INVESTMENTS AND PROFITS LONDON 4 TH NOVEMBER, 2015 Presentation - PowerPoint PPT Presentation

Zambia Development Agency ZAMBIA: AFRICA’S NEW FRONTIER FOR INVESTMENTS AND PROFITS LONDON 4 TH NOVEMBER, 2015

Presentation Outline Location of Zambia Economy at a glance Priority Sectors and Investment Opportunities ZDA: Your Gateway to Zambia Why Invest in Zambia

By Road KENYA By Air Addis Ababa – 4hrs 9mins Dar-es-Salaam – 2hrs 4mins Windhoek – 2hrs By Rail Lubumbashi – 1hr RSA

SADC - 2014 Approx. 301 million people Real GDP US $ 529 billion Zambia COMESA – 2014 Approx. 482 million people Real GDP US $ 353.8 billion

Area: 752,614km 2 (39 th ) Foreign Exchange Reserves Population: 15.02 million (2014 est.) • $3.04 Billion (Dec.2014) 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 I ndex of Global Competitiveness Index 2014 – 2015 of 144 Countries A frican G overnance 52 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.

65 64 58.1 70 51.5 48.5 60 41.9 50 35 36 40 30 20 10 0 2002 2004 2006 2010 Food Non-Food Source: Central Statistics Office  Proportion of income households spend on food has declined significantly implying increased demand for non-food items  T rend is expected to continue as Zambia’s economic growth has remained strong

Priority Sectors and Investment Opportunities

Manufacturing Tourism Agriculture Energy Priority Sectors Infrastructure

Total land area: 752, 614 km 2 , 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 Hydro Power: Kafue Gorge – 750MW, Batoka Gorge – 1600MW 4. 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 and international 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 Zambia International Trade Fair Grounds, Mukuba Hotel, Twin – Palm Housing project, and Golf Estate. 3. Industrial structure: MFEZs and Industrial parks Railway Projects: Lusaka Mass transit railway, Kafue(Zambia) – Ziwa (Zimbabwe) 4. Railway, TAZARA Nseluka – Mpulungu port, Mchinji/Chipata Railway 5. Ports and Habours : Redevelopment of Mpulungu Habour, Walvis Bay, Lobito and Mombasa

 Tourism is one of the fastest growing sectors in Zambia  It has the potential to be a major contributor to socioeconomic development as an important source of jobs, prosperity and competitiveness.  Key assets include pristine national parks and game management areas, which are 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-modern multi-purpose conference facility. Lodges: Kafue South National park – 250 beds, and Luangwa South National 3. Park Lodge - 120 beds Northern Circuit – Hotels, Lodges and Campsites in Nsumbu National Park 4.

 Sector accounts for over 65.5% of FDI and about 80% of exports earnings  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 sought after 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 in February 2015.  Investment opportunities exist in the extraction and processing of various mineral resources including diamonds, gold, and uranium among others.

PROFIT BY SECTOR RETURN ON SECTOR (US$ MILLION) 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 1 • 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 Non-Tax Incentives 2 • Investment guarantees and protection • Free facilitation for application of permits, licenses, land acquisition and utilities Location Support 3 • Multi Facility Economic Zones • Industrial Parks • Rural Area

Buffalo Implemented Sun Bird Mansa Sugar Consortium Investments Ltd Projects • Production of • Sakiza • Cement and • Zambian Breweries Ethanol Spinning Lime Production US$32 million Cassava in Limited in • Project cost: • Dangote Cement Kawambwa partnership with $500,000,000 US$400 million District, Luapula the Kenyan • Expected • Zambia Sugar Province investors. employment: Expansion Project - • Out-grower • Sugar cane US$82 million scheme plantation and a • Silverest Housing targeting 20,000 sugar Project – US$16 small scale processing million farmers factory Land • Global Plantation – • Project Cost: • Project cost: US$ 200 million $150million • Expected • Expected employment: employment: 600 direct jobs

6 Attractive investment incentives 1 Stable Political System Unlimited repatriation of profits & no Positive and investor friendly economic 7 2 exchange controls since 1994 environment Duty free access to regional, wider 3 Investment guarantee and securities 8 Africa, EU and USA Market. Abundant natural resources presenting Progressive banking, legal and 4 excellent investment and trade 9 insurance services of international opportunities standards and stock exchange. Good place to work and live friendly 5 Thriving private sector 10 people with a rich culture.

ZDA: Your Gateway to Zambia

Key Establishment Purpose Functions • Facilitate Trade and • Established by an • To foster Investment Act of Parliament, • Facilitate economic growth capacity ZDA Act No 11 of and national building to 2006 development by contribute to the • Commenced Growth and promoting trade operations in 2007 Competitiveness of and investment in after the merger of local private sector Zambia through five quasi- businesses an efficient, • Facilitate government access to effective and institutions, namely international Export coordinated • ZPA, Markets private sector led • SEDB, • Provide Information economic • EBZ, strategy …” and Advisory • ZIC, and Services to • ZEPZA stakeholders

Contact us for further Information: A-to-Z information on the Zambian Patrick D. Chisanga market Director General Zambia Development Agency Guidance through the entire export and Privatisation House, Nasser RD investment process and aftercare P.O. Box 30819, LUSAKA, ZAMBIA. Provision of matching Zambia partners and building contact networks Tel: +260 211 220177 Fax: +260 211 225270 Global export market information & product development Website: www.zda.org.zm Email: info@zda.org.zm SME & business development services