Zambia, a landlocked country covering an area of 752,612 sq. km lies in a tropical belt on a fairly high plateau averaging about 1,300 metres above sea level. Zambia is centrally located in Southern Africa and shares borders with Democratic Republic of Congo and United Republic of Tanzania in the north, Malawi and Mozambique in the east, Botswana, Namibia and Zimbabwe in the south and Angola in the west.

Agriculture and tourism offer the best investment opportunities as the country boasts of a wide range of fertile environments, wildlife and an ideal climate. With three great rivers and bordered by three lakes, the country has enough surface and ground water reserves. In addition, the country has abundant hydro-electric power, which is also exported to neighbouring countries. Zambia has vast mineral resources in the Copperbelt and North Western Provinces. Mineral deposits of copper, cobalt, zinc, lead, coal, gold and silver is found in these provinces. Zambia also contributes about a fifth of the world's trade in gemstones.

Since 1991, Zambia has been implementing an economic reform programme. Trade liberalisation is an integral part of Zambia’s reform effort, thus indicating its confidence in the efficacy of open, competitive market economy and adherence to the principles of multilateral trade. To this effect, trade barriers have been substantially reduced and quantitative restrictions eliminated. Import controls are only maintained for health, security and associated reasons. Customs duties are now the main trade policy instrument, and even these have been substantially reduced over the years, with the highest tariff being 25 percent on finished products.

The role of the State in the management of companies has been virtually removed. The Government has created a pro-active private sector driven economy and an enabling environment. Zambia has taken the lead in the privatisation process on the continent and has embarked on strategies that are aimed at realising the potential in specific sectors of the economy. These include among other things, investment and export promotion, public spending on infrastructure development and maintenance of a stable macro-economic environment.

Recognising that the participation of Zambians in the privatisation programme as the basis for sustainable economic growth and to facilitate public participation, Government set up the Lusaka Stock Exchange, which is operating well. A number of companies are now listed at the Lusaka Stock Exchange where they are raising capital for their companies. Furthermore, Zambia has no foreign exchange restrictions, with statutory protection of investment and the right to repatriate 100 percent of profits and dividends without any restrictions.

Government has addressed the aspect of stimulating private sector investment, through the provision of several attractive incentives and measures. Zambia offers a number of incentives to investors among others: A maximum of 37.5 percent personal income tax; Tax for companies listed on the Lusaka Stock Exchange qualify for a 2 percent discount (valid for one year only) from the normal corporate tax rate applicable for each sector; Tax of only 15 percent on income from farming and non-traditional exports; Dividends from a rural enterprise exempt from tax for the first five years of operation; Wear and tear allowance of 50 percent per annum for the first two years on implements used for farming, tourism or manufacturing; and Capital expenditure on the growing of coffee, tea, bananas, citrus fruit or similar plants qualify for a development allowance of 10 percent for the first year of production.

The Export Board of Zambia provides Zambian companies with a comprehensive package of export development programmes covering supply and market interventions. In addition EBZ provides exporters with advisory services and trade information through the global trade point network, product and market reports and trade publications.

Further opportunities exist in manufacturing enterprises that require expansion, modernisation or outright privatisation. Government, in addition, is reinforcing its commitment through the establishment of the Zambia Export Processing Zones Authority (ZEPZA) that promotes companies in the export market with competitive incentives. In an effort to secure investors' confidence, Zambia has joined the Multilateral Investment Guarantee Agency and has signed multilateral, regional and bilateral investment protection agreements with a number of countries.

The Zambia Investment Centre was created to facilitate, regulate, coordinate and promote the establishment of business enterprises. It was established with a view of making it a one-stop facility for investors and efforts towards achieving this are still continuing through the revision of the Investment Act. In conclusion, Zambia's active membership in Regional Organisations heightens its regional and global potential.

K. KONGA
Minister of Commerce, Trade and Industry