PRESENTATION ON 2014 ECONOMIC PERFORMANCE AND SELECTED INDICATORS AFFECTING THE BUSINESS ENVIRONMENT by Hon. Robert K. K. Sichinga Minister of Commerce, Trade and Industry

1. PRESENTATION ON 2014 ECONOMIC PERFORMANCE AND
SELECTED INDICATORS AFFECTING THE BUSINESS
ENVIRONMENT
Hon. Robert K. K. Sichinga
Minister of Commerce, Trade and Industry
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2. Content of Presentation
• Government’s Overall economic Thrust
• Summary of Achievements
• Performance of Selected Macro-Economic Indicators
• Sector Performance
• Ease of Doing Business
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3. GOVERNMENT’S OVERALL ECONOMIC THRUST
As contained in the PF Manifesto:
1. Create a conducive legal and regulatory framework for economic activity
2. Create increase employment through:
• Increased investment
• Lower taxes
• Increased participation of Zambian citizens in economic activity
through CEEC
4. Industrialisation and Job Creation
5. Infra-structure Development as a prelude to industrial development
6. Enhance education and health related facilities to build technical and
specialist capacity to support national development
7. Provision of energy to support the additional districts and all industrial
clusters, particularly rural which will undertake production based on
resource endowments
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4. Infra-structure Development:
A Necessity and Absolute Pre-requisite to Economic Development
• Good quality paved road infra-structure to enable developers reach resource
locations is critical as it facilitated increased economic activity as transportation
‘to and from’ is facilitated, movement speeded up and costs lowered.
• Industrial infra-structure including industrial clusters, warehousing facilities,
MFEZs, industrial parks or tax free zones aimed at improving/increasing
production, are great facilitators fir investment for economic growth.
• Reliable power supply is critical to any serious production. Processing can only
be carried out where there is reliable power and appropriate water supply.
• New storage dams, construction of power stations is an extremely high priority
to avoid blackouts, load shedding and other disruptions.
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5. Infra-structure Development:
A Necessity and Absolute Pre-requisite to Economic Development
Energy Infrastructure
• Kariba North Bank hydro power has been completed and brought on
stream 360 megawatts of power
• Another 120 megawatts at the Itezhi-Tezhi Hydro Power Plant and
300 megawatts of thermal power are being developed in Sinazongwe
by the private sector will come on stream this year.
• The 750 megawatts Kafue Gorge Lower Project, including the two
330kv transmission lines, on course and execution of this project is
expected to accelerate in 2015.
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6. Infra-structure Development:
A Necessity and Absolute Pre-requisite to Economic Development
ICT INFRA-STRUCTURE (communications, broadcasting etc.)
• In today’s economies, being able to have access to instant
telephone, Wi-Fi, broadband internet, radio, television,
computer technologies etc. are all critical to running a
successful business for purposes of procurement,
correspondence, communication and marketing.
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7. Infra-structure Development:
A Necessity and Absolute Pre-requisite to Economic Development
Education
• Given the population profile of 68% below the age of 25 who constitute an estimated 9 million of the Zambian population, their major
requirement is education and capacity building.
• Target is to have 9,600 bed spaces at UNZA(4,600), CBU (3,000), Mulungushi University (1,000) and Evelyn Hone (1,000)
• The PF Government has responded to this challenge by significantly increasing budgetary allocations for building additional educational
infra-structure at K2,555 million towards general education and K1,120 for higher education as shown in the table below.
• Further, Government has invested in constructing 35 new secondary schools and upgrading 81 basic schools into secondary schools to bring
the total to 116 new secondary schools.
• PF Government is also constructing 10 new Universities.
Table: Allocation to Construction of Educational Facilities
It will be evident from the above table that there has been a substantial increase in allocation which clearly demonstrates government’s
commitment to respond to the need for education and to meet the demand for higher quality labour force
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YEAR 2012 2013 2014 2015 TOTAL
Allocation for construction of
schools (K ’millions)
465.4 389.1 500.4 1 200 2 554.9
Allocation for Higher Learning
Institutions (K ’millions)
134.5 72.0 263.0 650.0 1 119.5

