ZAMBIA

REVIEW
2 010
11th edition
 Contents
FOREWORD .............................................. 2
By the Minister of Commerce, Trade and Industry

INTRODUCTION ........................................ 4
Social, Historical & Economic Overview

TRADE & INVESTMENT .......................... 12

Trade Agreements, Investment Incentives & Opportunities,
Privatisation Programme
Published by Directory Publishers of Zambia Ltd
PO Box 30963, Lusaka, Zambia
BUSINESS & FINANCE ........................... 18
Business Support, Banking & Financial Services, Taxation,
Tel: +260 211 257133
Stock Exchange
Fax: +260 211 257137
MINING & COPPERBELT INDUSTRY ..... 35
FRONT COVER Mineral Resources & Policies
The Royal Livingstone Express
Other photography - Courtesy: René Hartslief AGRICULTURE ........................................ 50
Products, Programmes & Prospects
MARKETING
Marie Gibbons
MANUFACTURING .................................. 64
Strategic Sectors & Export Growth

PHOTOGRAPHY FORESTRY & TIMBER ............................ 74

René Hartslief, Marie Gibbons, ZNTB Plantations, Forestry Products & the Timber Industry

PRODUCTION TOURISM ................................................. 80

Attractions & Game Reserves, Development Programmes
Creative Solutions - René Hartslief
PHYSICAL INFRASTRUCTURE .............. 89
DESIGN Construction, Transport, Communications, Water & Energy
Creative Solutions - Michel Gribben
EDUCATION & TRAINING ..................... 100
Primary, Secondary & Tertiary Education, Vocational Training
EDITORIAL RESEARCH & CONTENT
Louella Morgan-Jarvis HEALTH.................................................. 102
Health Services, HIV/AIDS Programmes
The publishers gratefully acknowledge the assistance of the Ministry
of Commerce, Trade and Industry and Zambia National Tourist USEFUL INFORMATION........................ 105
Board (ZNTB) in coordinating the supply of certain material. While Facts & Figures, Government & Business
every care has been taken in the preparation of this publication, the
publishers can accept no liability for any errors or omissions that may MAP ........................................................ 107
occur. This publication is the exclusive property of the publishers and Zambia & Surrounding Areas
no part of the contents may be reproduced in any form without
prior written permission of the publishers. INDEX TO ADVERTISERS..................... 108
1
 Foreword

Macroeconomic objectives aim to overcome the current

challenges and restore growth to pre-crisis trend levels and
beyond. For 2010, these goals are to exceed 5 percent growth,
reduce end-year inflation to 8 percent, and limit domestic
borrowing to 2 percent of GDP.

To achieve these aims, government is to focus on consolidating

the recovery of the domestic economy, which will continue to be
driven by the mining, construction and agriculture sectors, along
with a recovery in tourism, and wholesale and retail trade, and
continue with our economic diversification programme, thereby
laying a solid foundation for higher sustainable growth and
building resilience to external shocks. During 2010, we are also
beginning implementation of the second phase of the Financial
Zambia has come a long way in the past two decades. Sector Development Plan, an initiative which is expected to
Economic reforms in the period since 1991 have included a free improve access to credit and reduce the high cost of borrowing.
currency exchange regime, privatisation of many state-owned
enterprises, financial market developments such as the stock Diversification is being driven by targeted fiscal interventions
market, and the pursuit of structural reforms backed by the as well as structural reforms to remove the constraints to doing
International Monetary Fund (IMF) and World Bank, such as the business. Already, business licensing procedures have been
removal of consumer subsidies and price controls. reviewed and a legal framework for Public-Private Partnerships
introduced to boost infrastructure development. Electricity tariffs
Zambia boasted a real Gross Domestic Product (GDP) above have been revised to enhance investment in the energy sector
5 percent per annum between 2002 and 2008. This is testimony while ensuring improvement in service delivery levels by Zesco.
to the success of government’s macroeconomic programmes, International telecommunication gateway licensing fees are
backed by sound fiscal policies and good governance. Market- being reduced to regional averages and, with the arrival of fibre
oriented policies, focusing on sustainable economic growth and optic connectivity, the cost and standard of services is expected
private sector development, have created an enabling climate to improve substantially.
for business. This has seen international confidence in Zambia
grow, along with higher levels of foreign direct investment. Zambia has many positive attributes to attract potential
investors, including a democratic Westminster-style government
The most recent World Bank ‘Doing Business’ report indicates and a liberal economic framework combined with an investment-
that Zambia’s position has risen by ten places, putting it friendly and export-oriented business incentive package. The
ahead of a number of major economies. This reflects the Ministry of Commerce, Trade and Industry regards the Zambia
MMD government’s commitment to reducing the cost of doing Review as an important tool for the international business
business and promoting financial sector development. community to learn more about the country and identify
opportunities for productive investment. Therefore I encourage
The ravages of the global economic recession notwithstanding, investors, as well as business and industry leaders, to read the
Zambia continues to enjoy respectable economic growth. The 11th edition of the Zambia Review. I trust they will find it both
robust growth of the past decade has by and large remained interesting and informative.
intact, with the IMF’s projected growth of 4.5 percent in 2009
an admirable achievement when compared with global and
regional economies.

Despite a stronger performance in the second half of 2009,

the IMF estimates that world output contracted by 0.8 percent
during the year, compared to growth of 3 percent in 2008.
However, there are signs that the global economy is emerging
from the recession, with the help of substantial stimulus Hon. Felix Mutati, MP
packages launched by the United States of America (US), China Minister of Commerce, Trade and Industry
and some European countries. The IMF thus anticipates growth
of 3.9 percent during 2010, led by the Asian economies.

The global economic crisis has not spared Sub-Saharan Africa,

with growth expected to drop sharply from 5.5 percent in 2008
to 1.3 percent in 2009. However, a recovery is anticipated in
2010 with growth in the region projected to rise to 4.1 percent.

At home, the international crisis saw Zambia’s external trade

position decline, as buying power in industrialised countries
shrunk and commodity prices fell. It was thus encouraging to
see the prices of most major commodities rebound towards the
end of the first quarter of 2009, with copper prices expected to
average US$ 4 190 per metric tonne against initial estimates
of US$ 3 500, a development which should boost the country’s
foreign exchange earnings.
2
 Introduction
The peaceful and democratic country of Zambia has for many years enjoyed both social and
political stability, as well as a healthy macroeconomic environment, with economic growth
averaging close to 6 percent per annum since 2003.
Backed by rich natural resources such as copper and cobalt, ranks among the smaller countries in the region. A landlocked
the minerals sector has for many years been at the forefront of nation, she is bordered by Angola to the west, the Democratic
Zambia’s expanding economy. Agriculture is another important Republic of Congo (DRC) to the west and north, Tanzania to
sector, thanks to the country’s good soil and large tracts of the northeast, Malawi to the east, and Mozambique, Zimbabwe,
fertile, arable land. There is also an abundant hydropower Botswana and Namibia to the south. Zambia’s most elevated
resource to be found in the numerous lakes, dams and rivers. areas include the Copperbelt Highlands as well as the Nyika
Efforts to further diversify the economy mean that increased Plateau on the border with Malawi, where Mwanda Peak, at
attention is being given to the manufacturing and tourism 2 150 metres, forms the country’s highest point.
industries, with Zambia’s abundant wildlife and scenic beauty
having great potential for further development. Covered by deciduous savannah, small trees, grassy plains and
marshland, the north and northeast of the country form a
In recent years, economic growth has brought about huge broad, undulating plateau, which slopes away to the south
improvements in the country’s physical infrastructure, and the where Zambia’s main river, the Zambezi, forms a natural border
government is committed to creating an enabling environment with Namibia, Botswana and Zimbabwe. Other important rivers
to attract further investment and stimulate private sector comprise the Luangwa, which joins the Zambezi from the
activity. These efforts are reflected in the World Bank’s most northeast, and the Kafue, which flows from Zambia’s north-
recent ‘Doing Business’ report, where Zambia’s ranking rose western highlands. One of the natural wonders of the world,
from 99 to 90 between 2008 and 2009, putting it ahead of a the spectacular Victoria Falls is the region’s foremost tourist
number of major economies and second only to South Africa in attraction.
the Southern African Development Community (SADC) region.
CLIMATE
Economic growth has also had an effect on social indicators, Zambia is on average some 1 200 metres above sea level, and
with the United Nations Development Programme’s 2009 this high altitude combined with the country’s geographical
Human Development report acknowledging a general position has produced both temperate and sub-tropical
improvement in the welfare of Zambians in terms of life ecosystems. Temperatures range from about 15 to 33 degrees
expectancy, education and income, since 2007. To build upon Celsius and the climate is generally pleasant, with extreme heat
these gains, government is continuing to invest significant limited to the southern valleys around the Zambezi River. The
resources in infrastructure such as schools, health facilities, mean annual rainfall is around 1 400 millimetres in the northern
roads, water supply and the rehabilitation and expansion of region and 700 millimetres in the southern, eastern and western
electricity networks. provinces.

Zambia has recorded a respectable level of economic The country has three distinct seasons:
growth since 2003 of just below 6 percent per annum; • May to August is cool and dry, with temperatures ranging from
growth which has by and large remained intact in spite of 16oC/60oF to 27oC/81oF
the global recession. • September to October is hot and dry, and brings temperatures
from 27oC/81oF to 32oC/90oF
TOPOGRAPHY • November to April is warm and wet with temperatures
Zambia has a surface area of 752 612 square kilometres, and between 20oC/68oF and 27oC/81oF.
4
 progress, with government refocusing its economic policy and
strategy to encompass poverty alleviation and attainment of the
United Nation’s Millennium Development Goals (MDGs).
Economic planning was reintroduced, with the overriding
macroeconomic policy objectives of attaining high and
sustainable growth in real Gross Domestic Product (GDP),
maintaining low and stable inflation, achieving external sector
viability and reducing poverty.

The performance of the economy has subsequently been

extremely encouraging. Zambia’s judicious management of
financial and monetary resources and exceptional performance
under economic reform programmes saw the country qualify
for debt relief under the Heavily Indebted Poor Countries
(HIPC) initiative as well as the Multilateral Debt Relief Initiative
(MDRI). As such, some 90 percent of debt was cast off, with
the resources released from debt savings channelled into the
development of the Zambian people.

Despite the ever-present challenges of HIV/AIDS, poverty and

an over-reliance on copper mining, Zambia continues to enjoy
macroeconomic stability. This is evidenced by real GDP growth
of over 5 percent per annum since 2002, at least
5.9 percent per annum over the last five years, and an average
of 6.2 percent over the last three years (2007-2009) despite
the knock-on effects of the world recession. Growth has been
driven by factors such as investment in the private sector
supported by sound economic policies, with favourable external
sector developments including debt relief in 2006 and high
copper prices until the third quarter of 2008.

Other achievements include the reduction of inflation to single

Aloe - Photo Courtesy: René Hartslief digits, a stable exchange rate, declining interest rates, a secure
financial system and a substantial build-up in foreign exchange
THE ZAMBIAN ECONOMY reserves. Although the global financial crisis of 2008 saw a
Following the structural adjustment programmes and temporary set-back to this trend, the economy regained its
stabilisation policies introduced in the early 1990s, market positive momentum during 2009.
liberalisation, deregulation and privatisation have transformed
the Zambian economy. Once exhibiting a highly regulated While international commodity prices have largely recovered
command-type economy, Zambia has become more closely since the crisis of 2008, Zambia continues to focus its efforts
integrated with international markets, with the focus on trade on enhancing competitiveness and diversifying the economy
liberalisation and the promotion of exports against a stable away from dependence on mining. As a result, the theme for the
macroeconomic backdrop. 2010/11 National Budget remains ‘Enhancing Growth through
Competitiveness and Diversification’. Attaining a resilient and
diversified economy with the capacity for sustained and rapid
The role of the state has been considerably reduced. Private
growth is indispensible if Zambia is to achieve the Millennium
sector activity is encouraged through the provision of an
Development Goals by 2015, and to surpass them thereafter to
enabling environment while investment is promoted through
become a middle-income country by 2030, as articulated in the
several attractive incentive schemes. These measures have
Vision 2030 document.
enhanced competition, efficiency and openness in commerce
and industry and attracted further foreign direct investment, not
The Zambian economy in 2009 and beyond
only in resource-based sectors but in transport,
The performance of the economy in 2009 was largely influenced
telecommunications and utilities as well. by the economic turmoil of 2008. While Zambia was not directly
affected, the ensuing global recession saw reduced revenue
Zambia’s priority economic sectors of mining, agriculture, earnings from mineral resources; job losses, particularly in the
tourism and manufacturing serve as a foundation for extractive industry; lower foreign capital inflow (both foreign
further growth due to their strong backward and forward portfolio investment and foreign direct investment); loss of
linkages, particularly with regard to employment creation foreign exchange reserves; rising domestic inflation driven by
and income generation. the pass-through effects of the depreciation of the Kwacha
against major currencies; and declining numbers of foreign
Reforms which have been enacted include the abolition of tourists.
foreign exchange controls, the deregulation of interest and
foreign exchange rates, removal of price controls and The tax and expenditure measures instituted in the 2009
consumer subsidies, reform of land tenure, reduction of tariffs national budget went a long way toward safeguarding mining
and embargoes to open up domestic markets, a programme operations as well as saving jobs, not only in the mining industry
of privatisation for many parastatals and the strengthening but in related sectors as well. These measures, together with
of financial markets through merchant banking and the stock improvements in metal prices, saw most mines reopening
exchange. After tax profit, dividends and capital may be during the year, while others that had been threatened with
repatriated up to 100 percent without restriction, and there is closure continued to operate and even invested further in
statutory protection of investments. operations to increase production capacity.

The coming into office of the New Deal Administration in 2002 That Zambia has shown some resilience in the midst of the
marked an important milestone in the country’s economic global economic crisis is further evidenced by improvements in

6
macroeconomic indicators. GDP growth for 2009 is estimated at
6.3 percent, following growth of 6 percent in 2008, due to robust
expansion in the mining, agriculture and construction sectors.

Sectors that did not fare as well include manufacturing, due

to the increased cost of imported raw materials (mainly due to
the depreciation of the Kwacha in the first half of 2009) and a
decline in export demand; and tourism, where the number of
foreign tourists decreased in the wake of the global financial
crisis. However, compared to the International Monetary Fund
(IMF) estimates of a contraction of 0.8 percent in world output,
and Sub-Saharan Africa growth projections of 1.3 percent,
growth of 6.3 percent is indeed a commendable achievement.

Zambia’s per capita GDP during 2009 was estimated at

US$ 902.20.
Superb Starling - Photo Courtesy: René Hartslief

At the same time, inflation averaged 11.5 percent during 2009, Export development
declining from 16.6 percent in December 2008 to 9.9 percent Traditional exports grew by 8.5 percent in 2009 compared to
in December 2009 and 9.6 percent at end January 2010. The 4.5 percent in 2008, while non-traditional exports (NTEs)
fall in inflation during 2009 may be attributed to declining food increased by 41.6 percent in 2009 following a contraction of
prices, the relative strengthening of the exchange rate, stability 10.6 percent in 2008. Metal products continue to contribute the
in domestic fuel prices and transport costs, and the downward most to total export earnings – some 83.1 percent in January
trend in lending rates. 2010, while NTE earnings made up around 13.9 percent of total
earnings in the same month.
During the first half of 2009 the Kwacha depreciated against
major international currencies in response to the continuing The Southern African Development Community (SADC) is
effects of the global financial situation. However, during the Zambia’s leading trading partner and South Africa its single
second half of the year, it began to appreciate as a result of largest partner country, importing copper, electricity, tobacco,
improving investor confidence in the Zambian economy, and by cotton and sugar. OECD countries, including the EU, Japan
the end of the year was showing some stability against major and the USA, remain another important market for Zambia’s
international currencies. exports.

There was a sharp drop in the level of international trade The five major destinations for Zambia’s exports in February
during 2009, with the value of imports and exports falling by 26 2010 were Switzerland (64.6 percent), China (10.1 percent),
and 19 percent, respectively, during the first half of the year. South Africa (7.2 percent), DRC (5.2 percent) and the United
The reduction in imports was largely attributed to the steep Kingdom (2.6 percent). These five countries collectively
depreciation of the Kwacha during the first half of the year, while accounted for 89.7 percent of Zambia’s total export earnings.
exports were affected by weaker global demand for metals. Regionally, SADC is the largest market for Zambia’s exports.

According to the Central Bank, in the fourth quarter of 2009, Macroeconomic objectives for 2010
Zambia’s Balance of Payments position deteriorated to a deficit Macroeconomic policies in 2010 continue to focus on
of US$ 113.1 million, from US$ 1 049.5 million in 2008. This consolidating the recovery of the domestic economy, the rapid
was due to the unfavourable performance of both the current diversification of Zambia’s economic base, and the protection
account (US$ 213.4 million deficit) and the capital and financial of key social expenditures in sectors such as education and
accounts, where the surplus fell by 64.8 percent to health.
US$ 149.9 million in the fourth quarter. This is largely attributed
to the decline in imports, and also reflects, in part, a slowdown Macroeconomic objectives in 2010 are to:
in investment expenditure in the wake of the global recession. • Exceed 5 percent growth
• Reduce end-year inflation to 8.0 percent
At the end of November 2009, gross international reserves had • Limit domestic borrowing to 2.0 percent of GDP
increased to US$ 1 887.1 million, equivalent to five months of
import cover. This was mainly on account of the receipt of It is anticipated that domestic growth in 2010 will continue to
US$ 789 million in additional funds from the IMF. This is the be driven by the mining, construction and agriculture sectors,
highest level of reserves attained in the last 38 years. along with a recovery in tourism and wholesale and retail trade.
Batik - Photo Courtesy: René Hartslief
Growth from these sectors will be augmented by improved
metal exports, leading to improvements in the balance of
payments position.

The medium-term economic outlook at the beginning

of 2010 was that the Zambian economy would continue
growing at a rate of more than 6.0 percent.

HISTORY & POLITICS

One of the cradles of humankind, the earliest evidence of
homo sapiens in Zambia dates back some 100 000 years, with
remains of human habitation having been found in the region of
Kabwe. There is evidence that Bantu-speaking peoples reached
the area around 800 AD, and that from approximately 1000 AD
Arab and Swahili traders began exploring the region. However,
the ancestors of most of Zambia’s current ethnic groups arrived
7
 indigenous peoples experiencing increasing white domination,
a rising tide of African nationalism led to strikes and protests.
In 1948 the Northern Rhodesia African Congress was formed,
giving a formal voice to the country’s disenfranchised majority,
whose opposition to colonial rule continued to mount over the
next decade.

In 1953 the Federation of Rhodesia and Nyasaland,

encompassing Northern Rhodesia (Zambia), Southern
Rhodesia (Zimbabwe) and Nyasaland (Malawi), was created
by the British government, to protests locally and abroad. The
United National Independence Party (UNIP), formed in 1959
by Kenneth Kaunda, was at the forefront of calls to end British
rule, and in 1964 the federation was dissolved. On 24 October
1964 Northern Rhodesia became the independent Republic of
Zambia, taking its name from the Zambezi River. Kaunda was
elected Zambia’s first president, and was re-elected in 1968
and 1973, eventually serving for a total of 27 years.

The 1970s and 1980s were turbulent decades. Problems at

home were exacerbated by falling copper prices and rising
fuel costs. Together with much of the rest of the world, Zambia
imposed sanctions on Ian Smith’s white-ruled Rhodesia in
1965, but not without consequences. Retaliation took the form
of raids by the Rhodesian army, which targeted Zambia’s
infrastructure, as well as the disruption of traditional trade
routes through Rhodesia to the coast. These problems were
alleviated somewhat by the building of a petroleum pipeline
Cheetah - Photo Courtesy: René Hartslief
between Dar-es-Salaam and Ndola in 1968, and the opening of
a railway line between Zambia and Tanzania in 1975.
from present-day Angola and the DRC between the 16th and
18th centuries. By the mid 1980s President Kaunda was forced to introduce
economic austerity measures as a condition for aid. The
Trade with both the Atlantic and Indian Ocean coasts was ensuing food shortages and unemployment led to rioting and
fruitful, and brought the first European visitors to the area strikes, intensifying the mood for political change and the
sometime during the 18th century – Portuguese explorers abolition of Zambia’s one-party state. In 1991 the constitution
following the trade routes from the coast into the interior. The was amended, opposition parties legalised, and full elections
first half of the 1800s saw successive upheavals in southern held in October 1991.
Africa, with many refugees resettling in Zambia. These included
the Nguni, who fled Shaka and the mighty Zulu nation’s Zambia has been a parliamentary democracy since 1991,
‘difaqane’ (forced migration). At much the same time the Kololo and the current ruling party is the Movement for Multiparty
arrived in Zambia and settled in Lozi territory on the Zambezi Democracy (MMD). Elections are held every five years, with
River. the president serving a maximum of two five-year terms.

In 1851 David Livingstone, the celebrated Scottish doctor, A decisive victory was won by trade unionist Frederick Chiluba’s
explorer and missionary, first arrived in the region now known Movement for Multiparty Democracy (MMD) on the promise
as Zambia, searching for a route into the interior. A fierce of both economic and political reform. The MMD set about
critic of the slave trade, Livingstone’s efforts attracted other reforming the civil service as well as privatising a number of
government enterprises; moves which saw relations with the
missionaries, who were later followed by a stream of European
International Monetary Fund (IMF), World Bank and private
prospectors and hunters.
investors improve substantially.
In the scramble for control of Africa in the late 19th century,
Elected in December 2001, Chiluba’s successor Levy
Zambia eventually came under the jurisdiction of the British
Mwanawasa of the MMD took over one of the most broad-
South Africa Company (BSAC), which administered the region
based democratic parliaments ever seen in Zambia, with
after signing treaties with several African leaders, including
healthy opposition from other parties, including the United Party
Lewanika, the Lozi king. The area became Northern Rhodesia
for National Development and United National Independent
in 1911. In 1924 the British took over the administration of the Party. President Mwanawasa ran for a second term in the 2006
protectorate. elections, in which the MMD retained power.

Massive copper ore deposits were discovered in the north- Important steps taken under President Mwanawasa’s New
central region in the 1920s, and the large-scale mining of Deal Administration included the launching of a far-reaching
copper and lead began in earnest over the following two anti-corruption campaign in 2002 as well as a comprehensive
decades. Mining operations in the Copperbelt area attracted constitutional review process begun in 2005 in order to
a variety of European administrators, technicians and skilled strengthen government’s political accountability.
labourers. However, it was largely local Africans who worked
the mines, often under appalling conditions, in order to pay the Levy Mwanawasa served as President of Zambia from January
‘hut tax’ introduced by the colonial administration. 2002 until his untimely death in August 2008 following a
stroke. Mwanawasa’s Vice-President, Rupiah Banda, became
By 1910 some 1 500 Europeans had settled in the country, acting President and, as the candidate of the governing MMD,
and by 1958 this number had grown to about 72 000. With the narrowly won the October 2008 presidential election.
8
 country, approximately 100 kilometres from the border with
Zimbabwe and 1 300 metres above sea level, the city enjoys a
pleasant climate, with clear, mild winters and warm and sunny
summer days.

Lusaka is a city of contrasts, encompassing modern high-rise

buildings, a bustling central business district, tree-lined streets
with colonial architecture, dusty markets and sprawling informal
settlements. At the centre-point of the country’s road, rail and
air network, Lusaka beckons visitors from across Africa as well
as the globe. Over the past few years the city has witnessed a
sweeping programme of refurbishment and repair.

While many shops – including banks and bureaux de changes

– may be found along Cairo Road, there are a number of good
shopping malls such as Manda Hill along the airport road, the
popular Arcades (which includes cinemas), the Downtown
Shopping Centre on Kafue Road, Crossroads in Leopard’s Hill
and Kabulonga situated at the corner of Kabulonga and Chindo
roads. Other amenities include five-star hotels, conference
centres, nightclubs, restaurants and fast food outlets, and the
Lusaka Playhouse in the centre of town.

The city’s two main markets are Kamwala Market on

Independence Avenue and Lusaka’s largest market, the
colourful New City (‘Soweto’) Market along Lumumba Road.
Here visitors will find vegetables, fresh and dried fish, new
and second-hand clothing, as well as curios. There’s also a
good arts scene, with exhibitions of local art and handicrafts
at the Henry Tayali Visual Arts Centre and Namwane Art
Gallery. Original artworks and souvenirs may also be found
at Northmead Market, Kabwata Cultural Centre, the Dutch
Reformed Church Market, and at specialist stores such as
Ababa House, Kubu Crafts and Optimana.

Protea Hotel, Lusaka - Photo Courtesy: René Hartslief

Some of the city’s other attractions include the Lusaka National
Museum, Munda Wanga Environmental Park with its wildlife
THE PEOPLE sanctuary and botanical gardens, Kalimba Reptile Park and
Zambia is known as one of the safest countries in Africa and is Family Centre, and the water theme park and recreation centre
proud of its friendly and hospitable people. At the time of the of Adventure City. There are game drives, hikes or horseback
2000 census, the country had a total population of 10 285 631. trails through nearby game farms such as Lilayi Game Ranch or
The Central Statistics Office puts the projected mid-2010 the excellent Chaminuka Private Game Reserve.
population figure at 13 272 533 with a population growth rate of
2.8 percent. Presently just over a third of Zambia’s people live in LIVINGSTONE: Situated about 300 kilometres southwest
urban areas. of Lusaka and 11 kilometres northeast of the Victoria Falls,
Livingstone was established in 1905 following the bridging
About 98 percent of the country’s inhabitants are African, the of the Zambezi Gorge, and takes its name from the Victorian
main ethnic groups being Bemba, Nyanja, Lozi, Luvale and missionary and explorer, David Livingstone. This growing tourist
Tonga, with the remaining 2 percent comprising those of Asian centre continues to attract visitors from around the world, and
and European origin. English is the official language and is has expanded rapidly in the past few years as more and more
widely spoken throughout the country. There are 70 indigenous travellers choose to visit the Victoria Falls from the Zambian
languages, including Bemba, Nyanja, Tonga, Lozi, Kaonde, side of the river.
Luvale and Lunda. While Zambia is a Christian country (around
60 percent of the population), there are also a number of A trip to the falls is a must-see for anyone travelling to the
indigenous beliefs as well as religions such as Islam, Buddhism southern African region, and Livingstone makes an excellent
and Hinduism, although these are in the minority. Knife Edge Bridge, Livingstone - Photo Courtesy: René Hartslief

MAIN CENTRES
Zambia has one of the lowest population-to-land ratios on the
continent – some 13.27 million people in a country half the size
of Europe. It nevertheless has a large urban population due to
migration from rural to urban areas as a result of greater
employment opportunities in the mines and other industries post
independence. Population density is highest in the urban and
industrial centres, particularly Lusaka in Lusaka Province, Ndola
and Kitwe on the Copperbelt, and Livingstone in Southern
Province.

LUSAKA: Boasting a lively atmosphere and a genuine African

feel, Zambia’s vibrant commercial, administrative and financial
centre of Lusaka is one of the fastest growing cities in central
Africa. Situated in Lusaka Province in the southern part of the

10
base from which to explore the surrounding countryside. The growing number of guesthouses. Ndola has some low-key
town has two main business areas concentrated along Mosi- attractions, including the Copperbelt Museum, the Slave Tree
oa-Tunya Road, its principal thoroughfare. There is some in Makoli Avenue, and the Dag Hammarsköld Memorial site
lovely colonial architecture, characterised by spacious wooden located 10 kilometres along the Ndola-Kitwe road. Wildlife and
verandas and iron roofs. Livingstone is also witnessing a great scenic attractions in the vicinity include Nsobe Game Camp,
deal of construction and development, and there are new Lake Chilengwa and Lake Kashiba.
hotels and restaurants, shopping and entertainment centres,
and casinos and nightclubs, which cater to budget and luxury KITWE: Centrally positioned on the Copperbelt some
travellers alike. The impressive Zambezi waterfront complex 59 kilometres west of Ndola, Kitwe is Zambia’s second
is becoming one of the most exclusive destinations in southern largest population centre and owes its existence and present
Africa. expansion to the copper mining industry. In addition to those
associated with mining, secondary industries such as food
Accommodation options range from budget to extremely processing and furniture, clothing and cement manufacturing
luxurious. Adventure activities include game drives and have been established here.
elephant-back safaris as well as white-water rafting, body-
boarding, microlighting and bungi jumping. A more sedate Kitwe has a wide variety of comfortable accommodation, as
option is a sunset cruise on the Zambezi River, or a helicopter well as stores, restaurants and entertainment venues. While the
flight over the falls. Many companies offer guided sightseeing main market is situated alongside the railway line, Chisokone
tours, which take in everything from the falls and game parks to Curio Market at the end of Obote Avenue sells a variety of
local markets, museums and cultural villages. curios and souvenirs, with the emphasis on copper handicrafts.
Places of interest near Kitwe include Chembe Bird Sanctuary,
The Livingstone Performing Arts Foundation is a non- which is set in a woodland reserve around a small lake, the
profit foundation which is promoting and preserving popular boating and picnic spot of Mindolo Dam, and the
Zambian culture through excellence in the arts. crocodile ponds at Chililabombwe.

There is an acclaimed collection of steam locomotives at the CHINGOLA: Situated 50 kilometres west of Kitwe, Chingola
Railway Museum, and fascinating archaeological and historical is the site of the Nchanga open-pit mine. Accommodation
items at the Livingstone Museum, which also houses a comprises the new Protea Hotel, a variety of guesthouses
collection of David Livingstone’s memorabilia. The Victoria Falls and the Chimfunshi Wildlife Orphanage (just over an hour’s
Field Museum adjacent to the Falls Craft Village explores the drive from Chingola), which is also a popular tourist attraction.
geology and early history of the area. Other places of interest include Hippo Pool, which is a national
monument and popular picnic spot.
Other places of interest include cultural villages such as
Mukuni, Somonga and Songwe, which offer a slice of traditional SOLWEZI: This fast-expanding town is located in the North-
Africa. The colourful Maramba Market is the largest in Western Province near the Kansanshi Mine and 65 kilometres
Livingstone and sells the widest and most interesting variety of from Equinox Minerals’ open-pit Lumwana Mine (which
goods. There is a crocodile park to the south of Livingstone as contains one of the world’s largest copper deposits). Solwezi is
well as a reptile park. benefiting from the huge infrastructure investments sparked by
these copper mines, with Equinox’s investment of some
NDOLA: This is Zambia’s third largest town and the bustling US$ 762 million the biggest single investment in Zambia’s
commercial and industrial capital of the Copperbelt Province history.
– the region with the highest population density in the country.
Many manufacturers here operate in support of the mining CHIPATA: Formerly known as Fort Jameson, Chipata was the
industry, and the town’s refinery is the end point of the oil capital of North-Eastern Rhodesia until 1911, and is today the
pipeline which runs from Dar-es-Salaam in Tanzania. The city is capital of Zambia’s Eastern Province and the gateway to South
also home to the Copperbelt University as well as ‘The Times of Luangwa National Park. This busy town has around 320 000
Zambia’ newspaper. inhabitants and is just 30 kilometres from the Malawian border
and just an hour and a half from Lilongwe. Chipata has been
This pleasant town’s tree-lined suburbs and well-developed a busy trading post for over a century, and today its colourful
central business district belie its industrial roots. There is a markets and ‘Down Shops’ sell everything from fruit and
variety of shops, plenty of restaurants and takeaways, and vegetables to clothing and curios. While the town itself holds
accommodation options consisting of a few hotels and a few attractions, save the beautifully adorned Central Mosque,
Flamboyant trees, Ndola - Photo Courtesy: Marie Gibbons the cultural festivals of Ncwala (during February) and Kulamba
(held during August) are a tourist drawcard.

OTHER CENTRES: Situated 60 kilometres south of Kapiri

Mposhi, Kabwe is a transit stop between Zambia’s capital
and the Copperbelt; it is also an important heritage site, as
the prehistoric human skull known as Broken Hill Man was
found here in 1921. The industrial town of Kafue is situated
some 50 kilometres south of Lusaka on the magnificent Kafue
River, which is a focal point for tourism. The regional capital of
Northern Province, Kasama is a busy town and a good base
from which to explore the surrounding attractions, which include
the Chishimba Falls and excellent rock paintings dating back
some 2000 years. The town of Siavonga lies along the north-
eastern shore of Lake Kariba and is a popular destination for
conference tourism.

11
 Trade & Investment
Backed by strong macroeconomic fundamentals, including an average growth rate of
6.2 percent over the last three years, the resource-rich nation of Zambia offers enormous
trade and investment opportunities.
The past decade has been one of significant economic growth Amid global economic challenges, Zambia’s economy was
and poverty reduction, brought about by job and wealth creation projected to grow by an enviable 6.3 percent in 2009 from
in the industrial, commercial and trade sectors. During this time, 6 percent in 2008. This is due to robust growth in the mining
the investment climate improved tremendously, and despite (21.4 percent), agricultural (7.1 percent) and construction
the challenges of reduced investment inflows in the wake of (15.5 percent) sectors. Government is committed to building
the global recession, initiatives being implemented through on its enviable record of macroeconomic stability and fiscal
the Zambia Development Agency are once more beginning to discipline, while making the investment climate even more
attract higher levels of foreign direct investment. conducive to private sector activity and industrial growth.

The liberalisation of trade has been a key factor in supporting TRADE & INVESTMENT CLIMATE
private sector growth and export competitiveness, with Zambia Zambia possesses all the necessary attributes for sustainable
actively participating in regional and international trade fora. economic growth and development. It is centrally located in
Notwithstanding the decline in global trade volumes during southern and central Africa, surrounded by eight neighbouring
2009, with the value of Zambia’s imports and exports falling by countries and in close proximity to the large market of South
26 and 19 percent respectively during the first half of the year, Africa. It enjoys preferential market access through active
the rebound in commodity prices, international trade and global participation in the Southern African Development Community
growth in the latter part of 2009 and early 2010 should assist (SADC) trade protocol and the Common Market for Eastern and
Zambia in her efforts to further diversify the economy. Southern Africa (COMESA) free trade area.

