Zda Spotlight - May 2009

Zambia

Zda Spotlight

Development Agency

Issue 3

May 26 2009

Inside this issue:

SCALE UP INVESTMENT - RB

SMEs Given Lifeline

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Lumwana Gets MultiFacility Economic Zone

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Diagnostic Centre To Be Set Up

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Measures To Boost Investment

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ZDA and TATA Sign MoU

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National Labour System Verses IP

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ZDA at Groundnuts Value Chain Meeting

4 Business Advisory Council (ZIBAC) meeting, held at Zambezi Sun Hotel under the theme: “Global Economic Crisis-Zambia’s Response to Growth and Competitiveness,” the President said there was need to continue attracting investors from both domestic and foreign players into the country’s economy for Zambia to withstand the challenges rising from the economic crisis. Mr.

Lumwana Mine Setting A New Standard Points of Interest • “Zambia had scarce resources and needed to double its efforts to attract foreign investment a thing that would result in poverty reduction.” • “When we talk about job creation, we must ensure that it leads to the creation of decent jobs.” • “Government will this year reform the entire licencing regime in the country to make it easier for small businesses to operate and reduce on redundancies in the licencing procedures.”

Quote “An investment in knowledge always pays the best interest.” Benjamin Franklin

President Rupiah Banda says the country needs new approaches to partnerships, joint ventures and business strategies to increase the size and scale of investment in the country, including the public private partnership (PPP). Speaking in Livingstone at the opening of the sixth Zambia International

Banda said an effective interaction with the private sector provided a strong basis for strengthening the cooperation and partnership between the state and the business sector. He stressed the need for measures that strengthened competitiveness, infrastructure development, to allow the country place itself on a stronger footing once the recovery begins to take shape, and determine prosperity for the country. The President said government was aware of the private sector’s concerns about the approval of the recommendations on business licencing reforms and pledged that the state would soon finalise the report and present it to Cabinet for consideration. He said the reforms to improve the business environment and reduce the cost of doing business in the country had been discussed before and many lessons had been learnt Continued on Page 3

SME To Receive K2.1 Billion A small enterprise dealing in the production of hardware for the construction industry has qualified to receive K2.1 billion from the Citizens Economic Empowerment Commission (CEEC) with the help of ZDA’s MSE Division on how to come up with a viable business proposal and apply

for the funds for the expansion of its business. Kechas General Dealer (KGD) based in Kabwe, qualified to receive the funds from CEEC at the end of March after consulting the MSE Division on how to meet the CEEC’s requirements for the acquisition of the empowerment

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funds. With such funds, KGD graduated from being an SME to a medium enterprise and can now apply for an investment licence from ZDA. The Division assists SMEs to apply for CEEC funds because most of them do not know how to write business proposals to access funds.

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SMEs Given Lifeline…… The International Labour Organisation (ILO) in Zambia in conjunction with Ministry of Commerce, Trade and Industry and the ZDA have launched a BroadBased Wealth and Job Creation (BBWJC) programme in Kabwe as a long-term development objective articulated in the National Vision 2030, of Zambia becoming a prosperous middle income country by the year 2030. The programme which was launched on 15th May 2009 is in line with ZDA Micro and Small Businesses programmes that create linkages between trans-national corporations and SMEs as a way of improving SMEs’ efficiency and build their capacity. The programme complements the Business Development Services (BDS) plan to build capacity between SMEs and BDS providers in order to improve their service delivery. The BBWJC programme links SMEs to markets as a way of providing them with opportunities to upgrade their production systems through technology and knowledge transfer and enhanced access to finance. Speaking during the launch, Minister of Commerce, Trade and Industry, Mr. Felix Mutati, said the government will this year reform the entire licencing regime in the country to make it easier for small businesses to operate and reduce the redundancies in the licencing procedures. Mr. Mutati said small and medium enterprises needed encouraging innovations in their operations because they had the responsibility of helping to reduce the country’s poverty by 50 percent by 2015. He said MSMEs were still underdeveloped and required a lot of support and capacity building for the sector to effectively play its role of facilitating broad based economic development; hence the need for more strategies to be put in place to ensure that economic growth translates into wide spread job opportunities and broader distribution of the economic growth benefits. And ILO Representative, Gerry Finnegan said the programme would emphasize on wealth creation alongside job creation as outlined in the Zambia Decent Work Country Programme (Z-DWCP), which placed job creation as its first priority. “When we talk about job creation, we must ensure that it leads to the creation of decent jobs.” The other theme for the programme is economic empowerment through MSME development, and the theme is in line with the CEEC Act and CEEC, he said. He added that ILO would work with ZDA to enhance linkages between large firms and small scale producers and farmers.

