339 000 hectares, comprising 49 468 000 hectares of forests and some 6 075 000 hectares designated ‘Other Wooded Land’. Forest cover has been steadily dropping, from an estimated 52 800 000 hectares in 1990 to 51 134 000 hectares in 2000 and 50 301 000 hectares in 2005. Out of the total forest area of 49 968 000 hectares, forest plantation is estimated to be about 60 000 hectares. Natural forests cover 49 908 000 hectares, and are designated as: reserve (6.5 percent), national parks (9.1 percent), natural monuments (0.3 percent); habitat management (5.5 percent), multipurpose (16.9 percent) and production (23.7 percent). About 23 percent of the forests (11 478 840 hectares) have a management plan. Framework for development The state owns all land, woodlands, forest stands and trees outside forests. The new National Forest Policy of 1998 and the Forest Act No. 7 of 1999 are the policy and legal instruments that guide forest administration in the country. At the policy level, Zambia has, through the Lands Act of 1995, recognised customary land as eligible for state registration and thus its citizens can get leasehold title on customary land. This prevailing land tenure system notwithstanding, permits could be granted for harvesting of forest resources by private commercial enterprises or by the local community for domestic consumption, under prescribed circumstances. The Forestry Department operates under the Ministry of Tourism, Environment and Natural Resources and is charged with the protection of Zambia’s forests. The main duties of the Forestry Department are to enforce government regulations for the protection of woodland areas and to train forestry officers. The department also educates the population on the importance of forests and the dangers of deforestation. Lack of capacity within the Forestry Department has, however, hampered its ability to control forest exploitation or to assist local communities effectively in the sustainable management of natural resources. The transformation of the department into a semi-autonomous and self-financing statutory body, the Zambia Forestry Commission, should help to improve matters. The Forest Act of 1999 gives effect to the National Forest Policy and makes legal provision for the involvement of nongovernment stakeholders, especially local forest-adjacent communities. The Act also provides for the transformation of the Forestry Department into a statutory body to be called the Zambia Forestry Commission. The parastatal Zambia Forestry and Forest Industries Corporation (ZAFFICO) was formed from the Industrial Plantations Division of the Zambia Forest Department with the help of a World Bank loan in 1982. Based heavily on plantations, ZAFFICO was established to help meet the
increasing demand for timber in Zambia and to complement supplies from indigenous forests, which were being overexploited. ZAFFICO’s duties include: • Planting new trees to prevent soil erosion • Carrying out research on how best to develop Zambia’s forests • Educating the population on the importance of forests • Replacing forests that have been destroyed by deforestation Plans and programmes The Zambia Forestry Action Programme (ZFAP) is a major forestry initiative comprising all of Zambia’s forestry-related sectors. Supported by the FAO of the United Nations and others donors, ZFAP was launched in 1995 in response to the FAO Tropical Forestry Action Plan of 1987 (UNCSD 2002). The ZFAP comprises a number of sub-programmes: • Indigenous Forest Management and Biodiversity Conservation Programme (IFMBP)
Pine tree - Photo Courtesy: René Hartslief
ZAMBIA FORESTRY AND FOREST INDUSTRIES CORPORATION LIMITED
HEAD OFFICE P.O. Box 71566, Ndola,Tel: 0212 616030/671026, Fax: 0212 680742 • CHATI PLANTATION P.O. Box 21871, Kitwe
ICHIMPE PLANTATION P.O. Box 29060, Kitwe, Cell: 0966 924658 • LAMBA PLANTATION P.O. Box 21871, Kitwe
BACKGROUND The Government embarked on large scale exotic forest plantations in 1962 after it had become apparent that the timber yield from natural forests was declining. The decline of timber yields from natural forests was attributed to repeated exploitation of accessible forests, low yield per unit area, increasing logging distances and long gestation periods. These factors and the rising copper production in the mines made it increasingly difficult to meet the high domestic wood requirements particularly for the mining and construction industries. This increasing wood deficit prompted the Government to initiate the establishment of fast growing exotic tree species. The main objective of establishing exotic plantations was to supplement the diminishing indigenous forest resources in sustainably meeting the domestic wood demand. This large scale plantation programme was implemented by the Industrial Plantations Divisions (IPD), a unit created in 1968 under the Forestry Department. The Industrial Plantations Division was in 1982 commercialized and incorporated into a public company called Zambia Forestry and Forest Industries Corporation (ZAFFICO) Limited. The programme was financed through an International Development Association (IDA) credit facility in order to establish a projected 100,000 hectares of forest plantations by 1990. On its inception, ZAFFICO assumed liabilities and assets of IPD which included 40,000 hectares of Pine, 10,000 hectares of Eucalyptus and the processing units at Kafubu, Kalibu and Dola Hill. All processing were privatized by 2002 and the planted area still remains at 50,000 hectares of which about 2,000 hectares were leased to private firms during the privatization of the processing units. MAIN ACHIEVEMENTS The Corporation has emerged as major supplier of national wood requirements and attained about 50% of total domestic industrial wood consumption by 1997. The increased wood consumption from the plantations has helped to reduce pressure on indigenous timber for construction and mining industries. ZAFFICO is presently the major supplier of Saw Logs for the Sawmilling Firms, all untreated poles and its activities have created direct and indirect employment in many wood based industries and the transport sector. The forest
plantations are able to meet the current annual round wood demand of about 380,000m3 for the various wood processing firms which has significantly reduced the need for imported wood products. The Corporation has also a well developed infrastructure such as roads, buildings and water supply network for both domestic and industrial use at various stations located in Ndola, Kalulushi, and Lufwanyama Districts. ZAFFICO has continued to manage all the commercial plantations on the Copperbelt with estimated wood volume of over 12 million cubic metres and an annual allowable cut of approximately 500,000m3. It continues to assist various communities in various forms in order to supplement Government efforts in poverty alleviation, to attain the Millenium Development Goals (MDGs) and to realize the vision 2030. MAJOR CHALLENGES The main constraint has been the lack of expansion of the existing plantations and inadequate capacity to effectively manage the planted areas due to inadequate resources. This difficulty has further been compounded by the rapid rise in wood demand in the past five years which threatens to exceed the supply. There are also serious concerns
Pine seedlings at Mishishi (Ndola)
Pine seedlings at Mishishi (Ndola)
Thinning a plantation in order for others to grow - “Management effectively practice”
on the high levels of encroachment into the surrounding forest reserves which have led to increased pressure and illegal activities in the forest plantations. These unplanned settlements have made the expansion of plantations on the copperbelt difficult.
Although the current wood supply may be adequate to meet domestic needs, the rising global and regional timber demand has led to excessive pressure on the existing plantations wood supply in Zambia. The current situation if not properly managed could lead to depletion of forest plantation resources within the next 5 - 10 years. There is need to urgently address these challenges through a long term strategy in order to promote sustainable management and utilization of forest plantations. There are several measures that may be considered that include:i) There is need for massive investment in order to recapitalize the Corporation and to build capacity for the establishment, tending maintenance and protection of the forest plantations. ii) There is need to promote the participation of the private sector in plantation management through Government incentives and tax rebate for firms undertaking large scale reafforestation. iii) The Government through cooperating partners need to assist in financing the establishment and expansion of forest plantations in order to attain a sustainable wood supply. iv) The current annual replanted areas of 500 hectares need to gradually increase to over 3,00 hectare per year in the next 10 years in order to accommodate future wood requirements and economic developments. v) There is need to promote the private-public partnerships in the management of forest plantations. vi) There is need to encourage farm woodlots and out grower schemes in order to supplement the plantation forest resources.
FUTURE EXPANSION PLANS
The presently planted area of 48,000 hectares may not meet the rising wood demand in the next 5 years. Therefore, the existing forest plantations needs to be increased to over 80,000 hectares in the next 10 years. Such an expansion programme may be difficult to implement on the Copperbelt due to high levels of encroachment. However, the plantation expansion may be feasible in the North Western Province which could greatly contribute to meeting the wood requirements for the new mines in the area.
To ensure sustainable supply of quality wood products to meet local and export demand through effective management of exotic plantations and the inherent biodiversity for the benefit of present and future generation by promoting active participation of all stakeholders.
The forest plantations will be efficiently and sustainably managed to supply quality wood products for local and export markets.
A new office construction at Ichempe (Kitwe)
Pine seedlings at Ichempe (Kitwe)
Chati nursery - pine seedlings
Pruned eucalyptus - young stand at Chati
New office building at Lamba
Today, Zambia’s plantations consist almost entirely of pine (40 000 hectares) and eucalyptus (10 000 hectares) with a total standing volume of more than 11.5 million cubic metres. Their rotations vary from 15 to 25 years. Pine is utilised for the construction industry and for furniture manufacture, and gum poles are processed for the mining industry. Zambia Forest and Forestry Industries Limited (ZAFFICO) is the largest timber producer in the country, managing a total area of 48 000 hectares of exotic plantations. Some 1 092.3 and 873.3 hectares is under lease management to Ndola Pine Plantation Ltd and Copperbelt Forestry Company Ltd respectively. ZAFFICO produces 400 000 cubic metres of round wood timber every year. Some of this timber is sold to the Copperbelt Forestry Company for use in the manufacturing of electricity poles, which are supplied to ZESCO. Booming construction in Zambia has pushed up the demand for timber in recent years, and ZAFFICO is undertaking tree planting programmes to enable it to meet the growing demand of the local and export timber markets. During 2009, it planted 1 290 hectares of trees; a figure which is set to expand to 2 000 hectares in 2010. ZAFFICO has embarked on a programme to expand its plantations from 50 000 hectares to 85 000 hectares by 2014. At present, it is focusing on opening up new plantations in the North-Western, Northern and Central provinces to meet the high demand for timber. In order to increase output, ZAFFICO is also considering entering into joint ventures with the private sector to meet the high demand of timber, and has approached the Zambia Development Agency in this regard. Processing plants Under Zambia’s privatisation initiative, ZAFFICO had sold off all its processing plants by February 2002 and is currently only involved in the management of plantations, with the harvesting of timber in its forests contracted out to private harvesting contractors. Kafubu processing unit, a gum pole treatment plant, sawmilling and joinery operation based at Kalulushi some 40 kilometres from Kitwe, was sold by ZAFFICO to the Copperbelt Forestry Company (CFC). Kafubu has the capacity to handle 70 percent of Zambia’s timber production and is located in an area in which 80 percent of the country’s eucalyptus is grown. ZAFFICO’s Kalibu mill and wood processing operation 10 kilometres east of Kitwe was also sold to CFC. Kalibu sawmill has the capacity to process 20 percent of the country’s timber, and draws its raw material from the nearby Ndola pine and eucalyptus plantation. CFC operates two main production lines comprising gum pole treatment and sawmilling, with the latter including the joinery division which manufactures furniture. Another ZAFFICO processing unit, the Dola Hill Sawmill, which has the capacity to process 10 percent of Zambia’s total timber production, was sold to Wood Processing Industries (WPI) Limited. A leading manufacturing company in the forestry and wood products sector, WPI also owns FSC certified sustainable pine plantations and is an important supplier to the local building and furniture industries as well as being a leading nontraditional export earner. Situated in Western Province, the former parastatal Zambezi Sawmills, consisting of sawmill plants in Mulobezi and Sesheke, has been sold and renamed Zambezi Sawmills 2005 Ltd. The resuscitation of the timber industry in the area is of strategic importance to the hardwood sector, considering the presence of commercially viable tree species such as Zambezi Teak.
