doing business in zambia
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This documents helps companies to set up companies in ZambiaTRANSCRIPT
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Doing Business in ZambiaAunique flavour
March 2013
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2Table of contents
1. Forward 1
2. Introduction 3
3. High-level overview of Zambia 5
Introduction 5
Political and judicial environment 7
Economic environment 8
- Overview 8
- Mining 13
- Agriculture 16
- Energy 20
- Financial services 24
- Tourism 30
- Transport 32
- Telecommunications 34
Stock exchange 37
4. General business regulations 39
Company registration 39
ZDA Investment license 42
Exchange Controls 42
Employment permit 43
Temporary employment permit 43
Sector specific permits 44
Minimum wages and conditions
of employment 46
Social security 46
Mergers and acquisitions 47
Accounting and auditing 48
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3Doing Business in Zambia Aunique flavour
5. Taxation 50
Introduction 50
Tax administration 50
PAYE 51
Company Tax 52
WHT 55
Capital Gains Tax 55
VAT 56
Customs & Exercise 57
PTT 58
Investment incentives 59
Company vs. Branch 62
6. About Deloitte 63
Theglobal firm 63
Deloitte in Zambia 64
7. Key Deloitte contacts 65
8. Glossary of terms 66
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11. Forward
Iam delighted to present thefirst edition of Doing Business in Zambia, which Itrust will be handy for businesses and individuals seeking anunderstanding of theZambian business environment.
Zambians economic performance over thepast decade has been impressive, driven by:
Improved macro-economic management. This has resulted in general economic stability in contrast to pre 2000 years of significant foreign exchange rate volatility, high inflation, rapid currency depreciation and high interest rates.
Low debt levels. In 2005, Zambia qualified for significant debt relief under theWorld Banks Highly Indebted Poor Countries (HIPC) debt relief initiative. This has provided thecountry amajor impetus for sustained economic growth. GDP now stands at approximately US$20 billion, nearly double what it was in themid-2000s.
Aresurgence of themining industry, propelled by increased global demand for metals, particularly in China. Theoutlook for mining looks bright, with sector growth expected to accelerate over thenext three to four years. Based on current pipeline of major investments, Zambias copper output may almost double by 2016.
Zambia has undergone anunprecedented period of robust economic growth over thepast several years, atrend which appears set to continue
Chisanga Chungu
Managing [email protected]
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2Doing Business in Zambia Aunique flavour
Looking to thefuture, Isee Zambias economic outlook as promising. According to theEconomist Intelligence Unit (EIU), Zambias economic growth trajectory is expected to continue at arobust annual rate of about 7% over theperiod 2013 to 2016. Theone significant bottleneck to Zambias future economic growth is therelatively underdeveloped infrastructure particularly in thepower and transport sectors. Recognising this challenge, theZambian Government has embarked on asignificant 5 year investment program, which should assist un-lock Zambias economic growth potential:
Based on current planned projects, Zambias power generation capacity could increase to approximately 4,700 MW over thenext 5 years, from thecurrent c.1,800MW.
Road infrastructure is projected to improve significantly as afive-year US$5.6 billion project to upgrade approximately 8,000km of road network (20% of thecountrys road network) is implemented, under theLink Zambia 8,000 Programme.
As Ipresent our first edition of this booklet, Ithank all theDeloitte profes-sionals who have worked tirelessly and taken time to share their insights.
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32. Introduction
Purpose of booklet
Theprimary purpose of this booklet is to provide potential investors, businesses and interested individuals with information fundamental to doing business in Zambia. Theinformation we present in this booklet is intended to be aguide and accordingly, is not exhaustive.
Readers are strongly advised to seek professional advice prior to relying on any information contained herein. To contact Deloitte in Zambia please refer to theContacts section of this booklet. For information on how Deloitte can assist you in Zambia including details of our core service offerings, please refer to theAbout
Deloitte section of this booklet.Finally, this booklet is necessarily based on conditions existing at thedate of publication and will continuously evolve as changes occur in theZambian economic and regulatory environment.
This booklet is aimed at providing information relevant to Doing Business in Zambia to potential investors, businesses and other interested individuals
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4Doing Business in Zambia Aunique flavour
Zambia - Key statistics
Population (millions): 13.6 millionLand mass: 752,614 sq. kmNumber of neighboring countries: 8No. of ethnic groups: 72Year attained independence: 1964Business language: EnglishPrimary exports: Copper & CobaltCapital City: LusakaCurrency: KwachaTime zone: GMT + 2
Zambia is alandlocked country in theSouthern Africa sub-region. It is bordered by Tanzania in theNorth East, Malawi in theEast, Mozambique in theSouth-East, Zimbabwe in theSouth, Botswana and Namibia in theSouth-West, Angola in theWest and theDemocratic Republic of Congo in theNorth.
It is estimated that approximately 40% of thewater resources in Central and Southern Africa are found in Zambia, which gives thecountry immense irrigation and hydro-power potential.
Zambias climate is characterised by three distinct seasons: cool and dry from May to August, hot and dry from September to November and hot and wet from December to April. Average monthly temperatures remain above 20C for most of theyear.
Located in Southern Africa, Zambia is alandlocked country covering alandmass of approximately 750,000 sq. km, with apopulation of some 13.6 million people
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53. High-level overview of Zambia
Introduction
Zambia was aformer colony of Great Britain and attained political independence on 24 October 1964. Zambias population is estimated at 13.6 million, with approximately 46% of thepopulation representing anactive and productive workforce, aged between 15 and 64 years.
Thepopulation comprises approximately 72 Bantu-speaking ethnic groups. Almost 90% of Zambians belong to one of nine main ethno-linguistic groups namely; Nyanja-Chewa, Bemba, Tonga, Tumbuka, Lunda, Luvale, Kaonda, Nkoya and Lozi. English remains theofficial business language for thecountry.
Zambias key export products are copper and cobalt. However thecountry also has anumber of non traditional exports including, sugar and sugar confectionaries, dairy products, birds eggs and natural honey.
Zambia has significant world class tourism attractions including theVictoria Falls to theSouth and 19 national game parks strewn around thecountry.
Zambias population is estimated at 13.6 million and comprises approximately 72 Bantu-speaking ethnic groups
Fina
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Zambia
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6Doing Business in Zambia Aunique flavour
Zambias economy has experienced strong growth in recent years, with real GDP growth of more than 6% per year for thepast five years. Privatization of government-owned copper mines in thelate 1990s relieved theGovernment from sustaining mammoth losses generated by theindustry and greatly increased copper mining output and profitability to spur economic growth. In 2005, Zambia qualified for debt relief under theHighly Indebted Poor Country Initiative, consisting of approximately US$6 billion in debt relief. Nevertheless, poverty remains asignificant problem in Zambia with approximately 60% of thepopulation below thepoverty line, despite astronger economy. However, themedium-term economic outlook appears favourable, with inflation projected to remain in single digits. Thecurrent inflation rate is estimated at 6%.
TheZambian economy has historically been based on thecopper mining industry. However, theZambian Government is undertaking economic diversification to reduce theeconomys reliance on thecopper mining industry and exploit other components of Zambias rich resource base by promoting agriculture, tourism, gemstone mining, and hydro-power. In 2012, theGovernment raised USD750 million via aEurobond issue to cover afunding gap for infrastructure projects. Theinfrastructure investment is expected to boost growth by up to two (2%) percentage points per annum.
The Zambian Government recently took advantage of thecurrent low level of inflation and relatively stable economy to rebase theZambian currency by dividing every denomination by 1,000, effective 1 January 2013.
TheZambian Government is undertaking economic diversification to exploit other components of thecountrys rich minerals resource base
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7ThePolitical and Judicial Environment
Political Overview
System of Government Republic, Universal Suffrage
No. of parliamentary seats 158, with 8 members appointed by thePresident
Date of last Presidential election September 2011
Year of next election 2016
Name of current ruling party Patriotic Front
Duration of Presidential term 5 years
Current Head of State Mr. Michael Chilufya Sata
Main opposition parties Movement for Multi Party Democracy United Party for National Development
System of governance and arms of Government
Zambia is amulti-party democratic country, with three separate arms of Government namely, theExecutive, Legislature and theJudiciary.
TheExecutive is headed by thePresident, who has theprerogative to appoint aVice President.
Both thePresident, who must belong to aregistered political party, and members of Parliament are elected via national elections.
ThePresident is elected by popular vote for afive-year term. Presidents are eligible for amaximum of 2 five year terms.
Cabinet Ministers are appointed by thePresident from thepool of both elected and nominated members of Parliament.
Parliament is headed by aSpeaker and comprises 150 elected and up to 8 members nominated by thePresident.
TheZambian legal system is based on English common law and customary law principles.
TheSupreme Court is thehighest court of appeal and is headed by theChief Justice. Thejustices are appointed by thePresident.
Zambia operates amulti-party democratic system, with Presidential and Parliamentary elections held every five years
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8Doing Business in Zambia Aunique flavour
Recent historical economic trends
Indicator 2008 2009 2010 2011 2012
Nominal GDP (US$ m) 14705 13398 16855 19742 20939
GDP per capita (US$ at PPP)
1408 1479 1540 1643 1737
Population (m) 12,2 12,5 13,0 13,3 13,6
Forex rate (ZMK: US$) 4832 4641 4796 5117 5089
External debt stock (US$ m)
2975 3039 3689 4619 5442
TheEconomic Environment - Overview
Recent trends in economic performance
Since 2004, Zambia has undergone improved macro-economic stability in contrast to previous years of significant foreign exchange rate volatility, high inflation, rapid currency depreciation, and high interest rates.