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Lumwana Gets Multi Facility Economic Zone The ZDA has approved the application by Equinox to establish a Multi-Facility Economic Zone (MFEZ) at Lumwana Mine in Solwezi. A special Board of the ZDA approved the company’s application to establish an MFEZ within the Lumwana large-scale mining licence (LMFEZ) following discussions with the company management and the ZDA. “Together with the ZDA approval, it is anticipated that the government will undertake to support the MFEZ by giving explicit protection to Equinox’s cornerstone investments at Lumwana and will also undertake to promote and maintain new and existing investment agreements for businesses within the LMFEZ,” Equinox President and Chief Executive Officer Craig Williams said. In a statement releasing the company’s first three months results of 2009, Mr. Williams said Equinox anticipated that the new MFEZ would create an investment zone that would attract both local and foreign business investment and provide sustainable and integrated business opportunities and growth, with Lumwana Mine acting as the cornerstone investor and catalyst for such growth. The government through the enactment of the ZDA Act, and among other initiatives sanctioned the establishment of MFEZs in Zambia with the objective of catalysing industrial and economic development in the manufacturing sector in order to enhance domestic and export oriented business. The policy was designed to contribute positively to the growth of the manufacturing sector in Zambia through the provision of competitive environments that encourage investors to set up businesses within the borders of Zambia with much ease.

Solar Plant Coming… A Korean delegation from Hyosung Corporation and Korean Trade and Investment Agency (KOTRA) was recently in the country to meet with officials from the Ministry of Energy, Rural Electrification Authority and Zambia Development Agency (ZDA) on plans to construct a 3MW (megawatts) Solar Plant in Zambia. The investment is meant to increase cooperation between Zambia and Korea in the promotion and introduction of renewable energy technologies throughout Zambia. The project once implemented will enhance the country’s attraction of foreign investment and expansion of the rural electrification programme. “This project is welcome as is will increase capacity in the energy sector and will boost investment in other

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sectors,” says ZDA Director of Investment Promotion Mrs. Florence Mumba. A MoU is expected to be signed between the Korean and Zambian Governments to promote cooperation in the engineering, manufacturing and construction of the plant. The Korean government will provide a development loan for the project through the Korean EXIM Bank (EDCF).

Diagnostic Centre To Be Set Up An Indian business delegation is to invest about US$ 3 million to set up a diagnostic centre in Zambia that is expected to reduce the cost of sending patients for specialist treatment abroad as it would be able to provide such facilities and services locally. Dr. Emmanuel, the delegation leader, said that before any disease is treated, there is need to have proper scanning, which he said can also reduce the current death rate in the country. He was speaking when he met Professor Neil Nkanza, who also runs a diagnostic centre in Lusaka. Dr. Emmanuel, who is also Managing Director of Barati Scans Private Limited, added that this is why his company is happy to associate itself with the Zambian government in establishing good health facilities for all the citizens. The construction works for the diagnostic centre are expected to commence in the next six months. At the same meeting Professor Nkanza bemoaned lack of proper diagnostic services in the country. He said proper diagnostic facilities are important in any health management noting that there is need for the Zambian government to ensure that the facilities are made available in all health institution. He cited breast cancer as one of the diseases that require good scanning facilities before treatment is administered. Professor Nkanza also thanked the Indian business delegation for choosing to invest in the Zambian health sector. The delegation held a series of meetings with Zambian medical doctors and explored the possibilities of establishing health centres.

Sirte To Host AU Summit The next ordinary sessions of the decision-making organs of African Union will be held in Sirte, Great Socialist People’s Libyan Arab Jamahiriya. The decision was made on May 18, 2009, during the meeting of Permanent Representatives Committee (PRC) at the African Union Headquarters in Addis Abba, Ethiopia. The theme of the summit of the Heads of State and Government is; “Investing in Agriculture for Economic Growth and Food Security."