Eucalyptus trees - Photo Courtesy: René Hartslief
• Trees and Forest Development Programme (TFDP) • Forest Industry Development Programme (FIDP) • Woodfuel Energy Development Programme (WEDP) • Forestry Education and Training Programme (FETP) • Forestry Research and Extension Programme (FREP) • Planning, Monitoring and Evaluation Programme (PMEP) Under ZFAP, the Provincial Forestry Action Programme (PFAP) focuses on promoting community participation in sustainable forestry management, and building capacities for forestry planning at provincial and district levels. The Forestry Department is the lead institution in Zambia’s Integrated Land Use Assessment Project (2005-2008), which was carried out in collaboration with the Ministry of Agriculture and Cooperatives, Ministry of Lands, Central Statistics Office, Zambia Wildlife Authority, University of Zambia, Copperbelt University, Zambia Forestry College and local authorities. The project is expected to: • Improve institutional capacity to plan and implement land use assessments, monitor resources, manage the information and enhance natural resource management • Define a national land use assessment methodology, taking into account criteria and indicators for sustainable natural resource management and the information needs for national and international reporting • Establish a national database on land use resources and integrate it into management information systems Government’s interest concerning land use is to put in place an integrated land use assessment system that will improve the management of land resources in order to contribute to poverty alleviation. Integrated land use assessments will also bring and enhance cross sectoral coordination and collaboration between land use management institutions in the country by bringing all stakeholders together. THE TIMBER INDUSTRY Commercial timber exploitation is centred in the Copperbelt Province and in the southwest of the country. The timber industry has been in a state of transition over the past several years, with government trying to reduce its role by privatising some of the state-owned mills. Past challenges, such as illegal utilisation of forest resources and inadequate supervision of concession holders, are being addressed through the Forest Policy of 1998. Plantation development Forest plantations date back to 1963, when the Forestry Department started a pilot project to plant exotic species. In 1967 this was expanded to 55 000 hectares of plantations under a World Bank assisted project. In addition, a further 10 000 hectares was developed in other provinces to meet local demand.
Enabling organisations The Lumber Millers’ Association of Zambia (LUMAZ) represent business specialising in the production of sawn timber and manufactured products, utilising non-threatened species such as African (Rhodesian) Rosewood, Teak and Mahogany. Although some members have their own concessions, logs are also outsourced to concession owners operating under Forestry Department licenses. All materials purchased by LUMAZ members are logged and managed sustainably in line with the Forest Act of 1999. Under this Act timber is harvested to a management plan approved by the Forestry Department and all logs are inspected, certified and tracked by forestry officers in the respective concession areas. Having already received EU assistance to develop their business to a level where they can process timber to internationally acceptable standards, LUMAZ is looking to establish a joint initiative with other companies or organisations which would lead to the implementation of verifiable forest certification and chain of custody. Other organisations involved in the industry include the Timber Producers’ Association of Zambia (TPAZ). The association has 13 members who export timber to South Africa. Currently alternative markets are being explored in the Middle and Far East. Future growth in the industry Government is seeking private sector investment to develop an expanded plantation-based timber industry, with promising opportunities for increasing timber exports to South Africa, currently Zambia’s main export market for its timber. As such, the sale of up to 20 000 hectares of ZAFFICO plantations has been proposed – a move that would also generate revenue for the plantation expansion and recapitalisation programme. Furthermore, a Forest Industry Credit Facility targeted at rural populations provides US $500 000 each year for plantation development. There are also a number of investment opportunities in wood processing. Currently most timber is exported in its raw form, which could otherwise be processed into finished consumer and industrial wood products. While government is currently targeting secondary investment in the timber industry, there is also an opportunity for processors to be involved in the harvesting of timber. NON-WOOD FOREST PRODUCTS Non-wood forest products (NWFP) are biological products other than wood, gathered from a range of forest environments, wild or plantation, including agro-forestry schemes and other wooded land. NWFPs comprise food and food additives (edible nuts, mushrooms, fruits, herbs, spices and condiments, aromatic plants, game), fibres (used for construction, furniture, clothing or utensils), resins, gums, and plant and animal products. The majority of Zambians depend on NWFPs, mainly for selfconsumption, although the sale of bee products, mushrooms, baskets and caterpillars also provides much needed income for rural communities. Trade in honey, beeswax and mushrooms, which find markets both locally and internationally, is the most lucrative. Government supports the sustainable management of indigenous forests, especially for increased production of NonTraditional Forest Products such as honey. An important agro-food system, the honey subsector affects the livelihoods of more than 12 000 beekeeper households (100 000 people)
most of whom live in the North-Western Province. Honey constitutes 50 percent of these farmers’ incomes and up to 70 percent of their cash income. The Beekeepers’ Association monitors the industry, institutes quality control measures and negotiates with honey buyers on behalf of its members. Of the honey exported from Zambia, 95 percent is certified organic – Zambia currently exports about 700 metric tonnes of honey and 10 metric tonnes of beeswax each year, most of which is sold in the European Union (EU). Zambia is a surplus producer of honey and could double both its exports and the number of beekeepers. However, infrastructural and other trade-related and supply chain issues must be addressed if this is to be achieved. The processing of forest products has been identiﬁed as a priority sector for investment and is therefore entitled to ﬁscal incentives. The government honey factory in Kabompo, which was privatised in 1987 as North Western Bee Products Ltd (NWBP), is a certified alternative trade organisation specialising in organic forest bee products. Its bottled honey is widely available in the EU and USA. A modern honey processing plant under construction in Ndola will also be able to process mayonnaise and other honey by-products. There is also a robust trade in traditional medicine, with over 78 plant species of medicinal value. However, the over-exploitation of medicinal plants through the removal of bark or roots has seen the depletion of some of these species, while supplies of herbal medicine are also affected by timber logging. There is a good market for colourants taken from specific tree species, and tannins are used both at the local and national levels. NWFPs such as bamboo are widely used in traditional crafts such as basketry, which is an important small-scale industry, with over half of forest-based enterprises manufacturing baskets, mats or hats. Basketry and mat making is carried out on a semi-commercial scale in western Zambia. Reeds are also widely used for basketry, mat making and thatching in the vicinity of rivers. Fibres are used for rope and/or string making, with the end product employed in hut construction, tying of bundles and for basketry in some instances. Rattan products, where available, are also used for thatching, mat-making and basketry.
Pine needles and cones - Photo Courtesy: René Hartslief
Zambia’s national parks and game management areas are home to a great diversity of wildlife and flora, with scenic attractions including part of Africa’s Great Rift Valley as well as an abundance of lakes and rivers, and the world-renowned Victoria Falls.
In addition to a spectacular variety of pristine and unspoiled wilderness areas, Zambia has much to offer travellers. Assets such as a stable political backdrop, mild climate, fascinating cultural and heritage sites and plethora of adventure and leisure tourism prospects add to the country’s appeal as a tourism destination. Zambia has seen significant growth in its tourism industry over the past decade. This has been backed up by investments in tourism facilities, such as hotels, lodges and safari operations, road rehabilitation projects, the upgrading of the country’s four international airports to international standards, expanded flight schedules and intensified marketing initiatives. The Zambia Development Agency provides a one-stop-shop for investors, which has streamlined licensing procedures. The years of positive growth notwithstanding, tourism has been one of the sectors hardest hit by the global credit crunch. With most visitor arrivals originating from South Africa, Europe and the USA, the number of international tourists visiting Zambia declined sharply in the first half of the year against figures for same period in 2008. As a result, growth in the tourism sector shrank from 5 percent in 2008 to -14.5 percent in 2009. However, tourism is expected to pick up with the 2010 FIFA World Cup in South Africa, and growth is projected to rise to 15 percent in 2010 compared to a contraction of approximately the same magnitude in 2009. According to the Zambian Tourism Board, the country intends to increase its tourism arrivals from below one million to 3.5 million in the next two to three years. Currently, out of a world total of 900 million tourists, only 46 million visit Southern Africa. The main focus of the tourism sector continues to be on the construction of vital infrastructure in tourism areas during 2010 and in the medium-term. TOURISM DEVELOPMENT The Ministry of Tourism, Environment and Natural Resources has created a tourism policy based on the goal of sustainable growth and development, with the Tourism Development Master Plan an integral part of government initiatives. In 2007, the Tourism and Hospitality Act was passed to provide for the development of the tourism industry through enhanced tourism planning, management and coordination. In accordance with Section 62 of the Act, government is in the process of establishing the Tourism Development Fund for purposes of product development, marketing, training and research, as well as to support participating local councils in developing tourism related infrastructure. Government is also introducing legislation for a tourism levy, which will become a major source of financing for the sector. In the 2010 budget, K 83.4 billion was put towards the ‘Support to Economic Expansion and Diversification’ project aimed at fostering growth in the tourism sector. Strengthening infrastructure To enhance Zambia’s already numerous attractions, the spotlight has been on the rehabilitation of infrastructure such as roads, airports and communications facilities. Government is also facilitating the entry of tourists into Zambia through simplifying border formalities. New areas continue to be opened up wherever there is potential, in particular the Northern Tourism Circuit, covering tourist attractions in Northern and Luapula provinces. Other key interventions include the recapitalisation of the Zambia Wildlife Authority (ZAWA) and enhancement of park management in order to increase animal species and reduce poaching, as well as improving park facilities and infrastructure – especially in the Kafue and Lower Zambezi national parks. A sum of K 95.0 billion has been set aside for the development of the Northern Tourism Circuit during 2010. Of this amount, K 20.0 billion is being used for the continued construction of
international travel trade industry to meet, network, negotiate and conduct business. It also complements efforts by the Ministry of Tourism, Environment and Natural Resources and ZTB to raise the country’s profile internationally. INSTITUTIONAL FRAMEWORK Government regulates and monitors the tourism industry through the Zambia National Tourist Board (ZNTB), an autonomous statutory body that implements all government policies on tourism. The board was created for the purpose of promoting Zambia as an attractive tourist destination and also facilitating and coordinating development activities at the national level. Representing the various tourism organisations that are part of the industry, the Tourism Council of Zambia (TCZ) has the goal of facilitating growth through the creation of an enabling environment. The council is involved in creating the tourism policy; identifying strategic issues influencing tourism and developing proposals to address these issues; providing a single national voice for the industry in addressing government and the general public; and collaborating with government to improve quality and service standards in the industry. The Zambia Wildlife Authority (ZAWA) acts to conserve the country’s precious wildlife resource through promoting the appreciation and sustainable use of wildlife resources. This is achieved by facilitating the active participation of local communities in the management of the wildlife estate, promotion and development of tourism, ensuring that the economic value of wildlife resources is recognised by public and private stakeholders and educating the general public. The National Heritage Conservation Commission (NHCC), which assists the ZNTB in promoting Zambia’s national identity and protecting its diversity, is charged with looking after objects and relics of archaeological, aesthetic or scientific interest as well as managing and maintaining a wide range of heritage sites and structures. These include rock art sites, traditional shrines and burial sites, as well as over 600 sites of architectural or historic importance, comprising buildings, monuments and ruins, and more than 60 recorded engineering heritage sites. TOURISM ASSETS Tourism resources cover spectacular scenery, one of the largest concentrations of game in Africa, a colourful cultural heritage and major attractions such as Lake Kariba and the Victoria Falls. Zambia is also acknowledged as one of the safest countries in the world to visit, with the friendly Zambian people not the least of its attractions. The following assets make up Zambia’s tourism product: • Climate & pristine environment – Zambia’s beautiful
Carmite Bee-eater, Lower Zambezi - Photo Courtesy: ZNTB
People having sundowners in the water - Photo Courtesy: ZNTB
