zda spotlight : may 2010

8/9/2019 ZDA Spotlight : May 2010

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Issue 14

CAD Fund to OpenOffice in Zambia

2

Zambias EconomicOutlook Impressive

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Zambia, China SignUS$5bn Investment

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COMESA-EAC-SADC

Create TITA

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PFI Launched inZambia

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Zambias Exports toKorea Rising

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ZDA approves K1.3bnMSE Investment

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Inside this issue:

Zambias ranking on the Easeand Access to Credit hasimproved from 113 to 30 inthe world due to cross-cuttingbusiness reforms the countryis implementing, ZDA DirectorGeneral Mr. Andrew Chip-wende has revealed.And Mr. Chipwende saidZambias political stabilitystands-out as an importantfactor for the countrys com-petitiveness. He said thecross-cutting business re-

forms the country is imple-menting have positioned Zam-bia in an advantageous posi-

tion to attract huge investment

into the economy.

Our ongoing business re-forms and the streamlineddispute resolution and legalsystems have improved theease and access to credit by

the business community,reduced time for companyregistration from 30 days toone day and tax number

registration from about 21 to

4 days, Mr. Chipwende said.

He said Zambias positionin most world rankingssuch as the World Competi-

tiveness Report, Ease ofDoing Business, Technol-ogy Readiness Ranking,and Ease and Access to

Credit have been enhancedby the business reformsgovernment was imple-menting, making the coun-

try more competitive to

capital.

We can see from the in-flow of investment intovarious sectors of the econ-omy that world-wide capitalhas seen that Zambia hassomething to offer, hesaid. We also have anopportunity to tap from our

eight neighbours marketsas we are well intercon-nected and linked to the

sea through them.

Mr. Chipwende said Zambiahas various unique sellingpoints to attract invest-ment, such as its businessfriendly fiscal regime,

eased (Continued on Page 3

BUSINESS REFORMS REWARD ECONOMYUSINESS REFORMS REWARD ECONOMYUSINESS REFORMS REWARD ECONOMYMay 2010

LAP GreenN Buys 75% Zamtel SharesLAP Green Networks of Libyahas bought 75 percent of theequity of Zambia Telecommu-nications Company Ltd(Zamtel) and all parties havesigned binding transactiondocuments.LAP Green Networks hascommitted to pay a totalpurchase consideration ofUS$257 million for 75 per-

cent of Zamtel and an addi- tional US$127 million financ-ing for existing and new net-work expansion projects. Aspart of the revitalisation ofZamtel, LAP GreenN has com-mitted to a five-year businessplan, which would foresee arapid and sustainable return to

growth, underpinned by amajor investment in networkinfrastructure and support

systems to modernise the

company.

Government would retain 25percent of Zamtel and wouldcontinue to have an activerole in the management anddirection of Zamtels future,retaining two seats on theboard out of seven and vetorights to certain key deci-

sions (Continued on Page 6)

Zda Spotlight

Quote

Vision is not enough, it

must be combined with

venture. It is not enough to

stare up the steps; we

must step up the stairs.

Vaclav Havel

Points of Interest

We can see from the inflow

of investment into various

sectors of the economy thatworld-wide capital has seen

that Zambia has something to

offer.

We are delighted to have

signed an agreement with LAP

GreenN, who have both theresources and the track re-

cord in the African telecom-

munications sector to turnZamtel around and deliver

rapid change and tangiblebenefits to customers and the

people of Zambia.

Government has abolished

the minimum capital require-ment for establishing a busi-

ness in line with the on- goingreforms as a way of reducing

the cost of doing business in

the country..

Zambia

Development

Agency

ZDA Director General, Mr. Andrew Chipwende with Mr. Andy Roberts,Pick n Pay Group General Manager, signing an MoU to facilitate theBusiness Linkage Programme for MSMEs. Story on Page 6.


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PAGE 2ISSUE 14

Zambias Investment OutlookImpressiveZambias investment outlook is changingfor the better, making the country a morecompetitive investment destination, Japa-nese Ambassador to Zambia Mr. HidetoMitamura has noted.Mr. Mitamura said companies withstrongglobal existence and profiles were

coming to Zambia to learn about its eco-nomic turn-around and explore invest-ment opportunities. Speaking during abusiness information sharing meetinghosted for a Japanese business delega-

tion, Mr. Mitamura said Zambia hadmade incredible economic achieve-ments in the last five years; hence manyforeign companies were coming into the

country to invest.

And the delegation leader and AllianceForum Foundation (AFF) board chairper-son, Mr. George Hara said that AFF inconjunction with UNZA and Copperbelt

University was launching a highly ad-vanced video conferencing system thatwould enable lecturers from Japan teachstudents at the two universities at thesame time. The XVD distance learningsystem, which was launched by Presi-dent Rupiah Banda on the sidelines of theE-Learning Africa Conference, at the Mu-lungushi International Conference Centre,was the first ever technology to work in any

part of the world.

