Introduction to Zambia

Introduction to Zambia

TEXT: Mrs. Ndiyoi Muliwana Mutiti, Ambassador Extraordinary and Plenipotentiary of the Republic of Zambia to Japan


Zambia was known as Northern Rhodesia from 1911. It was renamed Zambia at Independence in 1964. The new name of Zambia was derived from Zambezi River.

The Republic of Zambia is a landlocked country in Southern Africa surrounded by Democratic Republic of the Congo to the North; Tanzania to the North-East; Malawi to the East; Mozambique, Zimbabwe, Botswana and Namibia to the South; and Angola to the West. The capital city is Lusaka in the South-Central part of Zambia. The area of Zambia is 752,618 sq km or 250,587 sq miles.

Climate

The climate of Zambia is tropical, modified by elevation. There are two main seasons, the rainy season (November to April) corresponding to summer, and the dry season (May/June to October/November), corresponding to winter. The dry season is subdivided into the cool dry season (May/June to August), and the hot dry season (September to October/November). The modifying influence of altitude gives the country pleasant subtropical weather rather than tropical conditions during the cool season of May to August. However, average monthly temperatures remain above 20 °C (68 °F) over most of the country for eight or more months of the year.

Political System

Politics in Zambia take place in a framework of a presidential representative democratic republic, whereby the President of Zambia is both Head of State and Head of Government in a pluriform multi-party system. The Government exercises executive power, while legislative power is vested in both Government and Parliament. Presidential and Parliamentary Elections are held every five years, in very democratic environment, with every Republican President allowed only two terms in the Office. Zambia has been governed by six Presidents since Independence in 1964. The current President of the Republic of Zambia is His Excellency Mr. Edgar Chagwa Lungu. Zambia has a British-style Parliamentary Democracy. Government consists of the President and the 158-seat National Assembly.

There are also traditional Chiefs and their Headmen, who still command a great deal of respect but hold little decision-making power except when it comes to traditional land distribution.

Economy

The now privatized copper mining industry is Zambia’s main source of income bringing in about 65% of foreign exchange earnings in exports. Other substantial minerals include cobalt–a by-product of copper mining–coal, zinc, lead, gold, silver, limestone, uranium and manganese. Emeralds, amethysts, garnets, tourmalines and other semi-precious stones are also mined.

Zambia’s domestic economy is based on agriculture. Maize is the staple food and other food crops include cassava, wheat, millet, vegetables, sugar cane, groundnuts, sweet potatoes, fruits, sorghum and soya beans.

Trade and Investment

Since the early 1990s, Zambia has pursued market oriented policies, with the country becoming increasingly integrated in the global economy. This has been done through the privatization of state enterprises, removal of unnecessary controls, deregulation of interest and foreign exchange rates, reduction of tariffs, strengthening of the financial sector, and reforms on policies of repatriation of tax profits, dividends and capital.

In 2010 the World Bank named Zambia as one of the world’s fastest economically reforming countries. The headquarters of COMESA are based in the capital of Lusaka.

Trade

Barriers to trade have been substantially reduced; export licenses are merely a formality, while import controls are maintained solely for statistical purposes. The main trade policy instrument is done through customs duties, which have even been reduced to support private sector growth and export competitiveness.

Although the country’s main exports remain metals and minerals, particularly copper and cobalt, emphasis is also on non-traditional exports such as vegetables, flowers, cotton, tobacco, cement and textiles. Major imports include crude oil, mining equipment, machinery, iron, steel, vehicles, and transport equipment.

Zambia’s export market is buoyed by the country’s membership in regional organisations such as the Common Market for Eastern and Southern Africa (COMESA) and the Southern African Development Community (SADC). Zambia’s participation in international trade has also boosted the country’s competitiveness in global trade. Currently, the European Union countries, China, South Africa, Democratic Republic of Congo, Kuwait, United Arab Emirates, India, Japan and the USA remain Zambia’s major trading partners.

Weeding maize, Mongu, Western Zambia. / Credits: Nathan Kanema.
Weeding maize, Mongu, Western Zambia. / Credits: Nathan Kanema.

Investment

Zambia’s stable macro-economic stability—a conducive and enabling environment for private sector and industrial growth, political stability, peace and tranquility is the hallmark for the country’s positive investment climate. The cost of doing business has been reduced significantly while the country has one of the most open economies on the continent.