In 2005, Zambia qualified for significant debt relief under theWorld Banks Highly Indebted Poor Countries debt relief initiative. TheHighly Indebted Poor Countries relief has provided Zambia with amajor impetus for sustained economic growth. GDP now stands at US$20 billion, nearly double what it was in themid 2000s.
Zambias GDP now stands at US$20 billion, nearly double what it was in themid 2000s
02468
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2004 2005 2006 2007 2008 2009 2010 2011 2012
0
5
10
15
20
25
30
35
40
20-nl tbb 11-206-103-51-2
4,0
4,5
5,0
5,5
6,0
6,5
7,0
7,5
8,0
8,5
9,0
2013f 2014f 2015f 2016f
-
1 000
2 000
3 000
4 000
5 000
6 000
7 000
8 000
9 000
-
100 000
200 000
300 000
400 000
500 000
600 000
700 000
800 000
2008 2009 2010 2011 2012e
2008 2009 2010 2011 2012e
US$
/ M
T MT
MT
-
10
20
30
40
50
60
-
1 000
2 000
3 000
4 000
5 000
6 000
7 000
US$
/ lb
21%
35%
44%
-
500
1 000
1 500
2 000
2 500
3 000
3 500
Maize Wheat Sweet Groundnuts Soya beans potatoes
2009 / 2010 2010 / 2011
10
12
18 1816
14 1413
1618
1990 1992 1994 1996 1998 2000 2002 2004 2010 20120
5
10
15
20
2,000
4,000
6,000
8,000
10,000
12,000
14,000
2008 2009 2010 2012
ZMK 'b
29%
18%
12%
10%
5%
5%
20%
22%
25%36%
9%
4% 4%
29%
46%
16%
9%1%
33%
15%
52%
0%
10%
20%
30%
40%
50%
60%
70%
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
2003 2004 2005 2006 2007 2008 2009 2010 2011
21%
61%
10%
8%
0.0%
0.2%
0.4%
0.6%
0.8%
1.0%
1.2%
-
20
40
60
80
100
120
140
2003 2004 2005 2006 2007 2008 2009 2010 2011
2004 2005 2006 2007 2008 2009 2010 2011
1 000 000
800 000
600 000
400 000
200 000
0
2007 2008 2009 2010 2011 2012
Unleaded petrol
Diesel
9.00
8.50
8.00
7.50
7.00
6.50
5.50
5.00
6.00
Historical GDP/inflation movement (%)
Inflation Real GDP Grow
Source: Bank of Zambia
Source: EIU, Deloitte analysis
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9 Despite therecent adverse global economic conditions, Zambia has continued to experience strong output performance. In 2011, GDP grew by 6.8%. GDP growth has continued to remain resilient with agrowth of 7% forecast for 2012.
Inflation has declined significantly from c.18% in themid-2000s to c.6% in 2012.
Further, Zambias exchange rate has remained relatively stable over recent years, with thecurrency depreciating by less than c.7% between 2008 and 2012.
This low level of inflation and relatively stable exchange rate provided thecountrys Central Bank,
BOZ, anopportune time to rebase theZambian currency by dividing every denomination by 1,000, effective 1 January 2013.
In September 2012, Zambia had asuccessful maiden entry into theinternational bond market through theUS$750 million bond issuance with acoupon of 5.375%, one of thelowest prices ever for aninaugural issue by aSub-Sahara African country. Thebond issue was 15 times over subscribed.
In order not to undermine long-term debt sustainability, theGovernment proposes to apply thebond proceeds primarily on energy and transport infrastructure as summarised in thetable opposite.
Application of proceeds from theUS$750m issue
Project US$ million
Energy (generation and transmission) 255.0
Transport (road and rail) 430.0
Human capital and access to finance 49.0
Fees and transaction costs 1.4
Discount premium 14.6
Total 750.0
Source: 2013 Zambia Budget speech
Despite unfavourable global economic conditions, theZambian economy has remained resilient, with annual GDP growth of 7% for 2012
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10Doing Business in Zambia Aunique flavour
Economic outlook
According to theEIU, Zambias economic growth trajectory is expected to continue at arobust annual rate c.7% over theperiod 2013 to 2016. Thegrowth will be led by increasing investments in mining, agriculture, power and construction:
- Growth in mining is expected to accelerate in 2014-15 as investments at theKansanshi, Lumwana and Konkola mines, as well as First Quantums new Trident mine, approach completion.
- Agricultural production, especially of thecountrys staple food, maize, looks set to be strong in 2012-13 supported by Governments continued efforts to assist thesector yield results.
- Based on current planned projects, Zambias power generation capacity may increase to c. 4,700 MW over thenext 5 years, from thecurrent c.1,800MW.
- Road infrastructure is projected to improve significantly as afive-year US$5.6 billion project to upgrade approximately 8,000km of road network (20% of thecountrys road network) is implemented, under theLink Zambia 8,000 Programme.
- Construction growth will be driven mainly by planned investments in mining, power and theroad network.
Zambias economic outlook appears bright, on theback of increasing investments in various core sectors of theeconomy
Economic forecasts
Indicator 2012 2013f 2014f 2015f 2016f
Nominal GDP (US$ m) 20,939 21,528 23,713 30.1 31.9
GDP per capita (US$ at PPP)
1 ,737 1 ,859 2,014 2,087 2,164
Population (m) 13.6 13.9 14.2 15.2 15.7
Forex rate (ZMK: US$) 5 ,089 5 ,712 5,787 5,756 6,135
External debt stock (US$ m)
5 ,442 5 ,995 6,601 n/a n/a
n/a: data not available Source: EIU, Deloitte analysis
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11
TheKwachas value is expected to be supported by robust growth in copper production levels over theperiod to 2016, significant Foreign Direct Investment (FDI) and public borrowing (e.g. thesuccessful bond issue of US$750 million in September 2012).
Inflation which averaged 8.3% in 2011, is forecast to decline further, averaging c.6.4% over theperiod 2013 to 2016
Inflation is projected to average c.6.4% between 2013 and 2016, down from 8.3% in 2011 0
2468
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2004 2005 2006 2007 2008 2009 2010 2011 2012
0
5
10
15
20
25
30
35
40
20-nl tbb 11-206-103-51-2
4,0
4,5
5,0
5,5
6,0
6,5
7,0
7,5
8,0
8,5
9,0
2013f 2014f 2015f 2016f
-
1 000
2 000
3 000
4 000
5 000
6 000
7 000
8 000
9 000
-
100 000
200 000
300 000
400 000
500 000
600 000
700 000
800 000
2008 2009 2010 2011 2012e
2008 2009 2010 2011 2012e
US$
/ M
T MT
MT
-
10
20
30
40
50
60
-
1 000
2 000
3 000
4 000
5 000
6 000
7 000
US$
/ lb
21%
35%
44%
-
500
1 000
1 500
2 000
2 500
3 000
3 500
Maize Wheat Sweet Groundnuts Soya beans potatoes
2009 / 2010 2010 / 2011
10
12
18 1816
14 1413
1618
1990 1992 1994 1996 1998 2000 2002 2004 2010 20120
5
10
15
20
2,000
4,000
6,000
8,000
10,000
12,000
14,000
2008 2009 2010 2012
ZMK 'b
29%
18%
12%
10%
5%
5%
20%
22%
25%36%
9%
4% 4%
29%
46%
16%
9%1%
33%
15%
52%
0%
10%
20%
30%
40%
50%
60%
70%
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
2003 2004 2005 2006 2007 2008 2009 2010 2011
21%
61%
10%
8%
0.0%
0.2%
0.4%
0.6%
0.8%
1.0%
1.2%
-
20
40
60
80
100
120
140
2003 2004 2005 2006 2007 2008 2009 2010 2011
2004 2005 2006 2007 2008 2009 2010 2011
1 000 000
800 000
600 000
400 000
200 000
0
2007 2008 2009 2010 2011 2012
Unleaded petrol
Diesel
9.00
8.50
8.00
7.50
7.00
6.50
5.50
5.00
6.00
Forecast GDP / Inflation movement (%)
Inflation
Source: EIU, Deloitte analysis
Real GDP Grow
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12Doing Business in Zambia Aunique flavour
TheZambian Government aims to create some one million jobs over thefive-year period to 2017, underpinned by theNational Strategy for Industrialisation and Job Creation
As part of thenewly formulated National Strategy for Industrialisation and Job Creation, theGovernment has identified four priority areas of focus for growth and job creation; namely, Agriculture, Tourism, Infrastructure and Manufacturing. Under this initiative, theGovernment aims to create approximately one million new jobs over thenext five years.
Jobs to be created over five-year period to 2017
Sector No. of new jobs over 5 year period
Agriculture 255.0
Tourism 300,000
Infrastructure (energy & transport) 110,000
Manufacturing 90,000
Tourism 300,000
Total 1,050,000
Source: 2013 Zambia Budget speech
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13
Themining sector is thecornerstone of Zambias economy, with copper and cobalt being themain metals mined
TheEconomic Environment - Mining
Overview
Zambia has avast endowment of metals, gemstones, industrial minerals and potential energy resources including coal, hydrocarbons, and more recently, uranium.