Mr. Hara said universities in the UnitedStates of America would be linked to thesystem by June this year, expressing

hope that the learning system wouldimprove education levels in universitiesand colleges in Zambia and the wholecontinent. He added that the nine Japa-nese companies represented by the teamwere interested in establishing joint ven-

tures with local companies in rail lines,roads, transport and telecoms, construc-

tion and cosmetics.

We hope to walk together with Zambia inthe new era of technology of service deliv-ery. If we can find joint ventures withlocal people, we can create basic infra-structure with sophisticated software thatwill become a starting point of a long termrelationship between Japan and Zambia,

Mr. Hara said.

And Commerce, Trade and Industry Min-ister, Mr. Felix Mutati said with the in-creased investment inflows and globaleconomic recovery, Zambia would postabout eight percent growth and wouldincrease its per capita income from thecurrent US$1, 200. The diversified in-vestment we are receiving offers us anopportunity to post much higher growthrates and improve our per capita income,

Mr. Mutati said. We will continue working

CAD Fund to Open Office inZambiaChina and Zambias development coop-eration is growing stronger, with theChina Africa Development Fund (CAD)Fund opening an office in Zambia to helpreduce the burden of access to finance inthe country, says ZDA Director General,Mr. Andrew Chipwende.And Chinese Ambassador to Zambia, Mr.

Li Qiangmin said China imported goodsworth more than US$1.4 billion in

2009.

Speaking during the China Jianghxi Zambia Business Matching Forum, Mr.Mr. Chipwende said the opening of theCAD Fund office in Zambia was one of

the new waves of development cooperation between Zambia and China. He said the Fund was a crucial component inreducing the challenge of access to fi-

nance in the country.

The CAD Fund is very important forequity funding and increasing access tofinance to Zambian companies that ex-port most of their products, he said. Thefund provides them ready capital to im-prove product quality and volume to meet

the foreign market demand. The fundwill also go a long way in easing access tofinance by the micro and small enter-prises (MSEs), who often fail to accesscapital due to high bank lending rates.Through CAD Fund, MSEs will obtainloans with much lower rates to enable

them maintain their businesses to self-

sustaining levels, Mr. Chipwende noted.

The opening of the CAD Fund office inZambia is one of three new waves ofbilateral cooperation that Zambia is dis-cussing with China, to help build capacityfor Zambian companies to diversify theirbusinesses, by finding new markets for

their products. Mr. Chipwende added thatrevamping Mulungushi Textiles and theestablishment of Chambishi multi-facilityeconomic zone were the other two wavesof the new cooperation. He said exportsfor about US$600 million to China wereexpected to be produced from the Cham-bishi economic zone once it was fully

operational.

Meanwhile, Mr. Qiangmin said theUS$1.4 goods China imported fromZambia last year represented 85 per-cent of the total Chinese trade in 2009.He said the trade balance recorded last

year in favour of Zambia was one of thefactors that attracted more Chineseinvestment into the country. Mr. Qiang-min said the business matching forumwas fundamental in creating more mutualbusiness linkages between the two coun-

tries, especially with the opening of theCAD Fund office in two African countries

including Zambia.

hard and attract investors from various

parts of the world.

He further said the launch of XVD wouldmake Zambia the hub to export educa-

tion technology to other countries in theworld. Mr. Mutati said the system wouldcreate high quality jobs as it was a high-

tech in nature.

Minimum Capital RequirementAbolishedGovernment has abolished the minimumcapital requirement for establishing abusiness in line with the ongoing reformsas a way of reducing the cost of doingbusiness in the country, Minister of Com-merce, Trade and Industry, Mr. Felix Mu-tati has indicated.Mr. Mutati said the removal of minimumcapital requirement was done in relation

to 14 enacted business licencing re-forms that were submitted to Parlia-ment and assented-to by the Presidentearly this year. The minister added that23 licences had been eliminated andone had been re-classified, while 40Bills had been drafted to incorporatebusiness licencing reform recommenda-

tions. The Bills will be presented to Par-

liament during the next sitting.

And Mr. Mutati said most regulatoryagencies were diligently and expedi-

tiously implementing government policyregarding streamlining of business licens-ing requirements. Most of the ministriesand agencies have strengthened the qual-

ity of the regulatory environment for busi-ness through the framework of the PrivateSector Development Reform Plan. Whatwe now need is to bring business effi-ciency and eliminate cumbersome busi-

ness procedures, he said.

Five Economic Zones to AcquireStatutory InstrumentsGovernment is expected to sign and issueStatutory Instruments (SIs) by mid-Junethis year to operationalise five Multi-Facility Economic Zones (MFEZ), Com-merce, Trade and Industry Minister Mr.Felix Mutati has disclosed.The Statutory Instruments to be signed

and issued would be for the MFEZs thatwill be developed in Lusaka, Ndola andSolwezi. The MFEZs being facilitated willbe at Lumwana, Lusaka South, Lusakasub-zone near the Lusaka InternationalAirport, Gemstone Exchange Centre atBwana Mkubwa and the Roma Indus-

trial Park in Lusaka.

