ZAMIA: AFRIA’S NEW FRONTIER FOR - Developing Markets...Investment Opportunities: 1. Divesture of...

Zambia Development Agency

ZAMBIA: AFRICA’S NEW FRONTIER FOR INVESTMENTS AND PROFITS

LONDON 4TH NOVEMBER, 2015

Presentation Outline

Priority Sectors and Investment Opportunities

Location of Zambia

Economy at a glance

Why Invest in Zambia

ZDA: Your Gateway to Zambia

RSA

KENYA

Dar-es-Salaam –2hrs 4mins

Addis Ababa – 4hrs 9mins

Windhoek – 2hrs

Lubumbashi – 1hr

By Road

By Air

By Rail

COMESA – 2014Approx. 482 million peopleReal GDP US $ 353.8 billion

SADC - 2014Approx. 301 million peopleReal GDP US $ 529 billion

Zambia

Foreign Exchange Reserves

• $3.04 Billion (Dec.2014)

Area: 752,614km2 (39th)

Population: 15.02 million (2014 est.)

ECONOMIC STATISTICS

GDP : $ 27.1 billion (2014)

Per Capita: $1, 802 (2014)

GDP Growth Rate 6% (2014)

Inflation (CPI): 7.7% (Sept. 2015)

2014 Mo Ibrahim’s Index of

African Governance 52 Countries

Global Competitiveness Index

2014–2015 of 144 Countries

2015 World Bank’s Ease of Doing

Business Out of 189 Countries

At 6% GDP growth rate in 2014, Zambia was the seventh fastest growing economy in Sub Saharan

Africa and tenth in the world.

Proportion of income households spend on food has declined significantly implying increased demand for non-food items

Trend is expected to continue as Zambia’s economic growth has remained strong

0

10

20

30

40

50

60

70

2002 2004 2006 2010

64 65

41.948.5

36 35

58.151.5

Food Non-Food

Source: Central Statistics Office

Priority Sectors and Investment Opportunities

Agriculture

ManufacturingTourism

EnergyPriority Sectors

Infrastructure

Total land area: 752, 614 km2 , 58% arable but only 14% is currently being

utilized

Total irrigation potential: 2.7 million hectares; only 6% is currently being

utilized

Sector includes livestock, crops, fisheries and forestry.

Investment opportunities exist in;

1. Farm blocks: (100,000ha)

2. Grain storage facility: Development of a 48,000mt steel silo storage

facility

3. Timber plantation: commercial exotic plantation of 50,000Ha of land

4. Yatu Tea: expansion of tea production on a 2000Ha land. Currently

producing 30ton/month of packaged tea

Zambia’s hydro resource potential is estimated at 6,000 MW.

Solar energy: Up to 3,000 sunshine hours per year.

Biomass resource estimated potential is 500MW (agriculture, forest and

Municipal waste).

Geothermal: there are more than 80 hot springs occurrences in Zambia.

Investment opportunities;

1. Development of Solar farms (Target Minimum 600MW)

2. Geo-thermal plant

3. Biofuel Energy Projects

4. Hydro Power: Kafue Gorge –750MW, Batoka Gorge – 1600MW

Chishimba Falls -14.8MW, Luswishi-15MW, Musonda Falls-10MW

The manufacturing sector in Zambia accounts for about 11 percent of

the country’s Gross Domestic Product (GDP)

The sector has high investment potential due to Zambia’s resource

factor endowment: raw materials, labor force, land, water, and

minerals.

Investment Opportunities:

1. Divesture of 49% Government shares in Indeni oil Refinery

2. Agro Processing: edible oils, food processing

3. Mineral Processing: copper, cobalt, gemstones

4. Light Engineering: Agriculture Equipment

A land-linked country surrounded by 8 countries thus access to sea ports andinternational markets is through roads, rail, and air

Government invites the private sector to finance infrastructure projects through the PPP

Investment opportunities:

1. Roads: Link Zambia 8000 (km) projects

2. Real Estate: Government Office accommodation, Redevelopment of the ZambiaInternational Trade Fair Grounds, Mukuba Hotel, Twin –Palm Housing project, andGolf Estate.

3. Industrial structure: MFEZs and Industrial parks

4. Railway Projects: Lusaka Mass transit railway, Kafue(Zambia) – Ziwa (Zimbabwe)Railway, TAZARA Nseluka – Mpulungu port, Mchinji/Chipata Railway

5. Ports and Habours: Redevelopment of Mpulungu Habour, Walvis Bay, Lobito andMombasa

Tourism is one of the fastest growing sectors in Zambia

It has the potential to be a major contributor to socioeconomic development asan important source of jobs, prosperity and competitiveness.