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Measures To Boost Investment

BEE Attracts 60 SMEs

National Labour System Vs. IP

The ZDA and its stakeholders have been urged to take practical steps to improve the attitude of public officials and community leaders in order to make investment in the country conducive. Speaking at the opening of a validation workshop to present results and recommendations of provincial sensitisation workshops on investment facilitation, Ministry of Commerce Trade and Industry representative, Mr. Mike Mulongoti, said government was committed to improving the investment climate in the country for local and foreign investment to flourish.

This year’s Business Enterprise Exhibition (BEE) held on May 14 to 15, 2009 attracted about 60 Micro, Small and Medium Enterprises (MSMEs) from as far as Solwezi, North Western Province and Chinsali, Northern Province. The annual business event, which is organised by Zambia Chamber of Small and Medium Business Associations (ZCSMBA) this year hosted by the Lusaka District business Association. The exhibition attracted a number of products that ranged from machinery, food, textiles, and services such as banking, among others. The Zambia Development Agency (ZDA) participated through the Medium Small Enterprise (MSE) Division.

ZDA Investment Promotion Manager, Mrs. Jessica Chombo has said there is need to create a national labour system that could satisfy market demands for skilled labour, socio-economic concerns and resources-based opportunities in the economy in response to the privatesector led economy demands. Speaking at a workshop on ‘Labour Laws and the Rights of Local and Foreign Business in Zambia,’ Mrs. Chombo said since Zambia’s economy is private-sector driven, there was need for an efficient and effective labour administration system that could provide adequate and reliable labour market information to investors who scan the labour laws in the region before investing in a given country.

The main focus of the event was to sensitize participants on the various programmes and incentives government offers through the ZDA’s to MSMEs. Various documents and brochures were displayed and distributed. In addition 30 SME registration forms were given out. Overall ZDA’s presence was well appreciated by most MSMEs that came to the exhibition as they were able to access information on activities and application forms. This year’s event was under the theme “Development through innovation.”

Ms. Chombo said the growing opportunities for new enterprise start-ups as well as the expansion of existing ones, called for more entrepreneurs in the economy and the growing investment trend like in the mining sector there was need to develop and implement innovative responses to the skilled labour demand signals prevailing in the economy. “Zambia is competing with over 160 Investment Promotion Agencies in the whole world, hence the need for the ZDA to have reliable and adequate labour market information as it packages investment promotions to investors,” she said.

He said this could be seen from a number of reforms programmes aimed at enhancing and improving the investment environment and noted that the influence and attitude of public officials and community leaders and its impact on the investment climate had been overlooked in the past. “I therefore hope that the report of the consultants on the findings of the provincial sensitisation workshops will provide government and other stakeholders such as the ZDA with practical steps that can be undertaken in order to improve the attitude of public officials and local community leaders towards investment facilitation,” he said. The insights from the workshop would be used to devise strategies to strengthen relationships between investors, public officials and local communities so as to enhance the ability of ZDA to facilitate investment in a much friendlier climate. The sensitisation workshops were funded by European Union – African Caribbean Pacific (EU-ACP) Business Facility (BizClim), a European funded project which aims at fostering a business enabling environment in the ACP countries.

ZDA and TATA Sign MoU ZDA and TATA Zambia have signed a business linkage Memorandum of Understanding (MoU) aimed at creating better incomes and more jobs for smallscale farmers in many parts of the country. The ZDA-TATA agreement is meant to broker business linkages for small-scale farmers, abattoirs and slaughter-houses to supply hides to the TATA tannery, a development which resonates with the broad-based job creation programme. With such an agreement, ZDA will identify farmers that can supply animal hides to TATA whom it (ZDA) will train on how to produce quality skins and how to treat them before they are supplied to TATA. . The MoU is in response to ZDA’s strategy of linking SMEs to transnational companies and for SMEs to have access to global markets.