Zambia is one of theworlds largest producers of copper and cobalt. It also has considerable reserves of selenium and silver, in addition to minor quantities of gold.
Theoutlook for mining looks bright, with sector growth expected to accelerate over thenext three to four years. Based on current pipeline of major investments, Zambias copper output could almost double by 2016.
On thepricing side, although copper prices weakened somewhat in 2012, most forecasts indicate that copper prices will remain robust over themedium term, driven by demand in China.
Historical copper exports and prices
Historical cobalt exports and prices
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2004 2005 2006 2007 2008 2009 2010 2011 2012
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2013f 2014f 2015f 2016f
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1 000
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3 000
4 000
5 000
6 000
7 000
8 000
9 000
-
100 000
200 000
300 000
400 000
500 000
600 000
700 000
800 000
2008 2009 2010 2011 2012e
2008 2009 2010 2011 2012e
US$
/ M
T MT
MT
-
10
20
30
40
50
60
-
1 000
2 000
3 000
4 000
5 000
6 000
7 000
US$
/ lb
21%
35%
44%
-
500
1 000
1 500
2 000
2 500
3 000
3 500
Maize Wheat Sweet Groundnuts Soya beans potatoes
2009 / 2010 2010 / 2011
10
12
18 1816
14 1413
1618
1990 1992 1994 1996 1998 2000 2002 2004 2010 20120
5
10
15
20
2,000
4,000
6,000
8,000
10,000
12,000
14,000
2008 2009 2010 2012
ZMK 'b
29%
18%
12%
10%
5%
5%
20%
22%
25%36%
9%
4% 4%
29%
46%
16%
9%1%
33%
15%
52%
0%
10%
20%
30%
40%
50%
60%
70%
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
2003 2004 2005 2006 2007 2008 2009 2010 2011
21%
61%
10%
8%
0.0%
0.2%
0.4%
0.6%
0.8%
1.0%
1.2%
-
20
40
60
80
100
120
140
2003 2004 2005 2006 2007 2008 2009 2010 2011
2004 2005 2006 2007 2008 2009 2010 2011
1 000 000
800 000
600 000
400 000
200 000
0
2007 2008 2009 2010 2011 2012
Unleaded petrol
Diesel
9.00
8.50
8.00
7.50
7.00
6.50
5.50
5.00
6.00
02468
101214161820
2004 2005 2006 2007 2008 2009 2010 2011 2012
0
5
10
15
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25
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20-nl tbb 11-206-103-51-2
4,0
4,5
5,0
5,5
6,0
6,5
7,0
7,5
8,0
8,5
9,0
2013f 2014f 2015f 2016f
-
1 000
2 000
3 000
4 000
5 000
6 000
7 000
8 000
9 000
-
100 000
200 000
300 000
400 000
500 000
600 000
700 000
800 000
2008 2009 2010 2011 2012e
2008 2009 2010 2011 2012e
US$
/ M
T MT
MT
-
10
20
30
40
50
60
-
1 000
2 000
3 000
4 000
5 000
6 000
7 000
US$
/ lb
21%
35%
44%
-
500
1 000
1 500
2 000
2 500
3 000
3 500
Maize Wheat Sweet Groundnuts Soya beans potatoes
2009 / 2010 2010 / 2011
10
12
18 1816
14 1413
1618
1990 1992 1994 1996 1998 2000 2002 2004 2010 20120
5
10
15
20
2,000
4,000
6,000
8,000
10,000
12,000
14,000
2008 2009 2010 2012
ZMK 'b
29%
18%
12%
10%
5%
5%
20%
22%
25%36%
9%
4% 4%
29%
46%
16%
9%1%
33%
15%
52%
0%
10%
20%
30%
40%
50%
60%
70%
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
2003 2004 2005 2006 2007 2008 2009 2010 2011
21%
61%
10%
8%
0.0%
0.2%
0.4%
0.6%
0.8%
1.0%
1.2%
-
20
40
60
80
100
120
140
2003 2004 2005 2006 2007 2008 2009 2010 2011
2004 2005 2006 2007 2008 2009 2010 2011
1 000 000
800 000
600 000
400 000
200 000
0
2007 2008 2009 2010 2011 2012
Unleaded petrol
Diesel
9.00
8.50
8.00
7.50
7.00
6.50
5.50
5.00
6.00
Copper exports (MT)
Cobalt exports (MT)
Source: 2008 to 2012 Budget speeches, BOZ, CSO reports, Deloitte analysis
Average copper price (US$/MT)
Average cobalt price (US$/lb)
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14Doing Business in Zambia Aunique flavour
With anumber of significant projects currently underway, theoutlook for Zambias mining industry appears bright
Zambia: Key copper mining companies
Entity Ownership Mine name / location
Annual 2011 production (MT 000)
Konkola Copper Mines Plc Vedanta Resources Plc (51%)
Zambia Copper Investments (28.4%)
ZCCM Investment Holdings Plc (ZCCM-IH) (20.6%)
Konkola
Nchanga
Napundwe
166
Kansanshi Mining Plc First Quantum Minerals Ltd (80%)
ZCCM-IH (20%)
Kansanshi
Sentinel
230
Mopani Copper Mines Plc Glencore International Plc (73.1%)
First Quantum Minerals Ltd (16.9%)
ZCCM-IH (10%)
Nkana, Mufulira 250
Lumwana Mining Corporation
Barrick Gold Corporation (100%) Solwezi 146
NFC Africa Mining Plc China Non Ferrous Metals Mining Group Limited (85%)
ZCCM-IH (15%)
Chambeshi 90
Source: Respective company websites, Deloitte research
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15
Key players in Zambias mining sector
Historically, thecopper mines in Zambia were owned by thestate-controlled Zambia Consolidated Copper Mines Limited (ZCCM).
By theearly 2000s, theGovernment had privatised thestate-owned copper mines in anattempt to return theindustry to profitability and to boost economic growth.
Zambias mining sector is currently dominated by entities owned by multina-
tionals, as depicted in thetable opposite.
Future outlook
There are anumber of significant projects currently underway, which are expected to transform thecopper mining landscape in Zambia:
- Konkola Copper Mines, owned by London listed Vendeta, is investing US$180million at Nchanga, which is expected to breath anadditional 25 years of life in themine.
- Canadian-owned First Quantums Sentinel project is expected to initially produce 150,000 MT of copper per annum, subsequently rising to 300,000 MT of copper per annum. Thecapital cost is expected to be in theregion of US $1 billion.
- Swiss-owned Mopani (Glencore) is projecting anadditional 150,000 tonnes per annum and has finalised afeasibility study on anew project to invest anadditional US$1.5 billion in Zambia.
Theabove projects, coupled with other on-going investments in thesector, could nearly double Zambias copper output to c.1.6 million tonnes by 2016.
Based on current pipeline of major investment, Zambias copper output may almost double by 2016
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16Doing Business in Zambia Aunique flavour
TheEconomic Environment - Agriculture
Introduction
Zambias agricultural sector accounts for 21% of GDP, with thebalance coming from industry (35%) and services (44%).
It is estimated that theagricultural sector employs about 70% of thepopulation.
Thesector has immense potential to drive economic growth, given thecountrys vast expanses of arable land and free flowing easily accessible water supplies:
- Zambia has approximately 752,000 sq.km of landmass of which 58% is arable. Yet only 15% of its of arable land is currently used for farming.
- Small scale farmers supply about 70% of national crop output, despite limited access to finance.
Key crops produced
Zambias primary agricultural output crop is maize, thecountrys staple. This is partly driven by:
- Generous guaranteed minimum prices; and
- Provision of subsidised inputs to small and medium scale producers.
Agricultural experts state that crop yield rates are currently low compared to global standards.
Zambias agricultural sector, which is dominated by maize, accounts for afifth of national GDP
02468
101214161820
2004 2005 2006 2007 2008 2009 2010 2011 2012
0
5
10
15
20
25
30
35
40
20-nl tbb 11-206-103-51-2
4,0
4,5
5,0
5,5
6,0
6,5
7,0
7,5
8,0
8,5
9,0
2013f 2014f 2015f 2016f
-
1 000
2 000
3 000
4 000
5 000
6 000
7 000
8 000
9 000
-
100 000
200 000
300 000
400 000
500 000
600 000
700 000
800 000
2008 2009 2010 2011 2012e
2008 2009 2010 2011 2012e
US$
/ M
T MT
MT
-
10
20
30
40
50
60
-
1 000
2 000
3 000
4 000
5 000
6 000
7 000
US$
/ lb
21%
35%
44%
-
500
1 000
1 500
2 000
2 500
3 000
3 500
Maize Wheat Sweet Groundnuts Soya beans potatoes
2009 / 2010 2010 / 2011
10
12
18 1816
14 1413
1618
1990 1992 1994 1996 1998 2000 2002 2004 2010 20120
5
10
15
20
2,000
4,000
6,000
8,000
10,000
12,000
14,000
2008 2009 2010 2012
ZMK 'b
29%
18%
12%
10%
5%
5%
20%
22%
25%36%
9%
4% 4%
29%
46%
16%
9%1%
33%
15%
52%
0%
10%
20%
30%
40%
50%
60%
70%
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
2003 2004 2005 2006 2007 2008 2009 2010 2011
21%
61%
10%
8%
0.0%
0.2%
0.4%
0.6%
0.8%
1.0%
1.2%
-
20
40
60
80
100
120
140
2003 2004 2005 2006 2007 2008 2009 2010 2011
2004 2005 2006 2007 2008 2009 2010 2011
1 000 000
800 000
600 000
400 000
200 000
0
2007 2008 2009 2010 2011 2012
Unleaded petrol
Diesel
9.00
8.50
8.00
7.50
7.00
6.50
5.50
5.00
6.00
Agriculture
Source: EIU
Industry
Services
Zambia: GDP contribution by sector
Zambias top five crops by production (MT 000)
Crop 2009 / 2010
2010 / 2011
% change
Maize 2795 3020 8%
Wheat 172 237 38%
Sweet potatoes 253 147 -42%
Groundnuts 165 139 -16%
Soya beans 112 116 4%
Source: Ministry of Agriculture & Livestock statistics
Note: In addition to theabove, sugar is another key agricultural output for Zambia. Production is dominated by Zambia Sugar Plc, which accounts for over 90% of thecountrys output. c.55% of sugar production is exported, 10%, to theEU. Annual sugar output is estimated at 450,000 tonnes.