Mr. Mutati said once the statutory instr-ments were sinned, it would make pos-


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sible various economic activities such assuch factories, buildings, warehouses,

housing, schools and medical centres aswell as recreation facilities to be devel-oped. And Mr. Mutati said MFEZs andIndustrial Parks would provide micro andsmall businesses with an opportunity toengage into business with companiesinvesting in these zones and parks through

a service and supply side window.

He said MSEs would be able to rentspace within the MFEZ so that they werepart and parcel of the MFEZ and Indus-

trial Parks initiatives. Mr. Mutati said thebiggest challenges for SMEs were infra-structure constraints but they would beallowed to trade within the zones by

selling a number of products.

Zambia, China Sign US$5bn In-vestment AgreementZambia and China have signed four memo-randa of understanding (MoUs) aimed atincreasing investment in various sectors ofthe economy, including US$5 billion fund-ing to companies in the mining sectors byDevelopment Bank of China (DBC).Among the signed MoUs was one be-

tween China and Africa DevelopmentFund (CAD) Fund and the Ministry ofCommerce, Trade and Industry on theestablishment of an agency for the CADFund in Zambia. Other ministries alsosigned agreements with the CAD Fund,China Agricultural Development Group andJilin Grain Group on developing agriculturein the country as well as with China Non-

ferrous Metal Mining Company.

And President Rupiah Banda has com-mended China for signing of the MoUs andurged the Zambian private sector to workwith their Chinese counterparts so that

they could access resources from thefinancing provision by China. Speakingwhen he met the Chinese delegationfrom DBC, CAD Fund and representa-

tives of other companies in Livingstone, the President said it was governmentsdesire to see that the cooperation bene-

fited the people of Zambia.

Meanwhile, DBC CEO, Mr. Jiang Chaoli-ang said the Bank was tasked to come

to Zambia to see how the Bank could helpthe country economically as a follow up to the state visit by President Hu Jintao toZambia in 2007 and President Bandas

visit to China in February this year.

Mr. Chaoliang said the bank was responsi-ble for long term external financing and

supporting infrastructure development,adding that the bank was visiting thecountry to further expand cooperation inagriculture as Zambia was endowed with

vast water and land resources.

Finland Commits 8mn TowardsPSDRP IIZambia and Finland have signed an agree-ment where the government of Finland willprovide eight million euros (8mn) for theimplementation of the second phase of thePrivate Sector Development Reform Pro-gramme (PSDRP II).Finance and National Planning Minister,Dr. Situmbeko Musokotwane signed onbehalf of the Zambian government,while Finnish Under-Secretary of StateRitva Mrs. Koukku-Ronde signed for the

Finnish government.

Mrs. Koukku-Ronde said Finland wascommitted to support programmes thatimproved business climate and govern-ment capacity to design investmentpolicy, hence the provision of the fundsfor PSDRP II. She said the private sectordevelopment reform programme was at

the epicentre of business reforms inZambia, hence Finlands continued sup-port to the programme to ensure itssustainable implementation. And DrMusokotwane said the private sector iskey to the attainment of national devel-opment, adding that government wascommitted to reducing challenges faced

by the private sector in doing business.

Business Reforms Reward Econ-omyFrom Page 1

employment laws, improved efficiency indifferent government agencies, andpolitical stability, among others. Headded that any investor looked for astable and safe investment destination,

thus political stability played a criticalrole in Zambias competitiveness in

investment.

Investment is any sector is highly re-warding in Zambia. For instance, returnson equity in construction were 67 per-cent in 2007 alone, 35 percent in manu-facturing and 40 percent in tourism.These kinds of returns are unseen in

the developing world, as returns are

mostly between 10 12 percent, Mr.Chipwende indicated.

Meanwhile, Bank of Zambia Director forBalance of Payments, Mr. Evans Zyuuluhas said monitoring and analysing for-eign private investment and investorperceptions (FPI & IP) is key for policyand planning. Mr. Zyuulu said informa-

tion on foreign private investment wasimportant for external policy formulationand evaluation to adequately complement

fiscal and monetary policies to deliver

overall macroeconomic stability.

Speaking during the training of 50 Enu-merators for the 2010 FPI & IP Survey,Mr. Zyuulu said information on foreignprivate investment would greatly improvethe compilation of Payments Statistics forZambia, which could serve as an earlywarning system for preventing external

shocks.

Monitoring and analysing investor per-ceptions is important for enabling policymakers to be proactive when dealing withexternal shocks such as the recent inter-national financial crisis, he said. It alsohelps us ascertain how much investmenthas been actualised and the kind of im-pact it has on the economy, adding thatZDA alone can only do little as the exer-

cise was costly.

