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Zambia

Zda Spotlight Development


Agency

Issue 5 July 31 2009


Inside this issue:
Chinese Firm to Invest US$3.63 Billion
Russia Determined to 2
Boost Trade with Africa Mining Group leading to its
signing within a few
months.
2009 First Half Records 2
US$755M Investment Speaking at the same oc-
casion, ZDA Chairperson,
Mr. Luke Mbewe, said for-
MSE Clinches Multi- 2
eign direct investment was
Dollar Project
becoming very competitive,
hence the need to be more
SA Firms Seeking 3 innovative to keep its in-
Agents at ZACS flow at par. Mr. Mbewe
assured Zhonghui Mining
ZDA Attends Dar-es- 3 Group that its investment
salaam Fair would be well protected
under the laws of Zambia.
MSEs Get Market & 3 MSEs earn a living through making simple wares . In picture, And Chinese Ambassador
Finance Access Training MSEs making pop corn machines. ZDA facilitates the growth of to Zambia, Li Qiangmin,
MSEs in the country to enhance wealth creation. ( Story below) commended ZDA for its
Implications of Current 4 courage to attract huge
Financial Crisis Government, Zambia Devel- Mr. Felix Mutati said the in- investment in the country
opment Agency and vestment Zhonghui Mining . “ZDA, you are very coura-
Zhonghui Mining Group Lim- Group was bringing to Zam- geous. It is not easy to
ited of China have signed a bia was the biggest single bring such a huge invest-
US$3.6 billion Investment investment in the region. Mr. ment into the economy
Points of Interest
Promotion and Protection Mutati said the investment from a single entity at
• “FDI is becoming very Agreement (IPPA) to guaran- would translate into more
once,” said Mr. Qiangmin.
competitive, hence the tee the Group’s investments than 32,000 direct job op-
need to be innovative to in the mining and related portunities and an additional Meanwhile, Zhonghui Min-
keep its inflow at par.” sectors. 2000 jobs in related indus- ing Group Chairperson,
tries. The minister has since
• “Wealthier nations have Speaking during the signing Yaohui Wang, said the
commended ZDA for working
the obligation to assist of the IPPA, Minister of Com- signing of the IPPA gave
hard to conclude the IPPA
Africa create joint institu- merce, Trade and Industry, negotiations with Zhonghui (Continued on page 2)
tions and companies that
rest on mutual economic
benefits rather than giv-
ing the continent primitive
aid which disadvantage
Africa’s development ”
30 MSEs Registered with ZDA
• There is a steady come ZDA approved thirty Small ers were from ventures situ- and construction sectors,
back of investor confi- and Medium Enterprise ap- ated in North-Western and with the service sector re-
dence in the economy plications for MSE certifi- Copperbelt provinces. cording the largest invest-
after the credit crunch. cates in June, with a total ment of about K791.6 mil-
investment of K2.1 billion. The K2, 108,142,542 total lion while the manufacturing
investment is expected to sector recorded about
Quote The approved investment create 170 job opportunities K616.2 million.
applications were from enter- in the economy.
“The investor of today prises located in Lusaka, Other sectors contributed
does not benefit from Central, Southern, Western, These applications were about K70 million to the
yesterday’s growth” and Luapula provinces. Oth- from the manufacturing, MSE investment certificate
Warren Buffet agriculture, trading, service, application approvals.