the road from Mbala to Kasaba Bay, K 70.0 billion comes from the Rural Electrification Fund for the electrification of the area, and K 5.0 billion is for the reconstruction of the Kasaba Bay Airport. A further provision of K 1.0 billion has been made for the restocking of Nsumbu National Park. Once these infrastructural developments are completed, government hopes to attract more than 12 world-class hotels to the area. Road infrastructure programmes focus on rehabilitating rural and feeder roads so as to facilitate access to tourist attractions and national parks, as well as to link the national transport network with regional transport corridors. In view of the fact that roads in some national parks become impassable during the rainy season, a rehabilitation programme is underway. For 2010, K 22.4 billion was allocated towards the construction of access roads to and within national parks, including the continued development of the Kafue National Park spinal road network. One of the most significant infrastructural programmes has been the upgrading of tourism facilities and general infrastructure in Livingstone, the country’s tourism capital. A variety of new construction ventures have seen the development of quality accommodation, entertainment and services, including the Zambezi Waterfront, luxurious hotels and guest houses, casinos and shopping complexes. In 2009, K 99 billion was put towards the rehabilitation of the Zimbabwe-Livingstone road. Work has commenced on the second phase of this major project, with a further K 194.5 billion allocated in 2010. The completion of this project will not only improve access for tourists, but also enhance the smooth movement of goods across Zambia’s southern borders. Tourism marketing and training Development programmes aim to improve the Zambia brand, both locally and internationally, as well as improve standards in hospitality, accommodation and related service industries. The 2010 national budget makes provision for tourism marketing activities in the amount of K 6.4 billion. The Tourism Council of Zambia (TCZ) and Zambia Tourism Board (ZNTB) have partnered with the United Kingdom based Cornell University School of Hotel Administration in order to re-brand and market Zambia. This is expected to raise the country’s profile among traditional and emerging tourism and hospitality markets across the world, putting Zambia on the map as a preferred destination in Africa. The project is to promote domestic, regional and international tourism, conduct valuable market research on key tourism markets and to obtain information on the latest market trends. Held annually in Lusaka, the Zambia International Travel Show (ZITS) is a business-to-business exhibition that enables the
temperate climate, despite its location in the tropical zone, makes it pleasant to visit all year round. The unspoilt quality of the country’s many attractions is a major advantage, with a huge number and variety of pristine wilderness environments. • Natural scenic attractions – The country’s beautiful lakes, waterfalls, rivers and mountains are without equal. First and foremost is the famous Victoria Falls, which is one of the seven natural wonders of the world as well as being a world heritage site. Kalambo Falls to the north is the second highest uninterrupted waterfall on the continent. Kariba Dam is the world’s second largest man-made lake and Lake Tanganyika the second deepest natural lake. The vast, grassy plains of the Zambezi and Luangwa valleys form part of Africa’s Great Rift Valley. • Game & birdlife – Zambia’s wildlife is one of its foremost tourist attractions, with game such as lion, elephant, buffalo, cheetah, zebra and giraffe as well as many rare species. Birdlife is also superb. • History, crafts & culture – There are sites of geological and ecological importance, such as a fossil forest and botanical reserves, and several areas have been declared national monuments as well as archaeological heritage sites. • Adventure tourism – Lakes, mountains and rivers provide opportunities for adventure tourism, such as white-water rafting, canoeing, abseiling, bungi jumping, climbing, horse riding and even elephant-back safaris. INVESTMENT OPPORTUNITIES The tourism sector is already one of the largest foreign exchange earners in Zambia, despite the fact that only a small proportion of the country’s tourism assets have been exploited so far. The government has identified tourism as one of the priority sectors for investment because it is a labour-intensive industry and has numerous linkages to other sectors of the economy. Situated in close proximity to Victoria Falls, Livingstone is the tourist capital of Zambia and serves as a growth point for development activities. Sites with attractive natural settings are also readily available in national parks and game management areas, with the Kafue National Park the largest potential tourism resource in the country. Other areas earmarked for development include Lower Zambezi (Siavonga, Luangwa district), Lusaka and surrounds (for conference tourism and sports) and South and North Luangwa national parks and surrounding game management areas. Opportunities exist in: • Transport services and tours, including luxury coaches, air charters and car hire operations. Organised tours to a variety of attractions by car, plane, horseback or boat. Game fishing, photographic or hunting safaris in wildlife areas and national parks. • The provision of high quality accommodation for international
Luxury transport - The Royal Livingstone Express
Rafting the Zambezi rapids - Photo Courtesy: ZNTB
visitors, conference facilities, and budget lodges for local tourists, with attractive sites in natural settings readily available. • Developing cultural heritage sites, including museums, theme parks and art galleries. • Adventure tourism such as climbing, bungi jumping and hanggliding. • Water sports activities on Zambia’s many lakes and rivers – sailing, waterskiing, canoeing, white water rafting, boat charter services and cruises. • Other sporting activities, such as horse riding, golf and tennis, are well suited to local conditions, with the compilation of sports-based holiday packages a possibility. PARKS, GAME RESERVES & TOURIST ATTRACTIONS Zambia has some of the biggest game reserves in the world and one of the richest wildlife resources on the continent. Most tourism is concentrated in the more developed parks, which comprise Kafue, Lochinvar, South Luangwa, Lower Zambezi, North Luangwa, Kasanka, Mosi-oa-tunya and Sumbu, with the other parks being more remote and undeveloped. All the main national parks are accessible by car and plane, and park gates are generally open from 06:00 to 18:00 daily. Day or night safaris with experienced guides who have an extensive knowledge of the flora and fauna are a popular way of seeing the magnificent wildlife. While game viewing is most commonly undertaken from comfortable, open-topped vehicles, Zambia is also renowned for its walking safaris, not to mention the novelty of a horseback or even elephant-back safari, or by canoe or motorised boat. Professional hunting companies offer safaris, and flights in light aircraft to the various camps provide splendid photographic opportunities. Zambia’s wildlife encompasses excellent bird watching as well, with over 740 different species. The bigger national parks (South Luangwa, Lower Zambezi and Kafue) offer some of the best bird watching opportunities. The best time for viewing wildlife is during the dry season, which lasts from May to October, as there is less vegetation and the animals tend to gather around water holes. The rainy season sees a dramatic increase in the bird population, especially during November and December, as well as spectacular changes to the landscape. While all the major national parks may be reached by car or plane, some are inaccessible to motor vehicles during the wet months. The Victoria Falls One of the most spectacular waterfalls in the world and the highest in Africa, the Victoria Falls are almost 2 kilometres across and over 100 metres high. During the rainy season over five million litres of water surge over the falls every
River, which traverses the escarpment in a series of waterfalls. The park offers a genuine wilderness experience, with access restricted to the few companies permitted to conduct walking safaris. Located between Lusaka and Livingstone, Kafue National Park is one of the closest and most convenient of Zambia’s parks for visitors to reach, yet still remains a wild and remote destination. One of the five largest national parks in the world and the largest in southern Africa, Kafue’s vast grassland plains and unique ecosystems cover an area of some 22 500 square kilometres, which stretches from the untouched Busanga Plains and wetlands in the north to the Itezhi Tezhi Dam in the south, traversed by the Kafue River which flows through the heart of the park. Lochinvar National Park to the south of Kafue is a birder’s paradise, with some 428 varieties of birds, as well as being the location of Ngwisho Hot Springs, one of the oldest archaeological sites in Africa. On the other side of the Kafue Flats is Blue Lagoon National Park a pristine wilderness area which, along with Lochinvar, boasts the largest concentrations of lechwe in Zambia. Mosi-oa-tunya National Park stretches from the Victoria Falls up the Zambezi River for about 12 kilometres, with wildlife that includes antelope, zebra, wildebeest, giraffe, warthog, elephant and the only white rhinos in Zambia. There are game drives and horseback trails, as well as a number of opportunities for adventure activities, from white-water rafting on the Zambezi to abseiling or gorge swinging. Elephant-back safaris with the tame elephants in the park offer some of the best game viewing around.
Abundant wildlife - Photo Courtesy: René Hartslief
Lying across from the famous Mana Pools Reserve in Zimbabwe, the Lower Zambezi National Park is an untouched
second, and the clouds of spray can be made out more than 30 kilometres away. Seen by the missionary and explorer Dr David Livingstone for the first time on 16 November 1855, and named ‘Victoria’ after the English queen, the falls had already been known by local inhabitants as ‘Mosi-oa-tunya’ (the smoke that thunders) for centuries. The falls are approximately 11 kilometres southwest of Livingstone, Zambia’s tourism capital, and can be reached by bus or car. While shared with neighbouring Zimbabwe, a large portion of the Victoria Falls is on the Zambian side, so visitors enjoy a different view of the falls as well as being able to get closer to the waterfall on walkways or by traversing a steep descent to the fall’s base. National parks and game reserves Part of the Great Rift Valley, South Luangwa National Park is about 250 kilometres northeast of Lusaka and just 20 kilometres from Mfuwe International Airport. Bordered by the Muchinga escarpment to the west and the mighty Luangwa River to the east, this premier park offers exception scenery and an immense variety of wildlife. Elephant and other mammals such as leopard, buffalo, zebra, impala and lion gather around the Luangwa River – which is itself home to some of the largest concentrations of Nile crocodiles on the continent. Cookson’s wildebeest and Thornicroft’s giraffe are indigenous to the park, and there are over 400 species of birds to be found here. The remote yet game-rich North Luangwa National Park is situated upstream of the South Luangwa National Park and to the west of the Luangwa River. In addition to the wildlife species found in South Luangwa, the park also contains hartebeest, reedbuck and statuesque eland, with birds such as the giant owl, crested crowned crane and bee-eater. The beautiful woodlands are criss-crossed with rivers, including the Mwaleshi
wilderness dominated by the presence of the great Zambezi River, which acts as a magnet for wildlife. Game viewing can be done on a canoe safari or game drives and walks, with anything from elephant and hippo to lion and leopard to be seen. Fishing and bird watching are also popular. Situated on the south-western fringe of the Lake Bangweulu basin amid papyrus swamps, riverine forests and tranquil lagoons, Kasanka National Park is one of Zambia’s smallest yet most attractive parks. This wetland harbours unusual birds, such as the rare shoebill stork, and mammals like sable, hippo, elephant, leopard, the blue monkey and buck populate the forested areas. The 5 000-kilometre square Sioma Ngwezi National Park is unfenced, allowing free movement of animals between the park, the much larger surrounding game management area and the Zambezi River. More than 3 000 elephants migrate here from the bordering national parks of Botswana and Namibia, and there are also a number of rare species, such as roan and sable antelope, cheetah and wild dog. Guided safaris are recommended. Liuwa Plains National Park situated in the remote western region is the location for one of the great spectacles of the African continent – the migration of vast herds of blue wildebeest. Liuwa is also home to black-maned lion and wild dog, and has abundant birdlife, including secretary birds, crowned and wattled cranes, fish, tawny and Marshall eagles, woodland kingfishers and white-bellied bustards. Hugging the shoreline of Lake Tanganyika, Sumbu National Park provides a haven for hippo, crocodile, flamingo and other water birds. A motorboat on the lake is a great vantage point from which to watch the variety of birdlife and game, which includes buffalo, lion, antelope, zebra and leopard. Nyika National Park situated on the Malawian border at the eastern-most tip of Zambia is an extension of the national park on the Malawian side. This beautiful montane highland area with its grasslands, valleys and masses of wild flowers consists of a plateau some 2 000 metres above sea level, with spectacular views. Game viewing includes a number of buck species – in particular the rare red duiker – as well as zebra, warthog and leopard. The Chisanga Falls are a short hike away. The famed Chimfunshi Wildlife Orphanage 60 kilometres west of Chingola was founded in 1983 by David and Sheila Siddle and is the largest chimpanzee sanctuary and rehabilitation centre in the world. Home to over 100 orphaned chimpanzees, many of whom were confiscated from poachers or rescued from dilapidated zoos and circuses, this non-profit refuge also cares for a host of other sick, wounded or unwanted animals. Transfrontier conservation areas Currently under development, the Malawi/Zambia transfrontier
conservation area (TFCA) includes the Nyika TFCA, which is centred on a high, undulating montane grassland plateau rising over 2 000 metres above the bushveld and wetlands of the Vwaza Marsh. A joint law-enforcement project operating as a single unit across international borders to combat poaching has been deployed with resounding success in the Nyika TFCA since 2005. Thanks to this, a wildlife restocking programme for Nyika National Park and Vwaza Marsh Wildlife Reserve was begun in 2007. The Kavango-Zambezi (KAZA) TFCA is situated in the Okavango and Zambezi river basins where the borders of Angola, Botswana, Namibia, Zambia and Zimbabwe converge. It is set to become the world’s biggest conservation area and will eventually span an area of approximately 287 132 square kilometres, taking in the Caprivi Strip, Chobe National Park, the Okavango Delta (the largest Ramsar site in the world) and the Victoria Falls. Kavango-Zambezi promises to be southern Africa’s premier tourist destination, with the largest contiguous population of African elephant (approximately 250 000) on the continent. The Lower Zambezi-Mana Pools TFCA between Zambia and Zimbabwe lies in the Zambezi Valley, which has for millennia been used by wildlife as a thoroughfare between the escarpment and the Zambezi River. Mana Pools is a World Heritage Site based on its wildness and beauty, wide range of large mammals, over 350 bird species and aquatic wildlife, with hippopotamus, crocodile and many different types of aquatic birds also associated with the pools. The Liuwa Plain-Mussuma TFCA between Angola and Zambia protects the third largest migratory population of blue wildebeest in Africa. Every year massive herds of blue wildebeest migrate from Zambia to Angola and back again, traversing the plains in their thousands and very often mingling with zebra along the way.
