AMN - Zambia continues to be popular for FDI - comment by Yolanda Torrisi

Zambia continues to remain an attractive investment destination. It’s favourable geology, a long mining history, political stability, low exploration risk, good security and favourable economic environment have given it a favourable rating for investment.

A Mining Investment and Governance Review (MinGov), led by the World Bank and a number of national and foreign institutes, has recently been carried out.

Zambia has a history of mining dating back to colonial times where large reserves of copper, emeralds and other mineral deposits were found. Its potential for further major discoveries remains very high.

Mining accounts for 12% of Zambia’s GDP and 70% of total export value. It contributes significantly to the country’s employment, both directly and indirectly.

Foreign investment is crucial to growing the country’s mining sector. Mining investment makes up 62% of foreign direct investment in Zambia. Furthermore, Zambia’s conflict-free status is another attraction. Since Zambia gained independence in 1964, there has never been a war.

The MinGov review showed that bottlenecks were restraining the mining sector’s growth potential in Zambia.

The review states: “Priority areas for improvement include stability of its mining and fiscal policy; the development of domestic procurement policies; improved budget transparency; and frameworks for improved infrastructure development, particularly energy infrastructure.

“Integrating the mineral sector into national development planning is a crucial driver for sustainable development in Zambia.”

World Bank Zambia country manager Ina Ruthenberg was reported saying, more can still be done for the country to fully benefit from its mineral resources. “Zambia is rich in minerals but we haven’t fully managed to convert that wealth for the benefit of the people.

“We need to know where to improve and what changes to make so we can harness this wealth to benefit not only current, but also future generations of Zambians.”

According to the review, the positive aspects of the Zambian mining sector are overshadowed by a lack of transparency and accountability regarding revenue management, a lack of consistency surrounding fiscal policy, and lack of support for diversifying the economy and leveraging of infrastructure for the general population.

Mining is a significant part of the economies of many SADC countries and has the potential to deliver significant development benefits when managed in a holistic, sustainable manner.

- Yolanda Torrisi is Chairperson of The African Mining Network and comments on African mining issues and the growing global interest in the African continent. Contact:yolanda@yolandatorrisi.com