-
17
Government has embarked on anumber of initiatives to improve yields, including:
- Investment in training of small scale famers;
- Investment in research and development; and
- Promotion of local production of key inputs such as fertilisers and seeds.
Anumber of initiatives are being implemented to improve yields
02468
101214161820
2004 2005 2006 2007 2008 2009 2010 2011 2012
0
5
10
15
20
25
30
35
40
20-nl tbb 11-206-103-51-2
4,0
4,5
5,0
5,5
6,0
6,5
7,0
7,5
8,0
8,5
9,0
2013f 2014f 2015f 2016f
-
1 000
2 000
3 000
4 000
5 000
6 000
7 000
8 000
9 000
-
100 000
200 000
300 000
400 000
500 000
600 000
700 000
800 000
2008 2009 2010 2011 2012e
2008 2009 2010 2011 2012e
US$
/ M
T MT
MT
-
10
20
30
40
50
60
-
1 000
2 000
3 000
4 000
5 000
6 000
7 000
US$
/ lb
21%
35%
44%
-
500
1 000
1 500
2 000
2 500
3 000
3 500
Maize Wheat Sweet Groundnuts Soya beans potatoes
2009 / 2010 2010 / 2011
10
12
18 1816
14 1413
1618
1990 1992 1994 1996 1998 2000 2002 2004 2010 20120
5
10
15
20
2,000
4,000
6,000
8,000
10,000
12,000
14,000
2008 2009 2010 2012
ZMK 'b
29%
18%
12%
10%
5%
5%
20%
22%
25%36%
9%
4% 4%
29%
46%
16%
9%1%
33%
15%
52%
0%
10%
20%
30%
40%
50%
60%
70%
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
2003 2004 2005 2006 2007 2008 2009 2010 2011
21%
61%
10%
8%
0.0%
0.2%
0.4%
0.6%
0.8%
1.0%
1.2%
-
20
40
60
80
100
120
140
2003 2004 2005 2006 2007 2008 2009 2010 2011
2004 2005 2006 2007 2008 2009 2010 2011
1 000 000
800 000
600 000
400 000
200 000
0
2007 2008 2009 2010 2011 2012
Unleaded petrol
Diesel
9.00
8.50
8.00
7.50
7.00
6.50
5.50
5.00
6.00
Zambias top five crops by production (MT)
-
18Doing Business in Zambia Aunique flavour
Key players in Zambias agricultural sector
Key players include:
TheMinistry of Agriculture & Livestock: Sets policies and provides farmer input support.
- Food Reserve Agency: Responsible for crop marketing and food storage.
- Commercial farmers: There are various commercial farms in thecountry including:
- Mpongwe Farms, adivision of Zambeef which produces over 50,000 tonnes of crop (wheat, maize, soya) ; and
- Zambia Sugar Plc, thecountrys largest sugar producer with amilling capacity of 450,000 tons per annum.
- Small-scale farmers i.e. those with less than two hectares of land: Theare fragmented and currently account for c.70% of national crop output.
- Various associations: These aim to protect theinterest of their
members and include theZambia National Famer Union and Zambia Coffee Growers Association.
Zambias top 5 crops yield rates (MT per Ha)
Crop 2009 / 2010
2010 / 2011
% change
Maize 2.25 2.23 -1%
Wheat 6.33 6.31 0%
Sweet potatoes 3.57 3.23 -10%
Groundnuts 0.61 0.62 2%
Soya beans 1.80 1.90 6%
Source: Ministry of Agriculture & Livestock statistics
Zambias agricultural sector has anumber of players including theMinistry of Agriculture and theFood Reserve Agency
-
19
Zambias agricultural regions
Province Annual rainfall Suitable crop / activity
Southern and parts of Eastern and Western
Less than 800 mm
Maize, cotton, sesame, millet, sorghum, groundnuts, beef, dairy
Lusaka, Central, Southern and Eastern
800 mm to 1,000 mm
Maize, cotton, soya beans, wheat, beef, dairy, vegetables, tobacco
Western 800 mm to 1,000 mm
Maize, rice, cashew nuts, cassava, millet, vegetables, timber, beef, dairy, poultry, fish
Northern, Luapula, Copperbelt, North-Western
1,000 mm to 1,500 mm
Maize, pineapples, millet, rice, sorghum, coffee, beans, sugarcane, cassava, groundnuts and fish farming
Source: Ministry of Agriculture & Livestock website
TheZambian Government recognises theagricultural sectors significant potential and has implemented targeted incentives to support growth
Government incentives
TheGovernment is keen to support growth in theagricultural sector given its immense potential to alleviate poverty. 52% of theapproximately one million jobs that theGovernment targets to create over thenext five years, are in theagricultural sector.
Promoting agriculture is one of theGovernments key strategies to diversify theeconomy from over reliance on mining. Agriculture related incentives include:
- Agricultural activities currently enjoy concessionary corporation tax rates of 10% compared to thestandard rates of 30% 35%;
- Dividends from agricultural activities are exempt from WHT for thefirst 5 years; and
- Designated farm blocks have been set up that can be accessed by both local and international investors. These are pre surveyed blocks for agro purposes where Government is providing/installing basic infrastructure such as roads, schools, health facilities, dams, and electricity.
Anumber of crops have been prioritized for investment including coffee, cotton, tobacco, sugarcane, pineapples, floricultural and horticultural crops.
-
20Doing Business in Zambia Aunique flavour
Zambias power output is dominated by hydro primarily generated by thestate owned ZESCO
Power generation capacity
Power station Current capacity (MW)
Projected capacity by 2018 (MW)
Estimated completion date
Type
Kafue Gorge 990 990 Existing Hydro
Kariba North Bank 720 720 Existing Hydro
Victoria Falls 108 108 Existing Hydro
LHPC 55 300 2018 Hydro
CEC 80 880 2018 Gas/Hydro
Other ZESCO small hydros
24 68 2018 Hydro
Kafue Gorge Lower _ 750 2017 Hydro
Kariba North Bank Extension
_ 360 2013 Hydro
Itezhi-Tezhi _ 120 2015 Hydro
Ndola Energy Company
_ 100 2013 HFO
Maamba 300 2015 Coal
Total 1,869 4,696
Source: ZESCO, Maamba, CEC websites & other Deloitte research sources
TheEconomic Environment - Energy
-
21
Overview
Zambia has abundant hydroelectric resources and has historically met most of its electricity needs from its own hydroelectric stations, which are operated by thestate-owned ZESCO Liimited (ZESCO).
Hydro power accounts for 99% of electricity production with themajor sources being Kafue Gorge, Kariba North Bank and Victoria Falls power stations.
Zambias mining sector is thesingle largest power consumer of power taking up over 50% of Zambias total power output.
Zambia was alarge regional electricity exporter, but in November 2005 ZESCO was forced to suspend exports, as generation capacity fell owing to thestart of rehabilitation work on thecountrys ageing main hydroe-lectric power stations.
Thefall in generation was so steep that electricity had to be imported from South Africa and theDRC. Matters were worsened in 2007 when South Africa suspended its own power exports as theregion fell victim to widespread power shortages.
Projected power capacity
Zambias current installed hydro-power capacity is less than 2000MW, while resource potential stands at anestimated 6000MW.
Based on projects currently in thepipeline, Zambias power generation capacity could increase to c. 4,700 MW over thenext five years. This excludes theBatoka Gorge project in respect of which theZambezi River Authority (ZRA) has recently invited Expressions of Interest to perform afeasibility study and environmental and social impact assessments. Should Batoka go ahead, it will be a1,600-MW hydroelectric project and is expected to take seven to eight years from date of construction. Output will be shared equally between Zambia and Zimbabwe.
ZESCO has recently announced that it intends to raise up to ZMK10 trillion (US$2 billion) through amixture of different type financing instruments to support various hydro power generation projects in thecountry.
Based on current planned projects, Zambias power generation capacity is to increase by two and ahalf times over thenext five years, from thecurrent c.1,800MW
-
22Doing Business in Zambia Aunique flavour
Key players in Zambias electricity sector
Thekey players in Zambias electricity industry include:
- ZESCO: Avertically integrated generation, transmission, distri-bution state utility which currently accounts for 99% of thecountrys electricity generation capacity. Thecompany produces thebulk of its power from three main hydro power plants, namely Kariba North bank, Kafue Gorge and Victoria Falls power stations. In addition, ZESCO generates limited amounts of power from mini hydro power stations including Chishimba, Lusiwasi and Shiwangandu.