Mr. Zyuulu said better information oninvestor perceptions would assist govern-ment in designing investor friendly poli-cies, consolidating domestic investment,and attracting foreign investment tobenefit all Zambians. He commended the

Private Sector Development Programme,Zambia Development Agency (ZDA), Bankof Zambia (BoZ) and Central StatisticalOffice (CSO) for providing necessary re-sources for the project. The PFI & IP sur-vey is being conducted by ZDA, BoZ andCSO to determine the investor percep-tions of Zambias business climate, deter-mine the magnitude, source, direction of

private capital flows and stocks.

Battery Recycling Plant Opens inKabweA battery recycling plant and smelter hasbeen opened in Kabwe, with an initial in-vestment of US$2.6 million by Zalco Indus-tries Limited. The investment is expectedto create 400 jobs in the area.Zalco Industries Limited, which is Zam-bias first company to be involved in bat-

tery recycling, will produce 35, 000 batter-

ies per month from its plant.

We are looking at meeting the needs ofthe local market as well as exporting to thesurrounding countries. This will cut downon imported batteries and create jobs,said company director Mr. Hussein Safied-

dine. Mr. Safieddine said since all batteriesin Zambia were imported, the locally pro-duced batteries would be competitive es-pecially that plans were underway to ex-port to the Democratic Republic of Congo,

Malawi, Mozambique and Tanzania.

Mr. Safieddine said Zalco wanted to revive the battery sector in Zambia and hopedKabwe will gain from the project. He saidZalco is also involved in the recycling ofaluminum scrap into metal sheets andsupplies companies that produce pots and

pans. ToZ

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COMESA-EAC-SADC Creates TITAThe COMESA, Eastern Africa Community(EAC) and SADC tripartite taskforce hasestablished a Tripartite Infrastructure TrustAccount (TITA) to support infrastructureunder the North-South Corridor projects.The TITA which has a grant funding of

67 million will be hosted by the Devel-

opment Bank of Southern Africa. Thefunding is particularly for infrastructureprojects like rail system, road infrastruc-

ture and other facilities under the North-South Corridor initiative to enhance

trade in the region.

And the COMESA, EAC and SADC tripartite task force has been given 33 million by

United Kingdom Department for Interna- tional Development (DfID) to facilitate thecreation of a Free Trade Area (FTA) from

Cape Town to Tripoli. British High Commis-sioners to Zambia Mr. Tom Carter andMrs. Carolyn Davidson jointly said tradewas a key factor in economic growth andpoverty alleviation. The high commis-sioners added although 80 percent ofpoverty alleviation has been ascribed to

trade in recent years, Africa only ac-counted for three percent of global traderegardless of the continent comprising

42 percent of the world population.

Meanwhile, COMESA secretary general,Mr. Sindiso Ngwenya commended theUK for the funds adding that over thepast five years, COMESA has benefitedfrom UK aid through the regional tradefacilitation programme. Mr. Ngwenyasaid the three regional bodies tripartite

taskforce would deepen regional inte-gration through harmonisation of re-gional economic programmes in tradepolicy, trade facilitation and infrastruc-

ture. COMESABEDIA, IFSC MergedBotswana International Financial Services(IFSC) and Botswana Export Developmentand Investment Authority (BEDIA) havebeen merged in order to improve efficiencyand policy coordination of national invest-ment promotion and export developmentactivities.Similarly, a separate Botswana BrandManagement Company will not be estab-lished as previously planned, and in-stead, its mandate and objectives will bedelivered by the merged entity. Themerger is intended to improve servicedelivery as well as result in an organiza-

tion that has a refocused and encom-passing mandate that will propel invest-ment promotion and export develop-ment as a key component of the eco-nomic diversification.

Elsewedy Electricity to InvestUS$200mn in MozambiqueThe company will spend half of the in-vestment (US$100million) on rural elec-trification projects and another US$100million on building small hydroelectricand coal- fired power stations, ElsewedyElectric Africa's Director, Mr. Hatem Abdsaid.The Elsewedys investment is a boost togovernment plans to electrify the entirecountry by 2014. It is expected to helpbring electricity to a further 3.5 millionpeople in the centre and north of thecountry, bringing to 23 per cent the pro-portion of people with formal access topower. Currently only 89 of 128 districtsin the vast former Portuguese colony of20 million people are covered by elec-

tricity from the national grid. Sapa-dpaImproving the Business ClimateOver the last four years, governmentseconomic reform agenda has propelledMauritius on the international arena. Mau-ritius is ranked 17th out of 183 economiesin the World Banks Doing Business report2010. The bold reforms implementedsince October 2006 have contributed inradically improving the investment climateand setting the stage for continued eco-nomic development.The impact of these reforms can be mainlymeasured by the increased level of invest-ment, reduction in the unemploymentlevel, a more diversified economy, a flour-ishing entrepreneurial culture, clear andsimplified procedures that contribute tomaking Mauritius an open and transparentmarket for investment based on good gov-

ernance principles.