Key assets include pristine national parks and game management areas, whichare home to a great diversity of wildlife and flora.

Investment Opportunities:

1. Mulungushi International conference center redevelopment

2. Livingstone Hotel and conference center: Development of an ultra-modernmulti-purpose conference facility.

3. Lodges: Kafue South National park – 250 beds, and Luangwa South NationalPark Lodge - 120 beds

4. Northern Circuit – Hotels, Lodges and Campsites in Nsumbu National Park

Sector accounts for over 65.5% of FDI and about 80% of exportsearnings

Mineral resources include: metals, gemstones, industrial minerals,agricultural, building and energy minerals

Zambia is the second largest copper producer in Africa

Zambia produces about 20% of the world’s emeralds: the most soughtafter due to their deep green color

Zambia has successfully hosted seven local emerald auctions.US$14.5 million was realized in the fifth emerald auction held inFebruary 2015.

Investment opportunities exist in the extraction and processing ofvarious mineral resources including diamonds, gold, and uraniumamong others.

SECTORPROFIT BY SECTOR

(US$ MILLION)

RETURN ON

EQUITY (%)

MINING AND QUARRYING 349.1 3.5

MANUFACTURING 329.1 27.4

FINANCIAL INSTITUTIONS 136.9 18.2

INFORMATION & OMMUNICATION 56.8 16.1

WHOLESALE & TRADE 49.1 8.9

REAL ESTATE 44.8 14.6

AGRICULTURE, FORESTRY & FISHING 11.4 2.8

TRANSPORT AND STORAGE 6.1 9.1

CONSTRUCTION 0.6 0.7

Source: Foreign Private Investment & Investor Perceptions Survey 2014

Tax Incentives

• Corporate Income Tax : 0% for 5 years

• Zero percent tax rate on dividends for 5

years

• No Import Duty on equipment and

machinery for five years

2

Location Support• Multi Facility Economic Zones

• Industrial Parks

• Rural Area

Non-Tax Incentives• Investment guarantees and protection

• Free facilitation for application of

permits, licenses, land acquisition and

utilities

3

1

Implemented Projects

• Zambian BreweriesUS$32 million

• Dangote Cement US$400 million

• Zambia Sugar Expansion Project -US$82 million

• Silverest Housing Project – US$16 million

• Global Plantation –US$ 200 million

Sun Bird Investments Ltd

• Production of Ethanol Cassava in KawambwaDistrict, LuapulaProvince

• Out-grower scheme targeting 20,000 small scale farmers

• Project Cost: $150million

• Expected employment: 600 direct jobs

Mansa Sugar

• SakizaSpinning Limited in partnership with the Kenyan investors.

• Sugar cane plantation and a sugar processing factory Land

• Project cost:

• Expected employment:

Buffalo Consortium

• Cement and Lime Production

• Project cost: $500,000,000

• Expected employment:

1 Stable Political System

2Positive and investor friendly economic

environment

3 Investment guarantee and securities

4

Abundant natural resources presenting

excellent investment and trade

opportunities

5 Thriving private sector

6 Attractive investment incentives

7Unlimited repatriation of profits & no

exchange controls since 1994

8Duty free access to regional, wider

Africa, EU and USA Market.

9

Progressive banking, legal and

insurance services of international

standards and stock exchange.

10Good place to work and live friendly

people with a rich culture.

ZDA: Your Gateway to Zambia

• Established by an Act of Parliament, ZDA Act No 11 of 2006

• Commenced operations in 2007 after the merger of five quasi-government institutions, namely• ZPA,

• SEDB,

• EBZ,

• ZIC, and

• ZEPZA

Establishment

• To foster economic growth and national development by promoting trade and investment in Zambia through an efficient, effective and coordinated private sector led economic strategy …”

Purpose

• Facilitate Trade andInvestment

• Facilitate capacitybuilding tocontribute to theGrowth andCompetitiveness oflocal private sectorbusinesses

• Facilitate access tointernational ExportMarkets

• Provide Informationand AdvisoryServices tostakeholders

Key Functions

A-to-Z information on the Zambian market

Guidance through the entire export and investment process and aftercare

Provision of matching Zambia partnersand building contact networks

Global export market information & product development

SME & business development services

Contact us for further Information:

Patrick D. ChisangaDirector General

Zambia Development AgencyPrivatisation House, Nasser RD

P.O. Box 30819, LUSAKA, ZAMBIA.

Tel: +260 211 220177Fax: +260 211 225270

Website: www.zda.org.zmEmail: info@zda.org.zm