8. Infra-structure Development:
A Necessity and Absolute Pre-requisite to Economic Development
Health
Further the PF Government is undertaking massive construction of 31
District Hospitals and 650 health posts.
Decentralisation
The increase in the number of provinces from 9 to 10 and districts from
73 to 103 is intended to bring government services closer to the people
and will also provide the opportunity to build the requisite infra-
structure i.e. offices, housing, water reticulation systems, power.
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9. Infra-structure Development:
A Necessity and Absolute Pre-requisite to Economic Development
COST
• However, infra-structure development is extremely costly.
• To illustrate the point, the road infrastructure being constructed
under the Link Zambia-8000 will have an estimated total project cost
of US$31.42 billion.
• Similarly the urban and feeder roads, also need urgent attention. For
example Lusaka’s L-400 project requires an investment of US$348
million to construct 408KM of paved roads, of which 87KM has been
completed
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10. Infra-structure Development:
A Necessity and Absolute Pre-requisite to Economic Development
FUNDING
• It is not possible for massive capital expenditure the PF Government is undertaking to be sourced from annual
budgets. Therefore, in order to expedite the work and partly fund this development, it became necessary for the
Government to supplement funding by :
(a) borrowing e.g. two sovereign bonds, the first one for US$750 million and the second one fro US$1 billion;
(b) borrowing specific to the project e.g. Indian Import & Export Bank financed the 650 Health Posts;
(c) borrowing from multilateral lending institutions e.g. World Bank, IMF, FAO, IFAD; and
(d) donor-sponsored funding, usually through General Budget Support or Project Financing.
• Because it is not possible to raise all that money or even construct all roads at once, they have to be phased.
Against Link Zambia-8000, so far, K10.7billion has been expended or committed.
• The Japanese Government is also separately funding the construction of ring roads in Lusaka.
• The USA Government is funding, through Millennium Challenge Corporation (MCC), a massive water supply and
sanitation project in Lusaka worth US $345million.
• With such massive capital demands, this has resulted in unprecedented capital projects construction.
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11. Infra-structure Development:
A Necessity and Absolute Pre-requisite to Economic Development
• The PF Government is very mindful of the critical importance of infra-
structure as a stimulant for economic growth which realised national
development.
• As a consequence of the roads development projects, it is estimated
that nearly twenty thousand ( 19,510) direct jobs have been created.
• Businesses need infra-structure and the incomes from procurement
of various goods, services and labour, all benefit business
• Hence our Ministry fully supports the Government’s policy thrust for
infra-structure development. It is good for overall development and
particularly business.
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12. SUMMARY OF ACHIEVEMENTS
Key Undertakings and Achievements
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INCREASE EMPLOYMENT THROUGH: ACHIEVEMENTS SO FAR
1.1 Increased Investment (a) Pledged Investment increased to a projected US$ 4.8 billion by the
end of 2014
(b) Enhancing attracting and investor confidence through various
initiatives such as:
- Undertaking of investment missions to the United States, UK,
Singapore and other foreign countries
- Successful hosting of ZIIF (2012-13), UNWTO (2013) and
Investment Conference Co-hosted Pangea (2014)
1.2 Lower Taxes Tax free threshold increased to K36,000 per annum or K3,000 per month
1.3 Citizens Economic Empowerment (a) Reorganized CEEC through change in leadership and board and
management levels
(b) Increased budgetary allocations to the empowerment fund
(c) Undertook national resource mapping for appropriate business
ventures throughout the country

13. SUMMARY OF ACHIEVEMENTS
Key Undertakings and Achievements (2)
13
INDUSTRIALISATION AND JOB CREATION ACHIEVEMENTS AND PROGRESS
Formulation and adoption of Industrialisation
and Job Creation Strategy to create 1 million
jobs.
(a) Increased funding to CEEC and DBZ
(b) Promoting and development of MSMEs through CEEC
(c) Since 2011, over 456, 539 new formal jobs have been
created.
INFRASTRUCTURE DEVELOPMENT
Development and upgrading of transportation
infrastructure
(a) Increased local participation through the Link Zambia
8000, pave Zambia 2000 and the L400
(b) So far works are underway on works to cover 2,260km of
roads valued at K10.7billion under Link Zambia Projects
(c) Completed roads include Kasama-Luwingu in Northern
Province, Sesheke-Senenga in Western province and
Mutanda-Chavuma in North-western province.
(d) 22 out of the 26 bridges on the Mongu-Kalabo stretch are
under construction with seven bridges already
completed.
(e) Upgrading of border infrastructure at Nakonde and
Katima mulilo