Specific investment opportunities exist in the following areas:

1. Mining

Zambia has vast mineral reserves with an estimated 10% of the world’s known reserves of copper which is exported to China, USA, UK, Japan, Italy, India, Thailand and some other EU and Asian countries. Around the world copper is used for electrical wiring, computer chips, in plumbing, heating and cooling facilities, and in automobiles. Zambia is one of the world’s largest cobalt producers, supplying 20% of the world’s cobalt. Copper and cobalt together represent 80% of Zambia’s export earnings, and contribute over 10 per cent to the country’s Gross Domestic Product. In addition to huge copper and cobalt reserves, Zambia possesses a variety of lead, zinc and precious and semi-precious minerals such as emeralds, amethyst, aquamarine, diamonds and gold. Deposits are marble, granite, ferrous metals, clay, limestone, iron and phosphate also remain underexploited.

World-renowned mining companies from Canada, Australia, China, UK, South Africa and USA are involved in mining and prospecting operations in Zambia.

2. Agriculture

Zambia has very good arable land for both extensive and intensive cultivation of various crops. Some 56% of Zambia’s total land area is available for agricultural production and only about one sixth of total arable land is under cultivation mostly by small-scale farmers. Much of the available land for agriculture is near urban areas which are close to transport links for accessing local and international markets. Good rainfall, favorable temperature, rich soils, and abundant sunshine make agriculture a very attractive sector for investment in Zambia. Special incentives also exist for those intending to invest in this sector.

Investment prospects abound in the growing of wheat, sugar, coffee, cotton, tobacco, vegetables, flowers and maize as well as livestock (such as cattle, poultry, sheep, and pigs), dairy farming and fisheries. Fertilizer and farm equipment supply and production also have significant potential.

3. Energy

With its vast water resources and coal reserves, Zambia offers abundant investment opportunities for hydro-electric power generation, supply and distribution. Investment in the energy sector has been slow and existing power generation does not match with current demand as a result of increased mining activities on the Copperbelt Province in recent years. The problem has been aggravated by the ongoing costly rehabilitation of existing power plants. Currently the country’s hydropower source potential stands at an estimated 6,000 Mega Watts (MW) while current production is only 1,786 MW resulting in a very big shortfall. With this deficit in power generation, the country requires massive investment in the energy sector. The Zambian Government is therefore looking for serious partners and companies which are ready to invest in this sector.

4. Manufacturing

Manufacturing is one of the top performers and a priority growth sector in the Zambian economy and contributes about 11% to the national Gross Domestic Product and 10% to employment. Manufacturing in Zambia is one of the most attractive sectors for investment as it has all the vital required elements in place such as raw materials, required labour force, abundant land and a good banking and financial system. Measures have been put in place to support growth within the sector including the creation of Multi-facility Economic Zones (MFEZs), credit provision and industrial skills training. Potential areas of investment include cement production, textiles and clothing apparels, agro-processing, processed and refined foods, leather products, wood processing, plastics, vehicle parts and assembly, chemicals, refining of petroleum, and metal and engineering works.

5. Physical Infrastructure

Potential investment opportunities in physical infrastructure such as housing, roads, and communications abound. The construction sector in Zambia is rapidly growing mainly due to construction of residential housing, investments in the mines, road construction and other civil works. The country also has a very robust Road Sector Investment Program (ROADSIP) in which both local and international road construction companies participate, although emphasis is on quality. The country is also looking for serious investors to venture into the air transport industry to support the ever-growing tourism sector and increased commercial activities.

6. Travel and Tourism

The tourism sector is one of the largest foreign exchange earners in Zambia and is a major source of economic growth. Zambia is one of Africa’s top tourist destinations and as such investment opportunities exist in tourism facilities such as hotels, lodges, and safari operations. Untapped tourism investment opportunities also exist in all the 19 National Parks and 34 game areas as well as the 23 million hectares devoted to the conservation of an amazing variety of animals. Business opportunities further exist in tourism transport such as air charters, car hire, travel agencies and tour operations management, sports, game ranching, adventure holiday packages, and organized tours.

7. Education

In Zambia, the education system consists of both government and private schools. Historically, the private school system began largely as a result of Christian missionary efforts during the late 19th and early 20th centuries. In schools, a student may initially receive two levels of education; basic education (years 1 to 9), and upper secondary (years 10 to 12). Some schools provide a “basic” education covering years 1 to 9, as year 9 is considered to be a decent level of education for the majority of children.

8. Higher Education

In Zambia, there are eight universities and several higher education institutions around the country. The Ministry of Science Technology and Vocational Training (MSTVT) in Zambia was also developed in 1992 to foster growth in technological fields. Educational opportunities beyond secondary school are limited in Zambia. After secondary school, most students study at the various universities and higher education institutions.


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