Efforts to diversify exports lauded; report to be presented to Zambian Minister of Commerce, Trade and Industry on 12 March
An UNCTAD review of investment policy in Zambia recommends substantial improvements to infrastructure services -- such as expansion of electricity, transport networks and telecommunications -- and steps to lower the costs of doing business to enable the country to achieve what the report terms a considerable potential for attracting foreign direct investment (FDI).
UNCTAD´s Investment Policy Review, or IPR, praises the Zambian Government for establishing a Private Sector Development Programme and taking other measures to enable the creation of vibrant private firms that can compete internationally. It notes among positive developments the substantial FDI channelled to the copper industry; Zambia´s expanding horticulture and small-scale gemstone businesses; and efforts to diversify the country´s exports.
The IPR will be launched in Geneva at the 12 March session of the Commission on Investment, Technology and Related Financial Issues, and the presentation will be attended by the Zambian Minister of Commerce, Trade and Industry, Kenneth Konga, and by investors, including Dunavant, a US-owned firm and Zambia´s largest cotton processor, and Actis, a private equity firm based in the United Kingdom with a large presence in emerging markets. Mr Konga will make a statement outlining the Government´s current investment policy.
The IPR notes that improved infrastructure is key for the country´s economic competitiveness and expresses concern about measures that would require every new investor to be screened by the Zambia Development Agency. It also remarks that bureaucratic procedures currently add complexity and delay to land transfers. The IPR calls for a national fiscal framework that limits tax incentives in favour of a more balanced universal tax rate. And it says the Government should clarify eligibility requirements for tax incentives.
During introduction of the Zambian IPR on 12 March, UNCTAD will also announce that a Blue Book of Zambia outlining best practices in investment promotion and facilitation will be presented to the Vice-President on 21 March in Lusaka. The book identifies ten practical measures that can be implemented within a year.
UNCTAD also will announce a programme of IPR follow-up technical assistance to Zambia to be supported by Irish Aid.
UNCTAD carries out Investment Policy Reviews at the request of developing-country Governments. An IPR for Morocco was presented on 9 March. Previous IPRs have evaluated investment regimes in 22 developing countries and advised them on how to maximize the development impact of FD. Most countries have implemented follow-up recommendations of the IPRs, both with UNCTAD´s assistance and also at the Governments´ own initiative. www.unctad.org/ipr