Tourists enjoying a local dish at Kawaza - Photo Courtesyl ZNTB
Further economic growth and private sector investment is contingent upon the creation of reliable and affordable utilities as well as modern and efficient communications and transport systems.
The provision of infrastructure remains one of government’s top priorities, with the focus on building and rehabilitating roads, bridges, electricity generation projects, schools and hospitals, among others. A significant constraint to growth in the economy has been the slow pace of development in large infrastructure projects – partly due to constrained public finances and limited participation by the private sector. For this reason, the PublicPrivate Partnership (PPP) Policy was launched in 2008, and a corresponding legal framework to support its implementation in 2009. Presently, proposals for PPPs in developing roads, bridges and energy projects are being reviewed and initiated. CONSTRUCTION Zambia’s construction industry is regulated by the National Council for Construction (NCC), which was established with the key objective of developing local construction capacity in the country. The NCC is responsible for registering, upgrading and downgrading consultants and contractors, in addition to monitoring the industry. The construction sector has a major influence on Zambia’s development, as the country’s economic activity depends to a large extent on the state of infrastructure, particularly the road network. This is especially critical for Zambia as a landlocked country, and trade linkages with the Southern African Development Community (SADC) and Common Market for Eastern and Southern Africa (COMESA) regional blocs depend on an effective regional and internal road network. Despite a slight drop in 2008 on account of shortages in the supply of cement and other materials, the sector has performed well over the past few years. In the main, construction activities have been driven by commercial and residential buildings and the development and construction of new mines. Although the industry was expected to perform somewhat below par in 2009 in the wake of the global financial crisis, construction activities in the country remained fairly robust, with growth rising to 15.5 percent compared to 8.7 percent in 2008. This is as a result of increased public and commercial infrastructure investments, and continued high demand for housing. The expanded production of cement by local manufacturers has also aided growth in the sector. Current construction activities are focused on the rehabilitation of roads across the country, in particular the North-Western Province, the development of a new tourism zone in Livingstone, and infrastructure to support the establishment of Multi-Facility Economic Zones. Investments in social infrastructure comprise the construction and rehabilitation of health centres and district hospitals, as well as classrooms, trades training institutes and universities. Property development Favourable socioeconomic factors and contemporary developments have boosted the commercial and residential property market in recent years, with a large percentage of buyers hailing from South Africa. The development of the financial sector, particularly with respect to home loans, along with increasing incomes of Zambian over the past few years, has also made property ownership more affordable to many citizens. The Heart of Africa is Zambia’s first ever lifestyle estate as well as the country’s largest residential project to date, and comprises approximately 850 homes along with a commercial and retail node, a five-star hotel, restaurants, an 18-hole Matkovich-designed golf course, a country club, dams and communal parks covering 70 hectares. Another project, the US$ 200 million Jewel of Lusaka at Levy Junction in the heart of Lusaka, is being developed by Liberty Properties and the Zambia National Pension Scheme Authority (NAPSA), and will include retail, office, hotel and residential nodes. In addition, Intermarket Securities Limited (ISL) is to develop a three-star hotel, business park and other infrastructure such
skilled labour in the construction-related areas of engineering, architecture and surveying, and the promotion of local building materials and technology. However, the existing housing deficit is too large for the state to deal with alone, and there is a need to integrate government and private sector efforts. The NHA is presently restructuring its operations to increase access to affordable accommodation for Zambians, with new services and products to be launched before the end of 2010 aimed at encouraging home ownership. This includes a housing scheme for Zambians working abroad, known as the Diaspora Housing Scheme, and the Fast Track Construction Scheme, which uses new building technology to reduce the cost of projects as well as the construction time-frame.
Housing has been declared a priority sector by government - Photo Courtesy: René Hartslief
as student hostels and staff houses at the University of Zambia under a PPP arrangement at a cost of somewhere between US$ 60 and 90 million. The project is being undertaken on a ‘develop, build, operate and transfer’ (DBOT) basis and will have a transfer period of between 25 and 30 years. Furthermore, TAJ Hotels group plans to begin building a fivestar hotel in Livingstone within the next two years. Sherwood Greene Properties Zambia is involved in property management and valuation, as well as providing estate agency services for commercial, industrial, residential and agricultural properties. The company has ofﬁces in Lusaka and Kitwe, and has 10 years’ experience in property consultancy. Housing Housing has been declared a priority sector by government in recognition of the fact that decent housing or shelter is a basic human need, and that home ownership is a form of wealth creation. Rapid population growth combined with rural-urban migration has resulted in a greater demand for housing, particularly in Lusaka. Some success has been achieved through the National Housing Authority (NHA), which has schemes in Kabwata Estates, Woodlands Extension, Nyumba Yanga and on the Copperbelt, for executive, high cost, medium cost and low cost housing. NHA is also involved in the upgrading of unplanned settlements, employment creation for unskilled as well as
TRANSPORTATION In view of its landlocked status, Zambia’s road, rail and air transport networks are critical to national and regional development. In addition to facilitating the influx of business people and leisure tourists, an efficient transport infrastructure is pivotal to trade. Road and rail transport are traditionally the most widely used transport modes, although inland water transport is also used. Mpulungu harbour on Lake Tanganyika sees shipments of cement, sugar, pharmaceuticals, steel and many other products. Trans-shipping for both imports and exports includes the ports of Durban (South Africa), Dar-es-Salaam (Tanzania), Walvis Bay (Namibia) and Beira (Mozambique). Growth in the transport, storage and communications sector fell to 3.1 percent in 2009 compared to 15.8 percent in 2008, mainly on account of negative growth in rail and air transport, as road transport and communications remained buoyant. Regional transport corridors Zambia’s government is working with cooperating partners and regional governments to improve and expand regional transportation networks, in order to enhance regional integration and economic development. Improving cross-border infrastructure will reduce the expense of surface transport – both road and rail – and, by extension, regional trading costs. One of the most critical transport corridors in southern Africa, the North-South Corridor, together with its adjacent spurs, services eight countries – Tanzania, Democratic Republic of Congo (DRC), Zambia, Malawi, Botswana, Zimbabwe, Mozambique and South Africa. The importance of the NorthSouth Corridor to Zambia is immense, as it links the Copperbelt to the southern ports in South Africa, and also interconnects with the Trans-Kalahari, Beira, Lobito, Dar-es-Salaam and Nacala corridors. The Dar-es-Salaam Corridor links the port of Dar-es-Salaam with the Copperbelt, while the Mtwara Corridor links Zambia, Malawi and the southern regions of Tanzania across Lake Malawi/Niassa and through Mozambique. The Lobito Corridor, which connects Zambia with Angola, has opened up direct access to the sea ports in Luanda and Lobito Bay on the Atlantic Ocean, providing Zambia with a shorter land route to the west coast for imports and exports destined to and from Europe and the USA. Projects such as Kazungula Bridge and the Nacala Corridor are expected to commence in 2010 as part of the North-South Corridor programme. The strategic importance of Kazungula Bridge, which will replace the existing ferry, is in improving links between Botswana, Zambia and Zimbabwe over the Zambezi River in the SADC regional trunk road network.
Road infrastructure In order to improve the state of Zambia’s road infrastructure, government, with the help of the international community and cooperating partners, developed the Road Sector Investment Programme (ROADSIP). At the beginning of ROADSIP Phase I in 1997, less than 10 percent of the paved road network was in good condition. The programme’s target was to improve at least 50 percent of the paved road network in the country to good condition. At the completion of ROADSIP I in 2002, this target had been exceeded, with 59 percent of paved roads in good condition. ROADSIP Phase II is running from 2005 to 2013. Government has invested heavily in the construction and rehabilitation of roads across the country since the inception of the Fifth National Development Plan (FNDP), which runs from 2006 to 2010. While this has seen the quality of arterial road infrastructure improving markedly, much more needs to be done to improve the road network, particularly rural roads. The Needs Assessment Report for 2009 from the Highway Management System has projected an annual budgetary amount of US$ 500 million for a period of five years to completely maintain and restore all roads from poor condition to a good or fair state. In 2009, government significantly increased the budgetary allocation for the development of road infrastructure, in line with its commitment to reduce the cost of doing business and improve access to rural areas. In a continuation of this trend, K 1 461.9 billion was allocated towards the construction, rehabilitation and maintenance of road networks in 2010. Key development projects for 2010 include: • The second phase of the Zimba-Livingstone Road, with a budget allocation of K 194.5 billion. • The upgrading of the Choma-Chitongo, Chembe BridgeMansa, Mongu-Kaoma-Tateyoyo, Kasama-Luwingu, and Luansobe-Mpongwe roads, at a cost of K 146.2 billion.
