18 June 2007

Zambia: Levy's Mission to Woo Investors Bearing Fruit

PRESIDENT Mwanawasa is on a mission to sell Zambia's vast investment potential in developing the country.

The President in his second and final year term has shifted his focus from loans to Direct Foreign Investment which will have a positive direct impact on the lives of the Zambian people.

Recently the president was in London, United Kingdom, to attend the Africa Business Forum, 2007 organised by the Commonwealth Business Council in partnership the Business Action Forum.

Mr Mwanawasa led a Government delegation comprising Foreign Affairs Minister, Mundia Sikatana, his counterpart at Commerce, Trade and Industry, Felix Mutati and Agriculture Minister, Ben Kapita.

Others in the presidential entourage were special economic advisor to the President, Dr Situmbeko Musokotwane, State House chief analyst for Press and public relations, David Kombe, and other senior Government officials.

Zambia's High Commissioner to the United Kingdom, Anderson Chibwa, speaking in an interview in London said the high profile Forum under the theme "Partnerships for Jobs, Growth and Sustainable Development," is an ongoing initiative to help business people explore trade and investment opportunities in Africa through high level conferences.

Mr Chibwa said the Forum was a platform to evaluate progress on the agenda for Africa produced by the Gleneagles in 2005.

In July 2005, a Business Forum was convened as part of the official preparations for the Gleneagles G8 Summit.

The Forum brought together over 330 African and international companies from 36 countries united in the belief that business should be an active partner with governments, donor institutions and other parts of civil society in supporting sustainable development in Africa.

It identified key messages to G8 and African governments which business leaders identified as critical to achieving sustainable growth in the continent, and founded Business Action for Africa.

Mr Chibwa said the Africa Business Forum 2007 also provided an opportunity to update and draw lessons from the business actions and campaigns agreed at the 2005 Forum adding that the Forum gives chance to look at how far business has been able to develop new partnerships with the Government to facilitate and support economic reform.

He said the Forum further aims to critically look at what has been achieved in critical areas such as trade and customs reform, tackling corruption, job creation and poverty reduction, enterprise development, and improving the investment climate.

He said among other issues the Forum reviews progress made since Gleneagles, and evaluate this against the key policy actions required by G8 and African governments to promote growth and development in the continent.

Mr Chibwa said the high level forum looks at newly emerging priorities such as managing climate change affect Africa, focusing on whether commitments on infrastructure and health are being delivered.

He said the Forum further seeks an update on business actions for Africa, and set out a framework for business partnerships on economic reform.

The Zambian envoy noted that the Africa Business Forum 2007 also serves as the catalyst that brings leading African entrepreneurs together with counterparts from the United Kingdom and around the world.

Mr Chibwa said the Forum creates a platform for interaction of business people in the Great Britain (UK) and Africa .

He said the Forum serves as an implicit expression of a new vision for Africa, promulgated by a New Generation of Africans and Friends of Africa.

Mr Chibwa added that the Africa Forum 2007 was structured to help foreign investors to familiarise themselves with the possibilities of working in the African market, and to provide both African and foreign businesses a forum where they could meet possible partners.

Commerce, Trade and Industry Minister, Felix Mutati, addressing the Zambia Investor Forum during the Africa Business Forum 2007 said Africa had all the necessary ingredients to be the most profitable investment destination of the 21st Century.

Mr Mutati said the continent had untapped investment potential, backed by a growing market, abundant and diversified natural resources, educated human resources some of which resided in the diaspora, and strengthening macro-economic management which is translating into higher economic growth.

He observed that profitable opportunities exist across Africa in various sectors ranging from unique tourism attractions, infrastructure such as telecommunications, extractive industries, manufacturing, agri-business, mining and the financial sector.

Mr Mutati said the investment environment also continued to experience tremendous improvement with the ongoing resolution of conflict, peace and political stability, as well as modernisation of regulatory and tax regimes.

He further noted Africa's entrepreneurs were also growing in number, size and sophistication, with an increased appetite for export markets.

Mr Mutati said it was in this regard that the Government was undertaking reforms to strengthen the country's investment climate so as to consolidate economic growth.

Mr Mutati said the reforms range from providing a policy environment that created a vibrant private sector exposed to competitive international best practice including a friendly legal framework.

He said the Government was creating an enabling macro-economic environment, strengthen public agencies that support Private Sector Development (PSD) and enhance public/private dialogue.

Mr Mutati said efforts were being made to improve regulatory frameworks and investment code to foster PSD.

He said efforts were further being made to boost the infrastructure platform for PSD by encouraging private investment in infrastructure (PPI).

Headded that the Government was also working tirelessly to remove administrative barriers to business entry and operation and facilitate development of high-growth sectors.

He said another key area was to create greater opportunities for access to regional and international markets by Zambian businesses.

Mr Mutati said of equal importance was to unlock the growth potential of citizens through business development support and empowerment initiatives.

Adding his voice at the Forum, Agriculture and Co-operatives Minister, Ben Kapita, said Zambia had vast fertile land which had remained unexploitated as currently only 14 per cent of the land was being utilised for production.

Mr Kapita urged investors to come to Zambia and exploit the virgin land readily available in Zambia by growing an array of crops for both the local market and for exports.