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PAGE 2 I S SUE 5

Russia Determined to Boost business forums and presentations to Chinese Firms to Invest
enhance mutual understanding among
Trade with Africa- Envoy US$3.6bn
partners.
Russian Ambassador to Zambia, Boris From page 1
“Russia and Zambia have good experi-
Malakhov, has urged African countries
ence of cooperation in many spheres. confidence for the Group to invest in the
to create effective financial instruments
This facilitated our investment in Zam- Zambian economy. “The IPPA is a guar-
that promote self-development to with-
bian soil. For example, through Zambia’s antee that we can entrust our money
stand economic upheavals.
cooperation in economic and investment into the Zambian economy and very
And Mr. Malakhov has charged that information exchange, several Russian soon both parties will see good results.
wealthier countries had the obligation to investors have shown interest to invest We hope to flourish with our Zambian
assist African countries develop joint in Zambia based on business proposals
brothers and sisters,” Mr. Wang said.
venture institutions and companies that prepared by the Russian-Zambia Busi-
rest on mutual economic benefit rather ness Council in September 2008 ,” Mr. Mr. Mutati signed on behalf of the Gov-
than giving primitive aid to the continent Malakhov said. ernment, Zhonghui Mining Group Lim-
that consequently disadvantaged eco- ited Chairman Yaohui Wang for the
The Ambassador said the Russian Em- Group and ZDA Board Chairperson,
nomic growth and development of Afri-
bassy was ready to broker the establish-
can economies. Luke Mbewe, for the Agency.
ment of business relations with Russian
Speaking at a Business Forum organ- partners. He said potential areas of co- The Zhonghui Mining Group Limited
ised by the Zambia Development Agency operation could be in energy projects, project involves the mineral explorations
at the just ended Zambia International mining industry, oil and gas, tourism and works, mining, concentrator works,
Trade Fair in Ndola, Mr. Malakhov said agricultural cooperation. smelting, marketing and selling the cop-
Russia’s approach to Africa is to assist per on the domestic and international
the continent to unlock its potential to 2009 First Half Injects markets. An initial US$3.633 billion has
boost its trade and economic stamina in US$755.3m been earmarked for the project during
the world. the first 5 years.
ZDA has recorded more than US$ 755.3
“What we want is to assist African coun- million planned investment in the first The investment project will be imple-
tries to the extent of unlocking their own and second quarter of 2009. And the mented by the Group through its sub-
possibilities. Russia is looking for such Agency has recorded a tremendous rise sidiary companies namely, Zhonghui
ways and means of mutually beneficial of investment in the second quarter Mining Industry Zambia Limited, which
cooperation and providing assistance, compared to the first quarter of the year was incorporated on 19 July 2007,
which by all means cannot be called by more than US$ 357.7 million. Golden Lion Mining Industry Zambia
dead aid,” Mr. Malakhov said. Limited, incorporated on 6 May 2008,
ZDA Senior Investment Promotion Offi- and Wang Wang Holdings Zambia Ltd.
He said although the global financial cer, Roy Kapembwa, attributed the in-
and economic crisis had substantially crease to the steady coming back of MSE Clinches Multi-Dollar Pro-
undermined world economic stability investor confidence in the economy from ject
and affected every country, further the credit crunch. “The confidence of
strengthening of friendly relations with investors is steadily coming back after A Small and Medium Enterprise has
the African states and promoting multi- serious investment decrease experi- partnered with Lumwana Mines and
faceted cooperation remained the high- enced recently due to the uncertainties Marli Investment (Z) Limited to under-
est priority of Russia’s foreign policy. that were caused by the credit crunch,” take Jatropha Curcas Linn seedling
Mr. Kapembwa said. farming and supply the Linn-seedlings
Mr. Malakhov said Russia’s trade policy to Lumwana Mines. Zam-Vizwear (Z)
paid less attention to African and Latin The real estate sector contributed the Limited is undertaking the project under
American continents in the 1990s, a largest amount of pledged investment of the out-grower scheme initiative with
situation the country has revisited. more than US$208.2 million, due to the Marli Investment Zambia. In this vain,
“Russia’s change of approach towards high demand for modern office spaces Zam-Vizwear acquired a 10 hectare land
Africa can be shown by the recent visit by the market . The recorded investment for the project at an estimated total
of the Russian Federation President, Mr. pledges during the period under review
investment of US$38,000.
Dmitry Medvedev, to Egypt, Namibia, were US$198, 777, 750 and US$556,
Nigeria and Angola. The visits were 510,450 in the first and second quarter The US$38,000 covered expenses for
meant to give boost to our trade and respectively. land acquisition and preparation, crea-
economic turnovers with Africa, which tion of a water reservoir, designing and
currently stands at US8.2 billion Dol- ZDA at the ZACS laying out the irrigation system, pur-
lars,” he said. chase of Jatropha seeds, water pumps
Zambian Development Agency (ZDA) will
and horse power engines for irrigation.
And Mr. Malakhov has said there was be explaining how it facilitates growth for
To kick-start the project, Zam-Vizwear
need for cooperating partners to sign Medium and Small Enterprises (MSEs)
purchased 10×25kg bags of Jatropha
intergovernmental agreements to en- at the 83rd Zambia Agriculture and Com-
Curcas Linn seeds from Marli Invest-
courage and protect investments that mercial Show slated for 30th July-3rd
ments (Z) Limited with each bag con-
faced difficulties in kick-starting due to August 2009. ZDA will use the ZACS to
taining 40,000 seeds at a total cost of
legal complications. Mr. Malakhov has promote the vast investment opportuni-
ties of Zambia to investors and entrepre- US$5,454.
since commended the Zambian Govern-
ment for facilitating the exchange of neurs locally and abroad. This years’ Upon satisfactory production of the
economic information to appropriate theme is: “Challenge of Change,” a seedlings in accordance with the terms
institutions that helped in organising theme that tallies with ZDA’s mandate of of reference and specifications, Marli
facilitating growth of the MSE sector.

