Zambia sees FDI doubling in 2008
Zambia has projected that foreign direct investment in copper and cobalt mining, agriculture and other sectors will double to $3 billion in 2008 from $1.4 billion the previous year, a government minister said on Tuesday.
Trade and Commerce Minister Felix Mutati said China alone would invest up to $400 million in the southern African country to construct a smelter at a new nickel mine, among other projects.
Mutati said the bulk of the investment was expected in agriculture and tourism and would significantly contribute to an expected 7 percent expansion in gross domestic product this year, create 100,000 new jobs and help reduce poverty.
"Last year we achieved $1.4 billion in new investments and we expect $3 billion to be invested this year alone. China may contribute between $300 million and $400 million," Mutati told Reuters in an interview.
The Chinese would construct a new smelter at a cost of about $120 million to process nickel at Munali mine after entering into partnership with Australia's Albidon Ltd, which will start to mine nickel this year.
"Expansions in the (copper and cobalt) mines will bring in about $500 million and another $56 million will be invested in a new refinery for edible oils while a new transformer and meter (manufacturing) company will invest $56 million," Mutati said.
NEW JOBS SEEN CREATED
He said foreign investors would construct a 900-bed hotel complex in the capital Lusaka, complete with a shopping mall and office blocks and others were planning to invest in a pan-African bank in Zambia.
"There will also be another cement plant that will be constructed and various agriculture projects are expected to take off this year. All these investments should create about 100,000 or more new jobs," he added.
A huge project to grow a jatropha plant for producing biofuels was expected to start as Zambia sought to diversify its economy from mining to agriculture, tourism, manufacturing and other sectors, Mutati said.
The new investments would help reduce poverty among 65 percent of Zambia's 12 million people and create opportunities for nationals to form their own enterprises.
"This year, the government intends to provide financing to Zambians through the Citizens Empowerment Fund to help create wealth and reduce poverty," Mutati said.
Zambia's government has created multi-facility economic zones (MFEZ) where foreign firms will enjoy a waiver on customs duty on imported equipment, excise duty and value added tax, among other concessions.
Analysts say Zambia has attracted direct foreign investment since the International Monetary Fund (IMF), World Bank and other Western lenders slashed its foreign debt to $502 million in June 2006 from $7 billion.
GDP growth has averaged 5.0 percent in the last six years while inflation has fallen to single digits in the past two years after more than three decades of double digit inflation.