- CEC: ALuSE listed company that was created following theprivati-sation of ZCCM power division in 1997. Currently, CECs principal assets comprises transmission and distribution assets in theCopper belt region of Zambia. It is estimated that thecompany purchases 55% of thepower generated by ZESCO, which it supplies to themines. As part of its growth strategy, CEC has recently announced that it would be partnering with aNigerian investment bank to develop
theKabompo gorge hydro-power project in northwestern Zambia (34MW) and five Luapula river hydro power projects with anestimated combined capacity of 800MW.
- LHPC: Aprivately owned independent power producer created following theprivatisation of ZCCM. TheCompany has aninstalled capacity of 55MW and currently sells all its power to ZESCO under apower purchase agreement. LHPCs vision is to grow generation capacity to more than 300MW by 2018.
- ERB: Theregulating body of Zambias energy sector, including
power.
Theelectricity supply industry primarily comprises thevertically integrated state utility, ZESCO, and anenergy service company CEC that purchases power from ZESCO and supplies it to themines
-
23
Other key energy sources
Apart from electricity, Zambias other key energy sources comprise:
Petroleum: Zambia imports all of its petroleum needs primarily via a1,700km pipeline which runs from Dar es Salaam to Ndola, in thecountrys Copperbelt Province. Thecountry has one petroleum refinery plant with adesign capacity of 800,000 tonnes per annum
Coal: proven coal deposits are estimated at over 30 million tonnes. Maamba Collieries Limited is thelargest coal mining company in Zambia and it is in theprocess of investing in acoal based 300MW power generation plant at anestimated capital outlay of approxi-mately US$750 Million.
Zambias other key energy sources comprise petroleum and coal
-
24Doing Business in Zambia Aunique flavour
TheEconomic Environment - Financial Services
Overview
Pre-2006, thebanking system was small and under-developed. However, over thepast few years anumber of new banks have entered themarket including:
- Access Bank of Nigeria;
- Ecobank from West Africa
- First National Bank of South Africa
- United Bank of Africa of Nigeria; and
- Rabo Bank of Netherlands who have acquired 49% of Zambia National Commercial Bank.
Improvements in thefinancial services regulatory framework coupled with improved macro-economic stability have had apositive impact on Zambias financial system over therecent past.
Among thegroup of seven foreign banks, three large banks (Barclays, Standard Chartered and Stanbic Bank), play adominant role in Zambias financial system.
Currently, there are 33 micro-financial institutions in Zambia excluding leasing, building societies and bureau de change, which all fall under thenon-bank financial institutions category. Non-bank financial institutions refers to institutions or persons authorised by law or theBank of Zambia to engage in banking business not involving thereceipt of money on current account subject to withdrawal by cheque.
There have been anumber of new entrants into Zambias banking sector over thepast few years, following improvements in thefinancial services regulatory framework macro-economic management
-
25
Barclays, Finance Bank and ZANACO, have thewidest branch network in Zambia
Branch network for commercial banks
Registered Bank Number of branches
AB Bank 1
Access Bank Zambia 5
African Banking Corporation 6
Bank of China 2
Barclays Bank Zambia 55
Cavmont Capital 16
Citibank Zambia 2
Ecobank Zambia 5
Finance Bank Zambia 51
First National Bank Zambia 9
First Alliance Bank 5
Indo-Zambia Bank 18
International Commercial Bank 2
Intermarket Banking Corporation 7
Investrust Bank 19
Stanbic Bank Zambia 19
Standard Chartered Bank 20
United Bank for Africa Zambia 4
Zambia National Commercial Bank 59
Source: Bank of Zambia
-
26Doing Business in Zambia Aunique flavour
Thetotal number of banks has increased from 10 in 1990 to 18 in 2012
02468
101214161820
2004 2005 2006 2007 2008 2009 2010 2011 2012
0
5
10
15
20
25
30
35
40
20-nl tbb 11-206-103-51-2
4,0
4,5
5,0
5,5
6,0
6,5
7,0
7,5
8,0
8,5
9,0
2013f 2014f 2015f 2016f
-
1 000
2 000
3 000
4 000
5 000
6 000
7 000
8 000
9 000
-
100 000
200 000
300 000
400 000
500 000
600 000
700 000
800 000
2008 2009 2010 2011 2012e
2008 2009 2010 2011 2012e
US$
/ M
T MT
MT
-
10
20
30
40
50
60
-
1 000
2 000
3 000
4 000
5 000
6 000
7 000
US$
/ lb
21%
35%
44%
-
500
1 000
1 500
2 000
2 500
3 000
3 500
Maize Wheat Sweet Groundnuts Soya beans potatoes
2009 / 2010 2010 / 2011
10
12
18 1816
14 1413
1618
1990 1992 1994 1996 1998 2000 2002 2004 2010 20120
5
10
15
20
2,000
4,000
6,000
8,000
10,000
12,000
14,000
2008 2009 2010 2012
ZMK 'b
29%
18%
12%
10%
5%
5%
20%
22%
25%36%
9%
4% 4%
29%
46%
16%
9%1%
33%
15%
52%
0%
10%
20%
30%
40%
50%
60%
70%
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
2003 2004 2005 2006 2007 2008 2009 2010 2011
21%
61%
10%
8%
0.0%
0.2%
0.4%
0.6%
0.8%
1.0%
1.2%
-
20
40
60
80
100
120
140
2003 2004 2005 2006 2007 2008 2009 2010 2011
2004 2005 2006 2007 2008 2009 2010 2011
1 000 000
800 000
600 000
400 000
200 000
0
2007 2008 2009 2010 2011 2012
Unleaded petrol
Diesel
9.00
8.50
8.00
7.50
7.00
6.50
5.50
5.00
6.00
02468
101214161820
2004 2005 2006 2007 2008 2009 2010 2011 2012
0
5
10
15
20
25
30
35
40
20-nl tbb 11-206-103-51-2
4,0
4,5
5,0
5,5
6,0
6,5
7,0
7,5
8,0
8,5
9,0
2013f 2014f 2015f 2016f
-
1 000
2 000
3 000
4 000
5 000
6 000
7 000
8 000
9 000
-
100 000
200 000
300 000
400 000
500 000
600 000
700 000
800 000
2008 2009 2010 2011 2012e
2008 2009 2010 2011 2012e
US$
/ M
T MT
MT
-
10
20
30
40
50
60
-
1 000
2 000
3 000
4 000
5 000
6 000
7 000
US$
/ lb
21%
35%
44%
-
500
1 000
1 500
2 000
2 500
3 000
3 500
Maize Wheat Sweet Groundnuts Soya beans potatoes
2009 / 2010 2010 / 2011
10
12
18 1816
14 1413
1618
1990 1992 1994 1996 1998 2000 2002 2004 2010 20120
5
10
15
20
2,000
4,000
6,000
8,000
10,000
12,000
14,000
2008 2009 2010 2012
ZMK 'b
29%
18%
12%
10%
5%
5%
20%
22%
25%36%
9%
4% 4%
29%
46%
16%
9%1%
33%
15%
52%
0%
10%
20%
30%
40%
50%
60%
70%
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
2003 2004 2005 2006 2007 2008 2009 2010 2011
21%
61%
10%
8%
0.0%
0.2%
0.4%
0.6%
0.8%
1.0%
1.2%
-
20
40
60
80
100
120
140
2003 2004 2005 2006 2007 2008 2009 2010 2011
2004 2005 2006 2007 2008 2009 2010 2011
1 000 000
800 000
600 000
400 000
200 000
0
2007 2008 2009 2010 2011 2012
Unleaded petrol
Diesel
9.00
8.50
8.00
7.50
7.00
6.50
5.50
5.00
6.00
Number of Banks: 1990 - 2012
Loans and advances historical development
Source: Bank of Zambia 2011 annual report
Source: Bank of Zambia
-
27
Regulation
Zambias financial system is regulated by theBOZ, whose stated mission is to achieve and maintain price and financial systems stability for balanced macroeconomic development.
TheBOZ draws its authority from theBank of Zambia Act, of 1996.
As thecountrys Central Bank, theBOZs primary functions include:
- Licensing, supervision and regulation of theactivities of banks and financial institutions;
- Issuance of notes and coins and regulation of all currency related matters;
- Supporting theefficient operation of theexchange system; and
- Acting as adviser to theGovernment on matters relating to economic and monetary management.
New capital adequacy framework
TheBOZ issued anew capital adequacy framework in January 2012. Prior to January 2012, theminimum capital requirement for commercial banks operating in Zambia was ZMK12 billion (US$2.4 million). Thenew capitalisation requirement are linked to theshareholding structure as follows:
- For foreign-owned banks theminimum requirement is now ZMK520 billion (US$104 million); and
- For local banks , alower threshold of ZMK104 billion (US$20 million)
Aforeign owned bank refers to abank with more than 49% of its equity by foreign entities.