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I S SUE 5 PAGE 3

Investment (Z) Limited bought the entire Zambia Development Agency (ZDA) coor- ZDA Records More Than
Jatropha seedlings off the nursery on dinated the participation of six Zambian
behalf of Lumwana Mines at companies in the 12 metre stand, which
US$100M Investment Rise
US$290,909.09. was visited by Tanzanian President, Last month’s planned investment inflow
Jakaya Kikwete. has increased by US$109.7 million com-
Following the country’s projected land
pared to May, an indication that the
use of 2,000,000 hectares for bio-fuels Mr. Kikwete was impressed with the
country has remained an attractive in-
the market value for the seedlings is products on display and walked away
vestment destination despite the credit
projected to rise by 20% as most farm- with product samples comprising as-
crunch. More than US$281.4 million
ers were closely following up the bio- sorted fruit juices from California Bever-
planned investment was approved last
fuels in the agro-sector ages, pharmaceutical baby care prod-
month, compared to US$171.7 million
ucts from Pharmanova Zambia Limited,
The Jatropha project is Zam-Vizwear’s that was approved in May 2009.
leather shoes from Malar Industries
diversification strategy from its initial Limited, baked Beans and Peanut Butter The approved investment licence appli-
business of supplying industrial safety from Fresh Pikt. Including some as- cations were from thirty-two applicants,
requirements, protective clothing and sorted garments and textile products with a total of 3, 614 new job opportuni-
reflective materials to the Zambian busi- from African Joy and product information ties expected to be created once imple-
ness community and the surrounding brochures. mented. These planned investments
Sub-Saharan African countries. were in the manufacturing, real estate,
Many visitors to the stand wanted to
The major clients of Zam-Vizwear have services, tourism, agriculture, transport
obtain first hand information about the
been the mines, but due to poor per- and construction sectors. Other sectors
products being exhibited, the manufac-
formance of the sector, the company were health, financial and education
turers, the quality of samples and how
experienced poor cash flow hence opt- sectors.
they could make orders.
ing to venture into agro-related business
The real estate sector attracted the larg-
to cushion the impact of the losses MSEs Get Finance and Market est planned investment of about
caused by the mining sector’s poor per-
Access Training US$200.6 million, while the manufactur-
formance. ing sector with US$22.8 million. Other
Zambia Development Agency (ZDA) and sectors shared the total of more than
South African Firms Seek Dis- partners have rolled-out a training pro- US$58 million of the approved invest-
tributors, Agents at ZACS gramme for Micro, Small and Medium ment licences.
Enterprises in all provinces on access to
Six South African companies under the finance and markets. The training pro- Uganda Hosts Smart Partnership
South African International Business gramme which is being undertaken by Dialogue
Linkages (SAIBL) have confirmed partici- ZDA’s Micro and Small Enterprise (MSE)
pation at this year’s Zambia Agriculture Division and seven relevant institutions The 19th Global Smart Partnership Dia-
and Commercial Show. These compa- is funded by the Private Sector Develop- logue was held in Kampala, Uganda with
nies include Fred Footwear, ShineOn ment Programme (PSDP) at a cost of a strong call for public-private partner-
Polish cc, Zhauns Group, Powa Brands K561 million.
cc, The Smart Food Company, and Mak- ship towards improving social-economic
haya Bushmen Ceramics. Institutions involved in the programme transformation for impoverished na-
include Citizen Economic Empowerment tions. Speaking at the opening cere-
The companies manufacture a number Commission, to explain its role in sup- mony, President Yoweri Museveni of
of products among them small-medium porting MSEs; Patents and Company Uganda described the Smart Partnership
machinery for food processing and dia- Registration Office, to highlight the regis- dialogue as a win-win situation that
per manufacturing, ceramic products tration procedures and requirements; could spearhead the transformation of
like tiles and bathroom assortments, Zambia Public Procurement Authority, African societies.
nutritional food (instant porridges, vita- for tender tips and how MSEs can ten-
min and fortified foods), school and der. Other partners are the Zambia Mr. Museveni pointed out that the devel-
formal leather footwear among others. Revenue Authority on tax matters, banks opment human resource, a network of
for guidance on financial discipline, a good roads and railway lines, adequate
The companies are looking for agents, Transnational Corporation to explain on
buyers and potential distributors of their and cheap electricity as well as the pri-
business linkages with MSEs, and Zam-
products as a way of broadening the bia Development Agency to give entre- vate sector and regional integration are
market for their products in the region. preneurial tips on bankable business critical pillars needed to accelerate
plans. socio-economic transformation of socie-
Those who wish to wish to get more
information on any of these companies ties in Africa. Mr. Museveni argued that
Zambia Development Agency Medium the Smart Partnership Movement was a
can contact their Trade Representative, and Small Enterprise Division Director,
Patrick Chilombo on 0955 600 010 or unique meeting that brought together
Windu Matoka said the programme will
saiblzambia@yahoo.com. people of different cultural, political and
run for five weeks. Mr. Matoka said the
training programme which started in economic backgrounds to discuss global
ZDA Attends Dar-es-Salaam Fair Solwezi in North Western province and issues with the aim of finding solutions
Mazabuka in Southern province this to the common problems.
The Zambian stand at this year’s Dar-es-
Salaam International Fair, which took month, will be concluded in September
2009. He said after this training, the The three-day conference attracted over
place from 28th June to 9th July 2009, 1,000 delegates and at least half of the
attracted many visitors with chain stores team will go back to the provinces to
have one-on-one discussions with MSEs 10 heads of government invited. Presi-
placing huge order for Zambian prod-
on challenges they encountered in con- dent Rupiah Banda was among those
ucts.
ducting business in their localities. who attended the conference.

