Big focus on attracting foreign investment

South African and international logistics companies are finding it quicker and more cost-effective to buy shares in established Zambian firms rather than establishing new entities. An economic growth rate of around 8% and diversification of the economy into agriculture, manufacturing and logistics makes it an attractive destination. Zambia has eased trade by implementing a one-stop border post with Zimbabwe, launching webbased submission of customs declarations, and introducing scanning machines at border posts. These measures are in line with the relatively new government’s focus on attracting investment – but it has some way to go. While Zambia is placed fourth in Africa on the World Bank’s Ease of Doing Business ranking, its global standing is 94. South Africa is 39th, followed by Botswana (59), and Namibia (87). Lesotho at 136 is the nextbest African country for business after Zambia. Investors are free to invest in any sector of the Zambian economy and are entitled to incentives provided through the Zambia Development Agency (ZDA) Act of 2006. The ZDA Act does not discriminate against foreign investors, and no business ventures are reserved solely for the government. Companies wanting to establish a new operation can expect to take an average of 17 days to register a business. But building that new warehouse or truck depot can take longer: Globally, Zambia stands at 151 in the ranking of 185 economies on the ease of dealing with construction permits. It will also take at least 40 days to register the property. Pulling power into the facility will take 117 days on average – Zambia is ranked at at 151 out of 185 economies on the ease of getting electricity. And then a back-up generator will be required for operations relying on power. New builds are, therefore, designed as “green” facilities not only to reduce the carbon footprint of the logistics chain but also to contain costs. The country’s two power companies have warned that power prices in Zambia may need to double by 2015 to make it viable to build new generation capacity and end a supply shortage That is not the only risk facing investors in the country. In terms of investment risk, Zambia is ranked at 82 out of 185 economies on the strength of investor protection index. Then there is the question of taxes: Zambia stands at 47 in the ranking of 185 economies on the ease of paying taxes. (Third in Africa, behind South Africa at 32 and Botswana at 39.) On average, firms make 37 tax payments a year, spend 132 hours a year filing, preparing and paying taxes and pay total taxes amounting to 15.2% of profit. INSERT 1 17 days The average time to register a business. INSERT 2 40 days The time it takes to register your property. INSERT 3 117days Getting power into your facility. INSERT 4 FAST FACTS: Ease of dealing with construction permits 151 out of 185 economies Investment risk 82 out of 185 Ease of paying taxes SA: 32 Botswana: 39