02468
101214161820
2004 2005 2006 2007 2008 2009 2010 2011 2012
0
5
10
15
20
25
30
35
40
20-nl tbb 11-206-103-51-2
4,0
4,5
5,0
5,5
6,0
6,5
7,0
7,5
8,0
8,5
9,0
2013f 2014f 2015f 2016f
-
1 000
2 000
3 000
4 000
5 000
6 000
7 000
8 000
9 000
-
100 000
200 000
300 000
400 000
500 000
600 000
700 000
800 000
2008 2009 2010 2011 2012e
2008 2009 2010 2011 2012e
US$
/ M
T MT
MT
-
10
20
30
40
50
60
-
1 000
2 000
3 000
4 000
5 000
6 000
7 000
US$
/ lb
21%
35%
44%
-
500
1 000
1 500
2 000
2 500
3 000
3 500
Maize Wheat Sweet Groundnuts Soya beans potatoes
2009 / 2010 2010 / 2011
10
12
18 1816
14 1413
1618
1990 1992 1994 1996 1998 2000 2002 2004 2010 20120
5
10
15
20
2,000
4,000
6,000
8,000
10,000
12,000
14,000
2008 2009 2010 2012
ZMK 'b
29%
18%
12%
10%
5%
5%
20%
22%
25%36%
9%
4% 4%
29%
46%
16%
9%1%
33%
15%
52%
0%
10%
20%
30%
40%
50%
60%
70%
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
2003 2004 2005 2006 2007 2008 2009 2010 2011
21%
61%
10%
8%
0.0%
0.2%
0.4%
0.6%
0.8%
1.0%
1.2%
-
20
40
60
80
100
120
140
2003 2004 2005 2006 2007 2008 2009 2010 2011
2004 2005 2006 2007 2008 2009 2010 2011
1 000 000
800 000
600 000
400 000
200 000
0
2007 2008 2009 2010 2011 2012
Unleaded petrol
Diesel
9.00
8.50
8.00
7.50
7.00
6.50
5.50
5.00
6.00
2011 Loans and advances by sector
Personal Loans
Agriculture
Manufacturing
Wholesale & Retail Trade
Transport, Storage & Comms
Financial Services
Others
Source: BOZ 2011 annual report
Theresponsibility to regulate Zambias financial system lies with theBOZ, as provided under theBank of Zambia Act, of 1996
-
28Doing Business in Zambia Aunique flavour
Currency rebasing
On 23 January 2012, GRZ gave approval to BOZs recommendation to rebase theZambian Kwacha, effective 1 January 2013.
Therebasing involved dividing Zambias currency, theKwacha, by one thousand (1,000). To illustrate, ZMK50,000 became ZMW50 following therebasing exercise.
Thekey drivers for implementing therebasement are as follows:
- To facilitate easier business transactions: Use of smaller units simplifies accounting and reduces therisk of errors arising from data input and time spent reviewing such financial data.
- To increase confidence levels in theZambian currency: People tend to have less confidence in currencies with numerous zeros.
- To reduce thecosts associated with adapting standard accounting packages: Most accounting packages are developed in countries where currencies have significantly fewer zeros compared to Zambia. Accordingly, Zambian entities purchasing these accounting packages, are required to customize them by increasing thefield size to accommodate multiple zeros, at acost.
- To encourage anefficient payment system: Theadoption of arebased currency will enable easier use of vending machines, car park meters and other related technologies. In addition it will avoid theneed to carry large sums of money for transactions.
- To facilitate theintroduction of coins: Therebasing of thecurrency will enable theBOZ to re-introduce theuse of coins, which are signifi-cantly more durable compared to notes.
Thecurrency rebasing transition period will run from 1 January to 30 June 2013. During this period both thenew and old currencies will circulate simultaneously. Further, both currencies will be used for thepurchase of goods and services.
During theperiod 1 January 2013 to 30 June 2013, aninterim symbol (KR) will be used to denote prices in thenew currency while thecurrent symbol (K) will denote prices in theold currency. Post-30 June 2013, theinterim symbol (KR) will cease to be used.
Thesimultaneous circulation of currencies will cease on 1 July 2013 and effective this date theold currency will no longer be accepted for thepurchase of goods and services.
Effective 1 January 2013, Zambia rebased its currency, aninitiative expected to bring several benefits to individuals, organisations and thecountry as awhole
-
29
Zambias insurance industry comprises several private players in addition to thestate-owned ZISC
Theinsurance industry
ThePensions and Insurance Authority (PIA) is theregulatory and supervisory authority for thepensions and insurance industry in Zambia. ThePIA was created by thePension Scheme Regulation Act no. 28 of 1996 and theInsurance Act No. 27 of 1997.
ThePIAs stated mission is to regulate theconduct of thepensions and insurance industry through prudential supervision in order to protect theinterest of pension scheme members and insurance policyholders and to foster theindustrys growth, development and stability.
Zambias insurance industry is relatively small and comprises thestate owned Zambia State Insurance Corporation (ZISC) and several private sector players including Madison, African Life and PICZ.
02468
101214161820
2004 2005 2006 2007 2008 2009 2010 2011 2012
0
5
10
15
20
25
30
35
40
20-nl tbb 11-206-103-51-2
4,0
4,5
5,0
5,5
6,0
6,5
7,0
7,5
8,0
8,5
9,0
2013f 2014f 2015f 2016f
-
1 000
2 000
3 000
4 000
5 000
6 000
7 000
8 000
9 000
-
100 000
200 000
300 000
400 000
500 000
600 000
700 000
800 000
2008 2009 2010 2011 2012e
2008 2009 2010 2011 2012e
US$
/ M
T MT
MT
-
10
20
30
40
50
60
-
1 000
2 000
3 000
4 000
5 000
6 000
7 000
US$
/ lb
21%
35%
44%
-
500
1 000
1 500
2 000
2 500
3 000
3 500
Maize Wheat Sweet Groundnuts Soya beans potatoes
2009 / 2010 2010 / 2011
10
12
18 1816
14 1413
1618
1990 1992 1994 1996 1998 2000 2002 2004 2010 20120
5
10
15
20
2,000
4,000
6,000
8,000
10,000
12,000
14,000
2008 2009 2010 2012
ZMK 'b
29%
18%
12%
10%
5%
5%
20%
22%
25%36%
9%
4% 4%
29%
46%
16%
9%1%
33%
15%
52%
0%
10%
20%
30%
40%
50%
60%
70%
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
2003 2004 2005 2006 2007 2008 2009 2010 2011
21%
61%
10%
8%
0.0%
0.2%
0.4%
0.6%
0.8%
1.0%
1.2%
-
20
40
60
80
100
120
140
2003 2004 2005 2006 2007 2008 2009 2010 2011
2004 2005 2006 2007 2008 2009 2010 2011
1 000 000
800 000
600 000
400 000
200 000
0
2007 2008 2009 2010 2011 2012
Unleaded petrol
Diesel
9.00
8.50
8.00
7.50
7.00
6.50
5.50
5.00
6.00
02468
101214161820
2004 2005 2006 2007 2008 2009 2010 2011 2012
0
5
10
15
20
25
30
35
40
20-nl tbb 11-206-103-51-2
4,0
4,5
5,0
5,5
6,0
6,5
7,0
7,5
8,0
8,5
9,0
2013f 2014f 2015f 2016f
-
1 000
2 000
3 000
4 000
5 000
6 000
7 000
8 000
9 000
-
100 000
200 000
300 000
400 000
500 000
600 000
700 000
800 000
2008 2009 2010 2011 2012e
2008 2009 2010 2011 2012e
US$
/ M
T MT
MT
-
10
20
30
40
50
60
-
1 000
2 000
3 000
4 000
5 000
6 000
7 000
US$
/ lb
21%
35%
44%
-
500
1 000
1 500
2 000
2 500
3 000
3 500
Maize Wheat Sweet Groundnuts Soya beans potatoes
2009 / 2010 2010 / 2011
10
12
18 1816
14 1413
1618
1990 1992 1994 1996 1998 2000 2002 2004 2010 20120
5
10
15
20
2,000
4,000
6,000
8,000
10,000
12,000
14,000
2008 2009 2010 2012
ZMK 'b
29%
18%
12%
10%
5%
5%
20%
22%
25%36%
9%
4% 4%
29%
46%
16%
9%1%
33%
15%
52%
0%
10%
20%
30%
40%
50%
60%
70%
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
2003 2004 2005 2006 2007 2008 2009 2010 2011
21%
61%
10%
8%
0.0%
0.2%
0.4%
0.6%
0.8%
1.0%
1.2%
-
20
40
60
80
100
120
140
2003 2004 2005 2006 2007 2008 2009 2010 2011
2004 2005 2006 2007 2008 2009 2010 2011
1 000 000
800 000
600 000
400 000
200 000
0
2007 2008 2009 2010 2011 2012
Unleaded petrol
Diesel
9.00
8.50
8.00
7.50
7.00
6.50
5.50
5.00
6.00
General insurance top players by gross premiums
Life insurance top players by gross premiums
ZISC
ZISC
Madison
PICZ
Aflife
ZIGI
Madison
PICZ
NICO
Goldman
ZIGI
Source: BOZ 2011 annual report
-
30Doing Business in Zambia Aunique flavour
General insurance top players by gross premiums TheEconomic Environment - Tourism
Tourism is becoming anincreasingly important foreign exchange earner, although it currently contributes only around 5% of Zambias GDP.
Growth in thesector is seen by theGovernment as having great potential for diversifying theZambian economy.
Theprincipal challenges that have limited Zambias tourism potential have included therelatively underde-veloped infrastructure, as well as, inadequate supply of competitive accommodation.
TheGovernment is attempting to remedy this and theprospects are improving. As part of therecently announced 2013 Budget, theGovernment has unveiled plans to create 300,000 jobs in tourism over thenext five years. In addition, Zambias tourism sector has benefited from thepolitical challenges in neighbouring Zimbabwe.
