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 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 – 2014

• Approx. 482 million people

Real GDP US $ 353.8 billion SADC - 2014

• Approx. 301 million people

Real 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

10 20 30 40 50 60 70

2002 2004 2006 2010

64 65 41.9 48.5 36 35 58.1 51.5

Food Non-Food

Source: Central Statistics Office

Priority Sectors and Investment Opportunities

Agriculture Manufacturing Tourism Energy Priority 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 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 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 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. 3. Lodges: Kafue South National park – 250 beds, and Luangwa South National Park 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 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.

SECTOR

PROFIT 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 Breweries

US$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 Kawambwa District, Luapula Province

• Out-grower

scheme targeting 20,000 small scale farmers

• Project Cost:

$150million

• Expected

employment: 600 direct jobs Mansa Sugar

• Sakiza

Spinning 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 2 Positive and investor friendly economic environment 3 Investment guarantee and securities 4 Abundant natural resources presenting excellent investment and trade

• pportunities

5 Thriving private sector 6 Attractive investment incentives 7 Unlimited repatriation of profits & no exchange controls since 1994 8 Duty free access to regional, wider Africa, EU and USA Market. 9 Progressive banking, legal and insurance services of international standards and stock exchange. 10 Good 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
• perations 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 and

Investment

• Facilitate

capacity building to contribute to the Growth and Competitiveness

• f

local private sector businesses

• Facilitate

access to international Export Markets

• Provide

Information and Advisory Services to stakeholders

Key Functions

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