Scale Up Investment - RB Continued from Page 1

through implementation of the first phase of the private sector development reform programme. And speaking on behalf of Zambia’s cooperating partners at the same function, Dutch Ambassador to Zambia, Harry Molenaar, said Zambia had scarce resources and needed to double its efforts to attract foreign investment, a thing that would result in poverty reduction, job creation, more domestic and foreign investment and food security among others. Mr. Molenaar urged government to promote local investment by enhancing operations of the Small and Medium Enterprises (SMEs). He said the country’s cooperating partners would strive to promote business competitiveness and a vibrant private sector through continued support of private sector development programmes. Meanwhile, Lord Cairns, ZIBAC Advisors Chairman, said that there was still a lot for Zambia to do in light of the global credit crunch. He said while the world economy was affected by the downturn China and India’s economies were likely to sustain their growth in the next two years.

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ZDA Advised To Map-up Country’s Endowments A consultant who spearheaded a collaborative project between the ZDA and BizClim (an ACP-EU Business Climate Facility Initiative) on the provincial sensItisation workshops for public officials and community leaders on investment facilitation issues and the importance of promoting productive relations, has recommended that ZDA should map-up and document each province’s (and district) endowments and use that data in its investment promotion strategies. Africa Corporate Advisors (ACA) cofounder, Michael Nyamazana, said identifying investment opportunities for each province and possibly district and documenting them would enhance ZDA’s investment promotion strategies as investors needed provable data of prevailing investment potentials of the country. And workshops facilitators, Paolo von Schirach and John Kasanga recommended that ZDA should collaborate with the Road Development Agency (RDA) in infrastructure development in the country as infrastructure played a pivotal role in investment promotion.

Zambia Development Agency

Events

Privatisation House P.O Box 30819 Nasser Road

Zambia Agriculture & Commercial Show-Kitwe 27-31 May 2009

Lusaka, Zambia

International Trade Fair/Trade Mission-Malawi June-Aug,2009 Tel: 260-211-220177

Zambia International Trade Fair –Ndola 1-7 July, 2009

Fax: 260-211-225270 E-mail: [email protected]

International Trade Exhibition– South Africa 19-23 July Big Five - Republic of South Africa July-August 2009 Zambia Agriculture and Commercial Show

July-Aug 2009

Trade Exhibition-Mozambique 1-7 September, 2009 Trade Mission-Democratic Republic of Congo October 2009

Facilitating Economic Growth and Development

Trade Mission/Trade Exhibition-Dubai

Oct-Nov 2009

Producer Association Meeting & Company Visits April-Dec 2009

ZDA AT GROUNDNUTS VALUE CHAIN MEETING IN CHIPATA The Zambia Development Agency (ZDA) was part of a regional meeting recently held in Chipata to discuss a wide range of issues affecting the production, management and marketing of groundnuts. The workshop, which was organized by the USAID Funded Market Access, Trade and Enabling Policies (MATEP) project brought together stakeholders from Zambia , Malawi, Mozambique, South Africa and the United Kingdom, was aimed at taking practical steps to improve market access for the groundnuts and groundnut products. The meeting deliberated on various issues in the entire value chain of groundnut production. The meeting touched on a range of issues such as volume requirements in the export market, delivery specifications, preferred varieties and procurement terms; where the main buyers were

in the region and European markets and the trends in the sector. Other issues centered on competitiveness, improvement of the efficiency and profitability; improvement of yields and management of aflatoxin levels in groundnuts, and other issues to do with the production chain of groundnuts. The participants included international buyers, private businesses, community groups, technical experts, NonGovernmental organizations and government institutions.

ZDA At Copperbelt Show The Zambia Development Agency (ZDA) will be participating in this year’s Copperbelt Agricultural Mining and Commercial Show in Kitwe from the 27th to 31st May, 2009. The ZDA will be at the show to disseminate information about its services and functions. On hand will be informa-

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tion about small businesses, investment opportunities, export information and guidelines and procedures to set up a business and getting an investment licence. The theme for this year’s show is “Productivity in Adversity” which is appropriate given that the global meltdown has slowed down growth in nearly every part of the world and, even more severe for third world countries, that depend on funds from richer countries and the Bretton Woods institutions International Monetary Fund, (IMF) and the World Bank. The Show has been held since 1957 when it had temporary stands, a few cattle, a handful of pigs and small herd of cattle. It then became a fully fledged agricultural show and in its fortieth year in 1997, exhibition by the mining sector was added. This was at time when the mines were facing one of their worst years in terms of performance.