Zambia’s principal export destinations include the United Ports most frequently used include Durban in South Africa, Dar-
Kingdom (UK), Switzerland, Tanzania, Zimbabwe and South es-Salaam in Tanzania and Walvis Bay in Namibia (the shortest
Africa. The country’s most successful exports are metals and route), with the route to the port of Beira in Mozambique being
minerals (in particular copper), a situation which looks set to another option. Currently under development, the North-South
continue due to a significant recovery in international commodity Corridor is a joint COMESA-EAC-SADC initiative aiming to
prices. The spotlight is also on expanding non-traditional upgrade 8 000 kilometres of road and rehabilitate 600 kilometres
exports (NTEs) such as cotton, tobacco and vegetables, as well of rail track to reduce the time and costs of surface transport and
as cement and textiles, in order to help diversify the economic open up new business opportunities in Tanzania, DRC, Zambia,
base. In the first two months of 2010, metal products made Malawi, Botswana, Zimbabwe, Mozambique and South Africa.
up more than four fifths of total export earnings, while NTEs
accounted for approximately 15 percent. A country with abundant natural resources and human capital,
it is also one of Africa’s most peaceful, tolerant and democratic
The country’s most important import commodities include states, boasting a Westminster-style government and sound
petroleum products, electricity, fertiliser, and machines and governance structures based on the rule of law and respect
transportation equipment. Zambia’s main import partners are for private property. Zambia has an independent judiciary and
the UK, United Arab Emirates and South Africa. strong anti-corruption measures have been instituted.

South Africa remains Zambia’s largest single investment Competitive production costs, incentives, and reforms have also
and trading partner in the SADC region. enhanced the business climate for both local and foreign
12
investors. Steps have been taken to streamline the • International telecommunication gateway licensing fees
establishment of new businesses and the process of acquiring have been reduced to regional averages.
visa and work permits as well as land. The launch of the • Regional transport networks are being enhanced, with
Zambia Development Agency has also helped to address these projects such as the Kazungula Bridge and the Nacala
obstacles through the creation of a one-stop-shop for investors Corridor, which are part of the North-South Corridor
to obtain required authorisations. programme, set to reduce regional trading costs.

Government is working on developing world class ZAMBIA DEVELOPMENT AGENCY

infrastructure in designated areas known as Multi- The Zambia Development Agency (ZDA) was established
Facility Economic Zones (MFEZs) to facilitate the entry of in 2006 under the ZDA Act No. 11 of 2006, and became
businesses. operational on 7 July 2007. The agency comprises a merger of
the Zambia Privatisation Agency, Zambia Investment Centre,
There is no legal distinction between foreign and domestic Export Board of Zambia, Zambia Export Processing Zones
investors, except in the case of the retail sector. Foreign Authority and the Small Enterprise Development Board. The
investment on the Lusaka Stock Exchange (LuSE) is not amalgamation of these agencies was intended to make the ZDA
restricted, and the privatisation process is likewise open to a one-stop-shop for investment and trade matters.
foreign bidders. While there are no requirements for local
content, equity, financing, employment or technology transfers, The ZDA is tasked with promoting growth and investment in
companies seeking licenses or concessions, or investors Zambia. The institution is client-focused in order to create
bidding for privatised companies, are encouraged to commit to confidence in the public sector’s support for business. The
local participation. agency facilitates overall private sector growth and investment
attraction. Government, through the ZDA, has committed itself
Investments are protected and private property rights to creating a business environment that benchmarks Zambia
guaranteed through the Zambia Investment Act, and as the best among dynamic developing economies. Such
investments are not adversely affected by any changes to the an environment is critical in attracting additional foreign and
Investment Act for a period of seven years. Zambia belongs domestic investment.
to the Multilateral Investment Guarantee Agency (MIGA), and
investment in the stock market is protected by the Securities Act Business reforms have helped ZDA to make great strides in its
of 1993. mandate of investment promotion. Following the establishment
of the agency, FDI rose drastically, and within the first two years
Investors are free to repatriate capital investments as well as of operation ZDA had attracted more than US$ 11.4 billion in
dividends, management fees, interest, profit, technical fees and FDI compared to the US$ 3.9 billion that had been brought
royalties. Foreign nationals may transfer/remit wages earned in between 1993 and 2006. This inflow is projected to have
in Zambia with ease. There is no exchange control in Zambia translated into the creation of more than 52 000 direct and
for anyone doing business as either a resident or non-resident. indirect job opportunities in various sectors of the economy.
Additionally, there are no restrictions on non-cash transactions.
Electricity - Photo Courtesy: René Hartslief

Investment in the latter part of 2009 included: US$ 400 million in

the cultivation and refinement of Jatropha in Northern Province,
US$ 200 million in a major residential and commercial property
development at Levy Junction in the heart of Lusaka, and more
than US$ 3 billion in mineral exploration and development in the
North-Western Province.

Building competitiveness
The drive towards economic diversification is being undertaken
through targeted fiscal interventions as well as structural
reforms to unshackle current constraints to doing business.
Most recently:
• The regulatory reform process has been accelerated through
the review of business licensing procedures, with a number of
bills being presented during 2009 and 2010.
• A legal framework for Public-Private Partnerships has been
developed to facilitate partnerships in key areas such as
infrastructure development.
• Electricity tariffs have been revised to enhance investment
in the energy sector while ensuring improvement in service
delivery levels.

13
 (WTO). This is to ensure that Zambian businesses take
advantage of the opportunities generated by those offers.

The agency promotes investment in order to strengthen the

growth of domestic industries and thereby enhance export
earnings. Accordingly, Zambia has formulated an industrial
policy vision that embraces the promotion of investment into
zoned areas for industrial parks. The ZDA promotes both FDI
and DDI (domestic direct investment) in different sectors of the
economy. Specifically, ZDA establishes Multi-Facility Economic
Zones (MFEZs) to enhance FDI and DDI inflow.

The MFEZ programme serves as a catalyst for Zambia’s

industrial and economic development through facilitation of
investment in these zones, with the objective of stimulating the
manufacturing sector to enhance both domestic and export
oriented business. The zones provide an environment that is
competitive enough for a manufacturer to process within the
borders of Zambia with relative ease, and are designed to give
Zambia a robust and viable manufacturing sector in the region
through increased productivity.

The MFEZ initiative is crucial to Zambia in its quest for greater

foreign exchange earnings, which flow in more easily when
exports are value-rich. As Zambia is a member of various
regional and international organisations, such as the WTO,
COMESA and SADC, and signatory to a number of market
Lion - Photo Courtesy: René Hartslief
access agreements, it has ready markets for the export of
value-added manufactured products.
The ZDA mainly promotes development by providing effective
and comprehensive business facilitation and aftercare services. The MFEZ programme has several incentives that are meant to
It also provides business development services and market attract investors in the zones. These include exemption from tax
information in order to promote Zambian exports efficiently on dividends for five years from the first year of declaration, and
and in a competitive manner. The agency additionally supports a corporate tax of zero percent for the first five years from the
greenfield investment through joint ventures and partnerships first year profits are made, among many others.
between local and foreign investors, as well as ensuring speedy
approval of licences by all government agencies. It further The ZDA principally furthers the economic development
assists in obtaining land for economic projects and helps of Zambia by promoting efficiency, investment and
expatriate staff to obtain work permits. competitiveness in business, as well as promoting exports. It
also addresses the high cost of doing business in the country by
ZDA is also mandated to support the growth of the Micro simplifying the processing of various business formalities, such
and Small Enterprises (MSEs) sector, which cuts across all as licensing. It builds and enhances the country’s investment
sectors of Zambia’s economy and is one of the most prolific profile for increased investment inflows to be realised. It also
sources of employment, serving as a fibre of wealth creation promotes the growth of the MSE sector by providing incentives
for most Zambians and a breeding ground for industries. that can propel long-term domestic growth.
This emphasis on MSEs aims to shift Zambia’s economic
Eucalyptus trees - Photo Courtesy: René Hartslief
development direction, which had hitherto been geared towards
the promotion of medium and large-scale enterprises, mainly
in the mining and manufacturing sectors. Current development
trends show that MSE involvement in the economy has become
essential. Thus, ZDA creates market linkages for MSE players
with trans-national corporations to enable them to realise
meaningful profits from their economic activities.

Export earnings are another crucial stimulant in propelling

Zambia’s economic development, and the agency thus
markets Zambia’s exports abroad to increase earnings from
the sector. It promotes exports and competitive international
trade, and assists Zambian businesses and entrepreneurs in
accessing new markets and expanding existing ones for their
products within the region and beyond. The agency also helps
entrepreneurs to source inputs at competitive rates.

The ZDA undertakes research on what different markets offer

Zambian exporters, and subsequently advises the Minister
of Commerce, Trade and Industry on matters relating to
International Trade and Development through the export of
goods and services. The agency largely utilises market access
offers received from trading partners under COMESA, SADC,
the European Union (EU) and other regional trading blocks, as
well as national initiatives and the World Trade Organisation
14
Foreign Direct Investment in 2010
In the first quarter of 2010, the Zambia Development Agency
recorded US$ 1.344 billion in FDI, compared to
US$ 194.548 million during the same period in 2009. The
approved investment applications came from 59 applicants and
represent a potential total of 5 943 new job opportunities once
implemented.

The Zambia Development Agency attracted more than US$

1.3 billion in FDI in the first quarter of 2010, surpassing the
projected US$ 1 billion FDI inflow for the year.

These approvals came from the following sectors:

manufacturing, services, health, education, energy, tourism,
agriculture, mining, real estate and construction. The mining
sector recorded the largest investment of US$ 500 million,
Floriculture - Photo Courtesy: René Hartslief
followed by manufacturing with about US$ 89.1 million.
reduction of corporate income tax to 30 percent, no restrictions
OPPORTUNITIES FOR INVESTMENT on foreign ownership and shareholding levels, and no capital
Zambia is an attractive investment destination and possesses gains tax. There are also various incentives available under the
a rich array of natural resources, the majority of which remain Multi-Facility Economic Zone (MFEZ) programme.
underexploited. While mining has been the anchor of the
country’s economy since the privatisation of the industry some Priority investment sectors have been set up to enhance the
years ago, efforts are being made to diversify the economic attainment of national development targets, with the following
base, focusing specifically on the agricultural, manufacturing sectors attracting fiscal incentives:
and services sectors, with FDI inflows through privatisation and • Floriculture
Public-Private Partnership (PPP) arrangements. • Horticulture
• Processed foods
The restructuring of the economy has opened up new horizons • Beverages and Stimulants
for investment, with an increasing number of sectoral and • Textiles
privatisation investment opportunities being generated every • Manufacturing of engineering and other products
year. Inflows of FDI complement the opportunities created by • Beneficiation of phosphates and any other related material
‘home-grown’ multinational and local corporations. A prime into fertiliser
example is the local company ZAMBEEF, one of the largest • Beneficiation of rock materials into cement
cropping operations in Africa. • Production and processing of raw timber into wood products
• Production and processing of hides and leather products
Prime growth sectors for investment include manufacturing, • Building of mini hydropower stations
agriculture and agro-processing, tourism and mining. • Information and Communication Technology (ICT)
Investment opportunities are also available in construction, • Health
transportation, energy, telecommunications and IT services. • Education and skills training
• Tourism
Investment incentives • Processing of agricultural products, forest products,
Zambia’s investment incentives are aimed at establishing a gemstones and non-ferrous metals
climate for greater domestic industrial growth and Foreign
Direct Investment (FDI), promoting exports and developing PRIVATISATION
the private sector. The Investment Act of 1993, as amended Zambia’s privatisation programme, which began in the early
in 1996, regulates matters such as investment incentives and 1990s under President Chiluba’s MMD government, is
investment guarantees. acknowledged as being one of the most successful in terms
of the World Bank’s Poverty Reduction Growth Facility. The
The standard corporate tax rate is 35 percent. The mining of privatisation process has involved selling shares in state-owned
base metals is taxed at a rate of 30 percent, while income from companies to the private sector in order to improve the running
farming is taxed at 15 percent, as is income originating from of these companies as well as to procure the required capital
the export of non-traditional products. Tax incentives relating to injections.
investments on the Lusaka Stock Exchange (LuSE) include a
Lusaka Stock Exchange - Photo Courtesy: René Hartslief Privatisation methods have differed according to the type of
company being sold, with smaller companies going under public
tender and some larger organisations being publicly floated.
Other options have included the Management Buy-Out (MBO)
system. The establishment of the Zambia Privatisation Trust
Fund (ZPTF) paved the way for ordinary Zambians to invest
in state-owned enterprises by buying shares on the stock
exchange, with some 60 percent of companies and units having
been sold to Zambians.

Positive outcomes have included increased production capacity

as well as improved standards of production, with companies
capturing new export markets and thus earning increased
foreign exchange. The programme has also led to an influx
of major international investors who have in turn invested in
other large projects outside the privatisation programme, with
local companies also benefiting from the existence of strong
15
 The COMESA Free Trade area (FTA) came into being in
the year 2000, whereafter intra-COMESA trade expanded
enormously due to the removal of tariffs among member states.
The launch of the Customs Union in June 2009 should deepen
integration in the region, harmonise policies regarding external
tariffs, classification and regulations, and enable the creation of
more effective trade agreements.

Economic Partnership Agreements (EPAs) are being negotiated

between the EU and the African Caribbean Pacific (ACP)
countries. Zambia is participating in negotiations under the
Eastern and Southern African (ESA) configuration, which
comprises all COMESA member states with the exception of
Angola, Egypt and Swaziland, with the aim of ensuring that ESA
countries continue to receive the benefits enjoyed under the
Cotonou Agreement, which expired at the end of 2007.

It is anticipated that the interim EPA process between the EU

and the ESA region will be concluded during 2010. As a Least
Developed Country, although Zambia already has duty-free
access to the European market under the EU’s EBA trade
Gemstones - Photo Courtesy: René Hartslief arrangement, the new EPA will provide a more comprehensive
agreement.
foreign players. Furthermore, privatisation has served as an
employment creator and has prevented the liquidation of many Zambia is also a member of the Southern African
enterprises. Development Community (SADC), a grouping of 14 countries
with a combined population of over 247 million and a cumulative
The process of privatisation in a country such as Zambia, GDP of US$ 431 billion. Other members of SADC include South
in which some 80 percent of the economy was once state- Africa, Zimbabwe, Tanzania, Malawi, Botswana, Mauritius,
owned, has had far reaching consequences and has been Angola, Democratic Republic of Congo, Namibia, Lesotho,
integral to private sector development. Swaziland, Seychelles and Mozambique.

From a modest start, which focused on local investment, SADC launched a Free Trade Area (FTA) in 2008 involving zero
Zambia’s privatisation programme expanded to attract tariff levels for 85 percent of all goods traded among member
international companies from Europe, Asia, South Africa and the states. Liberalisation of tariffs on the remaining 15 percent of
United States. Initially involving the divesture of approximately goods, considered to be sensitive products, is expected to be
150 state-owned enterprises, this number increased to 284 completed in 2012. Outstanding issues in the implementation
as many of these enterprises were split and their operating of the SADC FTA, such as the review of the rules of origin and
units sold independently. A total of 262 companies have so far elimination of non-tariff barriers, are also being addressed. This
been privatised, with some parastatals undergoing a process is one of the first milestones of the SADC Regional Indicative
of commercialisation as opposed to outright privatisation. Strategic Development Plan, and is to be followed by a
The privatisation programme was initially overseen by the Customs Union and Common Market.
independent Zambia Privatisation Agency (ZPA), and has
subsequently been taken over by the Zambia Development At a Tripartite Summit in October 2008, COMESA, SADC and
Agency (ZDA). the East African Community (EAC) decided to harmonise their
trade arrangements with a view to creating a common free trade
In 2009, government announced its intention to divest up to area.
75 percent of its equity in the Zambia Telecommunications
Company Limited (Zamtel), and may consider divesting the Processing of hides & leather products - Photo Courtesy: René Hartslief

remaining 25 percent through the sale of shares on the Lusaka

Stock Exchange. This is a historic move and will also go a long
way toward improving the quality of service and reducing high
costs in the telecommunications sector.

TRADE AGREEMENTS
The promotion of trade is crucial to the country in its efforts
to find additional regional and international markets for its
products. While Zambia is a key player and pioneer in various
regional initiatives, there is a need for Zambian products to
achieve further penetration in global markets such as the USA
under the African Growth and Opportunity Act (AGOA), the
EU under the Everything but Arms (EBA) Initiative, as well the
Chinese, Canadian and other markets.

Zambia is a member of the Common Market for Eastern

and Southern Africa (COMESA), which promotes regional
economic integration through trade and investment. In 2008,
COMESA’s 19 member states had a population of 430 million,
annual import bill of around US$ 152 billion and export bill of
over US$ 157 billion, making it a major marketplace for both
internal and external trade.

16
 Business & Finance
Zambia’s business climate has improved markedly in the past decade, driven by privatisation,
market liberalisation and deregulation, supported by macroeconomic stability.
Further development within the private sector is central to bring about a loss of foreign exchange reserves, while domestic
unlocking Zambia’s vast potential. Government’s Private Sector inflation rose as a result of the Kwacha’s depreciation against
Development Reform Programme, which aims to reduce the major currencies.
cost of doing business, is already yielding results. Among
its many achievements are the creation of the Zambia THE BUSINESS ENVIRONMENT
Development Agency (ZDA) and the Citizen Economic Zambia is one of the more attractive investment locations in
Empowerment Commission (CEEC), and the introduction of a sub-Saharan Africa, and both local and foreign companies are
policy on Public-Private Partnership (PPP) to speed up the pace able to take advantage of the many and varied benefits to doing
of development in large infrastructural projects. The subsequent business here.
investment inflows are a testament to high investor confidence
in the economy. Investors face no restriction on the amount of interest, profit,
dividends, management fees, technical fees and royalties that
In the World Bank’s ‘Doing Business’ survey, Zambia recorded a they are allowed to repatriate. Income earned by foreign
significant improvement, and was rated 90th in 2009 (from 99th nationals may also be externalised without difficulty. There is no
the previous year) out of 183 countries assessed for ease of distinction in law between foreign and domestic investors, and
doing business. In the SADC region, its ranking is second only while companies seeking licenses or concessions, or investors
to South Africa’s. Despite the setbacks brought about by the bidding for privatised companies, are encouraged to commit to
global recession, it is expected that once most reforms currently local participation, this is not compulsory. Businesses setting
in the pipeline have been fully implemented, Zambia’s business up in Zambia now enjoy faster company registration, which has
climate will improve even further. been reduced to just one day, while registration for VAT can now
be completed in three days.
Considerable growth has been seen in the financial sector
following its liberalisation in 1991, while the establishment of Business development institutions
the Lusaka Stock Exchange and the repeal of the Exchange The first Zambian chamber of commerce and industry was
Control Act have strengthened capital markets. The Financial established in Lusaka in 1933. Since then there has been a
Sector Development Plan (FSDP), which has entered its national body of chambers of commerce and industry under a
second phase, aims to achieve a stable, sound and market- variety of names.
based financial system that supports the efficient mobilisation
and allocation of resources necessary to achieve economic The Zambia Association of Chambers of Commerce and
diversification, sustainable growth and poverty reduction. Industry (ZACCI) is a national body representing the interests
of the private business sector in Zambia. The mission of ZACCI
The Zambian financial sector was not immediately affected by is the promotion and development of trade, commerce and
the credit crunch, as was reflected in the continued stability industry, and the association acts as a link between like
of the banking sector, with most banks being adequately organisations, the private sector and government.
capitalised and the inter-bank market operating normally.
This was mainly due to the sector’s limited integration with Among ZACCI’s many successes are improved advocacy
international financial markets. Further, the country’s financial programmes with members of parliament and government
sector had no exposure to the toxic assets which led to the ministries, the introduction of cleaner production to local
crisis in most developed markets. However, the subsequent industries and the training of over a thousand small and medium
global economic recession did lower foreign capital inflows and business entrepreneurs in various business skills.
18
An autonomous corporate body under the Ministry of project in Luanshya and Petauke. The programme is meant to
Commerce, Trade and Industry, the Zambia Competition promote accessibility to finance by SMEs, which usually face
Commission (ZCC) was established in May 1997 under the challenges in raising collateral and difficulties in the preparation
Competition and Fair Trading Act. The act was developed in of financial statements.
order to encourage competition within the economy, protect
consumer welfare, strengthen the efficiency of production and A K 349 million loan portfolio has been created, with no
distribution of goods and services, secure the best possible delinquencies recorded. Customers undergo an eight-week
conditions for the freedom of trade and expand the base of training programme on fundamentals in business management
entrepreneurship. The ZCC has a wide range of powers of prior to being granted a loan. During 2010, the programme
enforcement and investigation under the act, and the is being rolled out to Natsave’s 27 other branches across the
commission has achieved success in dealing with a variety
country.
of market distortions, protecting the competition process and
thereby rendering the Zambian market more attractive to
TAXATION
investors.
Significant progress has been made over the past few years in
Continuing the work of the Small Enterprise Development modernising tax policy and administration. Government remains
Board (SEDB), following its amalgamation under the Zambia committed to establishing a broad-based tax structure that is
Development Agency, the Small and Medium Enterprises more predictable, simple, fair and efficient in an effort to deliver
(SME) Division is charged with analysing the needs of lower taxation levels while securing additional resources to
businesses and developing products and services, particularly finance development programmes.
for small and medium sized enterprises, to be delivered
nationally and at regional level. It also monitors the overall Established in 1994, the Zambia Revenue Authority (ZRA)
effectiveness of local business programmes and manages assesses and collects taxes and duties on behalf of
programmes such the Trade and Industrial Development Fund. government, facilitates international trade and advises
Close liaison is maintained with relevant partners, including government on aspects of tax policy. General information on
small business associations and NGOs involved in the SME taxation is available from the ZRA Advice Centre.
sector.
All individuals receiving an income from a source within
The importance of the SME sector to job creation and wealth Zambia, whether they are resident or non-resident, are liable
distribution cannot be overemphasised, and government to pay tax. A foreign resident business undertaking pays tax
continues to work diligently with institutions supporting business only if business is conducted in Zambia through a permanent
management and entrepreneurship skills in order to ensure establishment. A company is resident in Zambia for tax
that Zambians are sufficiently qualified to undertake business purposes if the company is incorporated or formed in Zambia or
ventures at small-scale level.
the central management and control of the company’s business
or affairs is exercised in Zambia. Companies are taxed on
Economic empowerment
trading profits as well as interest and dividends, if those
The Citizens’ Economic Empowerment Act of 2006 established
the Citizens’ Economic Empowerment Commission (CEEC) dividends are paid in Zambia.
and the Citizens’ Economic Empowerment Fund, with a
view to promoting the economic empowerment of citizens. For 2010, there are no changes in annual tax bands or in
Particular focus is on those who have been marginalised or the standard rate of corporate tax.
disadvantaged and whose access to economic resources and
development capacity has been constrained due to factors such In order to reduce the tax burden, government has revised
as race, sex, educational background and disability. Pay-As-You-Earn (PAYE) by increasing the non-taxable monthly
threshold income from K700 000 to K800 000.
The National Savings and Credit Bank (Natsave) has • K 0 – K 800 000 per month (zero percent)
adopted a group lending micro financing scheme as a pilot • K 800 001 – K 1 335 000 per month (25 percent)

20
• K 1 335 001 – K 4 100 000 per month (30 percent) MONETARY & FINANCIAL DEVELOPMENTS
• Above K 4 100 000 per month (35 percent) Broad money growth in 2009 is projected to decline to
10.7 percent, from the 21.8 percent recorded in 2008.
Corporate tax rates are as follows: This is mainly due to a decline in domestic credit growth,
• Standard rate – 35 percent which is projected to slow down to 12.3 percent from the
• Mining (base metals) – 30 percent 37.8 percent recorded in 2008. This is mainly attributed to
• Farming – 15 percent weaker domestic demand and stricter lending conditions by
• Non-traditional exports – 15 percent commercial banks.
• Banks: Income not exceeding K250 million – 35 percent;
Income exceeding K250 million – 40 percent During the first three quarters of 2009, interest rates on
government securities were generally stable. The monthly
Value Added Tax average interest rate on treasury bills decreased marginally to
The Value Added Tax (VAT) system was introduced in July 1995 16.8 percent by end-September 2009, compared with
to replace a manufacturing and retail Sales Tax. VAT is invoice- 17.1 percent recorded in December 2008. The monthly average
based and operates on the destination principle, where goods interest rate on government bonds was at 19.5 percent in
and services are taxed in the country of consumption and not of September 2009 compared with 17.6 percent in December
origin. The VAT standard rate was reduced from 17.5 percent to 2008. The average commercial banks’ lending rate, however,
16 percent at the beginning of April 2008. increased to 29.6 percent in September 2009 from the
26.8 percent recorded in December 2008.
Special tax refunds are granted to tourists and commercial
exporters, and a range of favourable incentives to investors. Despite the global financial crisis and its adverse impact on
Qualifying goods do not pay import VAT, and the VAT Deferment banking systems globally, the overall financial condition of the
Scheme on capital goods and specified raw materials allows the banking sector (including NBFIs) in Zambia as at end-
payment of import VAT to be deferred and offset against input September 2009 was satisfactory, and all banks remained
tax due on those items. It is possible to recover tax on capital adequately capitalised. The performance of the Lusaka Stock
purchases before trading commences through monthly VAT Exchange’s all-share index is showing recovery.
returns, and excess input tax over output tax is not held as a
credit against future liabilities but is repaid. However, the quality of loan performance declined, with the
percentage of non-performing loans projected to rise to
The VAT Act is to be amended to make it a legal requirement for 13 percent by the end of 2009, compared with 7.2 percent in
taxpayers to have valid tax invoices in order to claim input tax. December 2008. This decline was somewhat mitigated by the
adequate capitalisation of commercial banks.
2010 tax amendments
As regards direct taxes, in addition to increasing the exemption More positively, five new commercial banks were granted
threshold by K 1 200 000 per annum (14.29 percent), the tax licenses to operate, comprising First National Bank Zambia Ltd;
credits for persons with disabilities have been increased from United Bank for Africa Zambia Ltd; Ecobank Zambia Ltd;
K 660 000 to K 1 560 000 per annum – an increase of 73 International Commercial Bank Zambia Ltd; and Access Bank
percent. In future, it is planned that the tax year, which currently Zambia Ltd. This is a clear demonstration of confidence that
runs from 1 April to 31 March, will be the same as the fiscal investors continue to have in the Zambian economy and
year, which commences on 1 January. government policies.

The following changes have taken place in indirect taxes: Monetary and financial sector policies
• Sale of commercial properties to be subject to VAT to broaden Monetary policy in 2010 will continue to focus on sustaining
the tax base. This is likely to encourage further development macroeconomic stability and maintaining the single-digit
of commercial properties and related infrastructure and reduce inflation reached at the end of 2009. In light of recent
the cost of buying and leasing commercial property in the experiences with the global economic crisis, it became evident
longer term. that the current framework, based on monetary aggregates,
• Insecticide-treated curtains to be zero-rated to help in the fight provides little room for monetary policy to counter adverse
against malaria. cyclical conditions through lower interest rates. In this regard,
• Amending the VAT Act to provide clarity on financial and the Bank of Zambia (BoZ) is reviewing its monetary policy
insurance services/charges that will be exempt for VAT framework with a view to shifting from the strict use of monetary
purposes. VAT on lease finance charges was removed in aggregates to short-term interest rates as the anchor for
2007, and the interest component on lease finance in 2008. monetary policy.

FNB in Ndola - Photo Courtesy: Marie Gibbons With regard to the development of financial markets, BoZ, in
consultation with stakeholders, was to introduce an overnight
lending facility to commercial banks in December 2009. This
will increase liquidity in the money market and improve the
effectiveness of monetary policy.

Another innovation will be the introduction of a framework to

facilitate secondary market trading of government securities
and other debt instruments. This will provide additional liquidity
to investors and provide information that will assist in improving
the efficiency of financial market operations.

To promote financial stability and safeguard the economy

against the lagged effects of the global financial crisis, BoZ
is revising the lender of last resort policy. The policy will be
aligned with accepted international standards to ensure that it
22
remains effective and relevant under prevailing circumstances.
In addition, government is working on a financial sector
contingency plan, which will deal with problems of a systemic
nature.

Furthermore, during 2010 government is to commence

implementation of the second phase of the Financial Sector
Development Plan (FSDP). This is expected to improve access
to credit and reduce the high cost of borrowing.

In order to hasten the detection and prevention of financial

irregularities, increased resources are being made available to
the offices of the Auditor-General and the Anti-Corruption
Commission. In addition, the government is introducing a
Financial Intelligence Unit to enhance the fight against financial
crime. Bank of Zambia - Photo Courtesy: René Hartslief

BANKING & FINANCIAL SERVICES process of modernisation and streamlining, with the country’s
The financial sector in Zambia comprises banks and non- central bank, the Bank of Zambia, having improved both
bank financial institutions (NBFIs) which are regulated and supervision and regulation of the sector. This has included
supervised by three agencies; namely, the Bank of Zambia revoking licenses of insolvent banks, denying bailouts, limiting
(BoZ), the Pensions and Insurance Authority (PIA), and the deposit protection, strengthening loan recovery efforts and
Securities and Exchange Commission (SEC). The Banking and upgrading the training and incentives of bank supervisors.
Financial Services Act was amended in 2005. These measures have resulted in a financial sector that is
reasonably efficient, sound and profitable.
According to 2010 BoZ figures, there are 17 commercial banks
in Zambia, which currently dominate the financial system. NBFIs A draft Bank of Zambia Act, which aims to give more
comprise the leasing and finance companies (12), building operational autonomy to the bank, has been finalised, and
societies (three), microfinance institutions (23), development was to be submitted during the first quarter of 2010 for
finance institutions (one – Development Bank of Zambia) and consideration.
savings and credit institutions (one – the National Savings and
Credit Bank). There are also 44 Bureaux de Change, as well as The Bank of Zambia recognises that financial stability is
a new entrant to the financial sector: Credit Reference Bureau essential for strong macroeconomic performance and execution
Africa Limited. of monetary policy. This entails ensuring that financial service
providers are adequately capitalised and have appropriate
Bank of Zambia risk management systems. In 2006, the Capital Adequacy
Zambia’s banking and financial system has undergone a Regulations of 1995 were amended to provide for a tiered
capital structure to encourage entrants into the financial sector.
The review was aimed at ensuring that banks are adequately
capitalised at commencement, and as they operate.

The bank has over the years made progress in modernising

the payment system in line with improvements in information
technology. The National Payment Systems Act No.1 (NPSA)
INDUSTRIAL CREDIT COMPANY enacted in 2007 has enabled BoZ to develop and implement
the national payment systems, with the bank designating
players wishing to provide payment services such as money
“The pioneers of leasing in transfer services and mobile banking. It has also seen the

Zambia”
introduction of a tax payment stream on the Real Time Gross
Settlement (RTGS) system. These developments have
strengthened the capacity of BoZ to monitor transactions and
Ndola Office Lusaka Office to ensure that only safe and efficient institutions are allowed to
Loita House, 44 Buteko Avenue Exchange Building, Cairo Road
PO Box 70742, Ndola, Zambia PO Box 35405, Lusaka, Zambia
provide payment services.
Tel: +260 212 611233-5 Tel: +260 211 227474/71
Fax: +260 212 618621 Fax: +260 211 236173 In order to improve the credit culture in the country, BoZ issued
E-mail: [email protected] E-mail: [email protected] the Credit Data (Privacy) Code and the Credit Reference
Services (Licensing) Guidelines to facilitate the establishment of
credit reference bureaux. Subsequently, the first credit bureau –
Credit Reference Bureau Africa Limited (CRBAL) – was formally
launched in January 2007. This is allowing for increased
credit extension because of better risk profiles; reduced credit
processing costs and times as well as loan write-offs; lower
borrowing costs; and an enhanced credit culture.

All commercial banks have since signed the Service Level

Agreement (SLA) with CRBAL. The Banking and Financial
Services Act (Provision of Credit Data and Utilisation of Credit
Reference Services) Directive was issued on 10 December
2008. All banks and NBFIs are required to use the services
of the credit reference agency before granting credit to a
customer.
24
COMMERCIAL BANKS
Zambia’s commercial, investment and merchant banks offer a
wide range of financial services. Almost all commercial banks
now have Automated Teller Machines (ATMs) and Point-of-Sale
(POS) terminals. The roll out of the E-switch is underway.

The Zambia National Commercial Bank – now known as

Zanaco – was established by government in 1969 to foster
national development. It is the country’s largest bank in terms
of outreach and, according to findings in the FinScope survey, it
also has the largest market share in terms of accounts held.

Zanaco partnered with Dutch bank Rabo Bank, a highly credible

bank with a triple A rating, in April 2007. Under this partnership,
Zanaco has designed broad-based, affordable banking services
for its retail customers and structured innovative financial
solutions for large corporations, agri-business and the public
sector, and has invested substantially in a versatile banking
information technology platform. With its empowerment profile,
extensive national presence of 56 branches and agencies
nationwide, and development of new and exciting e-commerce
products, Zanaco is well placed to respond to the diversity of
Zambian society.

