DEMAND FOR INFRASTRUCTURE: What are Infrastructure Needs and Programs?

Program NameZambia Development Agency
Sovereign Long-Term Rating
S & P Local: n.a. S & P Foreign: n.a.
Moody's Local: n.a. Moody's Foreign: n.a.
Fitch Local: n.a. Fitch Foreign: n.a.
Includes Sub-Sovereigns?Yes
Sub-Sovereign Long-Term Rating
S & P Local: n.a. S & P Foreign: n.a.
Moody's Local: n.a. Moody's Foreign: n.a.
Fitch Local: n.a. Fitch Foreign: n.a.
Program DescriptionThe Zambia Development Agency (ZDA) was established in 2006 under Act No. 11 of 2006.The ZDA is responsible for fostering economic growth and development in Zambia through promoting trade and investment and an efficient, effective and coordinated private sector led economic development strategy.

The agency also has the challenge to develop an internationally competitive Zambian economy through innovations that promote high skills, productive investment and increased trade.The ZDA principally furthers the economic development by promoting efficiency, investment and competitiveness in businesses, as well as promoting exports. It also addresses the high cost of doing business in the country by simplifying the processing of various business formalities, such as licensing.

It builds and enhances the country’s investment profile for increased capital inflows, capital formation and employment creation. It also promotes the growth of the SME sector by providing incentives that can propel long-term sustainable domestic growth. ZDA is a one stop shop for all investors and this is evidence that Zambia is open for all to do business.

Investment opportunities are available in the following sectors:

1) Agriculture: Zambia is endowed with a large land resource base of 42 million hectares of which only 1.5 million hectares is cultivated every year. There are abundant water resources for irrigation and the country has 40 percent of the water in Central and Southern Africa.

Agricultural output in Zambia increased from 18 percent of the Gross Domestic Product (GDP) in 2008 to about 20 percent of GDP in 2009. This was as a result of increased area planted, good rainfall patterns in the whole country, as well as favorable agriculture policies by the government. The country recorded increased production of major crops during the 2009/10 agricultural season compared to the 2008/09 season, including; sunflower (118 percent increase), soya beans (50 percent increase), rice (39 percent increase), maize (31 percent increase), tobacco (7 percent increase) and wheat (5 percent increase).

The agricultural sector continues to be the backbone of the Zambian economy as it contributes to the growth of the economy and also to exports. Primary agriculture contribute about 35 percent to the country’s total non traditional exports (all the country’s exports other than copper and cobalt) and about 10 percent of the total export earnings for the country.

Sector Profile:

2) Tourism: Zambia’s tourism sector is currently one of the country’s growth potential areas. It has been given the non-traditional export status and is receiving a lot of support from the Government by way of infrastructure development, promotion of increased private sector participation, as well as attractive tax incentives for all investments in the sector.

Zambia’s tourism potential draws from its natural environment, from which abound a variety of tourism attractions. The main tourism attractions in the country include; the Victoria Falls (which is one of the most renowned beautiful transcendental Seven Natural Wonders of the World), and the wealth of wildlife spread out in the country’s 19 national parks and 34 game management areas with a total area of 65,000 km2. Furthermore the country boasts of vast water falls, lakes and rivers, one of the largest concentrations of bird species in the world, a rich cultural heritage and several monuments spread across the country.

3) Construction: Infrastructure development, is one of the Government of Zambia’s priority areas, and is upheld in both the country’s Fifth National Development Plan, and the Sixth National Development Plan, as well as in the National Vision 2030.

Infrastructure is an essential driver of competitiveness which is critical for ensuring the effective functioning of any economy and the country has basic reliable infrastructure in terms of; airports, road networks, railway lines, energy generation and transmission installations and telecommunication infrastructure.

Sector Profile:

4) Energy: Zambia’s energy sources include; electricity, petroleum, coal, biomass, and renewable energy. It is only petroleum which is wholly imported in the country, while the country is basically self-sufficient in all the other energy resources, as it has substantial unexploited reserves of these forms of energy. The country’s economy has been growing at an average of 5 percent per annum over the past 10 years and demand for energy has also been rising.

The demand for the most important energy source in the country - electricity has been growing at an average of about 3 percent per annum mainly due to the increased economic activity in the country especially in the agriculture, manufacturing and mining sectors, as well as increased activity in the region. Furthermore the country’s growing economy has also lead to an increase in the demand for the other forms of energy such as petroleum and coal, as these are key factors of production and operations in most economic sectors. The demand for renewable energies has also seen significant growth in the recent years as the market explores alternative sources of energy, with renewable energies proving to be a viable alternative.