An ambitious target of being among the top ten economies in the world has beenset. Since the implementation of the Busi-ness Facilitation (Miscellaneous Provi-sions) Act 2006, the business landscapehas witnessed tremendous changes whichhave provided a more conducive businessenvironment to attract and stimulate in-

vestment. Board of Investment.COMESA and EU Sign 20mn EuroAgro Input ProjectCOMESA and the EU have signed a 20million Euro contribution agreement tosupport the COMESA agro inputs project,aimed at improving rural household foodsecurity and livelihoods in the region.The agro input project known as COM-RAP, will contribute to improving small-holders access to agricultural inputs aswell advancing the regional legal frame-works so as to increase agricultural pro-

ductivity. It will alleviate the constraints

to access seeds, fertilizers and financingin order to increase the volume of theirstaple crop production. COMESA Secre-

tary General Mr. Sindiso Ngwenya de-scribed COMRAP as key in contributing

to the improvement of rural food secu-rity and livelihoods in the COMESA re-gion through improving access to fi-

nance, fertilizers and seed.

And EU Head of Delegation in Zambia,Dr. Derek Fee said As you all know, thedeveloping world has been particularlyhit by the soaring food prices,with oftendevastating effects in terms of house-

hold food security. COMESANamibia, Angola to BuildUS$1.1bn Hydropower PlantNamibia and Angola have partnered tobuild a US$1.1 billion hydropower plant onKunene River to help end power disrup-tions that have plagued both countries fordecades.Head of NamPower, Ms. PaulinusShilamba said "it's a joint venture pro-

ject between the two countries and 50percent of the cost is covered by Angolaand the other 50 percent by Namibia."So there are no private parties but Idon't exclude the possibility of private

companies coming in."

The two nations will find contractors tobuild the power station soon after envi-ronmental and feasibility studies of the400-megawatt Baynes hydroelectricproject were ready by the second half of

the year. The hydropower station is ex-

pected to be completed by 2017. AfricaNewsUNECA Forecasts 4.8 % Growthfor AfricaAfricas economic growth is expected torebound to 4.8 percent in 2010 afterdipping by over 2 per cent in 2009, theUnited Nations Economic Commissionfor Africa (UNECA) Report has indicated.The Report indicated that growth in Af-rica dipped to 2.4 percent in 2009, from

4.9 per cent the previous year.

In 2009 growth was highest in WestAfrica at 5.5 per cent, partly as a resultof a boost in oil output in the Nigeria'sNiger Delta following a dip in attacks by

militants.

East Africa's economies grew by 4.3percent, while North Africa posted aGross Domestic Product growth rate of3.6 per cent. Central Africa economiesgrew by an average 1.8 percent and inSouthern Africa, the economies shrunk

by 1.1 per cent. Sapa-dpa

ISSUE 14 PAGE 4

Regional SpotlightRegional SpotlightRegional Spotlight


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PFI Launched in ZambiaZambia has launched the Policy Frame-work for Investment (PFI) to enhance in-vestment policy and implementation in thecountry.PFI will be conducted within the frame ofunlocking investment potential inSouthern Africa and will use the Organi-

sation for Economic Cooperation andDevelopments PFI as a benchmark for

carrying-out its work.

Speaking during the PFI launch, FinnishUnder Secretary of State for Policy andDevelopment, Mrs. Ritva Koukku-Rondesaid the project was a great chance forZambia to improve its business climateand attract bigger portions of foreigninvestment, particularly into non-

traditional sectors to diversify the econ-omy. Mrs. Koukku-Ronde said the use ofPFI in conjunction with a regional peerreview mechanism, offered Zambia a

chance to increase its opportunities forattracting all kinds of investment in the

long term. She has since commendedZambia for consistently strengthening thecountrys business climate over the past

five years.

And Commerce, Trade and Industry Minis- ter, Mr. Felix Mutati said governmentwould continue working towards makingZambia a preferential investment destina-

tion. It is not enough attracting foreigninvestment into the country, but beingcompetitive is also very important. We

therefore need to create a conducive envi-ronment that allows the private sector to

thrive in the country, the minister added.Mr. Mutati said in response to the need foran integrated approach to boost competi-

tiveness, the PFI project would engageother strategic government agencies in-volved in developing and implementing

investment related policies.

Meanwhile, ZDA Director General Mr. An-drew Chipwende has said Zambia has an

opportunity to evaluate itself with bestinvestment environments in the worldfollowing the launch of the countrys PFIproject. Mr. Chipwende said PFI was afundamental tool for self-assessmentpurposes in order to create a favourable

environment for private sector invest-ment.

He said the project was an importantprocess that embraced three principlesof policy coherence, transparency andregular evaluation, which were cardinalin helping Zambia attract more invest-ment. He said benchmarking wouldspeak for itself in attracting investmentas we shall be able to show where westand in terms of a conducive businessenvironment by using veritable evidence

made available through the PFI.