Finance Bank Zambia (FBZ), one of the leading and largest

private banks in Zambia, has operated in the country for almost
22 years. During this time it has registered strong performance
and growth, from an initial single branch operation in Lusaka to
an impressive network of over 50 outlets strategically positioned
in major commercial and agricultural centres across the
country. Key directorates and divisions are: finance, operations, Zanaco - Photo Courtesy: René Hartslief

credit, institutional/corporate banking and marketing, treasury, Ecobank Zambia is a full-service bank, providing a broad
international banking and products, information systems, and range of products and services to government, financial
audit and compliance. institutions, multinationals, international organisations, SMMEs
and individuals. The bank aims for a balanced business mix of
2008 saw the successful completion of the acquisition of retails, wholesale and investment banking activities.
40 percent of the issued capital of FBZ by Credit Suisse. This
partnership has speeded up the bank’s expansion programme, Ecobank’s parent company, Ecobank Transnational
and Finance Bank has recently applied for a banking license in Incorporated (ETI), was incorporated in 1985 and has its
the Democratic Republic of Congo to establish Finance Bank headquarters in Lomé, Togo. Ecobank’s vision is to build
DRC. Negotiations with the Reserve Bank of Zimbabwe are a world-class pan-African bank and to contribute to the
also well advanced in terms of securing a licence to commence economic and financial integration and development of the
banking operations in that country, and a wholly owned continent. Owned by more than 180 000 local and international,
subsidiary of Finance Bank (Micro Finance Zambia Ltd) has institutional and individual shareholders, Ecobank has over
been registered. 11 000 employees from 29 different countries in over 700
branches.

Ecobank Zambia opened its doors to the public on 24 August

2009. Its head office and first branch are located at the Arcades
roundabout in Zambia’s capital, Lusaka. More branches are
planned for 2010.

Investrust Bank Plc is a listed bank on the Lusaka Stock

Exchange and has branches in Lusaka, Chipata, Luangwa,
Kitwe, Chililabombwe, Solwezi and Livingstone. Furthermore
a branch has been opened in the mining town of Lumwana,
making Investrust the first wholly indigenous bank to establish a
fully fledged branch here.

NON-BANK FINANCIAL INSTITUTIONS

Non-bank financial institutions (NBFIs) include all financial
institutions that are not classified as commercial banks, and
include leasing and finance companies, housing financial
institutions (building societies), savings and credit institutions,
development finance institutions, microfinance institutions
and bureaux de change. NBFIs present an opportunity for
transforming the financial sector in Zambia through their role in
long-term lending and provision of financial services to under-
served rural consumers and small businesses often ignored by
traditional banks.
26
Development Finance Institutions (DFIs) were originally employer-sponsored housing loan schemes. Building societies
established and funded by government under separate statutes. are governed by the Building Societies (Amendment) Act of
The only remaining DFI is the Development Bank of Zambia 2005. The country’s three building societies are deposit-taking
(DBZ), which provides medium to long-term development institutions and include Finance Building Society, Pan African
finance. DFIs were brought under Bank of Zambia (BoZ) Building Society and Zambia National Building Society (ZNBS).
supervision after the amendment to the Banking and Financial
Services Act (BFSA) in 2000, with DBZ restructured in 2002. Rural banking and microfinance institutions deal directly
The DBZ is currently governed by the Development Bank of with the public, take deposits and make loans to individuals.
Zambia (Amendment) Act of 2005. Established under various pieces of legislation, such as the
National Savings and Credit Bank (NSCB) Act, Cooperatives
DBZ has recently relaunched its Enterprise Development Act and Societies Act, the NSCB and microfinance institutions
Project’s multi-purpose credit facility. Originally launched in were brought under BoZ supervision following amendments
2003, it comprises an investment credit line for supporting to the BFSA in 2000. In 2005, amendments were made to the
capital investments and a short-term credit line for financing NSCB Act.
export pre-shipment activities.
BoZ has reviewed and submitted to government reports on the
The fund has grown to US$ 52 million from the original US$ review of the revised ZNBS Corporation Strategy Plan (CSP)
40 million, and is expected to grow even more as financial and the NSCB Institutional Development Plan. Based on these
institutions come forward to participate in the initiative. reports, government is expected to recapitalise the institutions
accordingly.
Under BoZ supervision since the early 1990s, leasing
companies are commercial ventures established under the Bureaux de change deal in foreign exchange, particularly the
Companies Act, and their principle activity is the provision of British Pound, US Dollar and South African Rand, although
asset-based finance. those established by major banks transact in many other
convertible currencies. The sector is governed by the Banking
Industrial Credit Company (ICC) Zambia was established 45 and Financial Services (Bureau de Change) Regulations, which
years ago and is the largest independent leasing company in were amended in 2006.
Zambia, with a trusted brand. Being independent brings with it
both opportunities and challenges, the two biggest challenges Pension funds
being access to liquidity and cost of funding. However, the Pension scheme management has become more challenging
bank is discovering that being indigenous provides a significant in view of the recent global financial crisis, with the decline in
competitive advantage over the international banks, which tend stock market valuations having negatively affected the provision
to centralise operations and take a ‘one-size-fits-all’ approach to of pensions worldwide. Pension funds in Zambia have not been
emerging markets. spared the crisis, with a total holding of more than 70 percent of
the total market capitalisation on the Lusaka Stock Exchange.
The business has just finalised a strategic partnership with
an East African investor that will bring US$ 20 million into the There are several types of pensions on offer in Zambia –
operation in the first half of 2010. ICC feels that indigenous personal pensions, group occupational pensions and public
banks will be the way of the future and that international banks pensions. Unlike the National Pension Scheme, which is
will struggle to adapt to the culture and ethos that more and compulsory and is designed to provide social security in the
more Africans are demanding. The bank is very proud of its form of a basic pension, occupational group pensions are
heritage, what it has achieved and where it has come from. supplementary schemes sponsored by private sector employers
and employees.
Housing Finance Institutions (HFIs), which traditionally
provide banking services and mortgage lending, have tended The National Pension Scheme is run by the National Pension
to take two major forms – namely, building societies and Scheme Authority (NAPSA). Other major pension funds

28
29
comprise the Public Sector Pension Fund (PSPF) and Local The Insurance Act of 1997 is the principal piece of legislation
Authorities Superannuation Fund (LASF). The Association of governing the supervision and regulation of the insurance
Pension Fund Managers (APFM) represents the combined industry. As an insurance supervisor, the Pensions and
interests of these pension funds, as well as some smaller ones. Insurance Authority (PIA) is tasked with maintaining an efficient,
fair, safe and stable insurance market for the benefit and
The cumulative number of NAPSA members registered protection of policyholders.
since its inception in 2000 is slightly above 900 000, with
about 600 000 active members and 18 000 employers A number of local insurers have since emerged and competition
registered. has increased; however, the market is still relatively small. The
ZSIC currently has the broadest distribution network, which
Under the Financial Sector Development Plan (FSDP), pension covers all nine provincial centres and some critical districts.
scheme legislation is being updated and harmonised. The The corporation has launched an aggressive marketing drive to
Pension Scheme Regulation Act of 1996, which provided for promote its agricultural products in rural areas.
the administration and regulation of all pension schemes with
the exception of the National Pension Scheme (governed by The Insurance Act was amended in 2005 under the FSDP to
the National Pension Scheme Act), has been replaced with the include:
Pension Scheme Regulation (Amendment) Act, which came into • Compulsory local shareholding in insurance companies
effect during 2006. Draft legislation to harmonise the industry • Exhaustion of local capacity prior to carrying out reinsurance
was submitted to the Ministry of Finance and National Planning • Fostering investment of insurance funds in Zambia
in October 2009 for consideration. • Revisiting insolvency requirements and investment guidelines

The FSDP also recommends enhancing tax incentives for Asset Management
pension funds; effecting consumer education programmes; Madison Asset Management Company Limited (MAMco) is
conducting a study on viability of personal pension plans; a newly established investment management company licensed
training local actuaries and establishing investment guidelines. by the Securities and Exchange Commission to provide
Measures to build capacity at the Pensions and Insurance investment advisory and fund management services. MAMco
Authority (PIA) have been put in place, with the programme is a 100 percent subsidiary of Madison Financial Services
having included setting up systems and manuals as well as Company Limited (MFSL), which is a respected financial
seminar participation. services group in Zambia, having 100 percent shareholding
in leading insurance companies Madison General Insurance
PIA has been involved in the formulation of the National Social Company Zambia Limited and Madison Life Insurance
Security Bill under the Ministry of Labour and Social Security, Company Zambia Limited.
which seeks to bring NAPSA under the supervision of the
Registrar of Pensions and Insurance at PIA. Proposals to amend FINANCIAL SECTOR DEVELOPMENT PLAN
the provision in the Pension Scheme Regulation Act, which The financial sector in Zambia is considered relatively under-
exempts NAPSA from supervision, were submitted to developed and has had limited success in reaching all sectors
government and were under consideration in 2009. Government of the economy. A 2005 study by Finmark Trust revealed that
has since issued a letter of intent for NAPSA to be supervised by only 33 percent of the total population in Zambia had access
PIA. to financial services. The survey also indicated that most
Zambians prefer to invest in non-financial instruments, such as
The insurance industry a businesses, livestock, land or agricultural equipment.
The insurance industry consists of insurers, re-insurers, brokers,
assessors, adjustors and policy-holders. In 1970 the In recognition of the strategic importance of the financial
Government of Zambia formed the monopoly Zambia State sector to the country’s development and poverty reduction
Insurance Corporation (ZSIC) in order to provide low cost efforts, the Zambian government launched the Financial Sector
insurance to indigenous Zambians. This state of affairs existed Development Plan (FSDP) in 2004 to address weaknesses
until the liberalisation of the industry in 1992. that had been identified in the financial sector. The FSDP is a

30
comprehensive strategy aimed at achieving a financial system FSDP II proposes three project components; namely, market
that is sound, stable and market-based, and able to support the infrastructure, increasing competition and access to finance.
resource mobilisation necessary for economic diversification The focus of the programme will include implementing the
and sustainable growth. A key motivator behind the plan following project activities:
was the changing profile of the financial services sector and • Consumer awareness on the cost of banking services
a pressing need to develop effective means of supervising • Obtaining approval on investment guidelines for public and
the different sectors, with large financial conglomerates and private pension funds
integrated product development serving to blur the traditional • Facilitating adoption of good corporate governance principles
boundaries between banks and non-bank financial institutions. by institutions investing in companies that observe good
corporate best practices
A number of activities have already been undertaken under • Finalisation of the Sovereign Credit Rating for Zambia
• Dissemination of findings of the second FinScope Consumer
the FSDP, such as the establishment of a Credit Reference
Survey
Bureau. Similarly, policies and legal and regulatory frameworks
• Finalisation of the proposed modernisation and harmonisation
have been developed to take into account the evolving
of financial sector legislation under the law review exercise
financial environment. These developments have resulted • A study on reforming the financial sector tax regime
in a considerable increase in the number of banks and other • Development of a framework for channelling long-term funds
financial service providers in the country. Furthermore, the through a wholesale or apex financial institution
Bank of Zambia Strategic Plan 2008-2011 has made financial
inclusion one of its strategic objectives. Data collection for the second FinScope Consumer Survey
commenced in September 2009 and was concluded in
A Deposit Protection Scheme (DPS) is being established for December 2009, with dissemination of the final results
all eligible banks and deposit taking financial institutions. The expected to take place in the first quarter of 2010.
draft Deposit Protection Scheme Bill has been developed and
a meeting for stakeholders was convened in December 2009. LUSAKA STOCK EXCHANGE
Legislative drafting was expected to be undertaken during the Established in 1993 and opened on 21 February 1994, The
first quarter of 2010. Lusaka Stock Exchange (LuSE) has played a key role in
fostering economic transformation in the country. The formation
A policy on rural banking is being developed under the Rural of the LuSE was part of the Zambian government’s economic
Finance Programme, and a scoping study was finalised in reform programme to develop the financial and capital markets
December 2009. The next phase was due to begin in January in order to support and enhance private sector initiative.
2010 and will involve conducting a study on existing policy
gaps, identifying key issues and carrying out research into the The LuSE is made up of stockbroking corporate members and
adequacy of the policies. is incorporated as a non-profit limited company. Currently the
member brokers are Stockbrokers Zambia Limited, Intermarket
Securities Limited and Pangea/EMI Securities. Listed
Phase II of the FSDP
companies currently cover banking, retail trading, oil marketing,
Following the Financial Sector Assessment Programme (FSAP)
manufacturing, property, agricultural processing, hospitality and
report of November 2008, the World Bank and IMF proposed
investment.
that the FSDP Phase II Project document be expanded to take
into account implementation of the policy recommendations The exchange has been set up as a modern stock exchange
from the FSAP. based on the most current international standards and
practices. These include use of a central depository system,
In view of the issues currently outstanding from FSDP I, as trade for trade clearing and settlement process, rolling
well as new short to medium-term financial sector reform settlement three days after trade date (T+3), and meeting G30
recommendations arising from the 2008 FSAP, the FSDP recommendations for clearing and settlement system design
implementation period has been extended for a further three and operation. The Lusaka Stock Exchange’s automated
years to December 2012. trading system went live in November 2008.

Trading activity slowed down during Performance of LuSE from Jan to June 2009
the period compared to the first half Equity
in 2008. Number of trades reduced by June 2009 June 2008 % Change
Trades 3,268 5,090 -35.80%
35.80% from 5,090 in 2008 to 3,268 in Volume 418,254,835 1,432,618,582 -70.80%
2009. The volume traded was 418,254,835 Turnover K billion 114.48 481.32 -76.22%
shares 70% below 1,432,618,582 shares in 2008. US$ million 20.89 132.23 -84.20%
Turnover also dropped by 76.22% from K481
Bonds
billion to K114 billion in 2009. Although the June 2009 June 2008 % Change
percentage growth indicates 100% increase and 1,161% Trades 4 2 100.00%
for trades and turnover respectively, the activity was very Turnover (K million) 25,871.53 2,050.64 1,161.63%
marginal. In 2009, only 4 trades occurred compared to 2 in
Market Capitalisation
2008. The value in 2009 was K25.8 billion compared to K2.0 June 2009 June 2008 % Change
billion in 2008. In terms of market capitalization, the market shrunk In K million 20,718,712 25,476,048 -18.67%
by 18.67% in Kwacha terms closing June 2009 at K20.71 trillion from In US$ million 3,902 7,779 -49.84%
K25.47 trillion in June 2008. The decline in Kwacha terms can be attributed Market Cap / GDP Ratio % 37.33 60.03 -37.81%
Turnover / GDP Ratio % 0.82 0.92 -0.11%
to investor uncertainties about the stock markets caused by the global financial Turnover / Market Cap Ratio % 2.19 1.54 1.38%
crisis. Most of the investors exited the market at very low prices. All Share Index 2,744.57 4169.05 -0.34%

Although the total number of companies on the market remained the same,
2 companies which were on the quoted tier managed to move to the listed
tier. Zanaco listed on 27 November 2008 and Bata on the 30 March 2009. The
listed tier now has a total of 21 securities.

Tel 0211 228537 • Fax 0211 225969

PO Box 34523, Lusaka • 3rd Floor, Exchange Building, Central Park, Cairo Road, Lusaka

32
The LuSE has a unified market, comprising bonds and equities. Securities and Exchange Commission. The act is specifically
From its inception the exchange offered trading in equity designed to ensure adequate investor protection and support
securities and in March 1998 became the official market for the operation of a free, orderly, fair, secure and properly
trading in government bonds. informed securities market. There is also a compensation fund
established under the act, designed to compensate persons
Trading activities at the Lusaka Stock Exchange during 2009 who suffer pecuniary loss occasioned by the default of a
reflected the effects of the global financial crisis. Like many licensed dealer or licensed investment advisor.
global equity markets, the LuSE’s all-share index recorded a
decline, particularly during the first four months of the year. The LuSE offers several incentives to investors to promote
However, the index had recovered from a low of 2 096.7 in rapid development of the capital market in Zambia. In addition
April 2009 to close at 2 807.3 at end-September 2009. Market
to the absence of restrictions on shareholding levels and foreign
capitalisation, which had fallen to K18 583.4 billion in April
ownership, these include:
recovered to K22 651.0 billion by end-September 2009.
• No capital gains tax
A common technical interconnectivity platform being • No withholding tax on dividends paid by listed companies to
developed will allow investors to trade stocks across individuals
securities exchanges in the Southern African Development • Corporate income tax discount of 2 percent for companies
Community (SADC). listed on the LuSE for the first one year of listing
• A further 5 percent discount if offer results in at least
Investment incentives 33 percent uptake by Zambians
Several measures have been put in place to ensure investor • No property transfer tax on listed securities
confidence and protection within the LuSE. The market is
regulated by the 1993 Securities Act and enforced by the For further information, log on to www.luse.co.zm.
33
 MINISTRY OF MINES & MINERALS DEVELOPMENT
REPUBLIC OF ZAMBIA

In September 2003, the Government of the Republic of Zambia borrowed in excess of US$ 55 million from the World Bank and Nordic Development Fund to
finance the clean-up of historical mining environmental liabilities arising from past mining operations from both parastatal Zambia Consolidated Copper Mines Ltd
(ZCCM) and a number of other earlier private mining operators that were active on the Copperbelt and in Kabwe. Therefore, new mining companies formed post
privatization, are expected to make provisions for their environmental liabilities from the profits they make.This is in accordance with the polluter pays principle and
ensures that mine operators do not abandon mine sites whose clean-up finally will fall on the government. To avoid this and in line with international practices under
similar circumstances the Zambian government enacted a law to require mine operators make such financial provisions.

The Environmental Protection Fund (EPF) which falls under the Ministry of Mines and Minerals Development (MMMD) was made operational in 2008 as a way of
compelling mining operators to make financial provisions for their mining environmental liabilities as well as encourage “greener” behaviour.

The Minister appointed the members of Environmental Protection Fund Committee, and additionally appointed the Environment Management Facility (EMF) of
the Copperbelt Environment Project (CEP), as the Fund Committee secretariat. The Environment Management Facility is currently responsible for rehabilitation of
historical environmental liabilities at mine sites and facilities relating to ZCCM-IH and Government.

The EPF will henceforth address liabilities attributable to the new mining investors under the mandate of MMMD as provided for under the repealed Mines and
Minerals Act, CAP 213 of the laws of Zambia of 1995 and the subsequent Mines and Minerals Development Act of 2008.

The objectives of the Fund are:

• To provide assurance to the Director Mines Safety Department (MSD) that a person who holds a licence or permit issued under the Mines and Minerals Act,
shall execute the Environmental Impact Statement in accordance with the Mines and Mineral (Environmental) Regulations, 1997; and
• To provide protection to the Government against the risk of having the obligation to undertake the rehabilitation of a mining area where the holder of a mining
licence fails to do so.

The EPF Committee consists of the Permanent Secretary of the Ministry of Mines and Mineral Development, Director of Mines Safety Department, one member
representing Environmental Council of Zambia (ECZ), one member from the Ministry of Finance and National Planning, seven members from developers contributing
to the Fund who are appointed in consultation with the Chamber of Mines of Zambia.

Mining activities by their nature usually occur in green field areas where people are either resident or have an interest e.g. farming. It is important that these local
communities do not simply become victims of these mining investments through displacement or environmental degradation such as air pollution, water pollution,
residential houses cracking, deforestation, soil contamination, and other adverse effects - thus the importance of the EPF.

The EPF is intended to influence private mining sector to ensure mineral resource exploration and exploitation are performed in a sustainable manner. The EPF is
intended to provide protection to Government against the risk of having to rehabilitate mining areas where holders of mining licences fail to do so. Making tax payers
foot the bill to clean-up environmental liabilities abandoned by developers after they have benefited from the profits of mineral extraction is morally wrong.

By establishing the Environmental Protection Fund government is ensuring that mining developers address environmental issues; ensure public safety e.g. capping open
shafts; protect the Government against environmental liabilities in the event of premature closures e.g. economic insolvency; limit accrual of public debt; encourage
progressive rehabilitation (reclamation) and help to identify mitigation contingencies from the determination of rehabilitation costs.

The EPF therefore plays an important role in attaining mining sector long-term targets, as well as reinforcing the efforts of the other Environment Regulation
Agencies (ECZ and MSD), which have had limited enforcement capability. The EPF is to a great extent a tool through which MSD will be able to undertake some of
the rehabilitation in the event that a developer fails to do so, and bill the works against the developers’ contribution to the Fund. The Fund contributions by each
developer will only be used exclusively for the liabilities of the contributor.

In the short period that the Fund has been operational, thirty one major mine sites were audited. A total of 25 sites complied by submitting audit reports which
were assessed, and the estimated closure cost was established at US$ 189.8 million and annual cash contribution was finally established at US$ 4.95 million per year.
The same amount has also been established for the 2009 contributions which are now due.

Payment request notices were first sent to Fund Contributors in June 2008.To date nineteen major mine sites (representing 76%), paid the 2008’s cash contributions
in the amount of US$ 2.06 million. However, in terms of cash contribution value, the contributions represent only 42%. It is important to acknowledge and thank the
underlisted mining companies that have contributed to the Fund: Mopani Copper Mines Plc (Nkana and Mufulira), African Explosives Limited (Kafironda Factory),
First Quantum Mining Operations (Kansanshi Mine and Bwana Mkubwa Mine), Chambishi Metals Ltd, Chambishi Copper Smelter Ltd, Grizzly Mining Ltd, Kagema
Mining Ltd, Luanshya Copper Mines Ltd (Luanshya & Baluba - Operating), Luanshya Copper Mines Ltd (Luanshya & Baluba - Non-operating), Muliashi Mining Project,
Metorex Ltd (Chibuluma South Mine & Chibuluma East & West Mines), NFCA Mining Plc (Chambishi Mine), Orica Mining Services, Sable Zinc Kabwe Ltd, Sino Metals,
Lafarge (Lusaka & Ndola Plants), Ndola Lime and Munali Nickel Mining Project.

A further several small scale mine sites were also compliant. These included the following:
Collum Coal Mining Industries, Aggregates Ltd, Hi-Qualime Mining Ltd, EM Storti and Scirocco Enterprises Ltd.

Sadly, it is also important to raise concern on non-compliance from major mining companies who have failed to remit their contributions for 2008 and these include:
Konkola Copper Mines Plc - Konkola Mine, Konkola Copper Mines Plc - Nampundwe Mine, Konkola Copper Mines Plc - Nchanga Open Pit, Konkola Copper Mines
Plc - KCM Smelter Co, Maamba Collieries, and Gemfields Mining Ltd.

The grant or renewal of a mining right is subject to meeting conditions for the protection of the environment and human health, a main tenet of which is, compliance
with the Environmental Protection Fund. In addition to making recommendations for the non-renewal of mining licences of defaulting developers, the Fund reserves
the right to take legal action to compel mine developers to pay their statutory obligations.

The Ministry is intent on implementing its sector long-term vision of sustainable social economic development in the mining sector.

Tel: 0211 221854 • Fax: 0211 221852 • PO Box 50369, Lusaka, Zambia
Website: www.cepzambia.org.zm • E-mail: [email protected]
Mining & Copperbelt Industry
The mining industry continues to be the Zambian economy’s primary source of earnings,
having slowly recovered during 2009 from the worst effects of the economic slow-down.
Zambia is the largest producer of copper in Africa, as well as While rising copper prices over the past several years saw
being a major source of minerals such as cobalt, zinc, lead, copper soaring to a record high of US$ 8 980 per tonne in July
uranium and precious metals and stones. The Copperbelt is the 2008, the crisis on global financial markets in the second half
epicentre of the mining industry as well as the vast majority of of that year sent prices tumbling to just US$ 2 812 per tonne by
the country’s industrial activity, and has been one of the major December 2008.
drivers of growth in recent years.
This dramatic drop in the price of copper led to reduced
Zambia’s rich mineral resources, in particular its copper and
earnings from copper exports by mining companies and
cobalt mines, have brought much-needed foreign exchange
subsequently reduced earnings for the government from
earnings to the country. Privatisation of the formerly state-
owned mines, along with many years of high demand and mineral royalties and corporate taxes, as well as lower levels of
commodity prices for copper, has seen a great deal of investments and production. Further, some mining companies
investment in the mining industry and an expansion in mineral discontinued exploration activities, while Luanshya Copper
production, with the establishment of new mines and the Mine and Munali Nickel Mine were placed under care and
recapitalisation of existing ones. maintenance.

, Materials Evaluation (ME)

Tel: +260 212 226433

Fax: +260 212 226306
E-mail: [email protected]

35
 and just over 200 000 tonnes in the year 2000. Rising output is
expected to come from the start of production at the Konkola
Deep mining project, the resumption of production at Luanshya
and ramped up production at Lumwana, as well as investments
at KCM, MCM and Chambishi Copper Smelter that are
increasing production capacity.

The overall contribution of metal products to Zambia’s total

exports earnings was 83.9 and 83.1 percent in February
2010 and January 2010, respectively.

First quarter 2009 copper exports rose to 173 421 tonnes

versus 153 306 tonnes in the corresponding period during 2008.
Copper prices jumped to a 20-month high in April 2010 of US$
7 939.75 per tonne after reports indicated that manufacturing
Open pit mining - Photo Courtesy: René Hartslief
expanded in China, India, the USA and Europe.
Although a number of factors challenged the industry during
2009, various others have supported its growth, particularly Cobalt output in the three months to 31 March 2009 increased
the commencement of commercial copper production at to 1 921 tonnes from 1 081 tonnes in the first quarter of 2008,
Lumwana mine and improving metal prices in global markets, while exports of cobalt rose to 1 905 from 1 251 tonnes. Cobalt
with copper prices increasing from US$ 3 100 to US$ 6 000 production is on the rise as Chambishi Metals has started
between January and October 2009. As a result, the mining and producing once more and increases in the cobalt price serve as
quarrying sector recovered significantly during the year, from an incentive for cobalt producers to expand their output.
growth of just 2.5 percent in 2008 to 15.8 percent in 2009.
MINING REGULATIONS & INVESTMENT
Mining sector prospects in 2010 The Ministry of Mines and Minerals Development enacts
Economic diversification efforts notwithstanding, the mining mineral policy with the assistance of the departments of
sector is still considered by government to be crucial to national Geological Survey, Mines Development and Mines Safety.
development. Furthermore, despite the setbacks experienced Government adopts a purely regulatory and promotional role
following the crisis in global markets, Zambia remains a with regard to mining activities. Minerals in the ground are
favourable destination for investment, with its abundance of vested in the President on behalf of the state, with the right to
minerals and exceedingly rich copper deposits rendered even explore or produce minerals authorised by a licence granted
more attractive by the country’s political and macroeconomic under the Mines and Minerals Act.
stability.
In promoting the growth and diversification of the mining industry
Copper production is projected to increase to 800 000 tonnes during 2010, the Zambian government is committed to continue:
in 2010 from 676 000 tonnes in 2009, 575 000 tonnes in 2008 • Promoting exploration in the hope that more new mines will be

36
The Scaw Metals Group (Scaw) is an international group, manufacturing and or distributing a diverse range of steel
stranded and wire products. Its principal operations are located in South Africa, South America, Canada and Australia.
Smaller operations are in Namibia, Zimbabwe and Zambia. Scaw’s Specialist cast products manufactured for mining,
railways and engineering industries include:

• Lifting equipment Scaw has produced these products for these industries
• Reliance attachments since 1921 and is a technological leader in this field and
• Rolled steel manufactures to national and international standards.
• Wire rope and strand
• Chain products Scaw supplies globally and also offers nationwide distribution
• Cast alloy iron products in South Africa through its strategically located branches
• Forged and cast steel grinding media throughout Southern Africa.
• Steel and alloy castings
• Fibre products KITWE
• High tensile wire products Tel: +260 212 212174
• PC strand and wire products Fax: +260 212 216468
• Mild steel commercial wire and products E-mail: [email protected]
Website: www.scaw.co.za
 NFC AFRICA MINING PLC
CHAMBISHI MINE
PROFILE
Introduction
Chambishi Mine has been in operation since 1965 under different ownerships. It originally consisted of an open pit, an underground
mine, a concentrator, a cobalt plant, an acid plant and associated infrastructure. The open pit mine was closed in 1978, whilst the
underground mining and concentrator operations were suspended in 1987 and placed on care and maintenance owing to high
production costs and low copper price. On privatization, the former Chambishi Mine License area was sold in parts to NFC
Africa Mining PLC, Chambishi Metals PLC and to private concerns. NFCA took over the mine, concentrator and associated
facilities as well as the larger part of the mine license area.

NFCA Chambishi mine is located in the middle of the Copperbelt Province, approximately 28 km north-west of the city of
Kitwe in Kalulushi District on the Kitwe-Chingola Road.

Ownership
The mine at Chambishi is owned by NFC Africa Mining Plc (NFCA), a company owned by China Non-Ferrous Metals Corporation
(group) (CNMC) and Zambia Consolidated Copper Mines Investment Holdings (ZCCM-IH). CNMC has an 85% shareholding,
whilst ZCCM-IH holds the remaining 15% of the shares, on behalf of the Government of the Republic of Zambia (GRZ). The
registered head office for NFCA is Chambishi in Kalulushi District. The acquisition of Luanshya Mine by CNMC has seen the
reorganization of the Management team. Below are the new senior Management Team Members:

Mr. Wang Chunlai Mr. Xu Ruiyong Mr. Pan Jin Cheng Mr. Zhang Jinjun Mr. Zhang Dong’hong Mr. Jilowa Nelson Mr. Mhango Malaika
Chief Executive Officer Deputy C.E.O Deputy C.E.O Deputy C.E.O Deputy C.E.O Assistant Manager Assistant Manager
Corporate Affairs Finance and Budgeting

Rehabilitation of Chambishi mine

After taking over the mine in 1998, NFCA began a process of refurbishment of the key mining facilities in 2000. The initial total
investment for the reopening of the mine was over US$150 million. Trial production of copper concentrate began in October
2002.

Production
The mine was officially commissioned on 28th July 2003. The
design capacity of the mine copper concentrate production
facilities is 6,500 tons of copper ore per day. With extending
deeper downward and adopting backfilling mining, current
production levels stand at about 4500tpd with more
copper. Concentrates produced at NFCA are processed
at Chambishi Copper Smelter, a sister company. Production
has improved steadily at an average rate of 20% every year
since commencement of production amid new massive
investments in developing the existing No. 3 Shaft and the
New West Orebody (WOB) mine.

When the WOB is fully operational NFCA is expected to

achieve a capacity of 6500-7000 tonnes of ore per day by the
PO Box 22592, Kitwe
E-mail: [email protected]
Tel: +260 212 721619 (Chambishi) • +260 212 721977 (Kitwe)
Fax: +260 212 721520 (Chambishi) • +260 212 721 979 (Kitwe)

year 2012. Further development of the South East Orebody (SEOB) will result in doubling of the production output. Exploratory
work is currently underway at the SEOB.

Safety, Health and Environment (SHE)

In order to guide its management of Health, Safety and Environment, NFCA has put a policy in place as summarized below:

NFC AFRICA MINING PLC is committed to invest in the development of mineral resources and accelerate the development of
the economy and society. NFCA will provide attractive returns to shareholders and contribute to the wider social and economic
well-being of Zambia. In fulfilling these commitments NFCA will provide and maintain a safe and healthy work environment as
required by the national regulations and acceptable international business practice.

• Over the years NFCA has improved its compliance with statutory legal requirements and has enjoyed a good working
relationship with relevant government agencies such as the Environmental Council of Zambia (ECZ) and the Mines Safety
Department (MSD).
• As part of a programme to promote HSE awareness promotion activities are conducted frequently at the mine. The safety
performance of the mine has improved over the years due to the various activities being conducted at the site to improve
the safety situation on the mine.
• The Environmental Impact Statement (EIS) is in place following approval by ECZ on 26th October 2006. Implementation of
the same is underway.
• NFCA has so far contributed over $200, 000 to the Environmental Protection Fund (EPF) administered by the Ministry of
Mines & Minerals Development.

Socio-Economic Impacts of NFCA’s Operations

In relation to the socio-economic impacts of NFCA’s operations the following positive impacts have been identified:
• Initial financial investment amounting over US$ 150 million to refurbish the mine, concentrator and associated facilities to
allow for the resumption of mining operations and the extension of the expected mine life.
• Positive impact on the local economy through the generation of jobs and mine-related business. NFCA and its two major
contractors and other companies within the Chambishi Mine area employ around 3000 employees. The highest number of
employees ever recorded at Chambishi Mine during the ZCCM era was 1378 employees in 1989/1990.
• NFCA has over 150 local suppliers and contractors doing business with the mine. In terms of revenue NFCA pays over 75%
to local companies in comparison to the foreign companies.
• Income tax paid to the Zambia Revenue Authority and Local Authority contributes to the funding of government services
and programmes.
• NFCA is supporting health care service provision to its employees at the plant site clinic and to residents of Chambishi
Township at its Sinozam Clinic. It has input US$ 700,000 to update facilities of the Sinozam Friendship Hospital, formerly
Nkana Mine Hospital in Kitwe.
• NFCA has continued to provide raw water to Nkana Water and Sewerage Company Ltd which provides potable water to
Chambishi Township at a compassionate charge rate.
• The reopening of the Chambishi Mine has laid the foundation for attracting more Chinese investments into Zambia including
the now famous Multi-Facility Economic Zone in which 50 to 60 companies are expected to set up businesses creating tens
of thousands of jobs.

Corporate Socio Responsibility

NFCA strongly believes in a “common beautiful home” as it executes and interacts with the society in which it operates. The
company’s social responsibility aims at developing the enterprise and plough back tangible benefits into the local community.
Between 2008 and 2009 only the company has spent about US$ 1,000, 000 towards its corporate social responsibility in
Chambishi Township, Kitwe and Kalulushi towns through various projects and partnerships. Among other projects in which
NFCA is involved in are the Indoor Residual Spraying of households in Kalulushi District, rehabilitation of roads in Kitwe and
Chambishi towns, provision of health care for employees and the general public through Sinozam Friendship Hospital and play-
parks for recreation of children in the district. Various Educational materials have been donated to some community schools in
Chambishi Township.