Sector Profile:

5) Mining: Zambia is Africa’s largest producer of Copper and Cobalt. Although copper production was affected by low copper prices in the late 1990s, Copper production has been increased since 2000. It increased to 572,793 tonnes in 2007 from a low of 256,884 tonnes in 2000, representing an increase of over 100%. The rise in copper production over the years is attributed to investment in rehabilitation of infrastructure and technological innovations in existing mines, the coming on board of new mines and the increase in existing mines, the coming on board of new mines and the increase in small-scale copper mining activities. Copper production has been increasing over the recent past from 575,000 metric tonnes in 2008 to 665,000 metric tonnes in 2009 and to about 700,000 metric tonnes in 2010. This has been due to increased capacity utilisation facilitated by the continued increase in metal prices on the international markets.

The Zambia Development Agency Act provides for incentives for companies investing substantial amounts in the mining sector in the country. The Act provides for the investment thresholds that investors have to meet in order to qualify for fiscal and non-fiscal incentives. Currently the threshold is; investments of US$ 500,000 and above qualify for the incentives.

Sector Profile:

6) Manufacturing: The manufacturing sector in Zambia accounts for about 11 percent of the country’s Gross Domestic Product (GDP) and has been growing at an average annual growth rate of three (3) percent in the last five years. Growth in the sector is largely driven by the agro processing (food and beverages), textiles and leather subsectors. Secondary processing of metals in another main activity in the sector, including the smelting and refining of copper, and this has led to the manufacturing of metal products. Fertilizers, chemicals, explosives and construction materials such as cement are also produced in the sector. Other activities include wood products and paper products.

The manufacturing activities in the country are undertaken by the private sector with government playing a proactive role. The sector is of vital importance in relation to the country’ macroeconomic strategy for encouraging broad based economic growth. In this regard, the Government has put in place measures to support manufacturing activities, such as the establishment of Multi-Facility Economic Zones (MFEZs) and Industrial Parks (these are industrial areas for both export orientated and domestic orientated industries, with the necessary support infrastructure installed), and provision of sector-specific investment incentives. Government also promotes small and medium enterprises in rural and urban areas so as to enhance labour intensive light manufacturing activities in these areas.

The sector has attracted significant investment in recent years (foreign direct investment stocks in the sector totalled about US$ 1,200 million as of 2009), and other than producing many different products, manufacturing also absorbs much of the output from other sectors such as agriculture, and also supplies inputs into the other sectors such as mining and construction.

Sector Profile:

7) Agro Processing: Agriculture in Zambia remains a major contributor to Zambia’s economy contributing about 13% to the country’s Gross Domestic Product (GDP). Agriculture is also a major employer in Zambia and currently employs about half the total workforce in Zambia. However agriculture alone not enough to bring about meaningful development to the Zambia people, there is need for Zambia to diversify from primary agriculture into agro processing. Alternative or additional income generating opportunities are needed to support the millions of poor families who can no longer support their livelihoods from the land alone.

Agro processing - turning primary agricultural products into other commodities for market - has the potential to provide those opportunities.

Currently the agro processing industry and the manufacturing industry contributes about 11% to Zambia’s Gross Domestic product with increase investment it is hoped that the sector can contribute more to Zambia economic well being and bring about tangible benefits to the Zambian people such as employment creation and poverty alleviation.

Agro processing aims to increase income and access to food for the poor, by establishing smallscale, appropriate and sustainable processing businesses that are flexible, require little capital investment and can be carried out without the need for sophisticated or expensive equipment.

Sector Profile:

8) Public Private Partnership (PPP) Projects: Sectors include Health, Transport, Agriculture, Energy

9) Multi - Facility Economic Zone (MFEZ): The Multi- Facility Economic Zone (MFEZ) is a Government programme. Introduced to Zambia in 2005 by the Japanese Government through Japan International Corporation Agency (JICA).

The aim is to create a platform for Zambia to achieve economic development by attracting significant domestic and foreign direct investment (FDI) through a strengthened policy and legislative environment. The initiative emphasises on political will and integrity, private sector dynamism and integrity and civil service efficiency and integrity as key forces that enable the economy to attain accelerated economic development.

The implementation of MFEZs in Zambia is designed to make Zambia competitive through increased activity in the trade and manufacturing sectors, which have numerous positive spillover effects in other sectors such as utilities, transport, agriculture and services.

The MFEZs are, special industrial zones for both export-oriented and domestic-oriented industries. The zones will have the well appointed infrastructure in place in order to attract and facilitate establishment of world-class enterprises in the zone (s).

MFEZ Frequently Asked Questions:

Program Source(s)
Program Sector(s)No Specific Sector
Overall Program Contact(s),
Zambia Development Agency
Phone: +260 211 220177
Program Project(s)n.a.
Program Documents 2013 Doing Business, Zambia - World Bank.pdf
Investor Guide Handbook - April 2012.pdf
Program Web Sites
Entered On05/20/2013 at 08:04 AM
Updated On05/20/2013 at 08:20 AM