SA Firm to Invest $200,000 inSecurity Clothing PlantA African company plans to invest overUS$200,000 in establishing a plant forroad safety equipment and protectiveclothing for the mining sector in Zambia.SafetyXpress Stromberg Limited com-pany director, Raymond Hoekstra said

the company will set up its base in Kitwe

with the help of ZDA

He said the firm has been working inconjunction with ZDA in exploring invest-ment opportunities in Zambia. Mr. Hoek-stra was speaking in an interview at theCopperbelt Mining, Agricultural and Com-mercial Show (CMACS) in Kitwe. SafetyX-press is one of the 25 South African com-panies that exhibited at this years show in

Kitwe.

This is my first time in Kitwe and I amhappy with the general organisation of theshow. We have been able to showcase ourproducts to the Zambian people and for

this reason, we have decided to come andset up our base in Zambia because we

have seen the market potential, he said.

He said the company has been involved in the development and manufacturing oftraffic and road safety equipment in SouthAfrica since 1976.Mr. Hoekstra com-mended ZDA for its efforts in attractinginvestors to come and invest in various

sectors of the economy. He said his com-pany, which has offices in Johannes-burg, Pretoria and America, will create

jobs depending on the capacity ofbranches that will be established in

Zambia. Daily MailOne-StopWindow Faci l i tyLaunchedGovernment has launched a one-stop-window facility for company registration inLusaka, to make business registration lesscostly, quicker and simpler.Launching the facility, Commerce, Tradeand Industry Minister, Mr. Felix Mutatisaid the one-stop-window would improveefficiency and effectiveness of businessprocesses and information flow, as exist-ing conditions would be reformed, re-

packed and simplified to reduce institu-tional interventions in doing business.

Mr. Mutati said the facility would be firstpiloted in Lusaka as an initiative of theMinistry of Commerce, Trade and Indus-

try, bringing together ZDA, PACRO, ZRA,Immigration and CEEC to operate underone roof at Kwacha House. He said theharmonisation and simplification of busi-ness registration processes would resultinto a reduction in time an individual or

entity would take in registering a business.

The Minister indicated that it would nowtake a maximum of five days for a busi-ness to complete the entire process ofbusiness registration. Mr. Mutati added

that the launch was the first step ofcombining and collapsing governmentinstitutions under one roof for the pur-pose of business, so that we are able to

perform properly.

And Zambia Association of Chambers ofCommerce and Industry (ZACCI) vicepresident, Mr. Jeff Sakulanda com-mended government for facilitating aconducive business environment in thecountry. Mr. Sakulanda added. Theone-stop-window would reduce the costof doing business, hence making Zam-bia more competitive in terms of invest-

ment attraction.

Zambias Exports to Korea Ris-ingZambia and South Korea have recorded atrade balance of US$79 million and US$50million in favour of Zambia, during theperiod 2007 and 2008, Deputy Minister ofTrade, Commerce and Industry Dr. LwipaPuma has disclosed.Speaking during the Zambia-KoreaBusiness Seminar, Dr. Puma added thatalthough Zambia exported more than itimported from South Korea, the volumeof trade was still low and confined to afew products, mainly copper relatedproducts. He said there is need to ex-pand export trade between our twocountries because trade will do what aid

will not do. Export trade will create jobs,generate foreign exchange and will con-tribute to sustainable economic develop-

ment.

Dr Puma said total pledged investmentby companies from South Korea li-cenced with the ZDA for the period2000-2008 is US$560,000 in themanufacturing and service sectors, add-ing that more requires to be done to in-

crease the flow of investment.

And delegation leader Mr. Jung Hoon Kimsaid Korea is committed to co-operatingwith economies in need of help, adding

that countries such as Zambia can bene-fit from Koreas experience.

Korean Trade and Investment Agency(KOTRA) vice-president Dr. Ki Sik Park said

the relationship between the organisationand ZDA is based on mutual professionalrespect, which will ultimately benefit, on a

sustainable basis, the economies ofboth countries. Duringthe same seminar,ZDA and KOTRA signed a memorandumof understanding (MoU) on trade andinvestment promotion between the two

countries.

ISSUE 14 PAGE 5


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Zambia to Exceed 2010 GrowthForecastZambias economy may grow faster thanthe government forecast this year onhigher copper prices and a bumper graincrop, putting the country in a good positionto seek its first credit rating, Bank of Zam-bia Governor Dr. Caleb Fundanga has said.Dr. Fundanga said government wouldsign an agreement with JP Morgan Chase& Co. to serve as an advisor on how thecountry would proceed with the credit rat-ing. Zambia shelved plans for a credit rat-

ing in the second half of 2008 after the

global financial crisis hit.

Copper prices have more than doubledsince the beginning of last year, while

the government estimated a 42 percentsurge in grain output in 2010. That couldpush economic growth to between 7 per-cent and 8 percent in 2010, comparedwith 6.3 percent forecast in December,Dr. Fundanga said. These are reasons

why one should be optimistic, he added.I dont see why in a year when we have

fewer problems we should do less than a

year when we had more problems.