The company also sponsors NFCA Table Tennis club and the Chambishi Dragons Football team who will soon make their debut
in the Football Association of Zambia (FAZ) Division Two league in 2010.
 MINING OPERATIONS
Large-scale mining is widespread, with existing prospecting
licences and new applications encompassing roughly
50 percent of the Zambian land mass. World-renowned mining
companies are involved in mining and prospecting operations

CASTLE on the Copperbelt as well as in Central, Western and North-

Western provinces.
LEAD WORKS
ZAMBIA LIMITED
One of the principal players in the Copperbelt mining industry,
Zambia Consolidated Copper Mines (ZCCM) Limited was
LEAD ANODES formed in 1982 with the merger of Roan Consolidated Mines
Caste Lead Works Zambia Limited is and Nchanga Consolidated Copper Mines. Until 31 March 2000,
the sister company of Castle Lead
Works (CLW) in Krugersdorp, South ZCCM Ltd was a 60.3 percent state-owned mining company
Africa, a wholly owned division of Zimco in which Zambia Copper Investments Ltd (ZCI), an associate
Group (Pty) Ltd. This division was
established in 1933 & is Africa’s leading
company of Anglo American Plc, held 27.3 percent of shares,
manufacturer of lead anodes. Castle Lead with the balance of 12.4 percent of shares held by private
Works carries out its own research & investors.
development in anodes through an
associated company, Quemetco Metals
Inc. in Dallas, Texas. As part of the privatisation process, ZCCM’s mining assets
Subsidiary of Zimco Group (Pty) Ltd were unbundled and sold off as separate entities or business
PO Box 22385, Kitwe, Plot 1308, Chibuluma Rd, Zambia packages to the private sector in order to promote diversity
Tel: +260 212 217552 / 217553 • Fax: +260 212 217551 of ownership and minimise political and economic risk. Its
successor, ZCCM Investments Holdings Plc (ZCCM-IH), is
an investments holdings company with the majority of its
opened in the next five years
investments held in the Zambian copper mining sector. The
• Creating a special status for non-traditional mineral exports,
company’s shareholders are the Zambian government with
such as nickel, uranium, gold and platinum, and declaring them
priority minerals under the Zambia Development Agency Act 87.6 percent and private equity holders with 12.4 percent.
• Promoting large investments in the mining sector which have
a transformational impact on Zambia in terms of job creation, Created from the privatised assets of ZCCM, consisting of the
export earnings, supply and contracting by the Zambian Konkola and Nchanga divisions and the Nampundwe pyrite
business community mine, Konkola Copper Mines (KCM) is one of the largest
• Encouraging value addition within Zambia, mainly involving mining and metals companies in Zambia. KCM is a subsidiary
copper, cobalt and gemstone products of Vedanta Resources Plc, a London listed FTSE 100 metals
and mining group, with shareholding comprising Vedanta with
In order to encourage Zambian ownership of part of the 51 percent, ZCCM-IH with 20.6 percent and ZCI with
operating entities, government is working out measures to 28.4 percent.
ensure that, where possible, mining companies operating
in Zambia list their shares on the Lusaka Stock Exchange The first of KCM’s two major expansion projects, the
(LuSE); companies work closely with the Citizens’ Economic US$ 500 million Konkola Deep Mining Project (KDMP) is
Empowerment Commission (CEEC) so as to maximise benefits expected to increase production capacity at Konkola from
to Zambians through targeted joint ventures; local communities 2 million tonnes to 6 million tonnes of copper ore per annum by
benefit through a high level of corporate social responsibility; accessing the underlying rich ore body. Commissioning of the
and mining companies promote further training of employees, mid-shaft loading (MSL) station is set to take place during 2010,
both at home and abroad. with the rest of the project to be completed by the end of 2012.

AAC Mining Executors Ltd. is a Mining Development and Production

Contractor with successful experience in the Mining Industry with 13
years of Experience in South America and 7 years in Africa, in Mining and
Maintenance of Underground Mining Equipment, with African Operations
in Zambia and DRC.
AAC is ready to support and boost your mining operations with quality
and at competitive cost.
AAC Divisions:
- MINING
- MAINTENANCE
- TRADING
Plot 4966, Lyoneno Rd, Heavy Industrial Area, Kitwe
PO Box 21143, Kitwe, Zambia
Tel: +260 212 212036 (26), (27) Fax: +260 212 212029
E-mail: [email protected], Website: www.aacmining.com.zm

40
Nchanga Mine near Chingola consists of a number of open
pits, with mining currently concentrated on the main Nchanga
pit as well as an underground mine that accounts for around 45
percent of the total copper produced at Nchanga.

The Nchanga process plants consist of two concentrators,

which separately treat ore from the open pit and the
underground mine, as well as a tailings leach plant producing
copper cathodes. The sulphur based acid plant at Nchanga,
with a production capacity of 500 tonnes of sulphuric acid a day,
started production in 2007.

KCM’s second major expansion project has seen the

construction of a state-of-the-art smelter at Nchanga with a
capacity of 300 000 tonnes per annum. The smelter was built Workshop at Chambishi Mine - Photo Courtesy: NFC Africa Mining Plc
to handle not only the increased output from KDMP but also
concentrates from other mines in Zambia. is being expanded in a phased approach to 870 000 tonnes of
concentrate by the end of 2010. The current capacity with the
KCM produced 41 958 tonnes of finished copper in the third new Isa smelt furnace is 650 000 tonnes of concentrate.
quarter of the 2009/10 financial year. This figure includes
13 641 tonnes from purchased concentrates and is significantly The company also has four SXEW plants (Solvent Extraction
higher than the 25 472 tonnes produced in the third quarter and Electrowinning), two at Mufulira and two at Nkana. The
of 2008. The increase has been due to additional capacity at feed is sourced from in-situ leaching, vat leaching and heap
Nchanga Smelter. leaching.

Glencore International AG and First Quantum Minerals (FQM) First Quantum Minerals (FQM) owns and operates the Bwana
Limited acquired the Mufulira and Nkana divisions of ZCCM
Mkubwa copper mine located south-east of Ndola. Having
through Mopani Copper Mines (MCM) in 2000. Shareholding
exhausted its original source of ore, Bwana Mkubwa draws its
is 73.1 percent Glencore, 16.9 percent FQM and 10 percent
feed stock from the Lonshi mine, located 30 kilometres away in
ZCCM-IH. Production capacity at Mopani is 255 000 tonnes of
the DRC. The mine remained on care and maintenance during
copper metal and 2 200 tonnes of cobalt.
2009.
Mopani’s operations consist of four underground mines, a
concentrator and a cobalt plant in the town of Kitwe and an The Bwana Mkubwa copper SX/EW plant was restarted in
underground mine, concentrator, smelter and refinery in the January 2010 to process the stockpiled ore from the depleted
town of Mufulira. The capacity of the Mufulira Copper Smelter Lonshi open pit mine. Grade ‘A’ copper cathode production at

41
an average rate of 800 tonnes of copper cathode per month is deposits, Malundwe and Chimiwungo, which combined
expected to continue until the end of 2010. represent one of the world’s largest copper deposits. Other
metals such as gold, cobalt, silver and uranium are also
FQM owns 80 percent of the Kansanshi open pit copper mine present.
in Solwezi, North-Western Province. Gold is also produced.
Following an expansion programme and the setting up of a Lumwana, which started commercial production at the end
multimillion dollar pressure leach system, copper production of 2008, is the largest copper mine to have come on line
has increased tremendously. Kansanshi has the capacity to internationally in the past two years, and will make Equinox
continue producing oxide until about 2035. a top-20 copper producer when it reaches full production.
Lumwana has a 37-year mine life.
Copper production at Kansanshi came to 61 300 tonnes
during the third quarter of 2009, up from 53 400 during the Equinox’s investment of some US $762 million in the project is
same period in 2008, with production for the first nine months the biggest single investment in Zambia’s history. Over 2 500
standing at 182 500 tonnes against 153 300 tonnes in the jobs were created during the construction phase, and more than
previous year. Gold production increased significantly in 2009, 1 000 permanent jobs now production has begun.
rising to 99 936 ounces compared to 54 252 ounces in 2008
due to increased ore throughput and plant upgrades. Gold Following on from its steady growth through 2009, when a
production at Kansanshi is expected to improve further during total of 109 413 tonnes was produced, copper in concentrate
2010 as a result of the commissioning of additional gravity output at Lumwana totalled 30 471 tonnes in the first quarter
concentrators early in the year. of 2010, representing a 37 percent increase over the fourth
quarter of 2009. The mood is thus optimistic for Lumwana
FQM posted a gross operating profit of US$ 969 million to meet its full-year production target of 135 000 tonnes of
at the end of 2009, with the Kansanshi copper and gold copper metal in concentrates in 2010, which should increase
operation contributing US$ 610 million. to between 150 000 and 170 000 tonnes by the end of
2011. Thereafter, the Phase 2 expansion plan will push up
FQM’s 2010 exploration programme includes a drilling production to more than 200 000 tonnes of copper in the next
programme to delineate the extent and geometry of a new three to five years.
prospect identified approximately 2 kilometres from the main pit
at Kansanshi. An intensive drilling programme for copper is also Equinox has opened up negotiations with possible partners
planned at the Kalumbila exploration project and includes the for the construction of a uranium agitated acid leech plant at
Kawako nickel and Kawanga uranium prospects. Lumwana. The uranium project was placed on hold at the end
of 2008 until financial markets recovered sufficiently to raise the
Equinox Minerals Limited owns the Lumwana open pit mine approximate US$ 200-million preproduction capital required.
in North-Western Province, situated some 220 kilometres The company has been mining certain high-grade uranium
northwest of the Copperbelt and 65 kilometres from the zones from its Lumwana Mine, and uranium ore stockpiles are
provincial capital of Solwezi. Lumwana comprises two major being built up on site.

42
TRANSPORT
The company has grown to become the biggest transporter of 98% sulphuric acid on the copperbelt
and in Zambia as a whole. Gomes currently operates 105 trucks, tankers and trailers. Of these, 95
are acid trucks and tankers which transport acid to various clients in Zambia, Malawi and the DRC.
This fleet is planned to increase to 105 tankers by May 2010 and to 150 tankers by June 2011.

CONSTRUCTION
Gomes is aiming to become the preferred construction company on the copperbelt province in Zambia.
Our construction business has rapidly expanded over the past four years. We now handle various
construction assignments including but not limited to: road construction, civil structures construction,
various earth works and earth works and mining construction works. We have constructed various gravel
and asphalt roads on the copperbelt province. Our equipment base is very strong and includes asphalt
plants, mobile crusher plants, concrete plants, excavators, graders, pavers, dump trucks, tippers, water
bowzers, bulldozers, TLBs, various types of compactors, cranes, and low loaders among others.

SHOPPING MALL
We are currently constructing a multimillion dollar shopping mall in
Mitengo residential area of Ndola. The mall is projected to cost
US$15m and will offer excellent family entertainment
and shopping facilities. The mall will include a
5 screen cinema, a superstore, fast foods,
restaurants, gym and health club,
clothing shops and boutiques, sports
bar, DIY shop, and various shops
and entertainment facilities. It
is scheduled for opening in
April 2011. Shop rentals are
being handled by *Knight
Frank Zambia Ltd*.

MITENGO SHOPPING MALL, NDOLA

Equinox Minerals, owner of the Lumwana Mine, has production in 2006 and by the middle of 2007 had produced
doubled its exploration budget for 2010 to US$ 10 million 180 000 tonnes of copper concentrates and provided 2 028
on its mining licence in North-Western Province. jobs. Investment totalling US $100 million during 2007 to exploit
the west ore body is expected to produce one million tonnes of
Luanshya Copper Mines (LCM) comprises the Luanshya and copper ore per year and provide 1 000 additional jobs.
Baluba copper and cobalt mines and was originally operated
by the now defunct Roan Antelope Mining Company of Zambia Some US $300 million has been invested in the Chambishi
(RAMCOZ). Reopened in 2004, Baluba Mine has a lifespan of Copper Smelter, which is owned by CNMC (60 percent) and
over 20 years and contains cobaltiferous ore and total reserves Yunnan Copper Industry (Group) Co. Ltd (40 percent), the
estimated at 32 500 000 metric tonnes grading 2.48 percent latter being China’s third largest copper producer and smelter
copper and 0.17 percent cobalt. operator. The smelter has the capacity to process 400 000
metric tonnes of copper concentrate annually with an output of
LCM also operates Chambishi Metals Plc, the country’s 150 000 metric tonnes of copper.
largest cobalt producer, which is situated in the Copperbelt
capital of Kitwe. The company treats slag from the large surface
The Chambishi Smelter is part of the US$ 900 million
dump at Nkana, containing 20 million tonnes of slag, and
investment in the Multi-Facility Economic Zone, which is
produces copper and cobalt. The plant also treats copper and
expected to house 50 to 60 enterprises with the capacity to
cobalt sulphide concentrates arising from Baluba mine. LCM
employ 6 000 Zambians by 2014.
recorded a total turnover of over US $300 million between 2002
and 2008.
A number of other companies mine Zambia’s rich copper
Following the sharp drop in commodity prices, LCM halted all and cobalt reserves. Owned 85 percent by Metorex Limited,
operations in December 2008 and closed when former owners the Chibuluma Mine is situated on the Copperbelt near the
Enyo Holdings placed it under care and maintenance in January town of Kalulushi. It consists of the Chibuluma West and
of 2009. LCM was subsequently taken over by China Non- Chibuluma South sites, with ore treated at the Chibuluma
Ferrous Metal Mining Company (CNMC) in June 2009, and South concentrator. Increased production from the new mine
copper production resumed at the end of 2010. CNMC has at Chibuluma South has replaced the depleted Chibuluma
invested US$ 38 million in rehabilitating mining equipment and West mine. The mine produces approximately 16 000 tonnes of
machinery, and will increase investment up to US$ 400 million copper per annum.
in the next few years.
Production at Chibuluma South has increased steadily, from
Chambishi Mine, which has copper reserves of approximately an initial output of 25 000 tonnes a month of ore in December
33 million metric tonnes, is operated by NFC Africa Mining 2005. From 2006, when 363 311 tonnes of copper was milled,
Plc (NFCA), a joint venture between CNMC, with 85 percent tonnage rose to 503 880 in 2007 and further to 568 187 in 2009,
shareholding, and ZCCM Investment Holdings Limited (15 with the full impact of the expansion programme becoming
percent). With proven reserves of 5.01 million tonnes at an apparent and the copper head grades having also improved,
average grade of 2.19 percent copper, the mine began from 2.7 percent in 2006 to 3.1 percent in 2009.

Morganite BUILD ZAMBIA

BUY ZAMBIAN

Zambia Limited I
S
O
9
0

Morganite is a member of Omnilyne 0

2

Manufacture Carbon Brushes for Electric Manufacturing of Electric Switchboards

Motors & Machines for use in:-
• Mining Industry Product List:-
• Light & Heavy Industry • Distribution Boards - 110/240/380/415/550 & 1000V
• Farming Industry • Starters & Starter Control Panels - 110/240/380/415/550 & 1000V
• Domestic Industry • Gulley Boxes - 63/100/160 & 250A (Plug in type)
• Boomer Boxes - 100/160 & 250A
• Feeder Panels • Feeder Pillars
• Motor Control Centres, etc.
Brand Names:- Brand Names:-
• Morganite • National • CPO • Schunk • Schneider Electric
Builds switchboards up to 1000V We also supply loose spares:-
for use in all applications:- • Circuit Breakers
• Mining Industry (Open Pit & Underground) • Contactors AC/DC
• Heavy & Light Industry • Control Relays AC/DC
• Farming Industry • Protection Relays
• Domestic use • Overload Relays
• Distribution Components
• Motor Control Components
• Wiring Accessories

Tel: +260 212 611297/8 / 212 615058 • Fax: +260 212 615072
PO Box 70543, Ndola, Zambia

44
 Chibuluma is an efficient operation with a high grade ore
body and an estimated mine life of seven years. Sites with the
potential for further exploration are being identified in the vicinity
of the mine with the aim of extending the life of mine.

Also owned by Metorex, the Sable Zinc operation located near

the town of Kabwe in Central Province was commissioned
in 2006. The plant comprises a modern solvent extraction
electrowinning plant and an acid plant, and processes third
party ores from various suppliers in Zambia as well as Ruashi
in the Democratic Republic of Congo (DRC). It has a capacity
of 12 000 tonnes of copper cathode a year and 1 100 tonnes of
cobalt carbonate.

In the 2008/09 financial year, Sable’s profits were hit by the

drop in both cobalt and copper prices. In addition, revenue
was materially impacted by a lack of ore supply following the
collapse in global demand. Copper cathode production of
4 889 tonnes during this period (10 767 tonnes in 2007/08) was
based on Ruashi’s oxide concentrate feed, coupled with some
locally sourced ore. This supply was suspended in December
2008 when operations in the DRC were placed on care and
maintenance.

In March 2009, Sable secured an off-take agreement for the

period to December 2009. From an average copper production
of just 183 tonnes per month in the second quarter, copper
cathode tonnage improved to 678 tonnes in June 2009, while
sales for the year totalled 5 588 tonnes. Cobalt produced fell
from 565 tonnes in 2007/08 to 151 tonnes in 2008/09.

Going forward, Sable is confident of being able to source

suitable ore tonnages and grades from both the DRC and the
local market well into 2010. The terms under which these ores
are sourced are such that Sable should operate profitably for
the year provided copper prices remain robust.

45
Munali Nickel Mine in Mazabuka was officially re-opened international companies. London-listed Gemfields Resources,
on 26 March 2010, after having been put under care and which is part of Pallinghurst Resources, owns a majority stake
maintenance in 2009. This follows an investment of in Kagem Mining Limited, the largest emerald mine in Zambia
US$ 37 million in Albidon Zambia Limited by Jinchuan Mining and one of the most attractive emerald assets in Africa. While
Group of China. An upgrading programme is to increase Kagem’s licence area is extensive and includes five emerald-
production at the mine from 900 000 to 1 200 000 tonnes of ore bearing belts, production to date has focused on a single open
per annum by 2012. Furthermore, the number of employees pit lying on the Fwaya-Fwaya belt. Gemfields also owns the
is to be increased from the current 345 to 450 by the time the Mbuva-Chibolele and Kamakanga emerald mines, which lie on
mine is fully upgraded in 2010. the same Fwaya-Fwaya belt.

Emerald mining is concentrated in the Ndola Rural Protected Zambian emeralds comprise 20 percent of the world supply
Area, with several large open-pit mines actively worked by
and are much sought after because of their unique deep green
colour. Pallinghurst Resources is focusing its production and
marketing efforts on the coloured gemstone market in order to
create a steady and ethical supply of coloured gemstones.

The global market for gemstones deteriorated markedly in

2008, and Pallinghurst decided in March 2009 to reduce the
scale of mining at Kagem and to write down the mine’s value to
zero. In 2009, emerald production at Kagem dropped by
46 percent owing to a 28 percent decline in grade as well as a
28 percent decline in the ore mined.

Gemfields has narrowed its loss in the six months ended 31

December 2009 to £ 6.4 million, compared to a loss of
£186.6 million in the first half of the previous financial year.
Revenues from emerald sales increased by £ 12.1 million,
compared with £ 344 000 in 2008, despite its total emerald and
beryl production having declined by 47 percent to 7.82 million
carats compared with 14.7 million carats the previous year.

While there are encouraging signs of a sustainable increase

in demand for emeralds across all key markets (such as India,
China and the Middle East) in 2010, Gemfields continues
to limit its capital, project development and exploration
expenditure to key projects only. The company also intends
to continue expanding the underground mining operations at
Kagem by including new target sites, while at the same time
expanding open cast mining activities to new target sites.
Gemfields has also announced its intention to establish a trial
cutting facility in Kitwe, and plans to open a rough gemstone
trading business at Kagem.

In February 2010, gemstone producer Gemfields Resources

announced the discovery of a massive 6 225-carat rough
emerald in its Kagem mine.
46
 EC MINING LIMITED
EC GROUP OF COMPANIES
consists of:
• EC Mining Limited
• EC Grifo Zambia Limited
• Sulphuric Acid Solution Limited

Represents and suppliers of:

• Zest / Weg
View of offices and workshops
• David Brown
• Chas S Lewis
• Mess
• Alfa Laval
• Condra Cranes
• Voith

“Ongoing training on the maintenance

and care of the Grifo pumps at the
EC Mining Ltd office and workshops mines”
Contact us at:
Plot No. 5293/5294, Tanganyika Road
Heavy Industrial Area, Kitwe, Zambia
PO Box 23357, Kitwe
Tel: +260 212 210642
Fax: +260 212 210645
E-mail: [email protected]
[email protected]
Website: www.ecmining.com
Electric motors in warehouse

The Chief Executive, Mr Tom Anderson - slight in the workshop The workshop
 THE EPITOME OF GEMSTONE MINING
PROFILE
Grizzly Mining Ltd is Zambia’s leading gemstone mining company. Incorporated in 1999, Grizzly Mining
has in its decade long existence, built a reputation for being the major purveyor of quality gemstones
in the region. Grizzly mines ‘A-grade’ emerald and beryl in vast quantities for export to markets in
America, Europe, the Middle East and Asia. The company commands considerable attention on the world
stage owing to the exceptional quality of its gemstones which have been rated as some of the best in
the world. Our vast experience in the industry has raised our profile, guaranteeing us a significant share
of the world gemstone market. The bountiful receipts from our returns have enabled us to diversify into
numerous areas of business, and our tentacles stretch well beyond Zambia. Grizzly Mining Ltd is located
50 km south west of Kalulushi in Lufwanyama District which is also known as Ndola Rural.

Director of Administration
INVESTMENT & EXPANSION Mr Abdoul Ba

Our mining venture has continued to grow at an annual rate of 10% since inception. Last year we
acquired neighbouring Chimpundu Mine in order to further our expansion prospects and maximize
production.

CORPORATE SOCIAL RESPONSIBILITY

Jobs: Grizzly has been in the forefront in empowering the locals by providing them with gainful
employment. Half of all miners are drawn from the immediate community in which we operate.

INFRASTRUCTURE
Roads: The once impassable roads of the area have now been graded and are frequently maintained Director of Corporate Affairs
by Grizzly Mining Ltd. Mr Oumar Samba Ba

Security: Grizzly has helped to improve security in the area. It also maintains houses of the
paramilitary police in the area. The presence of law enforcement officers has made the area much more
secure.

Schools: Grizzly Mine has constructed 2 schools in the area, one of which has been taken up by
Government. The school at Pirala is fully sponsored by the company. All the uniforms and books are
provided.

Washing Plant: Grizzly Mining has invested in an extension to their washing plant. The old plant
was capable of washing approximately 35 tons per hour, but after the extension it has been increased Mine Manager
to 120 tons per hour. This is a great improvement on the old washing plant. A new workshop was built Mr Langson Mukuma
this year. This now enables the maintenance and repairs to all the machinery.

ENVIRONMENT
For a company that has witnessed 10% annual growth since inception a decade ago, Grizzly Mining Ltd
has had to deal head on with the effects of its mining activities on the environment. As a company we
have had to balance our needs for sustainable growth with those of the environment. We can confidently
state that it is possible to maximize production and still care for the environment. We as a company
have kept the degradation of the natural environment at a minimum.

General Manager
Ms Carolyne O Maphenduka

Mr. Ndiaye Abdoulaye

Chairman & Chief Executive Officer

Tel: +260 212 210894 / +260 212 222736 (home) • Fax: +260 212 210896
Cell: 0966 782616 Human Resources Manager
E-mail: [email protected] Ms Barbara N Shilengwe
 of US$ 26 million. MCL is being redeveloped at an estimated
cost of US$ 108 million, with a new coal handling and washing
plant to be built. A further US$ 500 million is being invested in a
300-MW coal-fired power plant. Targeted production at Maamba
is 2 million tonnes of washed coal per annum.

COPPERBELT BUSINESS
Synonymous with Zambia’s mining industry, the Copperbelt is
where most of country’s mineral wealth and the majority of its
mines are situated. Their location here is hardly surprising, as
the Copperbelt has the world’s highest-grade copper and cobalt
deposits, with tailings dumps often containing grades greater
than those of most hard rock mines.

The region has historically received the bulk of investment in

Amethyst - Photo Courtesy: René Hartslief
the mining industry, and is worked by numerous international
mining companies. It is also the location of several industries
Other emerald producers on the Copperbelt comprise Grizzly
involved in the downstream processing of minerals, and attracts
Mining, which is located about 50 kilometres south-west of
further exploration for new mineral deposits. The only major
Kalulushi. The company, which has grown at a steady rate of
copper mines outside the Copperbelt comprise Lumwana and
10 percent per annum, owns the largest facility for washing
gemstones in the mining area, and in 2008 employed over Kansanshi in North-Western Province.
400 workers. More than US $10 million has been invested in
modern machinery as well as human resources since starting In addition to the processing of copper and cobalt, production
operations in 1999. In 2009 Grizzly acquired the neighbouring on the Copperbelt comprises wood products, chemicals, bricks
Chimpundu mine. and tiles, pipes, tyres, soap and sugar. Ndola is the centre of
many important industries and manufacturing concerns, with
In addition to emeralds, Zambia possesses a number of other activities including cement and lime production, cotton spinning,
precious stones, such as amethyst, of which the country and the refining of petrol. A number of manufacturers operate in
boasts the largest deposits in Africa, producing an estimated support of the mining industry, and are involved in construction,
700 tonnes of material annually. There are also deposits of gas supply, explosives, engineering, energy and transportation,
tourmaline, spessartite garnet and aquamarine. Pink and as well as producing heavy machinery.
bicoloured tourmaline is mined in the Mkushi pegmatite region
at the Jagoda Mine, while tourmaline is mined at the Kumanga The newly-commissioned Chambishi Smelter has the
Mine in the Mkushi area. capacity to produce fertiliser, and this may be considered
in future if there is enough market for the commodity. Other
Zambia’s only producer of lime, the Ndola Lime Company new Copperbelt industries include Mukuba Breweries, which
(NLC) on the Copperbelt, produces limestone, quicklime and received K 480 million in funding from the CEEC.
hydrated lime. Most of its market demand comes from the
mining industry, followed by the construction sector. Ndola Heavy machinery - Photo Courtesy: René Hartslief

Lime’s production costs range between U$ 70 and US$ 100 per

tonne, but with the introduction of new technology this could be
brought much lower.

The US $74 million recapitalisation programme at NLC is set

to increase production capacity of quick lime from the current
400 000 tonnes to 800 000 per annum by 2013. The anticipated
increase in production capacity will improve export prospects
of lime products to markets such as the DRC, Angola, Malawi
and Tanzania, where there is a growing demand for hydrated
lime. The firm is currently studying lime deposits in the North-
Western Province.

Maamba Collieries Limited (MCL) is Zambia’s largest coal

supplier and currently mines two open cast mines in the
Kanzize and Izuma basins in Southern Province. The mine
boasts 80 million tonnes of coal deposits; with production of
8 000 tonnes per month, this translates into a lifespan of more
than 50 years.

Maamba produced about 600 000 tonnes of coal per year

during the 1980s; however, years of under-capitalisation led
to operational constraints following the breakdown of mining
equipment and machinery, with a subsequent fall in production.
In January 2008 the Zambian government transferred its
100 percent stake in MCL to ZCCM-IH Plc in order to revamp
operations at the coal mine, transform it into a viable business
entity and improve coal supply for industrial production.

At the end of 2009, equity partner Nava Bharat Singapore

Private Limited purchased a 65 percent stake in MCL at a cost
49
 Agriculture
Agriculture is viewed as one of the cornerstones of Zambia’s economic diversification
programme and is an important source of raw materials for the manufacturing industry as
well as being an essential tool in reducing poverty and narrowing the rural-urban divide.
Zambia has good arable land for both extensive and intensive 2009 allocation of K1 096.3 billion. Agriculture is also a key
cultivation of crops, with some 58 percent of the total landmass component of Zambia’s Vision 2030 and the Sixth National
considered suitable for agricultural production. The country also Development Plan (SNDP) 2011-2015, with funding levels
has a pleasant climate and contains around 40 percent of the targeted to rise to 9 percent of the domestic budget.
water resources of the southern African region, thereby creating
huge irrigation potential. FOOD SECURITY
Positive developments in agricultural growth over the past
Maize is Zambia’s dominant food crop and is produced by the several years have seen Zambia’s food security position
majority of smallholder farms, with larger agricultural concerns improve due to robust increases in maize output as well as
given over to cash crops such as cotton, sugar and tobacco. increased production of other crops such as soya beans, rice
While small-scale production for subsistence is widespread, and cassava. As a result, Zambia became a net exporter of
some of the smaller farms focus on both food and cash crops. food, with exports of cash crops such as tobacco and cotton
lint, as well as food crops such as maize, rising substantially.
Although maize is the main staple crop, rice and wheat Furthermore, efforts at diversification saw non-traditional
are becoming increasingly important foods, particularly in agricultural, horticultural and floricultural exports rising
urban Zambia.
significantly, along with foreign exchange earnings.
The livestock sector, while not as important as arable farming,
The Food Reserve Agency (FRA) plays an active role in the
has expanded in recent years. In view of aims to diversify
purchase of various crops from small-scale farmers, particularly
agricultural production, it is hoped that Zambia may, like some
those in remote areas, guaranteeing a stable and ready
of its neighbours, successfully develop a vibrant livestock
market. In addition, the agency has in the past been able to
industry to supply both the domestic and export markets.
supply disadvantaged households with relief food through the
Agriculture contributes around 16 percent to the Gross Disaster Management and Mitigation Unit and the World Food
Domestic Product (GDP), and is the source of more jobs than Programme. As a result, most farmers are presently part of
any other sector in the country, providing employment for some the agricultural marketing network, with further improvements
85 percent of the country’s workforce. Moreover, agricultural to focus on enhancing the capacity of the cooperative
activities are the main source of income for rural Zambian movement and developing strategies to increase Public-Private
women; a group that not only constitutes nearly two-thirds Partnerships (PPPs).
(65 percent) of the rural population, but is also among Zambia’s
most impoverished and vulnerable inhabitants. For the 2010 financial year, K 100 billion was allocated to the
FRA to augment its ability to purchase grains, while an extra
Bolstering agricultural activities and development has thus K 10 billion has been set aside for the Food Security Pack
been declared one of government’s priorities, fitting squarely initiative designed to protect vulnerable households from high
into the 2010 Budget theme of ‘Enhancing Growth through food prices. As an additional food security measure, silos in
Competitiveness and Diversification’. In the same year, the Lusaka have been rehabilitated with the aim of improving grain
proportion of National Budget allocated to the agriculture storage. This programme is continuing in 2010 through the
and livestock sectors increased to K 1 139.0 billion from the rehabilitation of silos in Kabwe and Ndola.
50
 ZAMBIA NATIONAL
FARMERS’ UNION
ZNFU – AT A GLANCE
Founded in 1905, ZNFU is historically one of the oldest associations
in Zambia. The Union has existed under various names almost since
the first large-scale farms were established in Zambia in the early
1900s. While it has changed names, about three times, the Union
has remained steadfast in adhering to its mission statement which is
to promote and safeguard the interests of its members as individual
farmers, corporations/companies, and other organizations involved in
the business of agriculture in order to achieve sustainable economic
and social development.

ZNFU has remained as the only member organization in region that

A banana plantation has united both small and large scale farmers under one umbrella.
This is envied in the region and serves as a shining example. With the
Union Agribusiness Chamber in place, ZNFU has now assumed a role
of representing the entire agricultural industry in Zambia. Currently
the Union boasts of a nationwide foot print, with a total of 60 District
Farmers’ Associations; 17 Commodity/Specialized Associations; 39
corporate members; and over 21 Agribusiness Chamber Members.

ZNFU is an apolitical institution, which cornerstone has seen it thrive

for well over 100 years. The Union’s policy has been strict and clear-cut
and has required members to resign any leadership position within the
Irrigation at Kasama coffee plantation ZNFU upon entering the national political arena. Principal functions
of ZNFU include: lobbying and advocacy; member services provision
and outreach; and information dissemination and communication. Out
of these core functions comes out, a ZNFU renowned and respected
for its strong and objective lobby and advocacy, and a farmers’ Union
with immense reputation for independence and lack of bias.

ZNFU Head Office, Farmers’ Village

Tiyende Pamodzi Road, Showgrounds
PO Box 30395, Lusaka 10101, Zambia
Tel: 0211 252649/255769/257958/254431 • Fax: 0211 252648
A group of farmers at a farm security meeting E-mail: [email protected] • Website: www.znfu.org.zm

Mr Jervis Zimba Mr Ndambo Ndambo

Coffee almost ready for picking President of ZNFU Executive Director ZNFU
 agriculture and increasing the efficiency of irrigation techniques,
as well as expanding markets. This entails:
• Increased investment in rural development, and in rural
infrastructure in particular, from both the public and private
sectors to boost productivity and link farmers to markets
• Targeting of support to small-scale producers of food
• Improved incentive measures and subsidy schemes for
provision of inputs, accompanied by an effective and efficient
agricultural extension service and robust adaptive research
services that accelerate smallholder farmer adoption of
appropriate technologies to boost productivity
• Better terms of trade at both regional and global level for
agricultural produce and inputs
• Formulation and implementation of national policies and
international cooperation agreements that enhance
productivity for the majority of small-scale farmers
• Provision of inputs at affordable cost
• Development of irrigation, especially for small-scale farmers
• Facilitation of evidence-based decision making by
strengthening monitoring and evaluation systems, capacity
of agricultural statistics as well as information communication
technologies (ICTs) to provide wider access to data and
information

The agricultural sector in 2009

Agriculture recovered strongly to grow by 12.4 percent in
2009 compared to just 1.9 percent in 2008. This growth is on
account of a bumper harvest, with maize, tobacco, soya beans,
sunflower, sorghum and wheat improving significantly in the
2008/9 farming season. In particular, maize production rose by
26.7 percent to 1.9 million metric tonnes, following output of 1.5
million metric tonnes in 2008. This is the largest harvest Zambia
has recorded in the past ten years.