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Zambia Development Agency SELECTED ECONOMIC INDICATORS
P.O Box 30819 JUNE 2008 JUNE 2009

Nasser Road 1. Inflation rate (%) 12.1 14.4

Lusaka, Zambia 2. Average Treasury bills rate (%) 12.1 13.9

3. GRZ Bond Yield Rate: (24-month) (%) 14.7 18.9

4. Average Lending Rate (%) 24.4 27.0


Tel: 260-211-220177
5. Exchange Rates: (ZMK/foreign currency)
Fax: 260-211-225270
US$ 3,186 5369
E-mail: zda@zda.org.zm
EURO 5,092 7,181
Website: www.zda.org.zm BPS 6352 8024

RSA 407 627

6. Agriculture Commodity Prices: (US$/MT)

Maize N/A 318

Wheat N/A 385

Soya beans N/A 380

7. Capital Market Activity Equity trading:

Number of Trades 821 564

Volume of Trade 134,932,568 165,065,335

Turnover (US$) 33,710,080 3,975,596

Foreign Portfolio Investment: (US$)

Inflows (Buying) (US$) 16,690,437 811,095

Facilitating Economic Growth


Outflows (Selling) (US$) (10,195,523) (1,723,220)

and Development Net Position (US$) 6,494,914 (912,125) Sources: Bank of Zambia, C.S.O., Luse, Zamace

Zambia Development Agency


ZDA At COMESA Customs Union Implications of Current Financial Tourism
under theand Investment
current Promo-
global financial
Launch Crisis crisis is local investment.
tion
Africa is affected by the financial crisis The Ministry of Tourism, Environment and
ZDA was part of the Zambian delegation
in many ways including reduced trade, Natural Resources and other relevant insti-
that attended the 13th COMESA Head of tutions between 13th and 17th July 2009
States and Governments Summit whose financial growth, reduced remittances
and stagnating official development undertook a trip to identify tourism sites on
deliberations culminated in a number of the Northern Tourist Circuit and other
agreements including the launch of the assistance. This observation was made
at the Expert Group Meeting on Indus- areas to boost the tourism and investment
COMESA Customs Union. The COMESA promotion drive. The exercise was meant
trial Investment Policies held in Addis
Customs Union was launched with a to capture photographs and video footage
Ababa, Ethiopia. The meeting sought to
Common External Tariff (CET) of four of the identified sites to promote and show
address the challenges hampering Afri-
tariff bands. These bands are 0% for raw existing infrastructure including available
can industrialisation. It was further ob-
materials, 0% for capital items, 10% for resources in the areas to entice investors
served that foreign direct investment is and tourists. The team comprised the Min-
intermediate goods and 25% for finished
falling rapidly than global investment. istry of Tourism, Environment and Natural
goods. The aim of the Customs Union
From empirical evidence, FDI has not Resources, Zambia Wild Life Authority,
aims is to create more trade links within
been a key driver of investment in Africa. Zambia National Tourism Board, Zambia
the COMESA region which will stimulate
As a proportion of GDP, FDI in Africa it Development Agency, National Housing
intra- COMESA trade diversification. The
Customs Union’s interim period will accounts for about 5%. The key to Authority and Zambia National Broadcast-
cover three years for tariff alignment, growth under the current condition is ing Corporation and provincial and district
ability of the economy to adapt to new administration officials in the identified
plus an extension of five years. Zambia
changes. There was also need for Africa areas. Areas earmarked for the exercise
is expected to realise tremendous bene- include Livingstone ,four sites in the Musi-
fits from the Customs Union, including to highlight the fact that profitability in
manufacturing is higher at 20% than in O-Tunya National park and two sites uphill
increased Foreign Direct Investment of Mukuni Village; Kafue National Park,
developed economies and the major
flows, export diversification and a two sites along Itzhi-Tezhi dam and two
driver of investment under the current
stronger negotiation position in multilat- inland sites in the park; and Kasaba Bay
eral negotiations. global financial crisis is local investment.
with four sites along Lake Tanganyika.