Zambia Air Force plane at Ndola International Airport - Photo Courtesy: René Hartslief
• K 60.9 billion is set aside to improve the condition of urban roads within Ndola and Kitwe. • K 603.9, which represents 40 percent of the roads budget, is being used to undertake routine maintenance and rehabilitation works. • The rehabilitation of feeder roads and river crossings across the country has an allocation of K 106.3 billion. • The allocation for rural road development in the nine provinces has been doubled to K 45 billion – K 5 billion for each provincial rural roads unit compared with K 2 billion in 2009. The Road Transport sector grew by 13.3 percent in 2009 compared to 13.2 percent in 2008. Air transport Zambia has four international airports, namely, Lusaka, Livingstone, Mfuwe and Ndola, with several secondary airfields and airstrips in Chipata, Kitwe, Kasama, Mongu, Solwezi and Mansa. Situated 24 kilometres from the centre of Lusaka city, Lusaka International Airport is Zambia’s main airport and connects the country with the rest of the world. Following the liquidation of the state-owned Zambia Airways in 1995, the air transport sector was liberalised to encourage private sector participation. In the ensuing years, a number of private local airlines arose to fill the gap left by the national carrier, and various Bilateral Air Services Agreements have been signed with other states whose airlines were interested in operating routes into Zambia and vice-versa. New developments in the industry include the 2009 launch of Zambezi Airlines, which offers scheduled flights to Johannesburg, Dar-es-Salaam, Nairobi and Lilongwe, using Boeing 737-500 series aircraft. Pro-flight is Zambezi Airline’s domestic partner. In addition, Zambian Airways (unrelated to Zambia Airways), which for some years operated an extensive domestic route network within Zambia as well as international flights to South Africa, Tanzania and the DRC, suspended operations on 10 January 2009. Rehabilitation work in the past few years has included improvements to the runway and buildings at Lusaka International Airport. Chipata Airport has been rehabilitated and reopened, and the length of the runway at Livingstone International has been increased from 2.3 to 3 kilometres to facilitate long-haul flights. For 2010, there is an allocation of K 15.7 billion for the rehabilitation of airports and airstrips across the country. Of this amount, K 5 billion is for Kasama Airport, K 4.9 billion for Solwezi Airport, K 4.2 billion for Mansa Airport, K 0.5 billion for Nyangwe Airstrip in Lundazi District, and K0.6 billion for Serenje and Senanga aerodromes. Rail transport Zambia’s rail networks have for many years been controlled
K135 billion on infrastructural development, which is double the amount specified in the concession agreement. The cost of rail track maintenance is borne solely by rail companies as opposed to roads, which are maintained by the government. In 2009, RSZ moved more than 400 000 tonnes of copper products, out of which 70 000 tonnes was through TAZARA, which accounted for imports of 50 000 tonnes. Since January 2009, RSZ had been operating eight of its locomotives jointly with TAZARA to improve capacity and service to the port of Dares-Salaam. COMMUNICATIONS Since the liberalisation of the communications sector, many positive developments have taken place in telecommunications, broadcasting and information communications technology (ICT), such as the provision of mobile telephony services and internet facilities, with deregulation, privatisation and wireless technologies having opened up new areas of potential investment. In December 2009, the Communications Authority of Zambia (CAZ) announced the change of its name to the Zambia Information and Communications Technology Authority (ZICTA). This was as a result of the operationalisation of the Information and Communications Technology (ICT) Act of 2009. The name change is in line with the convergence of technologies in what used to be different sectors; namely, telecommunications and information technology (internet). These formerly distinct segments have now become one in terms of both the delivery of infrastructure and consumer gadgets. A unified licensing regime will enable more competition in all market sectors from existing and new players. In addition to the ICT Act, the Electronic Communication and Transactions (ECT) Act and the Postal and Courier Services Act were also operationalised in 2009. ZICTA will now regulate postal and courier services, a former function of the Ministry of Communications and Transport. Additionally, electronic transactions will be legalised and regulated. ICT services While present infrastructure consists mainly of a microwave backbone and microwave trunk routes to major provincial centres providing analogue transmission, a digital microwave network and a domestic satellite system also provide services
Photo Courtesy: René Hartslief
by Zambia Railways and the jointly-owned Tanzania-Zambia Railways (TAZARA). The network links Zambia to the DRC and Angola in the north and Zimbabwe and South Africa in the south, while the TAZARA network links into the line at Kapiri Mposhi and runs to the port of Dar-es-Salaam in Tanzania. As part of government’s privatisation policy, Zambia Railways was concessioned during 2003 to Railway Systems of Zambia (RSZ), a consortium comprising New Limpopo Project Investments (NLPI) and Spoornet, both of South Africa. The objectives of the concession were to allow the private sector to inject capital into the company to improve its competitiveness and help divert traffic from roads to rail, thereby reducing overall transport costs. The concession is a long-term agreement, comprising a 20-year lease period with an option to renew for a further ten years. Further liberalisation within the transport industry has seen the private sector involved in the construction of a number of railways on a build, operate and transfer basis. The opening of mines in the North-Western Province – particularly Lumwana mine, which is one of the largest copper mines in Africa – is also spurring infrastructure development. The Chipata-Mchinji railway line will provide Zambia with its shortest sea route to the Indian Ocean port of Nacala in Mozambique. In a further effort to address the poor performance of the rail sector, government is presently exploring ways of improving the performance of TAZARA through the identification of a strategic private partner. Furthermore, RSZ has invested about
Communications Authority of Zambia (CAZ) has changed its name to Zambia Information & Communication Technology Authority (ZICTA) following the operationalization of the Information & Communications Technologies Act No. 15 of 2009 on 4th December, 2009. Also enacted were the Electronic Communications & Transactions Act and the Zambia Postal Services Act. These have a direct impact on the Authority as they introduce new functions for the Institution. The new Information & Communication Technologies Act of 2009 among other things: • Repeals both the Telecommunications Act & the Radio Communications Act • Changes the name of the Communications Authority of Zambia to Zambia Information & Communication Technology Authority (ZICTA) • Gives the Authority new powers especially as it relates to economic regulation & consumer protection • Gives additional responsibilities of regulating postal & courier services including oversight over electronic transactions. The Postal & Courier Services & the Electronic Communications & Transactions Acts enhance this new mandate • Allows the Authority to review the current licensing framework by coming up with a converged & uniﬁed licensing.
HEAD OFFICE: Plot 3141, Buyantashi Road PO Box 36871, Lusaka, Zambia Tel: +260 21 1 241236/246702 • Fax: +260 21 1 240023 NDOLA OFFICE: Photocopy House, Buteko Avenue PO Box 70728, Ndola, Zambia Tel: +260 21 2 620865/620867 • Fax: +260 21 2 620806
E-mail: email@example.com • Website: www.zicta.zm
Communications, Lusaka - Photo Courtesy: René Hartslief
to remote rural areas. Three satellite earth stations provide international telephone services. However, the capacity is not adequate to satisfy demand. Fibre optic cables, which are used for fixed and mobile telecommunication as well as for the internet, are presently being installed countrywide. Zambia is also being connected to the undersea cable in 2010. The Zambia Telecommunications Company Limited (ZAMTEL), the country’s national telecommunications service provider, has historically owned the monopoly on fixed lines and the international telecommunications gateway. It provides approximately 90 000 lines throughout the country and also operates Cell-Z, one of Zambia’s three mobile operators. Government has announced its intention to divest up to 75 percent of its equity in ZAMTEL, and may consider divesting the remaining 25 percent through sale of shares on the Lusaka Stock Exchange. This will go a long way toward improving the quality of service and reducing high costs in the telecommunications sector. International gateway licensing fees were aligned with regional averages at the end of 2009. However, with the arrival of fibre optic connectivity in Zambia, the usage of satellite-based telecommunications gateways will soon become obsolete, and the cost and standard of services are expected to improve substantially. Internet services Established in 1994, ZAMNET was Zambia’s first internet Service Provider (ISP), with numerous other ISPs having since joined the market. By 2007, there were 19 private providers, 7 610 internet hosts and over half a million internet users, with services widely available in Lusaka, Kabwe, Southern Province and on the Copperbelt. There is potential for further growth in the provision of services, with penetration still low in the rural areas.
ISP Bringcom Zambia Limited is introducing a Broadband Global Area Network (BGAN) – a special service that will render broadband facilities accessible in remote areas where communication infrastructure is non-existent. Clients will be able to access their corporate network through a secure Virtual Private Network (VPN) connection. Mobile telephony The provision of mobile telephony services is seeing remarkable growth, with improvements in extension of coverage and service quality, as well as reduced tariffs. In 2007 there were 91 800 landline connections compared to 2.639 million mobile phone customers. However, the average revenue per user (ARPU) dropped sharply in 2009. The vast majority of mobile subscribers use prepaid services. Zambia’s leading cellphone firm is Zain (formerly Celtel), which has a market share of around 75 percent, followed by MTN (formerly Telecel) from South Africa. Cell-Z is ZAMTEL’s cellular service. International gateway licenses have been awarded to Zain and MTN in a bid to bring down the high cost of communications. Mobile data services using GPRS and EDGE are available, and the rollout of third generation technology is in progress, including 3.5G HSPA. WATER SUPPLY Zambia is blessed with abundant water resources, which cover some 11 890 square kilometres of the country’s total area. Water resources comprise lakes – particularly Lake Tanganyika, Kariba Dam, and lakes Bangweulu and Mweru – as well as a number of rivers. Kariba Dam, a major supplier of Zambia’s water needs, is 280 kilometres in length, has a surface area of 5 580 square kilometres and holds 185 billion cubic metres of water. While the country has sufficient water resources, factors such as urbanisation as well as demands from mining and manufacturing industries have increased pressure on Zambia’s water and sanitation services, which need to be developed more efficiently for sustainable and environmentally safe usage. The National Water Policy of 1994, the National Environmental Support Programme (1994) and the Water Resources Master Plan (1995-2015) outline strategies and comprehensive action plans to develop the water sector. The 1997 Water Supply and Sanitation Act established an independent water regulator, the
Zambia is blessed with abundant water resources - Photo Courtesy: René Hartslief
National Water Supply and Sanitation Council (NWASCO) and delegated to local authorities the responsibility for providing WSS in their respective areas. Increasing access to clean water and sanitation continues to be a major goal of government, not least in order to prevent water-borne diseases, and Zambia is committed to achieving the target of 74 percent access to safe drinking water by 2015 in line with the UN’s Millennium Development Goals. As such, the water sector has been prioritised as one of the seven main investment areas in the FNDP. For 2010, government allocated K 433.7 billion to water supply and sanitation facilities – more than double the resources allocated in 2009. Of this amount, K 198.2 billion has been directed to the National Urban Water Supply and Sanitation Programme. In addition, K 116.5 billion has been put towards the National Rural Water Supply and Sanitation Programme, and is being used for the construction of 1 000 boreholes and 300 demonstration pit latrines, and the rehabilitation of 700 boreholes. ENERGY Zambia has an abundance of energy resources, the most important being hydroelectric power, with an estimated hydropower capacity of 6 000 megawatts, of which only about 1 640 megawatts has so far been installed – just 30 percent of the total capacity. Hydroelectric plants account for 92 percent of the total installed capacity and 99 percent of the total electricity