The country is currently experiencing a modest food surplus

Maize, Zambia’s largest crop - Photo Courtesy: René Hartslief
arising from the 2009 crop harvest. Notable contributions were
received from small-scale farmers supported by the Farmer
CHALLENGES TO AGRICULTURE Input Support Programme (FISP) and marketing services. As
Despite large and fertile tracts of arable land and a climate such, government will continue providing assistance through the
that is conducive to agricultural development, the sector FSIP to enable such farmers to attain even higher production in
faces numerous challenges. Lack of long-term investment future.
in agriculture, poor rural infrastructure and generally
underdeveloped rural areas have eroded productivity, while CURRENT PROGRAMMES & INITIATIVES
current yields of staple crops need to increase significantly if During 2010, government is focusing on:
food security is to be ensured. Less than one-sixth (14 percent) • Stabilising fertiliser prices while making fertiliser more widely
of total arable land is under cultivation, mostly by small-scale available through the Farmer Input Support Programme
farmers, and commercial agriculture tends to be confined to a (formerly the Fertiliser Support Programme)
small number of large and medium-size farms. • Improving credit availability in rural areas in partnership with
donors
Specifically, obstacles facing the agricultural sector in Zambia • Encouraging increased investment in the sector by both
include limited access to credit, inputs and extension services; small and large-scale farmers through the development of
fluctuating cost of inputs; low labour and land productivity; infrastructure to support farm blocks across the country
limited market access for small-scale farmers; poor livestock • The introduction of an Agricultural Marketing Bill that will allow
management; weaknesses in the Fertiliser Support Programme small-scale farmers to market their produce directly to buyers
(now the Farmer Input Support Programme); failure to attract
adequate private sector investment; and the seasonal nature of Farmer support programmes
agricultural production. Government has for some years encouraged food production
by subsidising farming inputs like fertiliser, seeds and chemicals
AGRICULTURAL POLICY for small-scale farmers under the Fertiliser Support Programme
Government’s main priorities are to maximise the contribution (FSP).
of the agricultural sector to GDP by facilitating and supporting
the development of a sustainable and competitive industry that A review of the FSP – renamed the Farmer Input Support
ensures food security at national and household level, facilitates Programme (FISP) – was undertaken in 2009 and some
poverty reduction through employment and income-generating recommendations have been implemented for the 2009/10
activities, and contributes to sustainable industrial development. farming season. This has seen the distribution of fertiliser
and seed for small-scale farmers rationalised. As a result
While intent on ensuring that the existing agricultural resource the number of beneficiaries has doubled to 534 000 eligible
base is maintained and improved, the National Agricultural farmers, thereby increasing the programme’s coverage.
Policy 2004-2015 also focuses on crop diversification and the
opening up of new agricultural production areas, providing Furthermore, the efficiency of distribution has been improved
agricultural support services, reducing dependence on rain-fed through using institutions at the agricultural camp level rather
52
than at the district level, and through the increased participation
of community organisations. Farmers receiving fertiliser will
be targeted for support from agricultural extension workers to
ensure that their fertiliser is applied correctly and efficiently.

With these interventions, government expects crop yields to

improve significantly. As such, a total of K 430 billion has been
allocated to the FISP in 2010.

Infrastructure development
In order to boost investment and productivity in the sector,
the development of farm blocks, typified by large and small-
scale operations coexisting in a symbiotic relationship, is
being stepped up. The 155 000-hectare Nansanga Farm Block
in Serenje District is expected to be a model of agricultural
development in Zambia. When fully populated, it will resemble
Nakambala Sugar Estates – although ten times the size – with
large estates and small-scale farmers located in close vicinity to
Good results from conservation farming - Photo Courtesy: NFU Conservation Farming Unit
one another.
Irrigation and water conservation technology
Nansanga farm block was nearing completion at the end Zambia’s crop production is largely rainfall dependent with a
of 2009, and in 2010 the remaining works – relating to the distinct production season running from November to April.
construction of additional roads and bridges – were due to Rainfall is the major determinant of crop performance in any
be completed. An additional K3.0 billion has been allocated given year, and with changing weather conditions more likely
for the construction of dams. Nansanga is being vigorously in the face of global warming, government is emphasising
marketed to investors, and substantial interest has already been decreased dependence on rain-fed agriculture. The focus
expressed in the block.
is therefore on developing water conservation and irrigation
technologies.
In 2010 similar infrastructure development is taking place in
Luena Farm Block in Kawambwa district. This is an area with
The scaling up of conservation agriculture could serve the
vast potential for the development of the sugar industry, and
twin purpose of increasing food production and mitigating
K 3.4 billion has been provided for preliminary work.
the effects of climate change.
Improving market access
Increasing crop yields alone is not sufficient to improve the Government is to spend US$ 50 million on an Irrigation
incomes of farming populations. While the FRA is a major Development and Support Project (IDSP) in Southern,
marketing agent for small-scale farmers, it is important that Copperbelt and Central provinces, with the bulk water
an effective and sustainable crop marketing institution is infrastructure being financed through a loan from the World
established in order to enhance earnings. Bank. The second phase of the project will look at developing
the Lumwana and Kasama irrigation sites in North-Western
Government is presently introducing the Agricultural Marketing and Northern provinces. The project is being executed under a
Bill, which is intended to enhance the access of small-scale Public-Private Parnership (PPP) agreement.
farmers to markets and ensure that transactions take place in a
fair manner. The Bill will also include provisions for warehouse Furthermore, a number of initiatives have begun to investigate
receipting, thereby allowing farmers to access finance against means of conserving water. Through its Conservation Farming
the value of their produce and enable them to purchase inputs Unit, the Zambia National Farmers’ Union (ZNFU) is helping
for the subsequent farming season. farmers dig water harvesting basins, a simple and cheap

53
technique for collecting excess water for drinking or irrigation.
The water is usually retained in small dams, manually-dug
basins or huge underground storage tanks.

In southern Zambia, the Water Harvesting Project is

encouraging livestock farmers in Choma to dig ditches that
collect rain runoff from roofs and result in water reservoirs.
Another technology, sand dams, is being advocated by the non-
governmental organisation Sahelian Solutions. Sand dams are
created by blocking a dry river bed through the construction of a
concrete dam. Over time sediment accumulating in the bottom
of the dam helps catch rain water during the rainy season and
prevents evaporation during the dry season.

Conservation farming
Some of the benefits of conservation farming include reduced
Good crops from hoe-minimum tillage; good conservation farming - Photo Courtesy: NFU Conservation
soil erosion and better rainfall infiltration as well as improved Farming Unit

timeliness of land preparation. The aim is for 50 percent of all

farmers in Zambia to have access to conservation agriculture To support the livestock subsector, government will continue
technology by 2015. with the creation of disease-free zones to facilitate livestock
exports. The first zone is expected to cover Central Province,
The European Union (EU) has provided about € 7.5 million to Lusaka Province and parts of the Copperbelt Province. Work
support conservation farming in Zambia from 2009 to 2011. has commenced on the renovation of a number of laboratories,
The funding covers 12 districts and is targeting 58 000 farmers. the construction of checkpoints in the proposed disease free
For the 2009/10 season, with the support of the Norwegian zone, and the establishment of breeding centres. This work
government, 189 000 farmers are using conservation agriculture is continuing in 2010, with an allocation of K 12.5 billion for
technology according to programmes under the Conservation disease-free zone programmes.
Farming Unit of the ZNFU and 42 000 farmers under the
Ministry of Agriculture. About 7 000 farmers are also supported The disease burden around these zones will also be targeted
under Community Markets for Conservation (COMACO). through the establishment of extension service centres in
the disease-prone areas of Western, Southern, and Eastern
Livestock and fisheries initiatives provinces. For this, and other livestock and fisheries activities
The livestock and fisheries subsectors play an important role in in the provinces and districts, a total of K 95.2 billion has been
improving the livelihoods of not only small-scale farmers but the allocated.
population at large. The recent creation of a specialised Ministry
of Livestock and Fisheries Development will ensure that this The Zambia National Farmers’ Union (ZNFU) promotes and
vital subsector receives focused attention. protects the interest of its members – farmers, individuals,
corporations/companies and other organisations involved
The potential of the livestock subsector is immense, and is in the business of farming – in order to achieve sustainable
being supported through targeted interventions aimed at economic and social development.
controlling animal disease and improving veterinary services.
The tackling of livestock diseases is given priority to enable INVESTMENT OPPORTUNITIES
Zambian meat products to meet demand in local markets as Of all of Zambia’s economic sectors, agriculture is thought to
well as satisfy the stringent requirements of export markets hold the most promise for growth and development, as well
such as the European Union and elsewhere. Through these as the potential to reap significant foreign exchange earnings.
interventions, it is hoped that beef will become second only to Production must be stepped up to meet the growing demand
copper as a foreign exchange earner. in expanding local, regional and international markets. This
calls for substantial private sector investment to transform
Under fisheries development, the key strategy is to ensure uncultivated arable land, privatised state land and traditionally
compliance with fisheries regulations so as to reduce the cultivated farmlands into productive commercial concerns.
depletion of fish in Zambia’s main water bodies. Aquaculture
development, especially by women, is being encouraged, and Arable assets
aquaculture centres are being constructed for the breeding of One of Zambia’s most important natural resources is its arable
fingerlings that will be used for restocking. land, with over half the country’s land classified as having
Healthy cattle - Photo Courtesy: René Hartslief
medium to high potential for agricultural production, and a
substantial percentage of the land available for agriculture
situated near urban areas. Rural areas possess arable land for
cultivation as well as pastureland for livestock farming.

Another plentiful resource is water, with Zambia’s mean annual

rainfall around 1 400 millimetres in the northern region and
700 millimetres in the southern, eastern and western areas. In
addition to rivers and lakes, there are groundwater resources.
Untapped potential exists in the irrigation of farmland, with tax
incentives for producers who invest in such equipment.

Climatic factors, such as rainfall, temperature, sunshine and

the different types of soils, provide the country with three
major agro-ecological zones suitable for a wide range of
crops, livestock, fish and forestry products. The different zones
54
range from a vast, temperate plateau region to the north, to as a means to improve food security. It is hoped that as
subtropical valleys around the Zambezi River to the south. cassava production increases it will offset the country’s heavy
dependence on maize as the primary food crop.
Areas for investment
Favourable investment opportunities exist in: Wheat: Two crops per annum of wheat are produced due
• Horticulture & floriculture – The production of cut flowers, to rotation with cotton and soybeans. Greater focus is being
wheat, soybean, cotton, tobacco and sugar. given to the production of irrigated ‘winter’ wheat, with national
• Livestock – Non conventional livestock farming, such as consumption having increased tremendously in recent years,
crocodile or ostrich farming. from 140 000 metric tonnes in 2007 to 195 000 in 2008 and
• Poultry products – Hatcheries for the production of chicken 210 000 in 2009.
for both domestic and regional markets.
• Fisheries – Zambia’s abundant fresh water and rivers provide Millet: A staple food grown mainly by small-scale farmers for
vast fishing and fish farming potential. subsistence, millet is also used locally in the brewing of beer.
• Agricultural support services – This includes the Northern Province accounts for over 50 percent of national
construction of dams and boreholes, installation of irrigation production. There is presently limited demand for millet and
systems and extension services. production levels have thus remained low.
• Agricultural inputs – Fertilisers, farm equipment and animal
feed also have significant potential, as does the packaging of Sorghum: Sorghum is grown in Southern, Western and North-
agricultural produce for export. Western provinces. Like millet, production levels remain low
due to low demand.
While tobacco is increasingly seen as a lucrative cash
crop, its production countrywide – especially in the dryer Rice: About half of Zambia’s rice is produced in Northern
Southern region – can be increased threefold with appropriate Province, followed by Western and Eastern provinces.
infrastructural development. Increases in coffee and cotton Production levels have increased greatly along with area
production have similar potential. planted, and national consumption of rice has risen from 31 248
metric tonnes in 2007 to 37 249 in 2008 and 54 000 in 2009.
Furthermore, both traditional and non-traditional agricultural
exports have historically been exported in their raw, Nuts and beans: Peanuts (groundnuts) are predominately
unprocessed form, and there is a great deal of potential in produced in Eastern and Northern provinces. Due to their great
the downstream processing of agricultural produce. Private popularity on the export market there is ample room to expand
enterprise is able to take advantage of the gap that exists in local production and processing of this lucrative product. There
the market through investment in processing plants, either as are also opportunities to increase production of cashew nuts,
stand-alone units or in conjunction with agricultural which are presently grown in Western Province.
initiatives.
Around 60 percent of soybeans are produced by commercial
In addition to a reduced tax rate of 15 percent on income farmers in Central, Lusaka, Copperbelt and Southern provinces.
from farming, government provides a number of incentives Storage facilities - Photo Courtesy: René Hartslief
and allowances for agriculture. These include 50 percent
depreciation allowance per year for the first two years on
machinery used for farming; 20 percent capital expenditure
allowance per year for the first five years on farm improvements;
10 percent development allowance per year, up to the first year
of production, on capital expenditure incurred for the purpose of
growing coffee, tea, bananas, citrus fruits or similar plants; and
100 percent farm work allowance for expenditure on farmland,
such as for stumping, land clearing, water conservation and the
like.

Major job creation developments during 2009 include a

Memorandum of Understanding with Man Ferrostaal for a
US$ 400 million investment in the cultivation and refinement of
Jatropha in Northern Province.

AGRICULTURAL SUBSECTORS
Zambia produces a variety of crops, livestock, fish and agro-
forestry commodities. In addition to maize, the staple food,
other crops produced include wheat, cassava, millet, sorghum,
rice, soybeans, groundnuts and mixed beans. Cash crops such
as cotton, tobacco, sugar cane, coffee, tea, seeds, flowers and
high-value horticultural produce are becoming increasingly
important as foreign exchange earners. Cattle are the
predominant livestock, while pigs, poultry, sheep and goats are
also farmed. Fresh water fish production occurs around areas
with rivers and lakes.

Cassava: One of Zambia’s staple crops, cassava is produced

in Northern and Luapula provinces, which contribute about 70
percent to national output, followed by Western Province at 16
percent and Southern Province at less than 1 percent. As part
of its emphasis on decreasing dependence on rain-fed crops,
Zambia’s government has spotlighted cassava production
55
 of sugar annually, and is planning a US$ 8 million expansion
which will increase production to 40 000 tonnes.

Cotton: Since the initiation of major agricultural reforms and

privatisation of the industry in the early 1990s, cotton production
and processing has grown rapidly. Some 80 percent of
Zambia’s cotton is produced in Eastern Province, with Central
and Southern provinces accounting for 11 percent and 8
percent respectively.

As cotton is largely a smallholder crop its potential role in

poverty alleviation and food security is huge. Cotton now ranks
as one of the most important sources of crop income among
small-scale farmers and agribusiness firms. Production is
largely undertaken by out-growers and the subsector is led by
two companies. Dunavant is Zambia’s leading cotton ginner
while Cargill, which acquired Clark Cotton in 2006, has around
500 employees based in Chipata.

Tobacco: Zambia produces as well as processes both Burley

and Virginia tobacco, with Central and Eastern provinces being
the most favourable for the crop. Some 83 percent of Burley
tobacco is grown in Eastern Province. Zambian tobacco has
received a grade of high quality and flavour, and increased
demand has seen substantial increases in production. This
is being fuelled to some extent by a reduction in cultivation in
Zimbabwe, with Zambian tobacco being similar to that grown in
Zimbabwe and therefore being able to fill the gap.

Out-grower schemes have increased commercial production,

and there is scope for small, medium and large-scale
production. According to the International Tobacco Growers’
Association, tobacco production in Zambia is currently 7.5
times more profitable per hectare than maize production and 14
times more profitable than cotton. The techniques used to grow
Sugarcane - Photo Courtesy: René Hartslief
quality tobacco help to improve other crops, and the residual
Oil from processed soybeans and sunflower seeds is in demand fertiliser effect for farmers that practice crop rotation cannot be
both in the local market and further afield. The main production underrated.
area for mixed beans is Zambia’s Northern Province, which is
responsible for around 70 percent of national output. Coffee: Coffee is grown in the Zambian highlands. The main
markets are Japan, the United Kingdom (UK), South Africa,
Sugarcane: Sugar is one of the country’s most valuable export USA, Dubai and Germany. While the country is a relatively
commodities, and is processed for the domestic market as small producer, demand has been increasing due to the high
well as being exported to regional and international markets, in quality of Arabica coffee produced, and there is scope to
particular the European Union (EU). increase production to service niche markets in Europe.

The local sugar industry has been successfully privatised, an Horticulture and floriculture: Both floriculture and horticulture
initiative led by Zambia Sugar Plc, which is majority-owned do exceedingly well in Zambia’s temperate climate. Production
by South Africa’s Illovo Ltd. By far the largest manufacturer in of fresh vegetables and flowers, mainly for the export market,
the country, Zambia Sugar is also among the least expensive recorded significant growth during the early part of the decade,
producers of refined sugar in Africa and is listed on the Lusaka when floriculture became one of Zambia’s leading NTEs. As
Stock Exchange. Zambia Sugar mills and refines its own both subsectors are highly labour intensive, they are promoted
sugarcane from its Nakambala Estate, as well as sugarcane as part of government’s poverty reduction programme in
from a number of out-growers, at its refinery in Mazabuka. The agriculture.
company produces and markets sugar and molasses, as well Floriculture, one of Zambia’s leading NTEs - Photo Courtesy: René Hartslief
as other value-added products such as icing sugar, castor sugar
and a range of syrups.

Zambia Sugar exports sugar to eastern African nations in

the Great Lakes region, and to the European Union.

Zambia Sugar plans to more than double output in the year to

end-March 2010 after expanding its plantation and factory and
buying a new farm. With factory capacity having increased by
60 percent, it is anticipated that sugar production will rise to
more than 420 000 tonnes in the current season from 192 186
tonnes in the year ended March 2009.

Other Zambian sugar producers are Kafue Sugar Company

near Lusaka and Kawambwa Sugar. Owned by Consolidated
Farming, Kafue Sugar currently produces around 28 000 tonnes
56
 Livestock: The livestock industry includes the production of
beef, poultry, pork, mutton and lamb. A large proportion – some
80 percent – of the industry remains at the smallholder level,
with many beef and dairy cattle raised solely for domestic
use. While grazing conditions suit a variety of livestock,
distribution is uneven and some areas are subject to tsetse
fly. The eradication of livestock diseases is a top priority, and
steps have been taken to educate farmers about the dangers
of moving animals from one area to another. The restocking of
affected herds is ongoing.

Zambeef Products Plc is a regional leader in cropping

operations, production, processing, distribution and retailing
of beef, chicken, pork, eggs, milk, dairy products, edible oils,
leather and industrial footwear. The company credits it success
to ensuring that every stage of the food production process –
including retail – is controlled by the company itself and that all
Growing of fresh vegetables - Photo Courtesy: René Hartslief
production steps remain within Zambian borders rather than
being contracted out to organisations outside the country. Other
beef producers include Keembe Meat Corporation, Realmeat
Development in the subsector has been marked by investment
and Galaunia Holdings.
in year-round irrigated production by medium and large-scale
farmers, as well as expanding out-grower schemes. Zambia
produces more than 60 varieties of cut flowers, with one of the The poultry subsector has grown tremendously in the past
prime areas of expansion being the growing of roses, which decade, although a shortage of day-old chicks has constrained
are exported to the EU, in particular the Netherlands. Other to some extent further expansion in the market. In addition
important markets are the UK, Germany and South Africa. to Zamchick, producers include Hybrid Poultry Farms, Ross
Breeders, Nulaid and Yielding Tree.
Tropical fruits and fresh vegetables also feature prominently,
and the UK, South Africa, Germany, the Netherlands, Australia, Dairy: Dairy farming is carried out by commercial, semi-
New Zealand, Norway and France are the main importers of commercial and traditional farmers, and is a subsector with
Zambia’s horticultural produce. The pre-packing of vegetables considerable growth potential. Over 90 percent of processed
adds value to exports. milk is produced by commercial dairy farmers. This is usually
pasteurised and packaged, as well as being made into yoghurt,
Seeds: Encompassing all public and private activities in plant cheese and fermented milk. Processors in Zambia include Zam
breeding, variety development, seed production and distribution, Milk, which is part of the Zambeef group, Finta, Parmalat and
the seed industry in Zambia includes formal and informal Diamondale, among others.
sectors. The Seed Control and Certification Institute (SCCI) is
the seed certification authority in Zambia, providing seed quality Fisheries: Fish is a major source of protein for many Zambian
control services to private seed companies, seed programmes, households on the subsistence level and is also able to provide
NGOs, seed traders and farmers. The Zambia Seed Trade cash income. Commercial production of fresh water fish occurs
Association (ZASTA) is the national seed association that looks in the northern, western and southern parts of the country as
after the interest of all players in the country’s seed trade. well as along major rivers and lakes. Development programmes
are focused on conservation and research in order to improve
The seed industry has registered increased participation by yields, with private sector involvement comprising fish farming,
the private sector, with research being concentrated on maize, marketing and distribution.
soybeans, wheat and cotton, and the emphasis on commercial
crop production. While seeds once had to be imported, an While fish is traditionally sold in its dried form, large amounts
increasing number of companies have set up in Zambia and are now being frozen due to improvements in transportation
are developing and producing local varieties. These include and refrigeration facilities. While the contribution of fish farming
Seed Co International Zambia Ltd, MRI Seed and Zambia Seed is relatively insignificant, exports of fish products to regional
Company. markets have been on the increase.
Fish - Photo Courtesy: René Hartslief

Dairy farming has considerable growth potential - Photo Courtesy: René Hartslief

57
 Manufacturing
Zambia’s future economic development is contingent upon moving away from its traditional
dependence on raw materials export and embracing the huge potential of value-addition
production.
The manufacturing sector accounts for nearly 11 percent of the grew by just 1.8 percent in 2008 and 2.5 percent in 2009.
country’s Gross Domestic Product (GDP) and is one of the most This was on account of factors such as the increased cost of
attractive sectors for investment, having all the vital elements imported raw materials (due to the depreciation of the Kwacha),
in place, such as raw materials, labour force, abundant land a decline in export demand and continued stiff competition from
and a good banking and financial system. The expansion of cheaper imports.
manufacturing activities will, over the medium term, improve
Zambia’s growth prospects and competitiveness and reduce INSTITUTIONS & POLICIES
its dependence on imports through a wider base of locally The legal and regulatory framework for investment and the
produced goods and services. production of manufactured goods is provided by the Ministry
of Commerce, Trade and Industry, which formulates enabling
However, the sector has at present a relatively narrow base, policies, programmes and incentives in the manufacturing
which needs further diversification to produce a wide variety sector. The ministry liaises with other private and public sector
of high-quality, value-added intermediate and final products, organisations and statutory bodies on the implementation of
principally for the export market. In addition, the high cost of industrial, commercial and trade policies.
doing business and lack of supporting infrastructure continues
to impede the development of the sector and its ability to create Sustainable growth is encouraged through an industrial policy
more jobs. that supports small and medium-scale businesses, with the
focus on quality control and standardisation of industrial
Currently, the core objectives in the manufacturing sector products. There is renewed emphasis on value-added linkages
include reducing the cost of doing business in Zambia and that will maximise the use of local materials and develop inter-
developing Multi-Facility Economic Zones. sectoral relationships, with particular interest in the contributions
of small-scale businesses.
For this reason, government continues to place emphasis on
the construction of arterial infrastructure and the development The Zambia Development Agency (ZDA) came into being
of Multi-Facility Economic Zones (MFEZs). Furthermore, at the beginning of 2007. Institutions within the ZDA assisting
the processes and procedures for doing business in the in the development of the manufacturing sector include the
manufacturing sector are being enhanced through regulatory Multi-Facility Economic Zones Division, Investment Promotions
and other reforms relating to the cost and conduct of business, and Guarantees Division, Export Promotions Division, State
with the Zambia Development Agency (ZDA) helping to facilitate Enterprise Restructuring, Monitoring and Privatisation Division
investment. and the Small and Medium Enterprises Division. The ZDA is
discussed in greater depth in the Trade & Investment chapter.
Manufacturing performance in 2008 and 2009
Despite the many challenges raised by market liberalisation, The Zambia Bureau of Standards (ZABS) publishes national
such as stiff competition from imports, the manufacturing sector standards, operates a limited metrology laboratory and
has performed relatively well over the past decade, becoming provides product certification services, offering assistance to
an important catalyst for private sector development in Zambia. both producers and consumers. The objectives of ZABS are
However, the events of the global economic crisis in the latter to improve the competitiveness of Zambian products in local
part of 2008 resulted in a slow-down in manufacturing, which and international markets through the creation of standards in
64
commerce and industry, as well as through quality awareness Business regulations inside the MFEZs are sufficiently flexible
programmes, which help to improve manufacturing processes, to provide an investment environment comparable to the
products and materials. best in the world. The ZDA’s Multi-Facility Economic Zones
Division leads the implementation of MFEZs in Zambia and
MANUFACTURING INCENTIVES is responsible for ensuring efficient government approval
Manufacturing incentives are extended in order to foster a procedures to streamline the setting up and administration of
strong manufacturing sector with the intention of achieving new businesses in these areas.
broad-based economic growth and reducing dependence on
imports. Over the past few years, government has increased Specific incentives include:
its efforts to provide an enabling environment for growth, and • Zero percent tax rate on dividends for companies operating in
offers manufacturers a number of incentives. Specific incentives the priority sector and/or MFEZ under the ZDA Act for a period
are detailed on the Zambia Development Agency’s website: of five years from the year of first declaration of dividends
www.zda.org.zm. • Zero percent on profits made by companies operating in
the priority sector and/or MFEZ for a period of five years from
Of import to the manufacturing sector in Zambia’s 2010 the first year profits are made. For years six to eight, only
National Budget was the abolishment of the penal bond system 50 percent of the profits should be taxed and for years nine
applicable to manufacturers of excisable goods, which should and ten, 75 percent of profits should be taxed
reduce the cost of doing business. In addition, customs duty
Some of the products produced by Parmalat - Photo Courtesy: Parmalat
on the fertiliser micronutrients of sulphur, zinc, iron, bentonite
pastilles, and manganese used in the blending of fertiliser has
been removed. The supply of paste and liquid polymers, which
are used in the manufacture of polypropylene bags, has been
exempted from VAT.

Multi-Facility Economic Zones

Exhibiting the best features of Free Trade Zones, Export
Processing Zones and Industrial Parks, Multi-Facility Economic
Zones (MFEZs) comprise specific geographic areas for both
export and domestic-oriented industries with high quality
physical and social infrastructure in order to attract investment
in the manufacturing sector and act as engines of economic
growth.

Zambia’s MFEZs accommodate not only industries but a variety

of other amenities such as recreation centres, shopping malls,
centres of excellence for higher learning and health facilities.

65
 • Zero percent import duty rate on raw materials, capital goods,
INGREDIENTS FOR FOOD
SUPPLIERS TO LARGE AND SMALL-SCALE ZAMBIAN INDUSTRY machinery including trucks and specialised motor vehicles for
AND BEVERAGE five years for enterprises operating in the MFEZ
MANUFACTURERS INCLUDING: • Deferment of VAT on machinery and equipment including
trucks and specialised motor vehicles imported for investment
The Beverage, Baker y, Dair y, Ice-cream, in MFEZ and/or priority sector
Confectionery, Sauce and Meat Sectors, Flavours,
Colours, Acids, Thickeners, Cocoa Powder, Starch, Presently, two MFEZs are under development; one on a
Enzymes, Stabilisers, Preservatives, Sweeteners, 2 000-hectare plot in Lusaka and another in Chambishi on the
Bread Pre-Mix, Juice Concentrate, Vitamins & Copperbelt, while a further zone is planned for Lusaka East.
Minerals, Aluminium Foil Packaging, Beverage There has been substantial progress in the development of the
Machinery, Dried Fruit, Orange Cells, etc. US$ 900 million MFEZ in Chambishi, where 11 manufacturers
began operating in 2009 and another five are expected to do so
in 2010. Chambishi has the capacity for around 60 enterprises,
with a job creation potential of 6 000 by 2014.
TEL 211 272120 • 211 272122 • CELL 0977 770409
TEL/FAX 211 272121/22 • CELL 0977 770409 • 0974 003417 Development of the Lusaka South MFEZ commenced in 2009,
with some K 30 billion allocated to support the construction of
FAX 211 274460
access roads to the zone. In 2010, a further K 20 billion has
E-mail: [email protected] been provided to complete infrastructure development here.
Kafue Rd, PO Box 33614, Lusaka Furthermore, construction of the Lusaka East MFEZ is expected
to start in 2010.

EXPORT DEVELOPMENT
There is a need for value-added in Zambia’s exports, and
downstream processing is seen as one of the best methods of
achieving this.

EQUATORIAL FOOD
The work of the Export Board of Zambia (EBZ) was taken
over by the Zambia Development Agency’s Export Promotions

INGREDIENTS LTD
Divisions in 2007 with the aim of expanding Zambia’s export
industry through product and market development. The new
division will supply the necessary support and trade information
services to business enterprises about international markets,

LUSAKA NDOLA

Paper & Board Metal Packaging

and Division
Liquid Packaging
Nampak
Divisions Zambia Tel 021 2 655001 • 655002
Packaging Excellence 655304-7
Tel 021 1 243616 • 247525 Fax 021 2 655709
247315 • 242753 “Proudly Nampak,
Fax 021 1 247199 Proudly Zambian” Manufacturers of crown corks
(bottle tops), steel drums from
60lt to 210lt, food cans and a
Manufacturers of litho-printed A subsidiary of the most wide range of general line
folding cartons & wet glue cans suitable for packaging
labels, corrugated cartons &
diversified packaging
paint, oil, adhesives, etc. Full
trays, HDPE plastic bottles and company in the world colour printing and drum
conical cartons spraying available
E-mail:
[email protected]
Plot 8212, Mungwi Rd Plot 415 A/O Kavu Rd
Heavy Industrial Area Bwana Mkubwa Industrial Area
PO Box 30413, Lusaka PO Box 71564, Ndola

68
 • Cotton yarn, fabric and garments
• Leather and leather products
• Wood and wood products, paper products and packaging
• Processing of metals, including the smelting and refining of
copper
• Machinery, iron and steel products
• Electrical and electronic products, including ICT and transport
equipment
• Processing and polishing of gemstones and jewellery making
• Plastic, glass and rubber products
• Pharmaceuticals and related products
• Professional medical and scientific products and measuring
devices
• Chemicals and petrochemicals
• Cement and explosives

Processed and refined foods and beverages

Processing of cotton - Photo Courtesy: René Hartslief One of the most successful subsectors in the manufacturing
industry, food processing and refining covers both large and
liaise with trade associations, provide training for exporters small-scale industries. The premier export earner in this sector
and give government input on market access offers and the is the sugar industry, with other important industries involved
challenges and opportunities these pose to Zambia. in grain milling (both maize and wheat), carbonated soft drink
production, clear and opaque beer brewing and the production
Held in Lusaka, the internationally-recognised Zambia of cooking oil.
Agricultural and Commercial Show exhibits agricultural
equipment, produce and manufactured goods, while Ndola’s The growing and processing of oilseed is becoming increasingly
Zambia International Trade Fair has an impressive variety important, and the production of seed oil has been stepped up
of products and draws exhibitors from the region as well as in view of the current high demand on the local market.
abroad.
Adding value to locally produced products, the agro-processing
Non-Traditional Exports sector is a key linkage to primary sectors like agriculture. Crops
The significance of non-traditional exports (NTEs) to Zambia’s such as tobacco, coffee, tea, soy beans and maize require large
economy cannot be overstated. Reducing the economy’s processing plants to be made into finished commodities that
reliance on traditional mineral exports such as raw copper and have more value added to them, while import substitution for
cobalt, NTEs are vital in increasing economic diversification edible oils such as butter, margarine, sunflower and cottonseed
and promoting growth. Zambia’s most important NTEs include also offers attractive opportunities for investment.
tobacco, flowers and cotton.
Fresh produce currently being processed includes tomatoes,
According to 2010 CSO International Trade Statistics, while beans, pineapples, sweet corn, onions and mangoes, among
NTE earnings dropped from US$ 958 million in 2007 to others. The production of tropical fruit juice through the
US$ 935 million in 2008 as a result of reduced global demand processing of locally grown tangerines, mangoes, pineapples,
for commodities as well as supply constraints, earnings rose oranges, papaya, guavas and bananas, is another potentially
once more in 2009 to reach US$ 976 million, with a weaker lucrative avenue. Products access regional markets, such as
Kwacha offering improving export competitiveness. Zimbabwe, Democratic Republic of Congo (DRC) and South
Africa, as well as European markets.
NTEs accounted for 23 percent of all exports in 2009 compared
with 18.3 percent in 2008 and 20.7 percent in 2007. In 2010, Small-scale agro-processing is considered with regard to
NTE earnings increased by 25.6 percent between January and supplying the domestic market, with farmers able to increase
February. However, in terms of percentage contribution to total the value of their produce by processing at the farm level. While
exports earnings, NTEs made up only 16.1 and 13.9 percent in large-scale processing facilities are usually limited to urban
February and January 2010, respectively, due to the resurgence centres, creating employment only in those areas, small-scale
in traditional (metal) exports. industries are able to provide services and employment in rural
areas.
Special incentives are offered to exporters of non-traditional
products, such as reduced corporate tax of 15 percent. With small-scale processing, transaction costs are low as there
Exemption from duty and sales tax on imports and machinery is is no need to transport crops to urban areas for processing and
offered to exporters of non-traditional products with net foreign then back to rural areas for consumption. Additionally, since
exchange earnings.
Manufacturing of beer at Zambian Breweries - Photo Courtesy: René Hartslief

PRIORITY INVESTMENTS
Investment opportunities in the manufacturing sector are
presently centred on the production of engineered products and
agro-processing, which includes crops such as tobacco, coffee,
tea, soy beans, maize, sunflower and cottonseed. Another
particular area of interest is the recycling of waste and the
production of steel suitable for manufacturing equipment.

