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Investment Policy Review - Zambia

image of Investment Policy Review - Zambia

To date, the performance of the Zambian private sector had been poor due largely to the high cost of capital and domestic inputs for local production, which make sustaining competitiveness in an open economy practically difficult. The present Investment Review notes that since the introduction of major economic policy reforms In the early 1990s, private investment, including FDI, had been playing a greater role in Zambia's economy. FDI had also contributed to the long-term policy objective of Zambia, which is to diversify its production and export base from mining to other products and services.

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Introduction

Zambia has many attributes to attract foreign direct investment (FDI). It is a mining economy with decades of experience in mining-related activities. The quality of its mineral resources is equivalent, if not better, than those found in many successful mining economies. Recent export trends, mainly spearheaded by FDI, also demonstrate the great potential and scope that exist in Zambia for deepening investment in non-traditional export sectors such as vegetables and flowers and non-copper mining. The prospects for investment in higher value added activities in mining, services and agriculture are also immense. Zambia has also underutilized rural resources, including unspoiled wilderness areas for tourism, which, if properly exploited, could help attract considerable amounts of FDI. Export potential is also enhanced by regional trading arrangements and privileged market access opportunities granted by developed countries.

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