generated in the country. The two main hydropower stations are Kafue Gorge (990 megawatts) and Kariba North Bank (600 megawatts). Hydropower stations supply the national grid while diesel power generating plants supply isolated loads, mainly in remote areas not connected to the grid. There are inter-connectors to Zimbabwe and the Democratic Republic of Congo (DRC), which are the two most important electricity export grids. Improving the supply of, and access to, electricity remains a key strategic focus in order to guarantee stable energy supply in support of private sector growth. As energy is an important driving force behind the country’s economic development, government has prioritised its provision to areas of high economic potential, such as mining, agriculture, tourism and manufacturing. Government is seeking alternative sources of energy, such as solar power and bio-fuels, while it expands the capacity of existing hydroelectric power stations. Intrinsic to this process is the raising of electricity tariffs to make investment in new capacity profitable and to attract private interest. Another pressing need is to ensure the security of supply of petroleum products. In 2009, the EU and African, Caribbean and Paciﬁc (ACP) countries launched a new global energy facility worth more than US$ 200 million (approximately K1 300 billion) to contribute to poverty alleviation and protection of the environment under the Millennium Development Goals. The ACP-EU Energy Facility is being funded under the 10th European Development Fund and covers the period 20092013. Electricity regulation and supply The Zambian power sector is governed by three pieces of legislation: • The Energy Regulation Act (1995) established the Energy Regulation Board (ERB) • The Electricity Act (1995) abolished the statutory monopoly of ZESCO in the power sector and provided for new entrants • The Rural Electrification Act (2003) aims to facilitate expanded electrification in rural areas The ERB is responsible for the licensing, monitoring and supervision of operators in the energy sector, as well as the approval of electricity tariffs. In consultation with other statutory bodies like the Zambia Competition Commission, the board monitors and promotes competition within the energy sector, while minimising the environmental impact of the production and supply of energy and storage and use of fuels in conjunction with the Environmental Council of Zambia. The major distribution network falls under the Zambia Electricity Supply Corporation (ZESCO), the national electricity utility, which was successfully commercialised in 2005. The corporation operates and maintains a high voltage transmission system, is responsible for all electrical power imports and exports in the country, and provides retail services to all but the largest mining customers on the Copperbelt. ZESCO has made great strides in reducing the backlog of customers awaiting connections: standard services are current, while for non-standard connections the backlog has been reduced from 7 000 in January 2008 to 3 600 in January 2010. Generally, a standard connection is completed within 30 days and a non-standard connection within 90 days. In an effort to sustain existing capacity as well as to attract additional investment in the sector, electricity tariffs have been adjusted upwards. Government approved a new multi-year tariff adjustment framework in 2009, which is aimed at inducing operational efficiency and increasing the profitability of the
Work is ongoing on the 360-megawatt Kariba North Bank Extension Project, which should be completed by 2012. This will bring the total installed capacity at the power station to 1 080 megawatts. Feasibility studies have been completed for the Kafue Gorge Lower and Itezhi-Tezhi projects. The 120-megawatt Itezhi-Tezhi hydropower plant is being developed under a joint venture investment with Tata Africa Holdings. The 600-megawatt Kafue Gorge Lower hydropower plant is expected to cost in the region of US$ 1.5 billion and be commissioned in 2017. While these large projects will almost double the country’s ability to generate electricity over the medium term, there is an urgent need to improve the supply of electricity in the most remote areas of Zambia. Given the high cost of building lengthy distribution networks, government has begun to develop a number of mini-hydro projects aimed at supplying smaller local areas with electricity. Several projects have been identified for which development is to take place within the Public-Private Partnership (PPP) framework, such as the Kabompo Gorge and Kalungwishi projects. Copperbelt Energy Company (CEC) is to spend US$ 120 million on the development of the 33-megawatt Kabompo Gorge hydroelectric project on Kabompo River in North-Western Province. The project is earmarked for commissioning by 2015. The 218-megawatt Kalungwishi hydroelectric project, which is being built by Zambian company Lunzua Power Authority, will cost in the region of US$ 641 million. Construction could start as early as 2010, with commissioning expected in 2014. Zambia is also pursuing the development of transmission inter-connectors with neighbouring countries. One such project is the Zambia-Tanzania-Kenya power inter-connector. Other investment opportunities in electricity transmission include the Zambia-Malawi inter-connector; Zambia-DRC inter-connector; and Solwezi-Kolwezi inter-connector. As less than 20 percent of all Zambians and only 3.1 percent of the rural population have access to electricity, public resources in 2010 will be focused on stepping up rural electrification programmes, which have received an allocation of K 234.7 billion. This is a huge increase on the 2009 allocation of K 88.8 billion and the 2008 sum of K26.1 billion. A US$ 3 billion biofuel project, which is a joint venture between Biomass Zambia and the Zhongying Changjiang International Investment Guarantee Company, a subsidiary of Wu Han Kaidi of China, is set to create more than 200 000 direct jobs in Zambia.
Government is expanding the capacity of hydroelectric power stations - Photo Courtesy: René Hartslief
There are investment opportunities in electricity transmission - Photo Courtesy: René Hartslief
sector. In addition, ZESCO has embarked on a countrywide programme to install prepaid meters, most of which are now locally manufactured. The public utility is also in the process of improving its cost structure for the benefit of its customers. Copperbelt Energy Corporation (CEC) is the sole distributor of electricity to the major mines in Zambia. Currently, CEC buys electricity from ZESCO under a bulk supply agreement that expires in 2020. Opportunities for investment exist in electricity generation and transmission projects, as well as the exploration for and production of petroleum resources, coal exploration and mining, and the development of renewable energy sources. Current infrastructure development Zambia experienced energy shortages during 2007 and 2008 when demand rose due to increased investment in the mining sector. While the situation was somewhat ameliorated when demand decreased in 2008, with the revival of investment in mining during 2009, the demand for power is on the upswing again. Nevertheless, no further power shortages are anticipated during 2010, as measures taken to increase power generation capacity will add 210 megawatts of electricity to the national grid. This should be enough to meet demand from new development projects. The power utility, ZESCO, has undertaken major upgrading and rehabilitation of generation infrastructure at Kafue Gorge and Kariba North Bank hydropower stations. The rehabilitation of Kafue Gorge has added 90 megawatts, while the upgrading of Kariba North Bank is to add an additional 90 megawatts. The remaining 30 megawatts will be added during 2010.
Education & Training
Government places a high priority on education and development, and Zambia is well on track to meet the Millennium Development Goal of providing universal education by 2015.
The education system covers a wide spectrum of formal, nonformal, private and community-based initiatives with the aim of enhancing access to educational facilities and improving the standard of education for pupils at every level. Guidelines such as cost-sharing, maximising of resources, infrastructural development and collaboration among stakeholders are emphasised. Support for community schools, which fulfil a vital function in providing learning opportunities to disadvantaged scholars, continues in order to achieve the goal of free education for all. The role of the private sector – particularly in the case of public-private partnerships (PPPs) – is becoming ever more critical for increasing access to education. POLICIES & PROGRAMMES The Fifth National Development Plan (FNDP) launched in 2007 foresaw significant investment in education over the ensuing four years, as evidenced by the increased government budget allocation to this sector in the years that followed. The FNDP focuses on addressing the numerous challenges that remain in education, including ensuring high quality education, increasing retention rates, building new schools and improving infrastructure in general, as well as providing adequate supplies and materials, including school books. Furthermore, the FNDP emphasises the provision of education through low cost yet high impact interventions for different categories of learners who were not catered for as children, youths or adults. Pro-poor policies are instituted to offer equitable education to vulnerable members of society, with particular attention given to programmes directed at gender, HIV/AIDS, school health and orphans, including out-of-school children. A significant step in supporting this vision has been the allocation of nearly one-fifth (19.9 percent) of the national budget to education in 2010. In line with government’s commitment to improve service delivery in education, the 2010 National Budget contains a 26.4 percent funding increase for education over the previous year. PRIMARY & SECONDARY EDUCATION Zambia’s education sector has improved markedly since the 1990s. Much of this may be attributed to the introduction of free primary education in 2002, with the net primary school enrolment increasing dramatically from 68.1 percent in 2000 to 92.3 percent in 2006. Furthermore, between 76 and 80 percent of children enrolled complete the final year of primary school education. Zambia thus looks set to achieve the United Nation’s Millennium Development Goal (MDG) of universal primary education for all children by 2015. While secondary school enrolment has not been as successful, school completion rates have risen from 63.6 percent in 2000 to current figures of close to three-quarters of enrolled pupils completing their secondary school education. 2008 witnessed a 61 percent secondary school pass rate nationally; an improvement over previous years. While the provision of free primary education and the re-entry policy have given many more pupils access to education, secondary education continues to be limited, with rural Zambians having far less access to either primary or secondary school education than their urban counterparts. Many schools suffer from poor infrastructure and a lack of learning materials. Furthermore, teachers’ salaries remain substantially below the regional average, and the HIV/AIDS crisis has increased teacher absences and attrition rates, as well as causing a rise in the number of school-age orphans. Nevertheless, in the last several years the education sector in Zambia recorded a number of positive developments. During 2008 efforts to recruit and train new teachers at primary and secondary school levels resulted in 5 000 new teachers entering the educational system. This contributed to a drop in pupil-teacher ratios. For instance, between 2005 and 2008 the ratio in grades 5 to 7 dropped from 37.5 to 34.7 pupils per teacher, and in grades 10-12 the ratio fell to 18.9 from 21.7. Continuing its push for infrastructure development in education, government has increased its allocation in this arena by nearly
CONSULTANCY SERVICES: • Environmental Impact Assessment (EIA) • Environmental Project Briefs (EPBs) • Hydrogeologists & Integrated Water Resources Management (IWRM) • Environmental Audits • Trainers in waste management • Hazardous waste experts OTHER PROGRAMME INTERESTS: • Climate change adaptation • Action research on “value chains and the rural poor in disadvantaged areas in Zambia” • Support Conservation Farming for the rural poor • Free Environmental Education for Kids (EEK) • Operates an Environmental Education Shop FEETAP has been operational since the second half of 2009
the TEVET policy under the aegis of the Ministry of Science, Technology and Vocational Training (MSTVT). For 2010, government will provide K 84.3 billion in support for operations and infrastructure development at TEVET institutions; an increase over the K 71.3 billion provided during the previous year. Government policy envisages a programme of increased education and training for the formal sector. This goal will entail the ongoing privatisation of the economy together with the development of linkages between vocational and technical educational facilities and business in order to increase the relevance of training to private sector employment. In order to contribute to education for all by 2015 as well as poverty reduction, the MSTVT has set a target of increasing access to TEVET from 30 000 to 50 000 by 2013. Universities Founded in 1966, the University of Zambia (UnZa) is the largest university in the country, with a student population of about 6 000. Its main campus is located on the Great East Road, about 7 kilometres from Lusaka. Offering diploma and degree courses in education, the humanities, engineering, law, medicine, veterinary sciences, mineral technology, agricultural and natural sciences, UnZa also provides a number of postgraduate programmes. A Consultancy and Training Unit supplies information technology services to the business and ICT community in Zambia and further afield. The Copperbelt University (CBU) was established in December 1987, and today comprises six schools and a directorate, with schools of The Built Environment, Business, Mathematics and Natural Sciences, Natural Resources, Technology and Graduate Studies. CBU’s programmes attract over 5 000 applications for the 1 200 places available each year. The university has a total student population of 5 155 and a staff establishment of 695, of whom 207 are academic staff. The university is currently engaged in a vigorous infrastructure development programme, encompassing upgrading and expansion of the School of Business, School of Technology and Centre for Lifelong Education, as well as the construction of student hostels. The former National College for Management and Development Studies in Kabwe, Mulungushi University (MU) was established as Zambia’s third public university on 1 January 2008, and admitted its first crop of students in September 2008. The government of Zambia amended the country’s University Act to facilitate the establishment of a public-private partnership with Konkola Copper Mines (KCM) that underlies the structure of MU. MU comprises two campuses: the Great North Road Campus, located 26 kilometres North of Kabwe; and the Kabwe Town Campus. A multi-level curriculum university, Mulungushi offers a wide range of degree, diploma and certificate programmes in its nine academic faculties. The university also offers distance and lifelong learning programmes, short courses and evening classes for students who are unable to attend full-time study.