Opportunities are available in the following priority areas, which

also attract fiscal incentives:
• Agro-processing, including fertilisers, soil conditioners,
pesticides and herbicides
• Processing of food, beverages and forest products
69
small-scale processing plants are less complex, they can be Minerals are also used in the development of other chemical
easily installed, allowing processing to be done at, or near, the products, such as cement, adhesives and glass. Products
point where the product is required. manufactured for export include argon gas, sulphuric acid,
detonators, automotive batteries, paints, cosmetics, soaps and
The downstream processing of livestock produce has potential, detergents.
particularly in the beef and dairy subsectors. There are also
indications that fish processing could gain momentum, provided Lafarge Cement Zambia Plc, formerly Chilanga Cement Plc,
refrigeration and storage facilities are expanded, or further is engaged in the manufacture and sale of cement, and has
processes such as canning developed to add value to the two operating facilities: Chilanga Plant near Lusaka and Ndola
fish product. The processing of grocery items such as cold Plant in Ndola. The company’s profit before tax increased by
meats, biscuits, tinned food, jam and cheese is also largely 103 percent to K 255 billion in 2009, driven by higher cement
underexploited. volumes and greater efficiency at the new Chilanga plant, which
was commissioned in March 2009. Lafarge also owns
Textiles and clothing 14 percent of Mbeya Cement Company Limited.
Cotton is grown, ginned and spun in Zambia at industrial sites
boasting state-of-the-art spinning, weaving and processing Cement is also produced by Zambezi Portland Cement (ZPC),
factories as well as warehouses. Products include cotton yarn which operates a US$ 40 million cement plant in Ndola’s light
and grey cloth of world-class quality, as well as garments. industrial area and has a capacity of 330 000 tonnes of cement
per year. ZPC is confident of attaining its full production
Cotton seed is exported to COMESA member countries such capacity of 1 000 tonnes of cement per day during 2010.
as Namibia, Malawi, Zimbabwe and the DRC as well as the
SADC countries of South Africa and Botswana, while cotton is Engineering
exported to the SADC region (South Africa and Lesotho) as well Supplying the copper mines with mining equipment, the
as the European Union (Belgium, Germany, Switzerland and manufacturing of engineering products also comprises metal
the United Kingdom) and the People’s Republic of China. items such as window frames, doors and roofing materials,
as well as nuts and bolts. Light engineering products include
The textile industry in Zambia has historically been one of the copper wire, cable and rods, alloys and ingots, cable carbon
principal contributors to economic growth in the manufacturing brushes, switchgears, pipes and rail sleepers, among many
sector, producing internationally competitive products from others.
abundant raw material. However, the competition brought on by
the liberalised economy has seen the industry dwindle in size. Leather products
By-products of the livestock industry include large quantities
Nevertheless, as a labour-intensive industry, the production of hides and skins, which find both regional and international
markets, as well as finished leather products such as bags,
of textiles and clothing has the potential to contribute greatly
footwear and leather garments. While predominantly cattle
to the Zambian economy by way of employment creation and
hides are tanned, the industry also utilises hippopotamus and
increased export earnings. Modern processing technologies
crocodile skins.
allow for increased production capacities and the variety of
products which are able to meet additional demand for capacity Bag-making machine - Photo Courtesy: Lamasat International

and range in the international market.

Mineral processing
Government incentives support new businesses that process
copper rather than exporting raw copper bars. Copper wire and
other copper products, such as copper plate and tubing, are
an area of growth, with copper rod and cables generating a
sizeable proportion of Zambia’s non-traditional export earnings.

The small-scale cutting and polishing of gemstones as well

as local jewellery manufacture is gaining ground since the
establishment of the gemstone exchange and a number of
government initiatives supporting minerals sector diversification.

Chemical products
Zambia’s substantial resources of agricultural minerals such
as peat and limestone deposits are used to manufacture soil Hon. Felix C Mutati (Minister of Commerce, Trade and Industry) during a visit to the plant with the Chairman of
Lamasat International, Mr Mohammed Ahmed - Photo Courtesy: Lamasat International
conditioners, while phosphates are used in the production of
fertilisers.

Nitrogen Chemicals of Zambia manufactures explosive

grade ammonium nitrate, chemical fertilisers and industrial
chemicals. Government is presently looking for a local partner
from the private sector to help run the company. The recently
commissioned Chambishi Smelter also has the capacity to
produce fertiliser.

Ndola Lime Company Limited produces limestone, quicklime

and hydrated lime, with copper mines presently accounting
for over 90 percent of the sales volume. With the company’s
production capacity set to double by 2013, export prospects for
lime products to markets such as the DRC, Angola, Malawi and
Tanzania should increase.
70
 Forestry & Timber
Forestry products comprise mainly soft and hardwood timber harvested from natural forests
and commercial plantations. Small quantities of honey and beeswax are also produced.
Forests in Zambia consist of both indigenous and exotic farmers depend on local woodlands for the gathering of foods,
timber. Indigenous trees comprise Mukusi (also known as bushmeat, medicinal plants and household materials, often
Zambian Teak), Mupapa, Muwaka, Musompa, Kayimbi, Mululu obtaining significant income from non-wood forest products
and Mukwa. Hardwood trees, such as Mukusi, Muwaka and such as honey, beeswax and edible caterpillars.
Kayimbi, are used to make railway sleepers, while Mukwa is
the main wood used in furniture and is found predominantly Economic contribution
in Western Province. Indigenous hardwoods are also used in At the outset of the Fifth National Development Plan, the
building and construction, as well as bee keeping, the collection Forestry Department, with donor support, commissioned a
of forest products, and traditional medicines and herbs. study to measure the direct financial contributions of the sector
and its potential to reduce poverty in order to improve the basis
Exotic softwood trees, which are used in construction, mining for decision-making and raise the profile of forestry. The report
and furniture-making, comprise tropical pine and gmelina. concluded that estimates of forestry’s contribution are low, and
Plantations may be found near Ndola, Kalulushi, Mufulira, that the potential of forest industries to reduce poverty depends
Choma, Samfya, Kabwe, Chisamba, Lusaka and Chipata. Most on their capacity to provide employment which, in turn, depends
commercial plantations are located on the Copperbelt and on reforming forest administration and establishing a climate
support the mining industry. conducive to private sector investment.

The privatisation of Zambia Forest and Forestry Industries The National Forest Programme Facility is providing funds to
Limited (ZAFFICO) has opened up the market for softwood, the Forestry and Environmental Vision Consultancy (FEVCO)
while the privatisation of Zambezi Sawmills has seen increased to conduct a more in-depth study on the sector’s contribution to
private sector participation in the hardwood sector. Adding value the economy and to poverty reduction, in addition to examining
to exports, processed timber is promoted ahead of raw timber Zambia’s forest revenue and concession systems. FEVCO is
produce, with export products including plywood, furniture, working closely with the Central Statistical Office to validate and
carvings and curios. analyse data collected.

The Forestry sector grew by 3.6 percent in 2009 compared THE FOREST RESOURCE
to 3.7 percent in 2008. By Sub-Saharan African standards, Zambia still has a relatively
large proportion of its land under forest cover. However,
Compared to the rest of the economy, the performance of the deforestation and forest degradation, soil erosion and fertility
forestry sector shows a consistent but slow progression. There loss, watershed degradation and loss of biological diversity
has been a marked increase in the production of wood and are ever-present challenges. Zambia’s forests face immense
wood products as well as paper and paper products, underlining pressure from the extensive practices of shifting cultivation
the growing importance of timber processing to Zambia’s non- and slash and burn, ever-increasing demands for wood-based
traditional exports. Certification of Zambia’s forests is vital if energy (firewood and charcoal), unsustainable commercial
forest products are to penetrate the lucrative markets of the utilisation of indigenous tree species, overgrazing and forest
European Union. fires.

Forests also play an important socioeconomic role in supporting According to the Forestry Department of the Food and
the livelihoods of rural communities. Wood fuel is critical for Agriculture Organisation (FAO) in their Global Forest Resources
domestic energy needs, particularly in rural areas. Furthermore, Assessment 2010, almost two-thirds of Zambia is covered
74
in forests. Zambia’s total land area is 74 339 000 hectares, increasing demand for timber in Zambia and to complement
comprising 49 468 000 hectares of forests and some supplies from indigenous forests, which were being
6 075 000 hectares designated ‘Other Wooded Land’. Forest overexploited.
cover has been steadily dropping, from an estimated
52 800 000 hectares in 1990 to 51 134 000 hectares in 2000 ZAFFICO’s duties include:
and 50 301 000 hectares in 2005. • Planting new trees to prevent soil erosion
• Carrying out research on how best to develop Zambia’s
Out of the total forest area of 49 968 000 hectares, forest forests
plantation is estimated to be about 60 000 hectares. Natural • Educating the population on the importance of forests
forests cover 49 908 000 hectares, and are designated as: • Replacing forests that have been destroyed by deforestation
reserve (6.5 percent), national parks (9.1 percent), natural
monuments (0.3 percent); habitat management (5.5 percent), Plans and programmes
multipurpose (16.9 percent) and production (23.7 percent). The Zambia Forestry Action Programme (ZFAP) is a major
About 23 percent of the forests (11 478 840 hectares) have a forestry initiative comprising all of Zambia’s forestry-related
management plan. sectors. Supported by the FAO of the United Nations and others
donors, ZFAP was launched in 1995 in response to the FAO
Framework for development Tropical Forestry Action Plan of 1987 (UNCSD 2002). The
The state owns all land, woodlands, forest stands and trees ZFAP comprises a number of sub-programmes:
outside forests. The new National Forest Policy of 1998 and the • Indigenous Forest Management and Biodiversity Conservation
Forest Act No. 7 of 1999 are the policy and legal instruments Programme (IFMBP)
that guide forest administration in the country.
Pine tree - Photo Courtesy: René Hartslief

At the policy level, Zambia has, through the Lands Act of 1995,
recognised customary land as eligible for state registration
and thus its citizens can get leasehold title on customary land.
This prevailing land tenure system notwithstanding, permits
could be granted for harvesting of forest resources by private
commercial enterprises or by the local community for domestic
consumption, under prescribed circumstances.

The Forestry Department operates under the Ministry of

Tourism, Environment and Natural Resources and is charged
with the protection of Zambia’s forests. The main duties of the
Forestry Department are to enforce government regulations for
the protection of woodland areas and to train forestry officers.
The department also educates the population on the importance
of forests and the dangers of deforestation.

Lack of capacity within the Forestry Department has, however,

hampered its ability to control forest exploitation or to assist
local communities effectively in the sustainable management of
natural resources. The transformation of the department into a
semi-autonomous and self-financing statutory body, the Zambia
Forestry Commission, should help to improve matters.

The Forest Act of 1999 gives effect to the National Forest

Policy and makes legal provision for the involvement of non-
government stakeholders, especially local forest-adjacent
communities. The Act also provides for the transformation of
the Forestry Department into a statutory body to be called the
Zambia Forestry Commission.

The parastatal Zambia Forestry and Forest Industries

Corporation (ZAFFICO) was formed from the Industrial
Plantations Division of the Zambia Forest Department with
the help of a World Bank loan in 1982. Based heavily on
plantations, ZAFFICO was established to help meet the
75
 ZAMBIA FORESTRY AND FOREST
INDUSTRIES CORPORATION LIMITED
HEAD OFFICE P.O. Box 71566, Ndola,Tel: 0212 616030/671026, Fax: 0212 680742 • CHATI PLANTATION P.O. Box 21871, Kitwe
ZAFFICO
ICHIMPE PLANTATION P.O. Box 29060, Kitwe, Cell: 0966 924658 • LAMBA PLANTATION P.O. Box 21871, Kitwe

BACKGROUND plantations are able to meet the current annual round wood demand
The Government embarked on large scale exotic forest plantations of about 380,000m3 for the various wood processing firms which
in 1962 after it had become apparent that the timber yield from has significantly reduced the need for imported wood products.
natural forests was declining. The decline of timber yields from natural
forests was attributed to repeated exploitation of accessible forests, The Corporation has also a well developed infrastructure such as
low yield per unit area, increasing logging distances and long gestation roads, buildings and water supply network for both domestic and
periods. These factors and the rising copper production in the mines industrial use at various stations located in Ndola, Kalulushi, and
made it increasingly difficult to meet the high domestic wood Lufwanyama Districts.
requirements particularly for the mining and construction industries.
This increasing wood deficit prompted the Government to initiate ZAFFICO has continued to manage all the commercial plantations
the establishment of fast growing exotic tree species. on the Copperbelt with estimated wood volume of over 12 million
cubic metres and an annual allowable cut of approximately 500,000m3.
The main objective of establishing exotic plantations was to supplement It continues to assist various communities in various forms in order
the diminishing indigenous forest resources in sustainably meeting to supplement Government efforts in poverty alleviation, to attain
the domestic wood demand. This large scale plantation programme the Millenium Development Goals (MDGs) and to realize the vision
was implemented by the Industrial Plantations Divisions (IPD), a unit 2030.
created in 1968 under the Forestry Department. The Industrial
Plantations Division was in 1982 commercialized and incorporated MAJOR CHALLENGES
into a public company called Zambia Forestry and Forest Industries The main constraint has been the lack of expansion of the existing
Corporation (ZAFFICO) Limited. plantations and inadequate capacity to effectively manage the planted
areas due to inadequate resources. This difficulty has further been
The programme was financed through an International Development compounded by the rapid rise in wood demand in the past five years
Association (IDA) credit facility in order to establish a projected which threatens to exceed the supply. There are also serious concerns
100,000 hectares of forest plantations by 1990. On its inception,
ZAFFICO assumed liabilities and assets of IPD which included 40,000
hectares of Pine, 10,000 hectares of Eucalyptus and the processing
units at Kafubu, Kalibu and Dola Hill. All processing were privatized
by 2002 and the planted area still remains at 50,000 hectares of
which about 2,000 hectares were leased to private firms during the
privatization of the processing units.

MAIN ACHIEVEMENTS
The Corporation has emerged as major supplier of national wood
requirements and attained about 50% of total domestic industrial
wood consumption by 1997. The increased wood consumption from
the plantations has helped to reduce pressure on indigenous timber
for construction and mining industries. ZAFFICO is presently the
major supplier of Saw Logs for the Sawmilling Firms, all untreated
poles and its activities have created direct and indirect employment
ZAFFICO HEADQUARTERS
in many wood based industries and the transport sector. The forest

Pine seedlings at Mishishi (Ndola) Pine seedlings at Mishishi (Ndola) Thinning a plantation in order for others to
grow - “Management effectively practice”
on the high levels of encroachment into the surrounding forest reserves which have led to increased pressure and illegal activities in the forest
plantations. These unplanned settlements have made the expansion of plantations on the copperbelt difficult.

STRATEGIES
Although the current wood supply may be adequate to meet domestic needs, the rising global and regional timber demand has led to excessive
pressure on the existing plantations wood supply in Zambia. The current situation if not properly managed could lead to depletion of forest
plantation resources within the next 5 - 10 years. There is need to urgently address these challenges through a long term strategy in order
to promote sustainable management and utilization of forest plantations.

There are several measures that may be considered that include:-

i) There is need for massive investment in order to recapitalize the Corporation and to build capacity for the establishment, tending
maintenance and protection of the forest plantations.
ii) There is need to promote the participation of the private sector in plantation management through Government incentives and tax rebate
for firms undertaking large scale reafforestation.
iii) The Government through cooperating partners need to assist in financing the establishment and expansion of forest plantations in order
to attain a sustainable wood supply.
iv) The current annual replanted areas of 500 hectares need to gradually increase to over 3,00 hectare per year in the next 10 years in order
to accommodate future wood requirements and economic developments.
v) There is need to promote the private-public partnerships in the management of forest plantations.
vi) There is need to encourage farm woodlots and out grower schemes in order to supplement the plantation forest resources.

FUTURE EXPANSION PLANS

The presently planted area of 48,000 hectares may not meet the rising wood demand in the next 5 years. Therefore, the existing forest
plantations needs to be increased to over 80,000 hectares in the next 10 years. Such an expansion programme may be difficult to implement
on the Copperbelt due to high levels of encroachment. However, the plantation expansion may be feasible in the North Western Province
which could greatly contribute to meeting the wood requirements for the new mines in the area.

Mission Statement
To ensure sustainable supply of quality wood products to meet local and export demand through effective management
of exotic plantations and the inherent biodiversity for the benefit of present and future generation
by promoting active participation of all stakeholders.

Vision
The forest plantations will be efficiently and sustainably managed to supply quality wood products for
local and export markets.

Land preparation A new office construction at Ichempe (Kitwe) Pine seedlings at Ichempe (Kitwe)

Chati nursery - pine seedlings Pruned eucalyptus - young stand at Chati New office building at Lamba
 Today, Zambia’s plantations consist almost entirely of pine
(40 000 hectares) and eucalyptus (10 000 hectares) with a
total standing volume of more than 11.5 million cubic metres.
Their rotations vary from 15 to 25 years. Pine is utilised for the
construction industry and for furniture manufacture, and gum
poles are processed for the mining industry.

Zambia Forest and Forestry Industries Limited (ZAFFICO) is the

largest timber producer in the country, managing a total area of
48 000 hectares of exotic plantations. Some 1 092.3 and 873.3
hectares is under lease management to Ndola Pine Plantation
Ltd and Copperbelt Forestry Company Ltd respectively.

ZAFFICO produces 400 000 cubic metres of round wood

timber every year. Some of this timber is sold to the Copperbelt
Eucalyptus trees - Photo Courtesy: René Hartslief
Forestry Company for use in the manufacturing of electricity
poles, which are supplied to ZESCO.
• Trees and Forest Development Programme (TFDP)
• Forest Industry Development Programme (FIDP) Booming construction in Zambia has pushed up the demand
• Woodfuel Energy Development Programme (WEDP) for timber in recent years, and ZAFFICO is undertaking tree
• Forestry Education and Training Programme (FETP) planting programmes to enable it to meet the growing demand
• Forestry Research and Extension Programme (FREP) of the local and export timber markets. During 2009, it planted
• Planning, Monitoring and Evaluation Programme (PMEP) 1 290 hectares of trees; a figure which is set to expand to 2 000
hectares in 2010.
Under ZFAP, the Provincial Forestry Action Programme (PFAP)
focuses on promoting community participation in sustainable ZAFFICO has embarked on a programme to expand its
forestry management, and building capacities for forestry plantations from 50 000 hectares to 85 000 hectares by 2014.
planning at provincial and district levels. At present, it is focusing on opening up new plantations in the
North-Western, Northern and Central provinces to meet the
The Forestry Department is the lead institution in Zambia’s high demand for timber. In order to increase output, ZAFFICO
Integrated Land Use Assessment Project (2005-2008), which is also considering entering into joint ventures with the private
was carried out in collaboration with the Ministry of Agriculture sector to meet the high demand of timber, and has approached
and Cooperatives, Ministry of Lands, Central Statistics Office, the Zambia Development Agency in this regard.
Zambia Wildlife Authority, University of Zambia, Copperbelt
University, Zambia Forestry College and local authorities. Processing plants
Under Zambia’s privatisation initiative, ZAFFICO had sold off
The project is expected to: all its processing plants by February 2002 and is currently only
• Improve institutional capacity to plan and implement land use involved in the management of plantations, with the harvesting
assessments, monitor resources, manage the information and of timber in its forests contracted out to private harvesting
enhance natural resource management contractors.
• Define a national land use assessment methodology, taking
into account criteria and indicators for sustainable natural Kafubu processing unit, a gum pole treatment plant, sawmilling
resource management and the information needs for national and joinery operation based at Kalulushi some 40 kilometres
and international reporting
from Kitwe, was sold by ZAFFICO to the Copperbelt Forestry
• Establish a national database on land use resources and
Company (CFC). Kafubu has the capacity to handle 70 percent
integrate it into management information systems
of Zambia’s timber production and is located in an area in which
80 percent of the country’s eucalyptus is grown.
Government’s interest concerning land use is to put in place an
integrated land use assessment system that will improve the
ZAFFICO’s Kalibu mill and wood processing operation 10
management of land resources in order to contribute to poverty
kilometres east of Kitwe was also sold to CFC. Kalibu sawmill
alleviation. Integrated land use assessments will also bring and
has the capacity to process 20 percent of the country’s timber,
enhance cross sectoral coordination and collaboration between
land use management institutions in the country by bringing all and draws its raw material from the nearby Ndola pine and
stakeholders together. eucalyptus plantation. CFC operates two main production lines
comprising gum pole treatment and sawmilling, with the latter
THE TIMBER INDUSTRY including the joinery division which manufactures furniture.
Commercial timber exploitation is centred in the Copperbelt
Province and in the southwest of the country. The timber Another ZAFFICO processing unit, the Dola Hill Sawmill, which
industry has been in a state of transition over the past several has the capacity to process 10 percent of Zambia’s total timber
years, with government trying to reduce its role by privatising production, was sold to Wood Processing Industries (WPI)
some of the state-owned mills. Past challenges, such as illegal Limited. A leading manufacturing company in the forestry and
utilisation of forest resources and inadequate supervision of wood products sector, WPI also owns FSC certified sustainable
concession holders, are being addressed through the Forest pine plantations and is an important supplier to the local
Policy of 1998. building and furniture industries as well as being a leading non-
traditional export earner.
Plantation development
Forest plantations date back to 1963, when the Forestry Situated in Western Province, the former parastatal Zambezi
Department started a pilot project to plant exotic species. In Sawmills, consisting of sawmill plants in Mulobezi and Sesheke,
1967 this was expanded to 55 000 hectares of plantations has been sold and renamed Zambezi Sawmills 2005 Ltd. The
under a World Bank assisted project. In addition, a further resuscitation of the timber industry in the area is of strategic
10 000 hectares was developed in other provinces to meet local importance to the hardwood sector, considering the presence of
demand. commercially viable tree species such as Zambezi Teak.
78
Enabling organisations most of whom live in the North-Western Province. Honey
The Lumber Millers’ Association of Zambia (LUMAZ) represent constitutes 50 percent of these farmers’ incomes and up to 70
business specialising in the production of sawn timber and percent of their cash income. The Beekeepers’ Association
manufactured products, utilising non-threatened species such monitors the industry, institutes quality control measures and
as African (Rhodesian) Rosewood, Teak and Mahogany. negotiates with honey buyers on behalf of its members.
Although some members have their own concessions, logs are
also outsourced to concession owners operating under Forestry Of the honey exported from Zambia, 95 percent is certified
Department licenses. organic – Zambia currently exports about 700 metric tonnes
of honey and 10 metric tonnes of beeswax each year, most of
All materials purchased by LUMAZ members are logged and which is sold in the European Union (EU). Zambia is a surplus
managed sustainably in line with the Forest Act of 1999. Under producer of honey and could double both its exports and the
this Act timber is harvested to a management plan approved number of beekeepers. However, infrastructural and other
by the Forestry Department and all logs are inspected, certified trade-related and supply chain issues must be addressed if this
and tracked by forestry officers in the respective concession is to be achieved.
areas.
The processing of forest products has been identified as
Having already received EU assistance to develop their a priority sector for investment and is therefore entitled to
business to a level where they can process timber to fiscal incentives.
internationally acceptable standards, LUMAZ is looking to
establish a joint initiative with other companies or organisations The government honey factory in Kabompo, which was
which would lead to the implementation of verifiable forest privatised in 1987 as North Western Bee Products Ltd (NWBP),
certification and chain of custody. is a certified alternative trade organisation specialising in
organic forest bee products. Its bottled honey is widely available
Other organisations involved in the industry include the Timber in the EU and USA. A modern honey processing plant under
Producers’ Association of Zambia (TPAZ). The association construction in Ndola will also be able to process mayonnaise
has 13 members who export timber to South Africa. Currently and other honey by-products.
alternative markets are being explored in the Middle and Far
East. There is also a robust trade in traditional medicine, with over 78
plant species of medicinal value. However, the over-exploitation
Future growth in the industry of medicinal plants through the removal of bark or roots has
Government is seeking private sector investment to develop seen the depletion of some of these species, while supplies of
an expanded plantation-based timber industry, with promising herbal medicine are also affected by timber logging. There is
opportunities for increasing timber exports to South Africa, a good market for colourants taken from specific tree species,
currently Zambia’s main export market for its timber. As such, and tannins are used both at the local and national levels.
the sale of up to 20 000 hectares of ZAFFICO plantations has
been proposed – a move that would also generate revenue NWFPs such as bamboo are widely used in traditional crafts
for the plantation expansion and recapitalisation programme. such as basketry, which is an important small-scale industry,
Furthermore, a Forest Industry Credit Facility targeted at rural with over half of forest-based enterprises manufacturing
populations provides US $500 000 each year for plantation baskets, mats or hats. Basketry and mat making is carried out
development. on a semi-commercial scale in western Zambia. Reeds are
also widely used for basketry, mat making and thatching in the
There are also a number of investment opportunities in wood vicinity of rivers. Fibres are used for rope and/or string making,
processing. Currently most timber is exported in its raw form, with the end product employed in hut construction, tying of
which could otherwise be processed into finished consumer bundles and for basketry in some instances. Rattan products,
and industrial wood products. While government is currently where available, are also used for thatching, mat-making and
targeting secondary investment in the timber industry, there basketry.
is also an opportunity for processors to be involved in the Pine needles and cones - Photo Courtesy: René Hartslief
harvesting of timber.

NON-WOOD FOREST PRODUCTS

Non-wood forest products (NWFP) are biological products
other than wood, gathered from a range of forest environments,
wild or plantation, including agro-forestry schemes and other
wooded land. NWFPs comprise food and food additives
(edible nuts, mushrooms, fruits, herbs, spices and condiments,
aromatic plants, game), fibres (used for construction, furniture,
clothing or utensils), resins, gums, and plant and animal
products.

The majority of Zambians depend on NWFPs, mainly for self-

consumption, although the sale of bee products, mushrooms,
baskets and caterpillars also provides much needed income for
rural communities. Trade in honey, beeswax and mushrooms,
which find markets both locally and internationally, is the most
lucrative.

Government supports the sustainable management of

indigenous forests, especially for increased production of Non-
Traditional Forest Products such as honey. An important
agro-food system, the honey subsector affects the livelihoods
of more than 12 000 beekeeper households (100 000 people)
79
 Tourism
Zambia’s national parks and game management areas are home to a great diversity of
wildlife and flora, with scenic attractions including part of Africa’s Great Rift Valley as well as
an abundance of lakes and rivers, and the world-renowned Victoria Falls.
In addition to a spectacular variety of pristine and unspoiled has created a tourism policy based on the goal of sustainable
wilderness areas, Zambia has much to offer travellers. Assets growth and development, with the Tourism Development Master
such as a stable political backdrop, mild climate, fascinating Plan an integral part of government initiatives.
cultural and heritage sites and plethora of adventure and leisure
tourism prospects add to the country’s appeal as a tourism In 2007, the Tourism and Hospitality Act was passed to provide
destination. for the development of the tourism industry through enhanced
tourism planning, management and coordination. In accordance
Zambia has seen significant growth in its tourism industry over with Section 62 of the Act, government is in the process of
the past decade. This has been backed up by investments establishing the Tourism Development Fund for purposes of
in tourism facilities, such as hotels, lodges and safari product development, marketing, training and research, as
operations, road rehabilitation projects, the upgrading of the well as to support participating local councils in developing
country’s four international airports to international standards, tourism related infrastructure. Government is also introducing
expanded flight schedules and intensified marketing initiatives. legislation for a tourism levy, which will become a major source
The Zambia Development Agency provides a one-stop-shop for of financing for the sector.
investors, which has streamlined licensing procedures.
In the 2010 budget, K 83.4 billion was put towards the ‘Support
The years of positive growth notwithstanding, tourism has been
to Economic Expansion and Diversification’ project aimed at
one of the sectors hardest hit by the global credit crunch. With
fostering growth in the tourism sector.
most visitor arrivals originating from South Africa, Europe and
the USA, the number of international tourists visiting Zambia
Strengthening infrastructure
declined sharply in the first half of the year against figures for
To enhance Zambia’s already numerous attractions, the
same period in 2008. As a result, growth in the tourism sector
spotlight has been on the rehabilitation of infrastructure such
shrank from 5 percent in 2008 to -14.5 percent in 2009.
as roads, airports and communications facilities. Government
However, tourism is expected to pick up with the 2010 FIFA is also facilitating the entry of tourists into Zambia through
World Cup in South Africa, and growth is projected to rise to simplifying border formalities.
15 percent in 2010 compared to a contraction of approximately
the same magnitude in 2009. According to the Zambian Tourism New areas continue to be opened up wherever there is
Board, the country intends to increase its tourism arrivals from potential, in particular the Northern Tourism Circuit, covering
below one million to 3.5 million in the next two to three years. tourist attractions in Northern and Luapula provinces. Other key
Currently, out of a world total of 900 million tourists, only interventions include the recapitalisation of the Zambia Wildlife
46 million visit Southern Africa. Authority (ZAWA) and enhancement of park management in
order to increase animal species and reduce poaching, as well
The main focus of the tourism sector continues to be on as improving park facilities and infrastructure – especially in the
the construction of vital infrastructure in tourism areas Kafue and Lower Zambezi national parks.
during 2010 and in the medium-term.
A sum of K 95.0 billion has been set aside for the development
TOURISM DEVELOPMENT of the Northern Tourism Circuit during 2010. Of this amount,
The Ministry of Tourism, Environment and Natural Resources K 20.0 billion is being used for the continued construction of
80
 international travel trade industry to meet, network, negotiate
and conduct business. It also complements efforts by the
Ministry of Tourism, Environment and Natural Resources and
ZTB to raise the country’s profile internationally.

INSTITUTIONAL FRAMEWORK
Government regulates and monitors the tourism industry
through the Zambia National Tourist Board (ZNTB), an
autonomous statutory body that implements all government
policies on tourism. The board was created for the purpose
of promoting Zambia as an attractive tourist destination and
also facilitating and coordinating development activities at the
national level.

Representing the various tourism organisations that are part of

People having sundowners in the water - Photo Courtesy: ZNTB
the industry, the Tourism Council of Zambia (TCZ) has the
goal of facilitating growth through the creation of an enabling
the road from Mbala to Kasaba Bay, K 70.0 billion comes from environment. The council is involved in creating the tourism
the Rural Electrification Fund for the electrification of the area, policy; identifying strategic issues influencing tourism and
and K 5.0 billion is for the reconstruction of the Kasaba Bay developing proposals to address these issues; providing a
Airport. A further provision of K 1.0 billion has been made for the single national voice for the industry in addressing government
restocking of Nsumbu National Park. Once these infrastructural and the general public; and collaborating with government to
developments are completed, government hopes to attract improve quality and service standards in the industry.
more than 12 world-class hotels to the area.
The Zambia Wildlife Authority (ZAWA) acts to conserve
Road infrastructure programmes focus on rehabilitating rural the country’s precious wildlife resource through promoting
and feeder roads so as to facilitate access to tourist attractions the appreciation and sustainable use of wildlife resources.
and national parks, as well as to link the national transport This is achieved by facilitating the active participation of
network with regional transport corridors. In view of the fact local communities in the management of the wildlife estate,
that roads in some national parks become impassable during promotion and development of tourism, ensuring that the
the rainy season, a rehabilitation programme is underway. For economic value of wildlife resources is recognised by public and
2010, K 22.4 billion was allocated towards the construction of private stakeholders and educating the general public.
access roads to and within national parks, including the
continued development of the Kafue National Park spinal road The National Heritage Conservation Commission (NHCC),
network. which assists the ZNTB in promoting Zambia’s national
identity and protecting its diversity, is charged with looking
One of the most significant infrastructural programmes has been after objects and relics of archaeological, aesthetic or scientific
the upgrading of tourism facilities and general infrastructure interest as well as managing and maintaining a wide range
in Livingstone, the country’s tourism capital. A variety of new of heritage sites and structures. These include rock art sites,
construction ventures have seen the development of quality traditional shrines and burial sites, as well as over 600 sites
accommodation, entertainment and services, including the of architectural or historic importance, comprising buildings,
Zambezi Waterfront, luxurious hotels and guest houses, casinos monuments and ruins, and more than 60 recorded engineering
and shopping complexes. heritage sites.

In 2009, K 99 billion was put towards the rehabilitation of the TOURISM ASSETS
Zimbabwe-Livingstone road. Work has commenced on the Tourism resources cover spectacular scenery, one of the largest
second phase of this major project, with a further K 194.5 billion concentrations of game in Africa, a colourful cultural heritage
allocated in 2010. The completion of this project will not only and major attractions such as Lake Kariba and the Victoria
improve access for tourists, but also enhance the smooth Falls. Zambia is also acknowledged as one of the safest
movement of goods across Zambia’s southern borders. countries in the world to visit, with the friendly Zambian people
not the least of its attractions.
Tourism marketing and training
Development programmes aim to improve the Zambia brand, The following assets make up Zambia’s tourism product:
both locally and internationally, as well as improve standards in • Climate & pristine environment – Zambia’s beautiful
hospitality, accommodation and related service industries. The
Carmite Bee-eater, Lower Zambezi - Photo Courtesy: ZNTB
2010 national budget makes provision for tourism marketing
activities in the amount of K 6.4 billion.

The Tourism Council of Zambia (TCZ) and Zambia Tourism

Board (ZNTB) have partnered with the United Kingdom based
Cornell University School of Hotel Administration in order to
re-brand and market Zambia. This is expected to raise the
country’s profile among traditional and emerging tourism and
hospitality markets across the world, putting Zambia on the
map as a preferred destination in Africa. The project is to
promote domestic, regional and international tourism, conduct
valuable market research on key tourism markets and to obtain
information on the latest market trends.