He explained that climatic conditions in Zambia were suitable for almost all varieties of crops as the country was divided into three ecological areas good for different types of crops.

And President Mwanawasa shifted his focus from loans to Direct Foreign Investment which will have a direct bearing on improving the lives of the Zambian citizenry, in his energetic address to the Forum said the move has been taken to prevent the country from sliding back into debt which had frustrated development and starved key sectors such as education and health of the much-needed resources.

President Mwanawasa told the Zambia Investment Forum organised by Merrill Lynch International, one of the world's leading wealth management, capital markets and advisory companies, with offices in 37 countries and territories and total client assets of approximately $1.6 trillion, that although Zambia welcomes and was completely open to investors from anywhere in the world, citizens and foreigners alike, provided of course they adhere to the laws of the country, investment partnerships were most ideal.

He said Zambia was a good investment destination because the economic environment had improved very significantly over the past few years.

Mr Mwanawasa said some of the indicators for this improvement include consistent growth at around five per cent per annum for the past few years, falling inflation and interest rates, and massive reduction in the external debt burden following the HIPIC and the multilateral debt relief initiative.

The President said other noteworthy improvements were the rapidly expanding exports, both metal and non metal, which had seen the national export values more than tripling since 2002 as well as increase in foreign direct investment which had attracted more than US$4 billion in the mining industry alone.

Mr Mwanawasa observed that to a large extent this expansion in the economy, was a reflection of the confidence that the investor community had shown in the way his administration had prioritised matters relating to the economy as well as the way we were running the economy.

He said Zambia was fast becoming the most preferred investment destination on the continent because governance was guided by law.

"The point regarding being guided by the law leads me to the issue of corruption. This is a scourge that has done much to inhibit development in many parts of the world including Africa and certainly Zambia," he observed.

President Mwanawasa further said the Government had zero tolerance for corruption and if any official entrusted to facilitate investments solicits for gratification, there was no hesitation to report such individuals to several existing law enforcing agencies in the country.

Mr Mwanawasa told the Africa Business Forum that the active participation of the private sector was central to the economic emancipation of Zambia and the rest of the countries on the African continent.

President Mwanawasa pointed out that the need for aid diminishes and eventually becomes irrelevant if the private sector becomes strong.

He said it was in this regard that his administration was trying to create a friendly investment climate through the implementation of the private sector development programme (PSD) in a bid to remove various obstacles to doing business.

Mr Mwanawasa explained that the programme covers areas such as software improvement such as creating a regulatory framework for involving the private sector in infrastructure development via Public-Private Partnerships (PPPS), cutting down the time required to register a company and cutting down the time for customs formalities at borders.

President Mwanawasa said the move would also rationalise licence requirements and generally change laws and regulations that choke private sector initiatives.

He said, in many cases, the envisaged improvements would be established through the application of Information Technology backed by agreed upon client charters which define the minimum acceptable standards of delivery of public services in support of the private sector.

Mr Mwanawasa said in addition, the Government was also creating improved hardware required by business mainly through targeted business infrastructure in special economic zones dubbed 'Multi Facility Economic Zones.'

He pointed out that companies operating in the special economic zones would not only benefit from world class physical environment, but would also benefit from excellent tax incentives and a world class regulatory environment.

President Mwanawasa invited the business community to explore the profit opportunities that were presented by these facilities.

He added that as a result of the improved environment, Zambia had attracted significant investment in the past few years that had seen huge investment in mining, agriculture and other sectors.

Mr Mwanawasa, however, pointed out that business could not thrive amidst corruption. He said it was in this light that his administration had taken practical steps by prosecuting people who were suspected to have participated in corruption and theft of public resources.

The President, however, pointed out that corruption could not be perpetrated by Government officials alone without getting cooperation from the general public including members of the business community.

"My strong advice to the businessmen and women therefore, is that please do not cooperate with corrupt officials," he said.

He said punishment of perpetrators was only one tool in the fight against corruption adding that another important part of the arsenal must deal with removing the incentives for corrupt activities to thrive.

"I say so because quite often, it is unreasonable rules and work procedures in the Public Service that create incentives for corruption as business people try to find ways and means of cutting corners to get things done quickly," he said.

President Mwanawasa said it was in recognition of this problem that the Zambian Government had taken steps to eliminate the major sources of graft.

On the sidelines of the Africa Business Forum, President Mwanawasa held private talks with Ugandan President Yoweri Museveni and with Baroness Lynda Chalker, the former British minister for Overseas Development.

Baroness Chalker is founder and chairman of Africa Matters Limited, an independent commercial consultancy supporting private sector development in Africa.

The hallmark of President Mwanawasa's official trip to London was the signing of the Zambia-UK Partnership Agreement that will see Zambia receive £40 million each year for the next 10 years.

Think-tanks across the globe unanimously agree that one of the most important tools for fighting poverty is to have an economy that grows strongly for sustained time periods.

In order for this to happen, there has to be business persons at individual enterprise level behind the growth, hence the link between business and growth is very clear.

It has become widely accepted that businesses from the world's richer countries can and must play an important role in supporting African governments and African companies to sustain robust economic growth, which is now evident in Zambia and many African countries.

However, the underlining principle as stated by President Mwanawasa, must be Foreign Direct Investment in a bid to avoid the country sliding back into the crippling effects of the debt overhang.-ZANIS

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