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+260 977 992297 / 969 964041 / 977 449806 / 967 449806 / 955 449806 G15 Westgate, Freedomway/Lumumba Rd • PO Box 36538, Town Centre, Lusaka firstname.lastname@example.org or phallenm@feetapzambia org • www.feetapzambia.org
50 percent to K 553.5 billion for 2010. In 2009, construction was begun on 20 new secondary schools and 2 500 additional primary school classrooms. These endeavours should be completed by mid-2010. In 2010, infrastructure monies will be used to construct 2 900 new classrooms that will provide places for an additional 250 000 students across the country. Most of these classrooms will be built using the community mode of contracting. In addition, K 21.4 billion has been allocated for the procurement of educational materials, including books and desks. TERTIARY EDUCATION In recent years, government has prioritised science education, technical, vocational and entrepreneurship training, and higher education. In addition to the drive to put more governmentsponsored students in universities and colleges, there has been a substantial increase in both public-private partnerships for funding higher education as well as the number of private institutions of higher learning in the country. There are now over two dozen private colleges in Zambia that offer training in areas as wide-ranging as public administration, education, marketing, agriculture and natural resource management. For 2010, government has allocated K 164.9 billion to assist the country’s three public universities. An additional K 114.6 billion will be used to provide bursary support for those seeking higher education. Technical and vocational education and training Technical education and vocational training are recognised as vital to producing the skilled labour needed to run the machinery, equipment and other products of science and technology that are essential for national development as well as poverty reduction. This realisation led to the introduction of Technical Education, Vocational and Entrepreneurship Training (TEVET) reforms in 1994, with the sector currently guided by
Improvements have been noted over a broad cross-section of Zambia’s health statistics in recent years, with government having stepped up its commitment to bring quality health services to all its citizens.
There have been a number of positive developments in Zambia’s health sector over the past decade. Some key health indicators, such as maternal and under five mortality rates and incidence of malaria have all declined since 2002. While HIV/ AIDS is arguably among the greatest threats to Zambians’ health and wellbeing, for the first time HIV infection rates appear to be dropping, not only in specific ‘high risk’ groups but also in the general population. Life expectancy at birth is estimated at 51.3 years (2010), according to the latest socioeconomic indicators released by Zambia’s Central Statistics Office. While this is higher than many neighboring countries, it is still substantially below the world average, and reflects a combination of poor health care and service access and the impact of HIV/AIDS-related morbidity and mortality. Recently HIV/AIDS prevalence in certain specific groups, primarily adolescent girls and young women in urban areas, appears to have been dropping. HIV prevalence in the general population has also dropped, currently standing at just over 14 percent, with national antenatal HIV figures remaining around 20 percent (Zambia DHS 2009). ARV coverage in Zambia is well above the African average and double the ARV access figures of countries in the region such as South Africa that have more funding and better health infrastructure. The first ARV access target of 10 000 people was not only met but exceeded, leading the government to set a new target of 100 000 people; which, with the help of the USbased President’s Emergency Plan for AIDS Relief (PEPFAR), was also met by the end of 2007. While meeting these targets is reason for hope, challenges still remain. Currently it is estimated that less than half (46 percent) of HIV-infected Zambians (330 000) needing ARV drugs are actually receiving them. The Health Sector in 2010 For 2010, government has allocated K 1 362.5 billion to health, or 8.2 percent of the National Budget. This includes K 128.4 billion for improvement of health infrastructure, K 134 billion for continued construction of district hospitals and staff housing, and K 20 billion for procurement of essential medical equipment. An amount of K 33.7 billion has been specifically ear-marked for prevention and treatment of HIV/ AIDS. While overall health allocation has dropped, due to suspension of aid by a number of cooperating partners, domestic contribution to government expenditure on health has actually increased by 18.6 percent for 2010. Government continues to emphasise improvement of health infrastructure. To this end, certain key projects related to health infrastructure and human resource improvement will continue. This includes the construction and expansion of 16 district hospitals in regions such as Samfya, Chadiza, Mumbwa, KapiriMposhi, Isoka, Shang’ombo, Lumwana, Chiengi, Mpulungu, Kaputa, Chama, Mufumbwe and Chongwe. In 2010, K 13.7 billion has been allocated toward continued recruitment of medical staff and the formation of 21 new health posts across the country. Government is also putting in place incentive programmes to improve retention of medical personnel in rural areas, and plans to rehabilitate and expand all 27 training schools for health care personnel in order to increase enrolment as a means of mitigating the shortage of frontline health care workers. HEALTH POLICY & PROGRAMMES The Fifth National Development Plan (2006-2010) provides strategies for achieving the UN’s Millennium Development Goals on HIV and AIDS, malaria and other related diseases by 2015. Of particular importance is government’s scheme to provide free ARVs and free medical services to all health centres within rural areas. The Zambia Integrated Health Programme (ZIHP) provides a platform for ongoing partnerships between government, public and private institutions, USAID and other international
organisations and agencies to address the country’s health problems as well as continuing with the reform of the health care system. A wide range of health issues are tackled through communication/behaviour change interventions, building community and private sector partnerships, improving health worker performance, strengthening non-government organisations (NGOs) and system support. Despite recent figures suggesting incidence declines, malaria continues to be a serious public health threat, resulting in over 50 000 deaths a year. The Roll Back Malaria initiative provides a platform for a united effort against malaria and includes the efforts of the ministries of Health and Education as well key partners such as UNICEF and the World Health Organisation (WHO). The integrated management of childhood illnesses has remained a prime focus of the Primary Healthcare Programme. While recent statistics show great success in controlling preventable diseases through the immunisation programme, malnutrition remains a challenge for government. Prior to 2003, measles was one of the five major causes of childhood illness in Zambia. During that year, an immunisation campaign cut the number of measles cases to zero. A nationwide followup immunisation campaign was conducted in July 2007, with more than 2.1 million children aged nine months to five years immunised. HIV/AIDS IN ZAMBIA AIDS is the leading cause of death after malaria, and it is estimated that close to one million Zambians are living with HIV/ AIDS. Due to low voluntary testing rates, it is likely that the vast majority of these individuals remain unaware of their infection. Unlike in many developing countries, in Zambia HIV/AIDS has not been confined to specific segments of the population; such as the poor and uneducated, women, adolescents, etc. Infection rates are very high among wealthier and more educated segments of society. HIV is most prevalent in urban centres such as Lusaka and in the Copperbelt, rather than in poorer rural populations. Furthermore, the impact of AIDS has gone far beyond the household and community level. All areas of the public sector and the economy have been weakened and national development efforts have been constrained. According to data published by AVERT, the Zambia Business Coalition has released figures suggesting that 82 percent of known causes of employee deaths are HIV-related and 17 percent of staff recruited are to replace people who have died or left because of HIV-related complications. HIV/AIDS has also impacted the agriculture sector. Given that the vast majority of Zambians’ livelihoods are through agriculture-related employment, HIV/AIDS has the potential to exert a very serious impact on agricultural productivity. AVERT cites data suggesting that the 2002 food shortages in Zambia (an event that was declared a national emergency) were due
in part to poor worker productivity stemming from AIDS-related morbidity and mortality. HIV/AIDS PROGRAMMES The National HIV/AIDS/STD/TB Council (NAC) is the single, high-level institution responsible for coordinating the actions of all segments of government and society in the fight against HIV and AIDS. Formed in 2002, this autonomous body is given political direction by a Committee of Ministers from some 14 ministries. Members of the council represent government, NGOs, religious and traditional leaders, media, youth, the private sector and those living with HIV/AIDS. NGO networks such as the Zambia National AIDS Network (ZNAN) have a pivotal role to play in supporting activities, both financially and technically, of various NGOs in the country, and receive funds from the Global Fund to fight AIDS, TB and Malaria. The community response to HIV/AIDS (CRAIDS) also plays an active role. Many national governments and NGOs fund the fight against HIV and AIDS in Zambia. Finances from the Global Fund (US$ 92 million and a further US$ 254 million in 2004) are spent on a wide range of activities run by numerous organisations, but treatment scale-up is now the main focus. The President’s Emergency Plan for AIDS Relief (PEPFAR) targets 15 focus countries, of which Zambia is the fourth most highly funded. Zambia has received steadily growing funding through PEPFAR: US$ 149 million in 2006, US$ 116 million in 2007, US$ 269.2 million in 2008 and US$ 270.4 in 2009. Government aims to ensure that greater numbers of those infected with HIV/AIDS have access to free Anti Retroviral Therapy (ART). During 2007, considerable progress was made in the implementation of the free ART policy. A total of 137 000 patients accessed free ARV therapy countrywide compared to 75 000 in 2006. Without intervention, the risk of mother-to-child HIV transmission in Zambia is around 40 percent. Launched in 1999, by 2004 Zambia’s prevention of mother-to-child transmission (PMTCT) initiative reached 74 health care facilities in four provinces. By 2008 the number of facilities offering antiretroviral drugs (primarily nevirapine) as part of PMTCT had increased to 935.