Held annually in Lusaka, the Zambia International Travel Show

(ZITS) is a business-to-business exhibition that enables the

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 temperate climate, despite its location in the tropical zone,
makes it pleasant to visit all year round. The unspoilt quality
of the country’s many attractions is a major advantage, with a
huge number and variety of pristine wilderness environments.
• Natural scenic attractions – The country’s beautiful lakes,
waterfalls, rivers and mountains are without equal. First
and foremost is the famous Victoria Falls, which is one of the
seven natural wonders of the world as well as being a world
heritage site. Kalambo Falls to the north is the second highest
uninterrupted waterfall on the continent. Kariba Dam is the
world’s second largest man-made lake and Lake Tanganyika
the second deepest natural lake. The vast, grassy plains of the
Zambezi and Luangwa valleys form part of Africa’s Great Rift
Valley.
• Game & birdlife – Zambia’s wildlife is one of its foremost
tourist attractions, with game such as lion, elephant, buffalo,
cheetah, zebra and giraffe as well as many rare species. Rafting the Zambezi rapids - Photo Courtesy: ZNTB
Birdlife is also superb.
• History, crafts & culture – There are sites of geological and visitors, conference facilities, and budget lodges for local
ecological importance, such as a fossil forest and botanical tourists, with attractive sites in natural settings readily
reserves, and several areas have been declared national available.
monuments as well as archaeological heritage sites. • Developing cultural heritage sites, including museums, theme
• Adventure tourism – Lakes, mountains and rivers provide parks and art galleries.
opportunities for adventure tourism, such as white-water • Adventure tourism such as climbing, bungi jumping and hang-
rafting, canoeing, abseiling, bungi jumping, climbing, horse gliding.
riding and even elephant-back safaris. • Water sports activities on Zambia’s many lakes and rivers –
sailing, waterskiing, canoeing, white water rafting, boat charter
INVESTMENT OPPORTUNITIES services and cruises.
The tourism sector is already one of the largest foreign • Other sporting activities, such as horse riding, golf and tennis,
exchange earners in Zambia, despite the fact that only a small are well suited to local conditions, with the compilation of
proportion of the country’s tourism assets have been exploited sports-based holiday packages a possibility.
so far. The government has identified tourism as one of the
priority sectors for investment because it is a labour-intensive PARKS, GAME RESERVES & TOURIST ATTRACTIONS
industry and has numerous linkages to other sectors of the Zambia has some of the biggest game reserves in the world
economy. and one of the richest wildlife resources on the continent. Most
tourism is concentrated in the more developed parks, which
Situated in close proximity to Victoria Falls, Livingstone is comprise Kafue, Lochinvar, South Luangwa, Lower Zambezi,
the tourist capital of Zambia and serves as a growth point for North Luangwa, Kasanka, Mosi-oa-tunya and Sumbu, with the
development activities. Sites with attractive natural settings are other parks being more remote and undeveloped. All the main
also readily available in national parks and game management national parks are accessible by car and plane, and park gates
areas, with the Kafue National Park the largest potential are generally open from 06:00 to 18:00 daily.
tourism resource in the country. Other areas earmarked for
development include Lower Zambezi (Siavonga, Luangwa Day or night safaris with experienced guides who have an
district), Lusaka and surrounds (for conference tourism and extensive knowledge of the flora and fauna are a popular way
sports) and South and North Luangwa national parks and of seeing the magnificent wildlife. While game viewing is most
surrounding game management areas. commonly undertaken from comfortable, open-topped vehicles,
Zambia is also renowned for its walking safaris, not to mention
Opportunities exist in: the novelty of a horseback or even elephant-back safari, or by
• Transport services and tours, including luxury coaches, air canoe or motorised boat.
charters and car hire operations. Organised tours to a variety
of attractions by car, plane, horseback or boat. Game fishing, Professional hunting companies offer safaris, and flights in light
photographic or hunting safaris in wildlife areas and national aircraft to the various camps provide splendid photographic
parks. opportunities. Zambia’s wildlife encompasses excellent bird
• The provision of high quality accommodation for international watching as well, with over 740 different species. The bigger
national parks (South Luangwa, Lower Zambezi and Kafue)
Luxury transport - The Royal Livingstone Express
offer some of the best bird watching opportunities.

The best time for viewing wildlife is during the dry season,
which lasts from May to October, as there is less vegetation
and the animals tend to gather around water holes. The
rainy season sees a dramatic increase in the bird population,
especially during November and December, as well as
spectacular changes to the landscape. While all the major
national parks may be reached by car or plane, some are
inaccessible to motor vehicles during the wet months.

The Victoria Falls

One of the most spectacular waterfalls in the world and the
highest in Africa, the Victoria Falls are almost 2 kilometres
across and over 100 metres high. During the rainy season
over five million litres of water surge over the falls every
84
 River, which traverses the escarpment in a series of waterfalls.
The park offers a genuine wilderness experience, with access
restricted to the few companies permitted to conduct walking
safaris.

Located between Lusaka and Livingstone, Kafue National

Park is one of the closest and most convenient of Zambia’s
parks for visitors to reach, yet still remains a wild and remote
destination. One of the five largest national parks in the world
and the largest in southern Africa, Kafue’s vast grassland plains
and unique ecosystems cover an area of some 22 500 square
kilometres, which stretches from the untouched Busanga Plains
and wetlands in the north to the Itezhi Tezhi Dam in the south,
traversed by the Kafue River which flows through the heart of
the park.

Lochinvar National Park to the south of Kafue is a birder’s

paradise, with some 428 varieties of birds, as well as being
the location of Ngwisho Hot Springs, one of the oldest
archaeological sites in Africa. On the other side of the Kafue
Flats is Blue Lagoon National Park a pristine wilderness area
which, along with Lochinvar, boasts the largest concentrations
of lechwe in Zambia.

Mosi-oa-tunya National Park stretches from the Victoria Falls

up the Zambezi River for about 12 kilometres, with wildlife that
includes antelope, zebra, wildebeest, giraffe, warthog, elephant
and the only white rhinos in Zambia. There are game drives
and horseback trails, as well as a number of opportunities for
adventure activities, from white-water rafting on the Zambezi
to abseiling or gorge swinging. Elephant-back safaris with the
tame elephants in the park offer some of the best game viewing
around.

Abundant wildlife - Photo Courtesy: René Hartslief Lying across from the famous Mana Pools Reserve in
Zimbabwe, the Lower Zambezi National Park is an untouched
second, and the clouds of spray can be made out more than 30
kilometres away. Seen by the missionary and explorer Dr David
Livingstone for the first time on 16 November 1855, and named
‘Victoria’ after the English queen, the falls had already been
known by local inhabitants as ‘Mosi-oa-tunya’ (the smoke that
thunders) for centuries.

The falls are approximately 11 kilometres southwest of

Livingstone, Zambia’s tourism capital, and can be reached by
bus or car. While shared with neighbouring Zimbabwe, a large
portion of the Victoria Falls is on the Zambian side, so visitors
enjoy a different view of the falls as well as being able to get
closer to the waterfall on walkways or by traversing a steep
descent to the fall’s base.

National parks and game reserves

Part of the Great Rift Valley, South Luangwa National Park is
about 250 kilometres northeast of Lusaka and just 20 kilometres
from Mfuwe International Airport. Bordered by the Muchinga
escarpment to the west and the mighty Luangwa River to
the east, this premier park offers exception scenery and an
immense variety of wildlife. Elephant and other mammals such
as leopard, buffalo, zebra, impala and lion gather around the
Luangwa River – which is itself home to some of the largest
concentrations of Nile crocodiles on the continent. Cookson’s
wildebeest and Thornicroft’s giraffe are indigenous to the park,
and there are over 400 species of birds to be found here.

The remote yet game-rich North Luangwa National Park is

situated upstream of the South Luangwa National Park and to
the west of the Luangwa River. In addition to the wildlife species
found in South Luangwa, the park also contains hartebeest,
reedbuck and statuesque eland, with birds such as the giant
owl, crested crowned crane and bee-eater. The beautiful
woodlands are criss-crossed with rivers, including the Mwaleshi
85
wilderness dominated by the presence of the great Zambezi conservation area (TFCA) includes the Nyika TFCA, which
River, which acts as a magnet for wildlife. Game viewing can be is centred on a high, undulating montane grassland plateau
done on a canoe safari or game drives and walks, with anything rising over 2 000 metres above the bushveld and wetlands of
from elephant and hippo to lion and leopard to be seen. Fishing the Vwaza Marsh. A joint law-enforcement project operating as
and bird watching are also popular. a single unit across international borders to combat poaching
has been deployed with resounding success in the Nyika TFCA
Situated on the south-western fringe of the Lake Bangweulu since 2005. Thanks to this, a wildlife restocking programme for
basin amid papyrus swamps, riverine forests and tranquil Nyika National Park and Vwaza Marsh Wildlife Reserve was
lagoons, Kasanka National Park is one of Zambia’s smallest begun in 2007.
yet most attractive parks. This wetland harbours unusual birds,
such as the rare shoebill stork, and mammals like sable, hippo, The Kavango-Zambezi (KAZA) TFCA is situated in the
elephant, leopard, the blue monkey and buck populate the Okavango and Zambezi river basins where the borders of
forested areas. Angola, Botswana, Namibia, Zambia and Zimbabwe converge.
It is set to become the world’s biggest conservation area and
The 5 000-kilometre square Sioma Ngwezi National Park will eventually span an area of approximately 287 132 square
is unfenced, allowing free movement of animals between the kilometres, taking in the Caprivi Strip, Chobe National Park,
park, the much larger surrounding game management area and the Okavango Delta (the largest Ramsar site in the world) and
the Zambezi River. More than 3 000 elephants migrate here the Victoria Falls. Kavango-Zambezi promises to be southern
from the bordering national parks of Botswana and Namibia, Africa’s premier tourist destination, with the largest contiguous
and there are also a number of rare species, such as roan population of African elephant (approximately 250 000) on the
and sable antelope, cheetah and wild dog. Guided safaris are continent.
recommended.
The Lower Zambezi-Mana Pools TFCA between Zambia
Liuwa Plains National Park situated in the remote western and Zimbabwe lies in the Zambezi Valley, which has for
region is the location for one of the great spectacles of millennia been used by wildlife as a thoroughfare between the
the African continent – the migration of vast herds of blue escarpment and the Zambezi River. Mana Pools is a World
wildebeest. Liuwa is also home to black-maned lion and wild Heritage Site based on its wildness and beauty, wide range of
dog, and has abundant birdlife, including secretary birds, large mammals, over 350 bird species and aquatic wildlife, with
crowned and wattled cranes, fish, tawny and Marshall eagles, hippopotamus, crocodile and many different types of aquatic
woodland kingfishers and white-bellied bustards. birds also associated with the pools.

Hugging the shoreline of Lake Tanganyika, Sumbu National The Liuwa Plain-Mussuma TFCA between Angola and Zambia
Park provides a haven for hippo, crocodile, flamingo and other protects the third largest migratory population of blue wildebeest
water birds. A motorboat on the lake is a great vantage point in Africa. Every year massive herds of blue wildebeest migrate
from which to watch the variety of birdlife and game, which from Zambia to Angola and back again, traversing the plains in
includes buffalo, lion, antelope, zebra and leopard. their thousands and very often mingling with zebra along the
way.
Nyika National Park situated on the Malawian border at the
Tourists enjoying a local dish at Kawaza - Photo Courtesyl ZNTB
eastern-most tip of Zambia is an extension of the national
park on the Malawian side. This beautiful montane highland
area with its grasslands, valleys and masses of wild flowers
consists of a plateau some 2 000 metres above sea level, with
spectacular views. Game viewing includes a number of buck
species – in particular the rare red duiker – as well as zebra,
warthog and leopard. The Chisanga Falls are a short hike away.

The famed Chimfunshi Wildlife Orphanage 60 kilometres

west of Chingola was founded in 1983 by David and
Sheila Siddle and is the largest chimpanzee sanctuary and
rehabilitation centre in the world. Home to over 100 orphaned
chimpanzees, many of whom were confiscated from poachers
or rescued from dilapidated zoos and circuses, this non-profit
refuge also cares for a host of other sick, wounded or unwanted
animals.

Transfrontier conservation areas

Currently under development, the Malawi/Zambia transfrontier

88
Physical Infrastructure
Further economic growth and private sector investment is contingent upon the creation of
reliable and affordable utilities as well as modern and efficient communications and transport
systems.
The provision of infrastructure remains one of government’s top with growth rising to 15.5 percent compared to 8.7 percent in
priorities, with the focus on building and rehabilitating roads, 2008. This is as a result of increased public and commercial
bridges, electricity generation projects, schools and hospitals, infrastructure investments, and continued high demand
among others. A significant constraint to growth in the economy for housing. The expanded production of cement by local
has been the slow pace of development in large infrastructure manufacturers has also aided growth in the sector.
projects – partly due to constrained public finances and limited
participation by the private sector. For this reason, the Public- Current construction activities are focused on the rehabilitation
Private Partnership (PPP) Policy was launched in 2008, and a of roads across the country, in particular the North-Western
corresponding legal framework to support its implementation Province, the development of a new tourism zone in Livingstone,
in 2009. Presently, proposals for PPPs in developing roads, and infrastructure to support the establishment of Multi-Facility
bridges and energy projects are being reviewed and initiated. Economic Zones. Investments in social infrastructure comprise
the construction and rehabilitation of health centres and district
CONSTRUCTION hospitals, as well as classrooms, trades training institutes and
Zambia’s construction industry is regulated by the National universities.
Council for Construction (NCC), which was established with
the key objective of developing local construction capacity in Property development
the country. The NCC is responsible for registering, upgrading Favourable socioeconomic factors and contemporary
and downgrading consultants and contractors, in addition to developments have boosted the commercial and residential
monitoring the industry. property market in recent years, with a large percentage of
buyers hailing from South Africa. The development of the
The construction sector has a major influence on Zambia’s financial sector, particularly with respect to home loans, along
development, as the country’s economic activity depends to a with increasing incomes of Zambian over the past few years,
large extent on the state of infrastructure, particularly the road has also made property ownership more affordable to many
network. This is especially critical for Zambia as a landlocked citizens.
country, and trade linkages with the Southern African
Development Community (SADC) and Common Market for The Heart of Africa is Zambia’s first ever lifestyle estate as
Eastern and Southern Africa (COMESA) regional blocs depend well as the country’s largest residential project to date, and
on an effective regional and internal road network. comprises approximately 850 homes along with a commercial
and retail node, a five-star hotel, restaurants, an 18-hole
Despite a slight drop in 2008 on account of shortages in the Matkovich-designed golf course, a country club, dams and
supply of cement and other materials, the sector has performed communal parks covering 70 hectares. Another project, the
well over the past few years. In the main, construction activities US$ 200 million Jewel of Lusaka at Levy Junction in the heart
have been driven by commercial and residential buildings and of Lusaka, is being developed by Liberty Properties and the
the development and construction of new mines. Zambia National Pension Scheme Authority (NAPSA), and will
include retail, office, hotel and residential nodes.
Although the industry was expected to perform somewhat below
par in 2009 in the wake of the global financial crisis, In addition, Intermarket Securities Limited (ISL) is to develop
construction activities in the country remained fairly robust, a three-star hotel, business park and other infrastructure such
89
 skilled labour in the construction-related areas of engineering,
architecture and surveying, and the promotion of local building
materials and technology. However, the existing housing deficit
is too large for the state to deal with alone, and there is a need
to integrate government and private sector efforts.

The NHA is presently restructuring its operations to increase

access to affordable accommodation for Zambians, with new
services and products to be launched before the end of 2010
aimed at encouraging home ownership. This includes a housing
scheme for Zambians working abroad, known as the Diaspora
Housing Scheme, and the Fast Track Construction Scheme,
which uses new building technology to reduce the cost of
projects as well as the construction time-frame.

Housing has been declared a priority sector by government - Photo Courtesy: René Hartslief TRANSPORTATION
In view of its landlocked status, Zambia’s road, rail and
as student hostels and staff houses at the University of Zambia air transport networks are critical to national and regional
under a PPP arrangement at a cost of somewhere between development. In addition to facilitating the influx of business
US$ 60 and 90 million. The project is being undertaken on a people and leisure tourists, an efficient transport infrastructure
‘develop, build, operate and transfer’ (DBOT) basis and will
is pivotal to trade. Road and rail transport are traditionally
have a transfer period of between 25 and 30 years.
the most widely used transport modes, although inland water
Furthermore, TAJ Hotels group plans to begin building a five- transport is also used.
star hotel in Livingstone within the next two years.
Mpulungu harbour on Lake Tanganyika sees shipments
Sherwood Greene Properties Zambia is involved in of cement, sugar, pharmaceuticals, steel and many other
property management and valuation, as well as providing products. Trans-shipping for both imports and exports includes
estate agency services for commercial, industrial, the ports of Durban (South Africa), Dar-es-Salaam (Tanzania),
residential and agricultural properties. The company has Walvis Bay (Namibia) and Beira (Mozambique).
offices in Lusaka and Kitwe, and has 10 years’ experience
in property consultancy. Growth in the transport, storage and communications sector fell
to 3.1 percent in 2009 compared to 15.8 percent in 2008, mainly
Housing on account of negative growth in rail and air transport, as road
Housing has been declared a priority sector by government in transport and communications remained buoyant.
recognition of the fact that decent housing or shelter is a basic
human need, and that home ownership is a form of wealth Regional transport corridors
creation. Rapid population growth combined with rural-urban Zambia’s government is working with cooperating partners
migration has resulted in a greater demand for housing, and regional governments to improve and expand regional
particularly in Lusaka. transportation networks, in order to enhance regional
integration and economic development. Improving cross-border
Some success has been achieved through the National
infrastructure will reduce the expense of surface transport –
Housing Authority (NHA), which has schemes in Kabwata
both road and rail – and, by extension, regional trading costs.
Estates, Woodlands Extension, Nyumba Yanga and on the
Copperbelt, for executive, high cost, medium cost and low cost
housing. NHA is also involved in the upgrading of unplanned One of the most critical transport corridors in southern Africa,
settlements, employment creation for unskilled as well as the North-South Corridor, together with its adjacent spurs,
services eight countries – Tanzania, Democratic Republic
of Congo (DRC), Zambia, Malawi, Botswana, Zimbabwe,
Mozambique and South Africa. The importance of the North-
South Corridor to Zambia is immense, as it links the Copperbelt
to the southern ports in South Africa, and also interconnects
with the Trans-Kalahari, Beira, Lobito, Dar-es-Salaam and
Nacala corridors.

The Dar-es-Salaam Corridor links the port of Dar-es-Salaam

with the Copperbelt, while the Mtwara Corridor links Zambia,
Malawi and the southern regions of Tanzania across Lake
Malawi/Niassa and through Mozambique. The Lobito Corridor,
which connects Zambia with Angola, has opened up direct
access to the sea ports in Luanda and Lobito Bay on the
Atlantic Ocean, providing Zambia with a shorter land route to
the west coast for imports and exports destined to and from
Europe and the USA.

Projects such as Kazungula Bridge and the Nacala Corridor

are expected to commence in 2010 as part of the North-South
Corridor programme. The strategic importance of Kazungula
Bridge, which will replace the existing ferry, is in improving links
between Botswana, Zambia and Zimbabwe over the Zambezi
River in the SADC regional trunk road network.
91
Road infrastructure
In order to improve the state of Zambia’s road infrastructure,
government, with the help of the international community and
cooperating partners, developed the Road Sector Investment
Programme (ROADSIP). At the beginning of ROADSIP Phase I
in 1997, less than 10 percent of the paved road network was in
good condition. The programme’s target was to improve at least
50 percent of the paved road network in the country to good
condition. At the completion of ROADSIP I in 2002, this target
had been exceeded, with 59 percent of paved roads in good
condition. ROADSIP Phase II is running from 2005 to 2013.

Government has invested heavily in the construction and

rehabilitation of roads across the country since the inception of
the Fifth National Development Plan (FNDP), which runs from
2006 to 2010. While this has seen the quality of arterial road Zambia Air Force plane at Ndola International Airport - Photo Courtesy: René Hartslief

infrastructure improving markedly, much more needs to be done

to improve the road network, particularly rural roads. The Needs • K 60.9 billion is set aside to improve the condition of urban
Assessment Report for 2009 from the Highway Management roads within Ndola and Kitwe.
System has projected an annual budgetary amount of • K 603.9, which represents 40 percent of the roads budget, is
US$ 500 million for a period of five years to completely maintain being used to undertake routine maintenance and
and restore all roads from poor condition to a good or fair state. rehabilitation works.
• The rehabilitation of feeder roads and river crossings across
In 2009, government significantly increased the budgetary the country has an allocation of K 106.3 billion.
allocation for the development of road infrastructure, in line • The allocation for rural road development in the nine provinces
with its commitment to reduce the cost of doing business and has been doubled to K 45 billion – K 5 billion for each
improve access to rural areas. In a continuation of this trend, provincial rural roads unit compared with K 2 billion in 2009.
K 1 461.9 billion was allocated towards the construction,
rehabilitation and maintenance of road networks in 2010. The Road Transport sector grew by 13.3 percent in 2009
compared to 13.2 percent in 2008.
Key development projects for 2010 include:
• The second phase of the Zimba-Livingstone Road, with a Air transport
budget allocation of K 194.5 billion. Zambia has four international airports, namely, Lusaka,
• The upgrading of the Choma-Chitongo, Chembe Bridge- Livingstone, Mfuwe and Ndola, with several secondary airfields
Mansa, Mongu-Kaoma-Tateyoyo, Kasama-Luwingu, and and airstrips in Chipata, Kitwe, Kasama, Mongu, Solwezi and
Luansobe-Mpongwe roads, at a cost of K 146.2 billion. Mansa. Situated 24 kilometres from the centre of Lusaka
city, Lusaka International Airport is Zambia’s main airport and
connects the country with the rest of the world.

Following the liquidation of the state-owned Zambia Airways

in 1995, the air transport sector was liberalised to encourage
private sector participation. In the ensuing years, a number
of private local airlines arose to fill the gap left by the national
carrier, and various Bilateral Air Services Agreements have
been signed with other states whose airlines were interested in
operating routes into Zambia and vice-versa.

New developments in the industry include the 2009 launch

of Zambezi Airlines, which offers scheduled flights to
Johannesburg, Dar-es-Salaam, Nairobi and Lilongwe, using
Boeing 737-500 series aircraft. Pro-flight is Zambezi Airline’s
domestic partner. In addition, Zambian Airways (unrelated to
Zambia Airways), which for some years operated an extensive
domestic route network within Zambia as well as international
flights to South Africa, Tanzania and the DRC, suspended
operations on 10 January 2009.

Rehabilitation work in the past few years has included

improvements to the runway and buildings at Lusaka
International Airport. Chipata Airport has been rehabilitated
and reopened, and the length of the runway at Livingstone
International has been increased from 2.3 to 3 kilometres to
facilitate long-haul flights. For 2010, there is an allocation of
K 15.7 billion for the rehabilitation of airports and airstrips
across the country. Of this amount, K 5 billion is for Kasama
Airport, K 4.9 billion for Solwezi Airport, K 4.2 billion for Mansa
Airport, K 0.5 billion for Nyangwe Airstrip in Lundazi District, and
K0.6 billion for Serenje and Senanga aerodromes.

Rail transport
Zambia’s rail networks have for many years been controlled

93
 K135 billion on infrastructural development, which is double the
amount specified in the concession agreement. The cost of rail
track maintenance is borne solely by rail companies as opposed
to roads, which are maintained by the government.

In 2009, RSZ moved more than 400 000 tonnes of copper

products, out of which 70 000 tonnes was through TAZARA,
which accounted for imports of 50 000 tonnes. Since January
2009, RSZ had been operating eight of its locomotives jointly
with TAZARA to improve capacity and service to the port of Dar-
es-Salaam.

COMMUNICATIONS
Since the liberalisation of the communications sector, many
positive developments have taken place in telecommunications,
broadcasting and information communications technology
Photo Courtesy: René Hartslief
(ICT), such as the provision of mobile telephony services
and internet facilities, with deregulation, privatisation and
by Zambia Railways and the jointly-owned Tanzania-Zambia
wireless technologies having opened up new areas of potential
Railways (TAZARA). The network links Zambia to the DRC
investment.
and Angola in the north and Zimbabwe and South Africa in the
south, while the TAZARA network links into the line at Kapiri
In December 2009, the Communications Authority of Zambia
Mposhi and runs to the port of Dar-es-Salaam in Tanzania.
(CAZ) announced the change of its name to the Zambia
Information and Communications Technology Authority (ZICTA).
As part of government’s privatisation policy, Zambia Railways
This was as a result of the operationalisation of the Information
was concessioned during 2003 to Railway Systems of Zambia
and Communications Technology (ICT) Act of 2009.
(RSZ), a consortium comprising New Limpopo Project
Investments (NLPI) and Spoornet, both of South Africa. The
objectives of the concession were to allow the private sector to The name change is in line with the convergence of
inject capital into the company to improve its competitiveness technologies in what used to be different sectors; namely,
and help divert traffic from roads to rail, thereby reducing overall telecommunications and information technology (internet).
transport costs. The concession is a long-term agreement, These formerly distinct segments have now become one in
comprising a 20-year lease period with an option to renew for a terms of both the delivery of infrastructure and consumer
further ten years. gadgets. A unified licensing regime will enable more competition
in all market sectors from existing and new players.
Further liberalisation within the transport industry has seen
the private sector involved in the construction of a number of In addition to the ICT Act, the Electronic Communication
railways on a build, operate and transfer basis. The opening of and Transactions (ECT) Act and the Postal and Courier
mines in the North-Western Province – particularly Lumwana Services Act were also operationalised in 2009. ZICTA will
mine, which is one of the largest copper mines in Africa – is now regulate postal and courier services, a former function of
also spurring infrastructure development. The Chipata-Mchinji the Ministry of Communications and Transport. Additionally,
railway line will provide Zambia with its shortest sea route to the electronic transactions will be legalised and regulated.
Indian Ocean port of Nacala in Mozambique.
ICT services
In a further effort to address the poor performance of the rail While present infrastructure consists mainly of a microwave
sector, government is presently exploring ways of improving backbone and microwave trunk routes to major provincial
the performance of TAZARA through the identification of a centres providing analogue transmission, a digital microwave
strategic private partner. Furthermore, RSZ has invested about network and a domestic satellite system also provide services

Communications Authority of Zambia (CAZ) has changed its name to Zambia Information & Communication Technology Authority (ZICTA)
following the operationalization of the Information & Communications Technologies Act No. 15 of 2009 on 4th December, 2009.
Also enacted were the Electronic Communications & Transactions Act and the Zambia Postal Services Act. These have a direct impact on the
Authority as they introduce new functions for the Institution.
The new Information & Communication Technologies Act of 2009 among other things:
• Repeals both the Telecommunications Act & the Radio Communications Act
• Changes the name of the Communications Authority of Zambia to Zambia Information & Communication Technology Authority (ZICTA)
• Gives the Authority new powers especially as it relates to economic regulation & consumer protection
• Gives additional responsibilities of regulating postal & courier services including oversight over electronic transactions. The Postal &
Courier Services & the Electronic Communications & Transactions Acts enhance this new mandate
• Allows the Authority to review the current licensing framework by coming up with a converged & unified licensing.
HEAD OFFICE: Plot 3141, Buyantashi Road NDOLA OFFICE: Photocopy House, Buteko Avenue
PO Box 36871, Lusaka, Zambia PO Box 70728, Ndola, Zambia
Tel: +260 21 1 241236/246702 • Fax: +260 21 1 240023 Tel: +260 21 2 620865/620867 • Fax: +260 21 2 620806
E-mail: [email protected] • Website: www.zicta.zm

95
Communications, Lusaka - Photo Courtesy: René Hartslief
to remote rural areas. Three satellite earth stations provide
international telephone services. However, the capacity is not
adequate to satisfy demand. Fibre optic cables, which are
used for fixed and mobile telecommunication as well as for the
internet, are presently being installed countrywide. Zambia is
also being connected to the undersea cable in 2010.

The Zambia Telecommunications Company Limited

(ZAMTEL), the country’s national telecommunications service
provider, has historically owned the monopoly on fixed lines
and the international telecommunications gateway. It provides
approximately 90 000 lines throughout the country and also
operates Cell-Z, one of Zambia’s three mobile operators.

Government has announced its intention to divest up to

75 percent of its equity in ZAMTEL, and may consider
divesting the remaining 25 percent through sale of shares on
the Lusaka Stock Exchange. This will go a long way toward
improving the quality of service and reducing high costs in the
telecommunications sector.

International gateway licensing fees were aligned with regional

averages at the end of 2009. However, with the arrival of fibre
optic connectivity in Zambia, the usage of satellite-based
telecommunications gateways will soon become obsolete, and
the cost and standard of services are expected to improve
substantially.

Internet services
Established in 1994, ZAMNET was Zambia’s first internet
Service Provider (ISP), with numerous other ISPs having since
joined the market. By 2007, there were 19 private providers,
7 610 internet hosts and over half a million internet users, with
services widely available in Lusaka, Kabwe, Southern Province
and on the Copperbelt. There is potential for further growth in the
provision of services, with penetration still low in the rural areas.
96
ISP Bringcom Zambia Limited is introducing a Broadband
Global Area Network (BGAN) – a special service that will
render broadband facilities accessible in remote areas where
communication infrastructure is non-existent. Clients will be
able to access their corporate network through a secure Virtual
Private Network (VPN) connection.

Mobile telephony
The provision of mobile telephony services is seeing
remarkable growth, with improvements in extension of coverage
and service quality, as well as reduced tariffs. In 2007 there
were 91 800 landline connections compared to 2.639 million
mobile phone customers. However, the average revenue per
user (ARPU) dropped sharply in 2009. The vast majority of
mobile subscribers use prepaid services.
Zambia is blessed with abundant water resources - Photo Courtesy: René Hartslief
Zambia’s leading cellphone firm is Zain (formerly Celtel), which
has a market share of around 75 percent, followed by MTN National Water Supply and Sanitation Council (NWASCO) and
(formerly Telecel) from South Africa. Cell-Z is ZAMTEL’s cellular delegated to local authorities the responsibility for providing
service. International gateway licenses have been awarded WSS in their respective areas.
to Zain and MTN in a bid to bring down the high cost of
communications. Mobile data services using GPRS and EDGE Increasing access to clean water and sanitation continues to
are available, and the rollout of third generation technology is in be a major goal of government, not least in order to prevent
progress, including 3.5G HSPA. water-borne diseases, and Zambia is committed to achieving
the target of 74 percent access to safe drinking water by 2015
WATER SUPPLY in line with the UN’s Millennium Development Goals. As such,
Zambia is blessed with abundant water resources, which cover the water sector has been prioritised as one of the seven main
some 11 890 square kilometres of the country’s total area. investment areas in the FNDP.
Water resources comprise lakes – particularly Lake Tanganyika,
Kariba Dam, and lakes Bangweulu and Mweru – as well as a For 2010, government allocated K 433.7 billion to water supply
number of rivers. Kariba Dam, a major supplier of Zambia’s and sanitation facilities – more than double the resources
water needs, is 280 kilometres in length, has a surface area of allocated in 2009. Of this amount, K 198.2 billion has been
5 580 square kilometres and holds 185 billion cubic metres of directed to the National Urban Water Supply and Sanitation
water. Programme. In addition, K 116.5 billion has been put towards
the National Rural Water Supply and Sanitation Programme,
While the country has sufficient water resources, factors and is being used for the construction of 1 000 boreholes and
such as urbanisation as well as demands from mining and 300 demonstration pit latrines, and the rehabilitation of 700
manufacturing industries have increased pressure on Zambia’s boreholes.
water and sanitation services, which need to be developed
more efficiently for sustainable and environmentally safe usage. ENERGY
Zambia has an abundance of energy resources, the most
The National Water Policy of 1994, the National Environmental important being hydroelectric power, with an estimated
Support Programme (1994) and the Water Resources Master hydropower capacity of 6 000 megawatts, of which only about
Plan (1995-2015) outline strategies and comprehensive action 1 640 megawatts has so far been installed – just 30 percent of
plans to develop the water sector. The 1997 Water Supply and the total capacity. Hydroelectric plants account for 92 percent of
Sanitation Act established an independent water regulator, the the total installed capacity and 99 percent of the total electricity

97
 generated in the country. The two main hydropower stations are
Kafue Gorge (990 megawatts) and Kariba North Bank
(600 megawatts).

Hydropower stations supply the national grid while diesel power

generating plants supply isolated loads, mainly in remote
areas not connected to the grid. There are inter-connectors to
Zimbabwe and the Democratic Republic of Congo (DRC), which
are the two most important electricity export grids.

Improving the supply of, and access to, electricity remains a

key strategic focus in order to guarantee stable energy supply
in support of private sector growth. As energy is an important
driving force behind the country’s economic development,
government has prioritised its provision to areas of high
economic potential, such as mining, agriculture, tourism and
manufacturing.

Government is seeking alternative sources of energy, such

as solar power and bio-fuels, while it expands the capacity of
existing hydroelectric power stations. Intrinsic to this process is
the raising of electricity tariffs to make investment in new capacity
profitable and to attract private interest. Another pressing
need is to ensure the security of supply of petroleum products.

In 2009, the EU and African, Caribbean and Pacific (ACP)

countries launched a new global energy facility worth more
than US$ 200 million (approximately K1 300 billion) to
contribute to poverty alleviation and protection of the
environment under the Millennium Development Goals.
The ACP-EU Energy Facility is being funded under the 10th
European Development Fund and covers the period 2009-
2013.