Dr. Fundanga projected that Zambiawould produce a grain surplus of onemillion metric tons this year, whichwould be exported, boosting foreigncurrency earnings. He said the creditrating would allow local companies toborrow at more favorable rates abroad,adding that government had not decidedwhether it would also use the rating to

sell an international bond.

Angola was awarded its first credit ratingof B+ by Standard & Poors and FitchRatings on May 18, 2010, paving theway for the sale of an internationalbond. Ghana, the worlds second-biggestcocoa producer, is also considering sell-

ing its second dollar bond next year.

Meanwhile, Deputy Finance and Na- tional Planning Minister, Ms. ChilesheKapwepwe has indicated that Zambiaseconomic growth will surpass the 6.3percent target for this year. Mrs. Kap-wepwe said this would be achieved

through economic diversification frommining to other equally vital sectors likemanufacturing, tourism, agriculture,

construction, among others.

She appealed to Zambians to continueworking with government to ensure thecountry further records a historical eco-nomic growth for the betterment of thecitizenry. Ms. Kapwepwe said preliminaryeconomic indicated from the first quartershowed that the economy would growbeyond the projected 6.3 percent, whichwas commendable. Bloomberg BusinessWeek

ZDA, Picky n Pay Sign BusinessLinkage AgreementZDA and Pick-n-Pay Zambia Limited havesigned a memorandum of understanding(MoU) to facilitate business linkages be-tween Picky n Pay and micro, small andmedium enterprises (MSMEs).Under the agreement, Picky n Pay will

engage MSMEs as suppliers and con-tractors of various goods and services tothe outlets the company was opening in

the country.

Speaking during the signing of the MoU,ZDA Director General, Mr. Andrew Chip-wende said the agreement providedMSMEs an opportunity to find space for

their goods and services in Picky n Paysbusiness line. Mr. Chipwende said ZDA,ILO, UNCTAD (United Nations Conferenceon Trade and Development) and otherpartners supported MSMEs through manyavenues including business linkages to

enhance their economic role.

And Pick-n-Pay Group General Manager,Mr. Andy Roberts said the chain store wasinvesting US$30 million in Zambia overfive years, which MSMEs could have ashare from for their short and long termgrowth. Mr. Roberts said MSMEs would becontracted to supply a variety of produces

to Picky n Pay as the company intended toprocure 50 percent of its supplies locallyonce the business linkage programme was

fully implemented.

Meanwhile, International Labour Organisa- tion (ILO) Senior Technical Advisor in

charge of Broad Based Wealth and Job

Creation, Mr. Jealous Chirove said it wasimportant for all investors coming intoZambia to consider developing the MSMEsby entering into business linkages with thelocal small enterprises by engaging them

as suppliers, sub-contractors or distribu-

tors.

LAP GreenN Buys 75% ZamtelSharesFrom Page 1

concerning the company. Governmentwould also retain the right to list some or

all of its holding on the Lusaka StockExchange in future. A substantial pro-portion of the total purchase has beenallocated to the settlement of full redun-

dancy packages of Zamtel employees.

An independent auditor will oversee thepayment of the packages to ensure eachemploy received the correct amount. Aspart of the process, LAP GreenN wouldretain a proportion of the workforce, suffi-cient to operate Zamtel in an optimal man-ner and in line with its five-year business

plan.

Commenting on the transaction, Financeand National Planning Minister, Dr. Situm-beko Musokotwane said the governmentof Zambia has today paved the way forcompleting the most significant privatisa-

tion in the history of Zambia. We are de-lighted to have signed an agreement withLAP GreenN, who have both the resourcesand the track record in the African tele-communications sector to turn Zamtel

around and deliver rapid change and tangi-ble benefits to customers and the people

of Zambia.

Dr. Musokotwane said the agreementwas a major step towards reinvigorating

the Zambian telecoms market and ensur-

ing that more people have accessto moreaffordable services, and high-speedaccess to internet, thus contributing to

and benefit from the digital economy.

And ZDA Director General, Mr. AndrewChipwende said through the Zamtel

transaction, ZDA actively employed aprocess that prepared the asset for pri-

vatisation, thus setting an importantprecedent for the future.

A significant amount of work has laidthe foundation for a rapid turnaround atZamtel. We are confident that we havefound in LAP GreenN the long-term stra-

tegic partner who can build on the workalready done and transform Zamtel intoa company that makes a substantial andcritical contribution to the Zambian

economy, Mr. Chipwende said.

Meanwhile, LAP GreenN Managing Di-rector, Mr. Abdulbaset Elazzabi said the

announcement of LAP GreenN as a pre-ferred buyer of Zamtel was hugely sig-

nificant for his company.

This is the single largest investment that we have made to date, Mr. Elaz-zabi said. Zambia is a key part of ourwider strategy to build telecom networksacross the African continent, and we areextremely happy to have been selectedby the government of Zambia to become

their partner in Zamtel.