Photo Courtesy: René Hartslief
Location: Southern Africa Capital: Lusaka Border countries: Angola, Botswana, Democratic Republic of Congo, Malawi, Mozambique, Namibia, Tanzania, Zimbabwe Total area: 752 614 square kilometres (2.5 percent of the area of Africa), comprising 740 724 square kilometres (land) and 11 890 square kilometres (water) Highest point: Mafinga Hills (2 301 metres) Lowest point: Zambezi River (329 metres) Climate: Subtropical with three distinct seasons. May to August is cool and dry, September to October is hot and dry and November to April is warm and wet Population: 13 272 533 (2010 mid-year estimate: CSO Population Projections Report) Ethnic groups: 98 percent African (Bemba, Nyanja, Lozi and Tonga), with the remaining 2 percent comprising Asian and European Religions: Christianity (60 percent), Islam, Hinduism, traditional beliefs Languages: English (official); indigenous African languages, of which there are more than 70, include Bemba, Kaonda, Lozi, Lunda, Luvale, Nyanja and Tonga Public holidays 2010: 1 January – New Year’s Day; 8 March – International Women’s Day; 12 March – Youth Day; 2 April – Good Friday; 3 April – Holy Saturday; 4 April – Easter Sunday; 5 April – Easter Monday; 1 May – Labour Day; 25 May – Africa Freedom Day; 5 July – Heroes’ Day; 6 July – Unity Day; 2 August – Farmers’ Day; 24 October – Independence Day (1964); 25 October – Day following Independence Day; 25 December – Christmas Day. Public holidays 2011: 1 January – New Year’s Day; 8 March – International Women’s Day; 12 March – Youth Day; 22 April – Good Friday; 23 April – Holy Saturday; 24 April – Easter Sunday; 25 April – Easter Monday; 1 May – Labour Day; 2 May – Day following Labour Day; 25 May – Africa Freedom Day; 4 July – Heroes’ Day; 5 July – Unity Day; 1 August – Farmers’ Day; 24 October – Independence Day (1964); 25 December – Christmas Day; 26 December – Day following Christmas Day. Weights and measures: Metric system Electricity: Local current is 220v, 50Hz, and plugs are squarepinned. Time difference: GMT +02:00 Currency: Zambian Kwacha (ZMK); 1 kwacha = 100 ngwee, with notes in denominations of 50, 100, 500, 1000, 5000, 10 000, 20 000 and 50 000. Smaller notes are rarely used and coins are obsolete. Business hours: Weekdays 08:00 - 17:00, Saturdays 08:00 13:00. Most banks open from 08:30 - 14:30 on weekdays, 09:00 - 11:30 on Saturdays. Many shops stay open later. Foreign exchange: Travellers’ cheques, dollars or pounds may be exchanged at any authorised bank or bureau de change in the main towns. Travellers’ cheques attract a commission. To avoid additional charges, travellers are advised to take travellers’ cheques in US Dollars, Euros or Pounds Sterling. Credit cards & ATMs: Accepted by most hotels, restaurants, travel agencies and the larger stores. There are ATMs in Lusaka as well as the larger towns. VAT: Value Added Tax is 16 percent. VAT refunds are offered to tourists, who are issued with an export tax invoice (VAT 263) when purchasing goods, both of which must be presented at the designated exit points of export for verification. Duty Free: The following items may be imported into Zambia without incurring customs duty: 400 cigarettes or 500g of tobacco; one bottle of spirits/wine and 2.5 litres of beer; 1 oz bottle of perfume. Visa requirements: Visitors must have a valid passport. Visas are required, except for citizens of countries which have visa abolition agreements with Zambia and citizens of some Commonwealth countries. Please confirm with Zambia’s
embassies or high commissions abroad. Health: Anti-malarial medication should be taken, especially if visiting the national parks. While tap water in the major towns is purified and safe to drink, elsewhere ensure that water is either borehole water, filtered or bottled. As in many other African countries, the HIV/AIDS pandemic is of major concern, and visitors should observe standard prevention measures. Transport • Road – Traffic keeps to the left and the general speed limit is 100 kilometres on main routes and 65 kilometres in built-up areas unless otherwise indicated. Visiting drivers must hold an International Driver’s Licence. SADC licences are also valid. A person driving into the country on business can have their car admitted without having to pay duty, provided they will not use it for hire or commercial purposes. Coach travel is available to a variety of regional destinations, while long range buses frequently leave from Lusaka to all the main towns and minibuses and taxis are available for local transport. Road borders are open 24-hours a day, with the exception of Chembe, Kazungula, Kariba and Chirundu, which are open from 06:00 to 18:00 hours. Victoria Falls Bridge is open until 20:00 hours. • Air – Four international airports, namely, Lusaka, Livingstone, Mfuwe and Ndola, with several secondary airfields and airstrips in Chipata, Kitwe, Kasama, Mongu, Solwezi and Mansa. • Rail – Zambia has three main internal train lines, from Lusaka to Livingstone, Lusaka to the Copperbelt, and from Kapiri Mposhi to the northern border with Tanzania. Main train station in central Lusaka, Dedan Kamathi Road. Telecommunications: Telecommunications are among the best in Sub-Saharan Africa. There are three mobile telephone operators – Zain (formerly Celtel), MTN (formerly Telecel) and Cell Z (the mobile division of Zamtel). Mobile penetration stood at 33 percent in June 2009. Dialling code: Direct dialling to Zambia +260 followed by area codes: Lusaka, Kafue (01); Chingola, Kitwe, Ndola (02); Livingstone (03); Kasama (4); Kabwe (05);etc, plus subscriber’s number. Direct dialling to neighbouring countries requires four sets of numbers: first the international prefix 00, then the country code, the city code, and the number. Internet: Broadband and wireless connections are becoming increasingly common, with services widely available in Copperbelt, Lusaka, Kabwe and Southern Province. There are a number of internet cafés in Livingstone and Lusaka. CONTACT DETAILS Government Ministries Agriculture and Cooperatives PO Box 50197, Lusaka, Tel: 254661, 256698, Fax: 254083 Commerce, Trade and Industry PO Box 31968, Lusaka, Tel: 228301/2/3/4/5/6/7/8/9, Fax: 226673, Tel/Fax: 226727 Minister, E-mail: email@example.com Communication and Transport PO Box 50065, Lusaka, Tel: 251444, Fax: 251795 Education PO Box 50093, Lusaka, Tel 250558, Fax: 253502, E-mail: firstname.lastname@example.org Energy and Water Development PO Box 36079, Lusaka, Tel: 252589, Fax: 252589 Finance and National Planning PO Box 50062, Lusaka, Tel: 253398/2505441/252146, Fax: 254335 Foreign Affairs PO Box 50069, Lusaka, Tel: 252698, Fax: 250240 Health PO Box 30205, Lusaka, Tel: 252989, 253040/5, Fax: 253344 Lands PO Box 50694, Lusaka, Tel: 252288, 252323, 252320, Tel/Fax: 251927 for Permanent Secretary Local Government and Housing
PO Box 50027, Lusaka, Tel: 253077 Tourism PO Box 34071, Lusaka, Tel: 225463, Fax: 222189 Mines and Minerals Development PO Box 31969, Lusaka, Tel: 235323 Works and Supply PO Box 50236, Lusaka, Tel: 252366, Fax: 254108 Business and Government Agencies Anti-Corruption Commission PO Box 50486, Lusaka, Tel: 252722, 253256, Fax: 251397, 255376, E-mail: email@example.com Bank of Zambia PO Box 30080, Lusaka, Tel: 228888, 228903-20, Fax: 221767, 237070, E-mail: firstname.lastname@example.org Copperbelt Energy Corporation PO Box 20819, Kitwe, Tel 244556, Fax: 244040 Export Board of Zambia PO Box 30819, Lusaka, Tel: 228106/7, Fax: 225270, E-mail: email@example.com Lusaka Chamber of Commerce and Industry PO Box 37887, Lusaka, Tel: 224114, Fax: 224134 Lusaka Stock Exchange PO Box 34523, Lusaka, Tel: 228391, Fax: 225969 Patents and Companies Registration PO Box 32020, Lusaka, Tel: 255127, 255151, Fax: 255426, Website: www.pacro.org.zm Tourism Council of Zambia PO Box 32020, Lusaka, Tel: 290439, E-mail: firstname.lastname@example.org Women Entrepreneurs Development PO Box 30495, Lusaka, Tel: 236140, E-mail: email@example.com Zambia Association of Chambers of Commerce and Industry PO Box 30844, Lusaka, Tel 255046, Tel/Fax 253020, 252369, 253007, 252483, E-mail: firstname.lastname@example.org / email@example.com Zambia Bureau of Standards PO Box 50259, Lusaka, Tel: 227075, Fax: 238483, E-mail: firstname.lastname@example.org Zambia Communications Authority PO Box 36871, Lusaka, Tel 246702, Fax 246701, E-mail: email@example.com, firstname.lastname@example.org Zambia Competition Commission PO Box 34919, Lusaka, Tel: 222787, Fax: 222789, E-mail: email@example.com Zambia Consolidated Copper Mines PO Box 30048, Lusaka, Tel: 221023, Fax: 220654, E-mail: firstname.lastname@example.org Zambia Electricity Supply Corporation PO Box 33304, Lusaka, Tel: 361111, Fax: 222753, E-mail: email@example.com Zambia Export Growers Association PO Box 31705, Lusaka, Tel: 271166 (main office), 271080 (technical office), 271081 (warehouse), Fax: 271167, 271080, E-mail: firstname.lastname@example.org Zambia Federation of Employers PO Box 31941, Lusaka, Tel: 295541/82, Fax: 295582, E-mail: email@example.com Zambia International Trade Fair PO Box 71058, Ndola, Tel: 651514, Fax: 651704, Website: www.zitf.org.zm Zambia Investment Centre PO Box 34580, Lusaka, Tel: 250048, Fax: 252150, E-mail: firstname.lastname@example.org, Website: www.zic.org.zm Zambia National Farmers’ Union PO Box 30395, Lusaka, Tel: 252649/255769, Fax: 252648 Zambia Tourist Board PO Box 30017, Lusaka, Tel 229087, Fax 225174, E-mail: email@example.com, Website: www. zambiatourism.com Zambia Revenue Authority PO Box 35710, Lusaka, Tel: 229214, 228414, 228423, Fax 222717, E-mail: firstname.lastname@example.org Zambia Telecommunications Company (Zamtel) PO Box 71660, Ndola, Tel: 611111
Index to Advertisers
AAC Mining Executors Ltd ............................................ 40 Access Bank (Z) Ltd ..................................................... 21 Afgri Corporation .................................. Inside back cover Alfred H Knight (Zambia) Ltd ........................................ 35 Andrews Motel .............................................................. 85 Bisonite Zambia Plc ..................................................... 71 Blu Rock Mining Services ............................................. 45 Blue Financial Services Zambia ............Inside front cover Business Connexion Zambia Ltd .................................. 23 Castle Lead Works Zambia Ltd .................................... 40 Choma Milling Company Ltd ....................................... 53 Cummins Zambia ................................................. 45 & 98 Diamond General Insurance Ltd ................................... 20 Diamonds of Lusaka ..................................................... 33 Drillafrica ....................................................................... 41 EC Mining Ltd ............................................................... 47 Ecobank Zambia Ltd ....................................................... 5 Environmental Council of Zambia ................................. 17 Equatorial Foods .......................................................... 68 Finance Bank (Z) Ltd .................................................... 27 Foundation for Environmental Education & Training ........ Partnership .............................................................. 101 Gomes Haulage Ltd ...................................................... 43 Grizzly Mining Ltd ......................................................... 48 Group Five .................................................................... 90 ICC - Industrial Credit Company ................................... 24 Lafarge Cement Ltd ...................................................... 92 Lamasat International Ltd ............................................. 72 Lusaka Stock Exchange Ltd ......................................... 32 Madison Asset Management ........................................ 30 Ministry of Mines & Minerals Development ................... 34 Ministry of Tourism, Environment & Natural ..................... Resources ................................................................ 86 Momentum Zambia Ltd ............................................... 103 Morganite Zambia Ltd ................................................... 44 Mukwa Lodge ............................................................... 46 Nampak Zambia Ltd ..................................................... 68 National Airports Corporation Ltd ................................. 94 National Savings & Credit Bank ................................... 29 NFC Africa Mining Plc ................................................... 38 NFU Conservation Farming Unit .................................. 58 Oryx Oil Zambia Ltd ...................................................... 93 Parmalat (Zambia) Ltd .................................................. 65 Protea Hotels ................................................................ 31 Scaw Metals Group ...................................................... 37 Sherwood Greene ........................................................ 97 Shreeji Investments Ltd ................................................ 19 Southern Sun Ridgeway ................................................. 9 Stefanutti Stocks Zambia Ltd ........................................ 91 Stockbrokers Zambia Ltd .............................................. 28 Sun International Zambia Ltd ....................................... 81 The Royal Solwezi Hotel .............................................. 42 Tri-Pump & Engineering ............................................... 46 United Bank for Africa ................................................... 26 UUNET Zambia ............................................................ 96 Zambezi Portland Cement ............................................ 36 Zambia Bottlers Ltd .............................................. 66 & 67 Zambia Development Agency ......................................... 3 Zambia Forestry & Forest Industries Corporation Ltd ... 76 Zambia Information & Communication Technology .......... Authority .................................................................... 95 Zambia National Commercial Bank .............................. 25 Zambia National Farmers’ Union .................................. 51 Zambia Tourism Board ................................................. 83
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