Most tourists are keen to see theVictoria Falls, which is located on theborder between Zambia and Zimbabwe. New hotels in Zambia are cashing in on theinflux, and this is raising revenue collection and creating new jobs.
In addition to theVictoria Falls, Zambia is home to 19 national game parks and 34 game management areas covering 22.4m hectares.
Tourism will receive aboost in 2013 from theUN World Tourism Organisation Conference, with visitor numbers expected to increase significantly.
There is significant growth potential in Zambias tourism industry. TheZambian Government aims to create some 300,000 jobs in tourism over thefive-year period to 2017
-
31
Zambia tourism sector snap shot
Key highlights
Travel and Tourism as a% of GDP 5.5%
Government 2013 tourism expenditure allocation ZMK21.1 billion
Revenue from international tourists (2010) US$125 million
Targeted revenue from international tourists (2015) US$550 million
Visitor arrivals (2011) 910,000
Visitor arrivals (2015) 4000,000
Targeted new jobs in tourism over next four years to 2017 300,000
Targeted Travel and Tourism as a% of GDP (2015) 8.0%
02468
101214161820
2004 2005 2006 2007 2008 2009 2010 2011 2012
0
5
10
15
20
25
30
35
40
20-nl tbb 11-206-103-51-2
4,0
4,5
5,0
5,5
6,0
6,5
7,0
7,5
8,0
8,5
9,0
2013f 2014f 2015f 2016f
-
1 000
2 000
3 000
4 000
5 000
6 000
7 000
8 000
9 000
-
100 000
200 000
300 000
400 000
500 000
600 000
700 000
800 000
2008 2009 2010 2011 2012e
2008 2009 2010 2011 2012e
US$
/ M
T MT
MT
-
10
20
30
40
50
60
-
1 000
2 000
3 000
4 000
5 000
6 000
7 000
US$
/ lb
21%
35%
44%
-
500
1 000
1 500
2 000
2 500
3 000
3 500
Maize Wheat Sweet Groundnuts Soya beans potatoes
2009 / 2010 2010 / 2011
10
12
18 1816
14 1413
1618
1990 1992 1994 1996 1998 2000 2002 2004 2010 20120
5
10
15
20
2,000
4,000
6,000
8,000
10,000
12,000
14,000
2008 2009 2010 2012
ZMK 'b
29%
18%
12%
10%
5%
5%
20%
22%
25%36%
9%
4% 4%
29%
46%
16%
9%1%
33%
15%
52%
0%
10%
20%
30%
40%
50%
60%
70%
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
2003 2004 2005 2006 2007 2008 2009 2010 2011
21%
61%
10%
8%
0.0%
0.2%
0.4%
0.6%
0.8%
1.0%
1.2%
-
20
40
60
80
100
120
140
2003 2004 2005 2006 2007 2008 2009 2010 2011
2004 2005 2006 2007 2008 2009 2010 2011
1 000 000
800 000
600 000
400 000
200 000
0
2007 2008 2009 2010 2011 2012
Unleaded petrol
Diesel
9.00
8.50
8.00
7.50
7.00
6.50
5.50
5.00
6.00
Zambias visitor arrivals
Sources: EIU, Zambia Country Report (2008); World Travel and Tourism Council, Travel & Tourism Economic Impact (2009), Tourism ministry website
Zambia is aiming to grow the number of tourist arrivals to 4 million by 2015, which compares with just under 1 million in 2011
-
32Doing Business in Zambia Aunique flavour
TheEconomic Environment - Transport
Overview
Zambia is alandlocked country with several natural lakes and rivers. Imports, exports and local commerce are significantly dependent on road and air transport to facilitate trade. Zambias lakes, rivers and canals present significant potential for development of transport infrastructure that can enhance and facilitate trade with neighbouring countries.
In 2012, theGRZ issued aUS$750 million bond from theinternational capital market. 57% of theproceeds of thebond has been allocated to investment in thetransport sector. Furthermore, customs duties have been eliminated for importation of locomotives, carriages, rail traffic control equipment, canoes, cruise and ferry boats, dredgers, pontoons, motor cycles and new motor vehicles for certain tourism enterprises.
Approximately 14% of the2013 national expenditure budget is earmarked for investment in thetransport sector, amounting to ZMW 3.4 million.
Afive-year plan to enhance theexisting road network by 8,000 kilometers is in theoffing. TheGRZ announcement to increase investment in rail will decongest existing roads and reduce road maintenance costs.
As shown below, diesel and petrol prices have fluctuated significantly in recent years, accentuated by uncertainty in global commodity markets.
Zambias transport sector is expected to receive amajor boost over thenext five years driven by major planned investment in road and rail infrastructure
-
33
Key players
Thekey players in Zambias transport industry include:
- Road Development Agency (RDA): Responsible for thecare, maintenance and construction of public roads in Zambia.
- National Council for Construction (NCC): Administration and registration of road contractors.
- Ministry of Communications and Transport: Formulation and adminis-tration of transport sector policies.
- Road Traffic and Safety Agency (RTSA): Implementation of policy on road transport, traffic management and road safety.
- Zambia Railways and Tanzania Zambia Railway (TAZARA): Railway operators.
Zambias transport sector comprises several players including RDA and RSTA
02468
101214161820
2004 2005 2006 2007 2008 2009 2010 2011 2012
0
5
10
15
20
25
30
35
40
20-nl tbb 11-206-103-51-2
4,0
4,5
5,0
5,5
6,0
6,5
7,0
7,5
8,0
8,5
9,0
2013f 2014f 2015f 2016f
-
1 000
2 000
3 000
4 000
5 000
6 000
7 000
8 000
9 000
-
100 000
200 000
300 000
400 000
500 000
600 000
700 000
800 000
2008 2009 2010 2011 2012e
2008 2009 2010 2011 2012e
US$
/ M
T MT
MT
-
10
20
30
40
50
60
-
1 000
2 000
3 000
4 000
5 000
6 000
7 000
US$
/ lb
21%
35%
44%
-
500
1 000
1 500
2 000
2 500
3 000
3 500
Maize Wheat Sweet Groundnuts Soya beans potatoes
2009 / 2010 2010 / 2011
10
12
18 1816
14 1413
1618
1990 1992 1994 1996 1998 2000 2002 2004 2010 20120
5
10
15
20
2,000
4,000
6,000
8,000
10,000
12,000
14,000
2008 2009 2010 2012
ZMK 'b
29%
18%
12%
10%
5%
5%
20%
22%
25%36%
9%
4% 4%
29%
46%
16%
9%1%
33%
15%
52%
0%
10%
20%
30%
40%
50%
60%
70%
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
2003 2004 2005 2006 2007 2008 2009 2010 2011
21%
61%
10%
8%
0.0%
0.2%
0.4%
0.6%
0.8%
1.0%
1.2%
-
20
40
60
80
100
120
140
2003 2004 2005 2006 2007 2008 2009 2010 2011
2004 2005 2006 2007 2008 2009 2010 2011
1 000 000
800 000
600 000
400 000
200 000
0
2007 2008 2009 2010 2011 2012
Unleaded petrol
Diesel
9.00
8.50
8.00
7.50
7.00
6.50
5.50
5.00
6.00
Average retail pump price pr litre (ZMW)
Source: Energy Regulation Board website
-
34Doing Business in Zambia Aunique flavour
02468
101214161820
2004 2005 2006 2007 2008 2009 2010 2011 2012
0
5
10
15
20
25
30
35
40
20-nl tbb 11-206-103-51-2
4,0
4,5
5,0
5,5
6,0
6,5
7,0
7,5
8,0
8,5
9,0
2013f 2014f 2015f 2016f
-
1 000
2 000
3 000
4 000
5 000
6 000
7 000
8 000
9 000
-
100 000
200 000
300 000
400 000
500 000
600 000
700 000
800 000
2008 2009 2010 2011 2012e
2008 2009 2010 2011 2012e
US$
/ M
T MT
MT
-
10
20
30
40
50
60
-
1 000
2 000
3 000
4 000
5 000
6 000
7 000
US$
/ lb
21%
35%
44%
-
500
1 000
1 500
2 000
2 500
3 000
3 500
Maize Wheat Sweet Groundnuts Soya beans potatoes
2009 / 2010 2010 / 2011
10
12
18 1816
14 1413
1618
1990 1992 1994 1996 1998 2000 2002 2004 2010 20120
5
10
15
20
2,000
4,000
6,000
8,000
10,000
12,000
14,000
2008 2009 2010 2012
ZMK 'b
29%
18%
12%
10%
5%
5%
20%
22%
25%36%
9%
4% 4%
29%
46%
16%
9%1%
33%
15%
52%
0%
10%
20%
30%
40%
50%
60%
70%
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
2003 2004 2005 2006 2007 2008 2009 2010 2011
21%
61%
10%
8%
0.0%
0.2%
0.4%
0.6%
0.8%
1.0%
1.2%
-
20
40
60
80
100
120
140
2003 2004 2005 2006 2007 2008 2009 2010 2011
2004 2005 2006 2007 2008 2009 2010 2011
1 000 000
800 000
600 000
400 000
200 000
0
2007 2008 2009 2010 2011 2012
Unleaded petrol
Diesel
9.00
8.50
8.00
7.50
7.00
6.50
5.50
5.00
6.00
TheEconomic Environment - Telecomms
Regulation
TheZambia Information and Communications Technology Authority (ZICTA) is anICT Regulatory body responsible for regulating theInformation and Communications Technologies (ICT) Sector in Zambia.