Electricity regulation and supply

The Zambian power sector is governed by three pieces of
legislation:
• The Energy Regulation Act (1995) established the Energy
Regulation Board (ERB)
• The Electricity Act (1995) abolished the statutory monopoly of
ZESCO in the power sector and provided for new entrants
• The Rural Electrification Act (2003) aims to facilitate expanded
electrification in rural areas

The ERB is responsible for the licensing, monitoring and

supervision of operators in the energy sector, as well as the
approval of electricity tariffs. In consultation with other statutory
bodies like the Zambia Competition Commission, the board
monitors and promotes competition within the energy sector,
while minimising the environmental impact of the production
and supply of energy and storage and use of fuels in
conjunction with the Environmental Council of Zambia.

The major distribution network falls under the Zambia

Electricity Supply Corporation (ZESCO), the national
electricity utility, which was successfully commercialised in
2005. The corporation operates and maintains a high voltage
transmission system, is responsible for all electrical power
imports and exports in the country, and provides retail services
to all but the largest mining customers on the Copperbelt.

ZESCO has made great strides in reducing the backlog of

customers awaiting connections: standard services are current,
while for non-standard connections the backlog has been
reduced from 7 000 in January 2008 to 3 600 in January 2010.
Generally, a standard connection is completed within 30 days
and a non-standard connection within 90 days.

In an effort to sustain existing capacity as well as to attract

additional investment in the sector, electricity tariffs have been
adjusted upwards. Government approved a new multi-year
tariff adjustment framework in 2009, which is aimed at inducing
operational efficiency and increasing the profitability of the
98
 Work is ongoing on the 360-megawatt Kariba North Bank
Extension Project, which should be completed by 2012. This will
bring the total installed capacity at the power station to
1 080 megawatts.

Feasibility studies have been completed for the Kafue Gorge

Lower and Itezhi-Tezhi projects. The 120-megawatt Itezhi-Tezhi
hydropower plant is being developed under a joint venture
investment with Tata Africa Holdings. The 600-megawatt Kafue
Gorge Lower hydropower plant is expected to cost in the region
of US$ 1.5 billion and be commissioned in 2017.

While these large projects will almost double the country’s

ability to generate electricity over the medium term, there is
an urgent need to improve the supply of electricity in the most
remote areas of Zambia. Given the high cost of building lengthy
distribution networks, government has begun to develop a
number of mini-hydro projects aimed at supplying smaller local
areas with electricity. Several projects have been identified for
which development is to take place within the Public-Private
Partnership (PPP) framework, such as the Kabompo Gorge and
Kalungwishi projects.

Copperbelt Energy Company (CEC) is to spend US$ 120 million

on the development of the 33-megawatt Kabompo Gorge
hydroelectric project on Kabompo River in North-Western
Province. The project is earmarked for commissioning by 2015.
The 218-megawatt Kalungwishi hydroelectric project, which is
being built by Zambian company Lunzua Power Authority, will
cost in the region of US$ 641 million. Construction could start
as early as 2010, with commissioning expected in 2014.

Zambia is also pursuing the development of transmission

inter-connectors with neighbouring countries. One such project
There are investment opportunities in electricity transmission - Photo Courtesy: René Hartslief
is the Zambia-Tanzania-Kenya power inter-connector. Other
investment opportunities in electricity transmission include the
sector. In addition, ZESCO has embarked on a countrywide
Zambia-Malawi inter-connector; Zambia-DRC inter-connector;
programme to install prepaid meters, most of which are now
and Solwezi-Kolwezi inter-connector.
locally manufactured. The public utility is also in the process of
improving its cost structure for the benefit of its customers.
As less than 20 percent of all Zambians and only 3.1 percent of
the rural population have access to electricity, public resources
Copperbelt Energy Corporation (CEC) is the sole distributor
in 2010 will be focused on stepping up rural electrification
of electricity to the major mines in Zambia. Currently, CEC buys
programmes, which have received an allocation of K 234.7
electricity from ZESCO under a bulk supply agreement that
billion. This is a huge increase on the 2009 allocation of
expires in 2020.
K 88.8 billion and the 2008 sum of K26.1 billion.
Opportunities for investment exist in electricity generation
A US$ 3 billion biofuel project, which is a joint venture between
and transmission projects, as well as the exploration for
Biomass Zambia and the Zhongying Changjiang International
and production of petroleum resources, coal exploration
Investment Guarantee Company, a subsidiary of Wu Han Kaidi
and mining, and the development of renewable energy
of China, is set to create more than 200 000 direct jobs in
sources.
Zambia.
Current infrastructure development Government is expanding the capacity of hydroelectric power stations - Photo Courtesy: René Hartslief

Zambia experienced energy shortages during 2007 and 2008

when demand rose due to increased investment in the mining
sector. While the situation was somewhat ameliorated when
demand decreased in 2008, with the revival of investment in
mining during 2009, the demand for power is on the upswing
again. Nevertheless, no further power shortages are anticipated
during 2010, as measures taken to increase power generation
capacity will add 210 megawatts of electricity to the national
grid. This should be enough to meet demand from new
development projects.

The power utility, ZESCO, has undertaken major upgrading and

rehabilitation of generation infrastructure at Kafue Gorge and
Kariba North Bank hydropower stations. The rehabilitation of
Kafue Gorge has added 90 megawatts, while the upgrading of
Kariba North Bank is to add an additional 90 megawatts. The
remaining 30 megawatts will be added during 2010.
99
 Education & Training
Government places a high priority on education and development, and Zambia is well on
track to meet the Millennium Development Goal of providing universal education by 2015.
The education system covers a wide spectrum of formal, non- PRIMARY & SECONDARY EDUCATION
formal, private and community-based initiatives with the aim Zambia’s education sector has improved markedly since the
of enhancing access to educational facilities and improving 1990s. Much of this may be attributed to the introduction of
the standard of education for pupils at every level. Guidelines free primary education in 2002, with the net primary school
such as cost-sharing, maximising of resources, infrastructural enrolment increasing dramatically from 68.1 percent in 2000 to
development and collaboration among stakeholders are 92.3 percent in 2006. Furthermore, between 76 and 80 percent
emphasised. Support for community schools, which fulfil a vital of children enrolled complete the final year of primary school
function in providing learning opportunities to disadvantaged education. Zambia thus looks set to achieve the United Nation’s
scholars, continues in order to achieve the goal of free Millennium Development Goal (MDG) of universal primary
education for all. The role of the private sector – particularly in education for all children by 2015.
the case of public-private partnerships (PPPs) – is becoming
ever more critical for increasing access to education. While secondary school enrolment has not been as successful,
school completion rates have risen from 63.6 percent in 2000
POLICIES & PROGRAMMES to current figures of close to three-quarters of enrolled pupils
The Fifth National Development Plan (FNDP) launched in completing their secondary school education. 2008 witnessed
a 61 percent secondary school pass rate nationally; an
2007 foresaw significant investment in education over the
improvement over previous years.
ensuing four years, as evidenced by the increased government
budget allocation to this sector in the years that followed. The
While the provision of free primary education and the re-entry
FNDP focuses on addressing the numerous challenges that
policy have given many more pupils access to education,
remain in education, including ensuring high quality education,
secondary education continues to be limited, with rural
increasing retention rates, building new schools and improving Zambians having far less access to either primary or secondary
infrastructure in general, as well as providing adequate supplies school education than their urban counterparts. Many schools
and materials, including school books. suffer from poor infrastructure and a lack of learning materials.
Furthermore, teachers’ salaries remain substantially below
Furthermore, the FNDP emphasises the provision of education the regional average, and the HIV/AIDS crisis has increased
through low cost yet high impact interventions for different teacher absences and attrition rates, as well as causing a rise in
categories of learners who were not catered for as children, the number of school-age orphans.
youths or adults. Pro-poor policies are instituted to offer
equitable education to vulnerable members of society, with Nevertheless, in the last several years the education sector in
particular attention given to programmes directed at gender, Zambia recorded a number of positive developments. During
HIV/AIDS, school health and orphans, including out-of-school 2008 efforts to recruit and train new teachers at primary
children. A significant step in supporting this vision has been and secondary school levels resulted in 5 000 new teachers
the allocation of nearly one-fifth (19.9 percent) of the national entering the educational system. This contributed to a drop
budget to education in 2010. in pupil-teacher ratios. For instance, between 2005 and 2008
the ratio in grades 5 to 7 dropped from 37.5 to 34.7 pupils per
In line with government’s commitment to improve service teacher, and in grades 10-12 the ratio fell to 18.9 from 21.7.
delivery in education, the 2010 National Budget contains
a 26.4 percent funding increase for education over the Continuing its push for infrastructure development in education,
previous year. government has increased its allocation in this arena by nearly
100
 FEETAP
CONSULTANCY SERVICES:
• Environmental Impact Assessment (EIA) • Environmental Project Briefs (EPBs)
• Hydrogeologists & Integrated Water Resources Management (IWRM)
• Environmental Audits • Trainers in waste management the TEVET policy under the aegis of the Ministry of Science,
• Hazardous waste experts
Technology and Vocational Training (MSTVT).
OTHER PROGRAMME INTERESTS:
• Climate change adaptation For 2010, government will provide K 84.3 billion in support
• Action research on “value chains and the rural poor in disadvantaged
areas in Zambia”
for operations and infrastructure development at TEVET
• Support Conservation Farming for the rural poor institutions; an increase over the K 71.3 billion provided
• Free Environmental Education for Kids (EEK) during the previous year.
• Operates an Environmental Education Shop
FEETAP has been operational since the second half of 2009 Government policy envisages a programme of increased
education and training for the formal sector. This goal will
Start Today to Save Tomorrow!!! entail the ongoing privatisation of the economy together with
+260 977 992297 / 969 964041 / 977 449806 / 967 449806 / 955 449806 the development of linkages between vocational and technical
G15 Westgate, Freedomway/Lumumba Rd • PO Box 36538, Town Centre, Lusaka educational facilities and business in order to increase the
[email protected] or phallenm@feetapzambia org • www.feetapzambia.org relevance of training to private sector employment.
TRAINING WORKSHOP

In order to contribute to education for all by 2015 as well as

poverty reduction, the MSTVT has set a target of increasing
access to TEVET from 30 000 to 50 000 by 2013.

Universities
Founded in 1966, the University of Zambia (UnZa) is the
largest university in the country, with a student population of
about 6 000. Its main campus is located on the Great East
Road, about 7 kilometres from Lusaka. Offering diploma and
50 percent to K 553.5 billion for 2010. In 2009, construction
degree courses in education, the humanities, engineering, law,
was begun on 20 new secondary schools and 2 500 additional
medicine, veterinary sciences, mineral technology, agricultural
primary school classrooms. These endeavours should be
and natural sciences, UnZa also provides a number of
completed by mid-2010.
postgraduate programmes. A Consultancy and Training Unit
supplies information technology services to the business and
In 2010, infrastructure monies will be used to construct 2 900
ICT community in Zambia and further afield.
new classrooms that will provide places for an additional 250
000 students across the country. Most of these classrooms will
The Copperbelt University (CBU) was established in December
be built using the community mode of contracting. In addition,
K 21.4 billion has been allocated for the procurement of 1987, and today comprises six schools and a directorate, with
educational materials, including books and desks. schools of The Built Environment, Business, Mathematics and
Natural Sciences, Natural Resources, Technology and Graduate
TERTIARY EDUCATION Studies. CBU’s programmes attract over 5 000 applications for
In recent years, government has prioritised science education, the 1 200 places available each year. The university has a total
technical, vocational and entrepreneurship training, and higher student population of 5 155 and a staff establishment of 695,
education. In addition to the drive to put more government- of whom 207 are academic staff. The university is currently
sponsored students in universities and colleges, there has engaged in a vigorous infrastructure development programme,
been a substantial increase in both public-private partnerships encompassing upgrading and expansion of the School of
for funding higher education as well as the number of private Business, School of Technology and Centre for Lifelong
institutions of higher learning in the country. There are now Education, as well as the construction of student hostels.
over two dozen private colleges in Zambia that offer training
in areas as wide-ranging as public administration, education, The former National College for Management and Development
marketing, agriculture and natural resource management. For Studies in Kabwe, Mulungushi University (MU) was
2010, government has allocated K 164.9 billion to assist the established as Zambia’s third public university on 1 January
country’s three public universities. An additional K 114.6 billion 2008, and admitted its first crop of students in September 2008.
will be used to provide bursary support for those seeking higher The government of Zambia amended the country’s University Act
education. to facilitate the establishment of a public-private partnership with
Konkola Copper Mines (KCM) that underlies the structure of MU.
Technical and vocational education and training
Technical education and vocational training are recognised MU comprises two campuses: the Great North Road Campus,
as vital to producing the skilled labour needed to run the located 26 kilometres North of Kabwe; and the Kabwe Town
machinery, equipment and other products of science and Campus. A multi-level curriculum university, Mulungushi offers
technology that are essential for national development as well a wide range of degree, diploma and certificate programmes in
as poverty reduction. This realisation led to the introduction of its nine academic faculties. The university also offers distance
Technical Education, Vocational and Entrepreneurship Training and lifelong learning programmes, short courses and evening
(TEVET) reforms in 1994, with the sector currently guided by classes for students who are unable to attend full-time study.

101
 Health
Improvements have been noted over a broad cross-section of Zambia’s health statistics
in recent years, with government having stepped up its commitment to bring quality health
services to all its citizens.
There have been a number of positive developments in K 128.4 billion for improvement of health infrastructure,
Zambia’s health sector over the past decade. Some key health K 134 billion for continued construction of district hospitals and
indicators, such as maternal and under five mortality rates and staff housing, and K 20 billion for procurement of essential
incidence of malaria have all declined since 2002. While HIV/ medical equipment. An amount of K 33.7 billion has been
AIDS is arguably among the greatest threats to Zambians’ specifically ear-marked for prevention and treatment of HIV/
health and wellbeing, for the first time HIV infection rates AIDS. While overall health allocation has dropped, due to
appear to be dropping, not only in specific ‘high risk’ groups but suspension of aid by a number of cooperating partners,
also in the general population. domestic contribution to government expenditure on health has
actually increased by 18.6 percent for 2010.
Life expectancy at birth is estimated at 51.3 years (2010),
according to the latest socioeconomic indicators released by Government continues to emphasise improvement of health
Zambia’s Central Statistics Office. While this is higher than infrastructure. To this end, certain key projects related to health
many neighboring countries, it is still substantially below the infrastructure and human resource improvement will continue.
world average, and reflects a combination of poor health This includes the construction and expansion of 16 district
care and service access and the impact of HIV/AIDS-related hospitals in regions such as Samfya, Chadiza, Mumbwa, Kapiri-
morbidity and mortality. Recently HIV/AIDS prevalence in Mposhi, Isoka, Shang’ombo, Lumwana, Chiengi, Mpulungu,
certain specific groups, primarily adolescent girls and young
Kaputa, Chama, Mufumbwe and Chongwe.
women in urban areas, appears to have been dropping.
HIV prevalence in the general population has also dropped,
In 2010, K 13.7 billion has been allocated toward continued
currently standing at just over 14 percent, with national
recruitment of medical staff and the formation of 21 new
antenatal HIV figures remaining around 20 percent (Zambia
health posts across the country. Government is also putting in
DHS 2009).
place incentive programmes to improve retention of medical
ARV coverage in Zambia is well above the African average personnel in rural areas, and plans to rehabilitate and expand
and double the ARV access figures of countries in the region all 27 training schools for health care personnel in order to
such as South Africa that have more funding and better health increase enrolment as a means of mitigating the shortage of
infrastructure. The first ARV access target of 10 000 people frontline health care workers.
was not only met but exceeded, leading the government to set
a new target of 100 000 people; which, with the help of the US- HEALTH POLICY & PROGRAMMES
based President’s Emergency Plan for AIDS Relief (PEPFAR), The Fifth National Development Plan (2006-2010) provides
was also met by the end of 2007. While meeting these targets strategies for achieving the UN’s Millennium Development
is reason for hope, challenges still remain. Currently it is Goals on HIV and AIDS, malaria and other related diseases
estimated that less than half (46 percent) of HIV-infected by 2015. Of particular importance is government’s scheme
Zambians (330 000) needing ARV drugs are actually receiving to provide free ARVs and free medical services to all health
them. centres within rural areas.

The Health Sector in 2010 The Zambia Integrated Health Programme (ZIHP) provides
For 2010, government has allocated K 1 362.5 billion to health, a platform for ongoing partnerships between government,
or 8.2 percent of the National Budget. This includes public and private institutions, USAID and other international
102
organisations and agencies to address the country’s health in part to poor worker productivity stemming from AIDS-related
problems as well as continuing with the reform of the health care morbidity and mortality.
system. A wide range of health issues are tackled through
communication/behaviour change interventions, building HIV/AIDS PROGRAMMES
community and private sector partnerships, improving health The National HIV/AIDS/STD/TB Council (NAC) is the single,
worker performance, strengthening non-government high-level institution responsible for coordinating the actions
organisations (NGOs) and system support. of all segments of government and society in the fight against
HIV and AIDS. Formed in 2002, this autonomous body is given
Despite recent figures suggesting incidence declines, malaria political direction by a Committee of Ministers from some 14
continues to be a serious public health threat, resulting in over ministries. Members of the council represent government,
50 000 deaths a year. The Roll Back Malaria initiative provides NGOs, religious and traditional leaders, media, youth, the
a platform for a united effort against malaria and includes the private sector and those living with HIV/AIDS.
efforts of the ministries of Health and Education as well key
partners such as UNICEF and the World Health Organisation NGO networks such as the Zambia National AIDS Network
(WHO). (ZNAN) have a pivotal role to play in supporting activities, both
financially and technically, of various NGOs in the country,
The integrated management of childhood illnesses has and receive funds from the Global Fund to fight AIDS, TB and
remained a prime focus of the Primary Healthcare Programme. Malaria. The community response to HIV/AIDS (CRAIDS) also
While recent statistics show great success in controlling plays an active role.
preventable diseases through the immunisation programme,
malnutrition remains a challenge for government. Prior to 2003, Many national governments and NGOs fund the fight against
measles was one of the five major causes of childhood illness HIV and AIDS in Zambia. Finances from the Global Fund (US$
in Zambia. During that year, an immunisation campaign cut 92 million and a further US$ 254 million in 2004) are spent
the number of measles cases to zero. A nationwide follow- on a wide range of activities run by numerous organisations,
up immunisation campaign was conducted in July 2007, with but treatment scale-up is now the main focus. The President’s
more than 2.1 million children aged nine months to five years Emergency Plan for AIDS Relief (PEPFAR) targets 15 focus
immunised. countries, of which Zambia is the fourth most highly funded.
Zambia has received steadily growing funding through
PEPFAR: US$ 149 million in 2006, US$ 116 million in 2007,
HIV/AIDS IN ZAMBIA
US$ 269.2 million in 2008 and US$ 270.4 in 2009.
AIDS is the leading cause of death after malaria, and it is
estimated that close to one million Zambians are living with HIV/
Government aims to ensure that greater numbers of those
AIDS. Due to low voluntary testing rates, it is likely that the vast
infected with HIV/AIDS have access to free Anti Retroviral
majority of these individuals remain unaware of their infection.
Therapy (ART). During 2007, considerable progress was made
in the implementation of the free ART policy. A total of 137 000
Unlike in many developing countries, in Zambia HIV/AIDS has
patients accessed free ARV therapy countrywide compared to
not been confined to specific segments of the population; such
75 000 in 2006.
as the poor and uneducated, women, adolescents, etc. Infection
rates are very high among wealthier and more educated
Without intervention, the risk of mother-to-child HIV transmission
segments of society. HIV is most prevalent in urban centres in Zambia is around 40 percent. Launched in 1999, by 2004
such as Lusaka and in the Copperbelt, rather than in poorer Zambia’s prevention of mother-to-child transmission
rural populations. (PMTCT) initiative reached 74 health care facilities in four
provinces. By 2008 the number of facilities offering antiretroviral
Furthermore, the impact of AIDS has gone far beyond the drugs (primarily nevirapine) as part of PMTCT had increased to
household and community level. All areas of the public 935.
sector and the economy have been weakened and national
Photo Courtesy: René Hartslief
development efforts have been constrained. According to
data published by AVERT, the Zambia Business Coalition has
released figures suggesting that 82 percent of known causes
of employee deaths are HIV-related and 17 percent of staff
recruited are to replace people who have died or left because of
HIV-related complications.

HIV/AIDS has also impacted the agriculture sector. Given

that the vast majority of Zambians’ livelihoods are through
agriculture-related employment, HIV/AIDS has the potential to
exert a very serious impact on agricultural productivity. AVERT
cites data suggesting that the 2002 food shortages in Zambia
(an event that was declared a national emergency) were due
104
Useful Information
Location: Southern Africa – Day following Labour Day; 25 May – Africa Freedom Day;
4 July – Heroes’ Day; 5 July – Unity Day; 1 August – Farmers’
Capital: Lusaka Day; 24 October – Independence Day (1964); 25 December –
Christmas Day; 26 December – Day following Christmas Day.
Border countries: Angola, Botswana, Democratic Republic of
Congo, Malawi, Mozambique, Namibia, Tanzania, Zimbabwe Weights and measures: Metric system

Total area: 752 614 square kilometres (2.5 percent of the area Electricity: Local current is 220v, 50Hz, and plugs are square-
of Africa), comprising 740 724 square kilometres (land) and pinned.
11 890 square kilometres (water)
Time difference: GMT +02:00
Highest point: Mafinga Hills (2 301 metres)
Currency: Zambian Kwacha (ZMK); 1 kwacha = 100 ngwee,
Lowest point: Zambezi River (329 metres) with notes in denominations of 50, 100, 500, 1000, 5000,
10 000, 20 000 and 50 000. Smaller notes are rarely used and
Climate: Subtropical with three distinct seasons. May to August coins are obsolete.
is cool and dry, September to October is hot and dry and
November to April is warm and wet Business hours: Weekdays 08:00 - 17:00, Saturdays 08:00 -
13:00. Most banks open from 08:30 - 14:30 on weekdays, 09:00
Population: 13 272 533 (2010 mid-year estimate: CSO Population Projections Report) - 11:30 on Saturdays. Many shops stay open later.

Ethnic groups: 98 percent African (Bemba, Nyanja, Lozi and Foreign exchange: Travellers’ cheques, dollars or pounds may
Tonga), with the remaining 2 percent comprising Asian and be exchanged at any authorised bank or bureau de change in
European the main towns. Travellers’ cheques attract a commission. To
avoid additional charges, travellers are advised to take travellers’
Religions: Christianity (60 percent), Islam, Hinduism, cheques in US Dollars, Euros or Pounds Sterling.
traditional beliefs
Credit cards & ATMs: Accepted by most hotels, restaurants,
Languages: English (official); indigenous African languages, travel agencies and the larger stores. There are ATMs in Lusaka
of which there are more than 70, include Bemba, Kaonda, Lozi, as well as the larger towns.
Lunda, Luvale, Nyanja and Tonga
VAT: Value Added Tax is 16 percent. VAT refunds are offered
Public holidays 2010: 1 January – New Year’s Day; 8 March to tourists, who are issued with an export tax invoice (VAT 263)
– International Women’s Day; 12 March – Youth Day; 2 April – when purchasing goods, both of which must be presented at the
Good Friday; 3 April – Holy Saturday; 4 April – Easter Sunday; designated exit points of export for verification.
5 April – Easter Monday; 1 May – Labour Day; 25 May – Africa
Freedom Day; 5 July – Heroes’ Day; 6 July – Unity Day; Duty Free: The following items may be imported into Zambia
2 August – Farmers’ Day; 24 October – Independence Day without incurring customs duty: 400 cigarettes or 500g of
(1964); 25 October – Day following Independence Day; tobacco; one bottle of spirits/wine and 2.5 litres of beer; 1 oz
25 December – Christmas Day. bottle of perfume.

Public holidays 2011: 1 January – New Year’s Day; 8 March Visa requirements: Visitors must have a valid passport.
– International Women’s Day; 12 March – Youth Day; 22 April Visas are required, except for citizens of countries which have
– Good Friday; 23 April – Holy Saturday; 24 April – Easter visa abolition agreements with Zambia and citizens of some
Sunday; 25 April – Easter Monday; 1 May – Labour Day; 2 May Commonwealth countries. Please confirm with Zambia’s
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embassies or high commissions abroad. PO Box 50027, Lusaka, Tel: 253077
Tourism
Health: Anti-malarial medication should be taken, especially if PO Box 34071, Lusaka, Tel: 225463, Fax: 222189
visiting the national parks. While tap water in the major towns is Mines and Minerals Development
purified and safe to drink, elsewhere ensure that water is either PO Box 31969, Lusaka, Tel: 235323
borehole water, filtered or bottled. As in many other African Works and Supply
countries, the HIV/AIDS pandemic is of major concern, and PO Box 50236, Lusaka, Tel: 252366, Fax: 254108
visitors should observe standard prevention measures.
Business and Government Agencies
Transport Anti-Corruption Commission
• Road – Traffic keeps to the left and the general speed limit PO Box 50486, Lusaka, Tel: 252722, 253256, Fax: 251397,
is 100 kilometres on main routes and 65 kilometres in built-up 255376, E-mail: [email protected]
areas unless otherwise indicated. Visiting drivers must hold an Bank of Zambia
International Driver’s Licence. SADC licences are also valid. A PO Box 30080, Lusaka, Tel: 228888, 228903-20, Fax: 221767,
person driving into the country on business can have their car 237070, E-mail: [email protected]
admitted without having to pay duty, provided they will not use Copperbelt Energy Corporation
it for hire or commercial purposes. Coach travel is available PO Box 20819, Kitwe, Tel 244556, Fax: 244040
to a variety of regional destinations, while long range buses Export Board of Zambia
frequently leave from Lusaka to all the main towns and mini- PO Box 30819, Lusaka, Tel: 228106/7, Fax: 225270, E-mail:
buses and taxis are available for local transport. Road borders [email protected]
are open 24-hours a day, with the exception of Chembe, Lusaka Chamber of Commerce and Industry
Kazungula, Kariba and Chirundu, which are open from 06:00 to PO Box 37887, Lusaka, Tel: 224114, Fax: 224134
18:00 hours. Victoria Falls Bridge is open until 20:00 hours. Lusaka Stock Exchange
• Air – Four international airports, namely, Lusaka, Livingstone, PO Box 34523, Lusaka, Tel: 228391, Fax: 225969
Mfuwe and Ndola, with several secondary airfields and airstrips Patents and Companies Registration
in Chipata, Kitwe, Kasama, Mongu, Solwezi and Mansa. PO Box 32020, Lusaka, Tel: 255127, 255151, Fax: 255426,
• Rail – Zambia has three main internal train lines, from Lusaka Website: www.pacro.org.zm
to Livingstone, Lusaka to the Copperbelt, and from Kapiri Tourism Council of Zambia
Mposhi to the northern border with Tanzania. Main train station PO Box 32020, Lusaka, Tel: 290439, E-mail: [email protected]
in central Lusaka, Dedan Kamathi Road. Women Entrepreneurs Development
PO Box 30495, Lusaka, Tel: 236140, E-mail: [email protected]
Telecommunications: Telecommunications are among the Zambia Association of Chambers of Commerce and
best in Sub-Saharan Africa. There are three mobile telephone Industry
operators – Zain (formerly Celtel), MTN (formerly Telecel) and PO Box 30844, Lusaka, Tel 255046, Tel/Fax 253020, 252369,
Cell Z (the mobile division of Zamtel). Mobile penetration stood 253007, 252483,
at 33 percent in June 2009. E-mail: [email protected] / [email protected]
Zambia Bureau of Standards
Dialling code: Direct dialling to Zambia +260 followed by PO Box 50259, Lusaka, Tel: 227075, Fax: 238483, E-mail:
area codes: Lusaka, Kafue (01); Chingola, Kitwe, Ndola (02); [email protected]
Livingstone (03); Kasama (4); Kabwe (05);etc, plus subscriber’s Zambia Communications Authority
number. Direct dialling to neighbouring countries requires PO Box 36871, Lusaka, Tel 246702, Fax 246701,
four sets of numbers: first the international prefix 00, then the E-mail: [email protected], [email protected]
country code, the city code, and the number. Zambia Competition Commission
PO Box 34919, Lusaka, Tel: 222787, Fax: 222789, E-mail:
Internet: Broadband and wireless connections are becoming [email protected]
increasingly common, with services widely available in Zambia Consolidated Copper Mines
Copperbelt, Lusaka, Kabwe and Southern Province. There are a PO Box 30048, Lusaka, Tel: 221023, Fax: 220654,
number of internet cafés in Livingstone and Lusaka. E-mail: [email protected]
Zambia Electricity Supply Corporation
CONTACT DETAILS PO Box 33304, Lusaka, Tel: 361111, Fax: 222753, E-mail:
Government Ministries [email protected]
Agriculture and Cooperatives Zambia Export Growers Association
PO Box 50197, Lusaka, Tel: 254661, 256698, Fax: 254083 PO Box 31705, Lusaka, Tel: 271166 (main office), 271080
Commerce, Trade and Industry (technical office), 271081 (warehouse), Fax: 271167, 271080,
PO Box 31968, Lusaka, Tel: 228301/2/3/4/5/6/7/8/9, E-mail: [email protected]
Fax: 226673, Zambia Federation of Employers
Tel/Fax: 226727 Minister, E-mail: [email protected] PO Box 31941, Lusaka, Tel: 295541/82, Fax: 295582, E-mail:
Communication and Transport [email protected]
PO Box 50065, Lusaka, Tel: 251444, Fax: 251795 Zambia International Trade Fair
Education PO Box 71058, Ndola, Tel: 651514, Fax: 651704, Website:
PO Box 50093, Lusaka, Tel 250558, Fax: 253502, E-mail: www.zitf.org.zm
[email protected] Zambia Investment Centre
Energy and Water Development PO Box 34580, Lusaka, Tel: 250048, Fax: 252150, E-mail:
PO Box 36079, Lusaka, Tel: 252589, Fax: 252589 [email protected], Website: www.zic.org.zm
Finance and National Planning Zambia National Farmers’ Union
PO Box 50062, Lusaka, Tel: 253398/2505441/252146, Fax: PO Box 30395, Lusaka, Tel: 252649/255769, Fax: 252648
254335 Zambia Tourist Board
Foreign Affairs PO Box 30017, Lusaka, Tel 229087, Fax 225174,
PO Box 50069, Lusaka, Tel: 252698, Fax: 250240 E-mail: [email protected], Website: www.
Health zambiatourism.com
PO Box 30205, Lusaka, Tel: 252989, 253040/5, Fax: 253344 Zambia Revenue Authority
Lands PO Box 35710, Lusaka, Tel: 229214, 228414, 228423, Fax
PO Box 50694, Lusaka, Tel: 252288, 252323, 252320, Tel/Fax: 222717, E-mail: [email protected]
251927 for Permanent Secretary Zambia Telecommunications Company (Zamtel)
Local Government and Housing PO Box 71660, Ndola, Tel: 611111
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 Index to Advertisers
AAC Mining Executors Ltd ............................................ 40 Resources ................................................................ 86
Access Bank (Z) Ltd ..................................................... 21 Momentum Zambia Ltd ............................................... 103
Afgri Corporation .................................. Inside back cover Morganite Zambia Ltd ................................................... 44
Alfred H Knight (Zambia) Ltd ........................................ 35 Mukwa Lodge ............................................................... 46
Andrews Motel .............................................................. 85 Nampak Zambia Ltd ..................................................... 68
Bisonite Zambia Plc ..................................................... 71 National Airports Corporation Ltd ................................. 94
Blu Rock Mining Services ............................................. 45 National Savings & Credit Bank ................................... 29
Blue Financial Services Zambia ............Inside front cover NFC Africa Mining Plc ................................................... 38
Business Connexion Zambia Ltd .................................. 23 NFU Conservation Farming Unit .................................. 58
Castle Lead Works Zambia Ltd .................................... 40 Oryx Oil Zambia Ltd ...................................................... 93
Choma Milling Company Ltd ....................................... 53 Parmalat (Zambia) Ltd .................................................. 65
Cummins Zambia ................................................. 45 & 98 Protea Hotels ................................................................ 31
Diamond General Insurance Ltd ................................... 20 Scaw Metals Group ...................................................... 37
Diamonds of Lusaka ..................................................... 33 Sherwood Greene ........................................................ 97
Drillafrica ....................................................................... 41 Shreeji Investments Ltd ................................................ 19
EC Mining Ltd ............................................................... 47 Southern Sun Ridgeway ................................................. 9
Ecobank Zambia Ltd ....................................................... 5 Stefanutti Stocks Zambia Ltd ........................................ 91
Environmental Council of Zambia ................................. 17 Stockbrokers Zambia Ltd .............................................. 28
Equatorial Foods .......................................................... 68 Sun International Zambia Ltd ....................................... 81
Finance Bank (Z) Ltd .................................................... 27 The Royal Solwezi Hotel .............................................. 42
Foundation for Environmental Education & Training ........ Tri-Pump & Engineering ............................................... 46
Partnership .............................................................. 101 United Bank for Africa ................................................... 26
Gomes Haulage Ltd ...................................................... 43 UUNET Zambia ............................................................ 96
Grizzly Mining Ltd ......................................................... 48 Zambezi Portland Cement ............................................ 36
Group Five .................................................................... 90 Zambia Bottlers Ltd .............................................. 66 & 67
ICC - Industrial Credit Company ................................... 24 Zambia Development Agency ......................................... 3
Lafarge Cement Ltd ...................................................... 92 Zambia Forestry & Forest Industries Corporation Ltd ... 76
Lamasat International Ltd ............................................. 72 Zambia Information & Communication Technology ..........
Lusaka Stock Exchange Ltd ......................................... 32 Authority .................................................................... 95
Madison Asset Management ........................................ 30 Zambia National Commercial Bank .............................. 25
Ministry of Mines & Minerals Development ................... 34 Zambia National Farmers’ Union .................................. 51
Ministry of Tourism, Environment & Natural ..................... Zambia Tourism Board ................................................. 83
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ZAMBIA
REVIEW
2 010
11th edition