Magazine article Global Finance

A Waiting Game

Magazine article Global Finance

A Waiting Game

Article excerpt

Governments that need foreign direct investment (FDI) for economic development can be forgiven for putting their best foot forward. Zambia certainly touts its advantages, including opportunities in the energy, tourism and agriculture sectors, among others, along with the Zambia Development Agency's One Stop Shop for Business Registration. Launched in June 2010 by the Ministry of Commerce, Trade and Industry, the registration is part of the ministry's Private Sector Development Reform Program.

Zambia has a history of carrying through on initiatives and a detailed, long-range economic plan called Vision 2030, which it hopes will pave the way to prosperity and stability. The plan acknowledges the country's need for FDI.

However, Frank Chamas, CEO of Tel Aviv-based AfriQue Consulting Group, says risks and challenges have eroded the FDI environment within Zambia. "At the moment it's not great," he says. "There are a lot of question marks, and I believe investors are waiting to see how these things play out."

In the economic arena, FDI into Zambia is dominated by large mining investments from Canada, Australia, the United Kingdom and China. American participation in this sector is still at the exploration stage, according to the State Department. The Zambian government's decision to levy a new mineral royalty tax has contributed to uncertainty, Chamas says. Moreover, China's slowdown has meant reduced exports of Zambian copper, which has affected Zambia disproportionately. …

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