He said LAP GreenN would make Zamtela company that delivered benefits to allZambian companies, consumers and the

people as it had done before in other Afri-can markets.

Mr. Elazzabi said LAP GreenN had theexperience to turn Zamtel as it had donein other countries where it exists such asUganda, Rwanda, Southern Sudan andCote dIvoire. The agreement will be-come unconditional at the close of the

transaction at the end June, after which aformal handover by government to LAPGreenN would done and a detailed an-

nouncement will be made at that time.

ISSUE 13 PAGE 6


7/7

7

Zambia to Issue US$1bn Interna-tional BondsFinance and National Planning Minister,Dr. Situmbeko Musokotwane has dis-closed that Zambia will raise US$1 billionfor rail and power projects from the sell ofits first international bonds.In an interview with CNBC Africa, Dr.Musokotwane said the sale of the bondson the global market would take place in

the third quarter of the year. He saidZambia would proceed with the transac-

tion after the country had acquired itsfirst sovereign credit rating by the third

quarter of the year.

Zambia joins countries including Kenya,Ghana and Angola that want to tap inter-

national capital markets to help finance the building of power plants and rail-ways as economic growth accelerates.He said Zambia expected a credit ratingof higher than B+, which was awardedby Standard & Poors and Fitch Ratings

to Angola in May, adding that B+ shouldbe the minimum. Dr. Musokotwanesigned an agreement with JP MorganChase & Company on May, 28 2010 tohelp the government prepare for thecredit rating. Zambia is working concur-rently on the rating and the bond sale.

Bloomberg/CNBC

ZambiaAfricas New Frontier For

Investments and Profits

Zambia Development Agency

P.O Box 30819

Nasser Road

Lusaka, Zambia

Tel: 260-211-229240

Fax: 260-211-225270

E-mail: [email protected]

Website: www.zda.org.zm

Learn New-Business Tech-niques, SMEs UrgedZDA Regional Entrepreneurship Develop-ment Officer Mr. Shental Siajunza hascalled on Small and Medium Entrepre-neurs (SMEs) business organisations todevelop interest in learning new tech-niques in running their businesses.Speaking during a COMESA workshop inKasama, Mr. Siajunza said SMEs shouldadvance in running their business profita-bly and effectively through joining rele-vant trade organisations. He said by link-ing with relevant organisations like CO-MESA, SMEs could avoid paying trade taxes to councils and exorbitant border

charges.

Mr. Siajunza advised SMEs to make jointtrips when importing items abroad to cutdown on costs, which could result in eco-

nomic growth of their businesses.

Meanwhile, ZANACO Head of BusinessBanking and SME Manager Mr. Chi-bamba Lopa said the bank was proud tosponsor the SME workshop to empowerlocal businesses in national interest. Mr.Lopa said ZANACO is aiming at promotingand empowering Small and Medium Busi-ness Entrepreneurship by providing aconducive business climate to it clients

And achieve economic growth.

He added that ZANACO is also geared inoffering short-term loans, credit facilitiesin overdrafts and make their customers

comfortable by spending shorter time attheir branches national wide. ZanisZDA Approves K1.3bn MSE In-vestmentZambia Development Agency has ap-proved 25 micro and small enterprises(MSEs) applications for MSE certificates inMay, with a total investment of K1.3 bil-lion.The approved applications are expected

to create 187 job opportunities in Lu-saka and Southern provinces where all

the 25 enterprises are located.

About K760 million of the approvedinvestment was from trading, represent-ing 58.6 percent of the total investmentMSEs from Lusaka and Southern prov-

inces injected into the economy.

The approved applications in May werefrom trading, services, transport, agricul-

ture, education, tourism, and automo-tive. The May approvals represent more than 200 percent investment increasefrom Aprils K396.7 million total invest-

ment ZDA approved from MSEs.

SELECTED ECONOMIC INDICATOR MARCH 2009 MARCH 2010

1. Inflation rate (%) 13.1 10.12. Average Treasury bills rate (%) 14.0 2.53. GRZ Bond Yield Rate: (24-month) (%) 17.5 10.04. Average Lending Rate (%) 26.9 28.05. Exchange Rates: (ZMK/foreign cur-

rency)

US$ 5,600 4,695EURO 7,200 6,400BPS 7,900 7,000RSA 550 630

6. Agriculture Commodity Prices:

(US$/MT)

Maize 340 N/AWheat 367 N/ASoya beans 470 N/A

7. Capital Market ActivityEquity trading:Number of Trades 578 584

Volume of Trade 20,741,312 47,977,337Turnover (US$) 1,537,000 9,135,000

Foreign Portfolio Investment: (US$)Inflows (Buying) (US$) 23,400 184,000Outflows (Selling) (US$) (1,352,000) (4,800,000)Net Position (US$)

Source: BoZ, CSO, LuSE, Zamace(1,328,000) (4,616,000)

zda spotlight : may 2010

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