ZICTAs stated visions is: To be thecatalyst of abetter Zambia transformed through theuse of ICTs in all sectors of theeconomy.
ZICTA derives its mandate from thethree Acts, thePostal Services Act No. 22 of 2009, Electronic Communications and Transactions Act No. 21 and theInformation and Communications Technologies (ICT) Act No. 15 of 2009 to regulate ICTs, postal and courier services in Zambia.
Zambias ICT sector is regulated by ZICTA
Average retail pump price pr litre (ZMW)
Market share of mobile market based on subscription
Sources: ZICTA website 3 February 2013
MTN
ZAMTEL
Airtel
-
35
02468
101214161820
2004 2005 2006 2007 2008 2009 2010 2011 2012
0
5
10
15
20
25
30
35
40
20-nl tbb 11-206-103-51-2
4,0
4,5
5,0
5,5
6,0
6,5
7,0
7,5
8,0
8,5
9,0
2013f 2014f 2015f 2016f
-
1 000
2 000
3 000
4 000
5 000
6 000
7 000
8 000
9 000
-
100 000
200 000
300 000
400 000
500 000
600 000
700 000
800 000
2008 2009 2010 2011 2012e
2008 2009 2010 2011 2012e
US$
/ M
T MT
MT
-
10
20
30
40
50
60
-
1 000
2 000
3 000
4 000
5 000
6 000
7 000
US$
/ lb
21%
35%
44%
-
500
1 000
1 500
2 000
2 500
3 000
3 500
Maize Wheat Sweet Groundnuts Soya beans potatoes
2009 / 2010 2010 / 2011
10
12
18 1816
14 1413
1618
1990 1992 1994 1996 1998 2000 2002 2004 2010 20120
5
10
15
20
2,000
4,000
6,000
8,000
10,000
12,000
14,000
2008 2009 2010 2012
ZMK 'b
29%
18%
12%
10%
5%
5%
20%
22%
25%36%
9%
4% 4%
29%
46%
16%
9%1%
33%
15%
52%
0%
10%
20%
30%
40%
50%
60%
70%
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
2003 2004 2005 2006 2007 2008 2009 2010 2011
21%
61%
10%
8%
0.0%
0.2%
0.4%
0.6%
0.8%
1.0%
1.2%
-
20
40
60
80
100
120
140
2003 2004 2005 2006 2007 2008 2009 2010 2011
2004 2005 2006 2007 2008 2009 2010 2011
1 000 000
800 000
600 000
400 000
200 000
0
2007 2008 2009 2010 2011 2012
Unleaded petrol
Diesel
9.00
8.50
8.00
7.50
7.00
6.50
5.50
5.00
6.00
Mobile voice market: subscription & penetration levels
Sources: ZICTA website 3 February 2013
Subcribers (000)
Penetration levels
Mobile phone sector
Themobile phone sector has boomed in recent years, with competition between thethree providers, thestate-owned ZAMTEL and theprivately owned MTN and Airtel Zambia resulting in major improvements in coverage and quality together with significantly lower prices.
Thecountrys telecommunications market is dominated by mobile network operator Bharti Airtel which
has amarket share around 52%, with MTN and ZAMTEL in second and third place respectively.
All operators have intensified efforts to cover rural areas, and nearly all ten provinces can now be reached by mobile phones on one of thenetworks.
TheGovernment of Zambia has recently confirmed it intends to license afourth mobile network operator in thenear future and aims for thenew player to be in place before theend of 2013.
Increasing competition in theZambian telecommunications sectors has led to lower price tariffs, and increased investments
-
36Doing Business in Zambia Aunique flavour
02468
101214161820
2004 2005 2006 2007 2008 2009 2010 2011 2012
0
5
10
15
20
25
30
35
40
20-nl tbb 11-206-103-51-2
4,0
4,5
5,0
5,5
6,0
6,5
7,0
7,5
8,0
8,5
9,0
2013f 2014f 2015f 2016f
-
1 000
2 000
3 000
4 000
5 000
6 000
7 000
8 000
9 000
-
100 000
200 000
300 000
400 000
500 000
600 000
700 000
800 000
2008 2009 2010 2011 2012e
2008 2009 2010 2011 2012e
US$
/ M
T MT
MT
-
10
20
30
40
50
60
-
1 000
2 000
3 000
4 000
5 000
6 000
7 000
US$
/ lb
21%
35%
44%
-
500
1 000
1 500
2 000
2 500
3 000
3 500
Maize Wheat Sweet Groundnuts Soya beans potatoes
2009 / 2010 2010 / 2011
10
12
18 1816
14 1413
1618
1990 1992 1994 1996 1998 2000 2002 2004 2010 20120
5
10
15
20
2,000
4,000
6,000
8,000
10,000
12,000
14,000
2008 2009 2010 2012
ZMK 'b
29%
18%
12%
10%
5%
5%
20%
22%
25%36%
9%
4% 4%
29%
46%
16%
9%1%
33%
15%
52%
0%
10%
20%
30%
40%
50%
60%
70%
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
2003 2004 2005 2006 2007 2008 2009 2010 2011
21%
61%
10%
8%
0.0%
0.2%
0.4%
0.6%
0.8%
1.0%
1.2%
-
20
40
60
80
100
120
140
2003 2004 2005 2006 2007 2008 2009 2010 2011
2004 2005 2006 2007 2008 2009 2010 2011
1 000 000
800 000
600 000
400 000
200 000
0
2007 2008 2009 2010 2011 2012
Unleaded petrol
Diesel
9.00
8.50
8.00
7.50
7.00
6.50
5.50
5.00
6.00
Fixed telephony
Thefixed line telephone sector is amonopoly controlled by thestate-owned ZAMTEL.
As depicted opposite, thenumber of fixed lines in thecountry is low, with thenumber of lines at less than 100,000.
Penetration levels are less than 1%.
Internet sector
Zambia has recently gained access to international submarine fiber optic cables for thefirst time, which has already led to some significant retail price reduction for broadband services.
Third generation (3G) mobile broadband services were launched in early 2011 and national fiber networks are being rolled out by anumber of different companies. Several ISPs have rolled out W/MAX wireless broadband networks.
These developments are set to increase broadband penetration significantly in thecoming years.
Mobile voice market: subscription & penetration levels
Africonnect
ZAMTEL
ZAMNET
Other
Sources: ZICTA website 3 February 2013
02468
101214161820
2004 2005 2006 2007 2008 2009 2010 2011 2012
0
5
10
15
20
25
30
35
40
20-nl tbb 11-206-103-51-2
4,0
4,5
5,0
5,5
6,0
6,5
7,0
7,5
8,0
8,5
9,0
2013f 2014f 2015f 2016f
-
1 000
2 000
3 000
4 000
5 000
6 000
7 000
8 000
9 000
-
100 000
200 000
300 000
400 000
500 000
600 000
700 000
800 000
2008 2009 2010 2011 2012e
2008 2009 2010 2011 2012e
US$
/ M
T MT
MT
-
10
20
30
40
50
60
-
1 000
2 000
3 000
4 000
5 000
6 000
7 000
US$
/ lb
21%
35%
44%
-
500
1 000
1 500
2 000
2 500
3 000
3 500
Maize Wheat Sweet Groundnuts Soya beans potatoes
2009 / 2010 2010 / 2011
10
12
18 1816
14 1413
1618
1990 1992 1994 1996 1998 2000 2002 2004 2010 20120
5
10
15
20
2,000
4,000
6,000
8,000
10,000
12,000
14,000
2008 2009 2010 2012
ZMK 'b
29%
18%
12%
10%
5%
5%
20%
22%
25%36%
9%
4% 4%
29%
46%
16%
9%1%
33%
15%
52%
0%
10%
20%
30%
40%
50%
60%
70%
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
2003 2004 2005 2006 2007 2008 2009 2010 2011
21%
61%
10%
8%
0.0%
0.2%
0.4%
0.6%
0.8%
1.0%
1.2%
-
20
40
60
80
100
120
140
2003 2004 2005 2006 2007 2008 2009 2010 2011
2004 2005 2006 2007 2008 2009 2010 2011
1 000 000
800 000
600 000
400 000
200 000
0
2007 2008 2009 2010 2011 2012
Unleaded petrol
Diesel
9.00
8.50
8.00
7.50
7.00
6.50
5.50
5.00
6.00
Market share of internet subscription
Zambias fixed line sector is controlled by state owned ZAMTEL
-
37
TheStock Exchange
TheLusaka Stock Exchange (LuSE) was established in 1994 as amodern stock exchange based on themost current international standards and practices. These include:
- Use of acentral share depository system.
- Trade-for-trade netting clearing and settlement process.
- Rolling settlement three days after thetrade (T+3).
Theprimary objectives of LuSE include:
- To enable local businesses raise longer term capital.
- Citizenship empowerment through shares ownership.
- To attract foreign direct investment (FDI).
- To enable companies achieve wider share ownership and good
corporate governance.
There are currently 21 listed companies on LuSE. Ten of these were triggered by Zambias privatisation process in the1990s / early 2000s.
Notably Shoprite, which should benefit from rising consumer demand in thecountry, represents over half of LuSE market capitalisation making it by far thelargest company on this basis, driven by thedual listing of its holding company on theLuSE and theJohannesburg Stock Exchange.
Overall supervision of theZambian capital market including licensing