14. PERFORMANCE OF SELECTED MACRO-ECONOMIC INDICATORS
(a) GDP Annual Growth Rate
Average GDP Growth rate was 2.8% from 2011 to 2013.
Graph shows a rise to 7.6% at end of 2011, a slight drop to 6.6% in 2012 but an improved rate in 2013 at
7.3% with projected rated above 7% at end of 2014. This is indicative of good performance by any
standard.
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6.3
7.6
6.6
7.3
7.1
0
1
2
3
4
5
6
7
8
2010 2011 2012 2013 2014
Percentage
GDP Annual Growth Rate

15. Performance of Selected Macro-Economic Indicators (2)
(b) Real Interest Rate
Real interest rate has steadily been declining since 2009 but rose to 9.3 percent in 2013 from 8.8
percent in December 2012. Reduced average lending rate is a positive macro-economic indicator in
any growing economy.
15
0
5
10
15
20
25
2009 2010 2011 2012 2013
Percentage
Average Lending Rate

16. PERFORMANCE OF SELECTED MACRO-ECONOMIC INDICATORS (3)
(c) Inflation Rate
Averaged 9.39 % from 2005 until 2014, reaching the highest at 19.20 % in April of 2005 and
recording the lowest rate of 6 % in December of 2011. Inflation rate has since 2011 been maintained
at single digit level ranging between 7.1% and 8.1%.
16
0
1
2
3
4
5
6
7
8
9
2010 2011 2012 2013 2014
Inflation Rate (%)

17. SECTOR PERFORMANCE
(a) Trade
Both Total Exports and Non Traditional Exports (NTEs) have been increasing in absolute terms since
2010. The estimated value of NTEs for the year 2014 is US$8,170.1.
Due to commodity price drops, metal exports growth rate was in 2012 was -6%.
Further, NTEs are increasing in importance in Zambia’s trade portfolio and now account for 33% of
Zambia’s exports.
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2010 2011 2012 2013
Total NTEs (US$'M) 1,381.81 1,832.53 2,712.2 3,550.28
NTE Growth % 41.17 32.61 48.0 30.90%
Total Metal Exports US$' m 6,071.70 6,916.22 6,504.87 7,069.46
Metal Export Growth % 81.62 13.91 -5.95 8.68%
Total Exports Growth 72.46 17.38 7.25 13.18%
NTEs as % of Total Exports 18.54 20.95 30.67 33.43%
Total Exports US$' m 7,453.51 8,748.74 9,382.85 10,619.74

18. SECTOR PERFORMANCE (2)
(b) Manufacturing
• Positive manufacturing sector growth rate, has been recorded based
on the index of industrial production.
• However the strategy is to increase both the production volumes and
total value through value addition (Industrialisation Strategy)
• Growth largely driven by leather; paper products; chemicals; rubbers;
non-metal mineral products, basic metal industries and the food,
beverages and tobacco subsectors
• Growth is expected to improve as new industries are brought on
board through the Industrialisation and Job Creation Strategy, by
increased local value addition.
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19. SECTOR PERFORMANCE (5)
(d) Empowerment Fund
Focus of fund realigned to support the creation of value chain clusters in products such as cotton, fish, dairy,
rice, cassava.
The CEEC has seen an increase in the rate of recovery on disbursed loans from 33% that was recorded year
ended 2011 to 43% recorded as at 31st December 2013 on the 2008 - 2011 portfolio. However, repayments on
loans disbursed starting from 2013 stands at 81%.
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YEAR 2011 2012 2013 2014
Disbursements to
projects (K)
48 599 934 7 055 382 4 206 484 49 348 787
Recoveries on pre 2011
portfolio
16 096 254 16 008 424 19 826 637 9 030 380
Recovery Rates on pre-
2011 portfolio (as % of
amount due)
33% 36% 39% 43%
Recovery Rate on loans
disbursed from 2013
75% 81%

20. SECTOR PERFORMANCE (6)
Empowerment Fund cont’d
• Total cumulative investment portfolio as at 31st December 2014 stood at K260, 904,037.
• Whereas a combined total of 1,445 projects were funded from 2008 to 2012, the Commission
funded a total of 1,157 in 2013 and 2014.
• Ninety (90) percent of the funds disbursed in 2013 and 2014 went to rural areas to promote
Rural Industrialization in line with MCTI’s Industrialization Strategy.
• The Commission strategically supported industrial sectors in 2013 and 2014 that are high
drivers of economic transformation and growth.
• Access to Empowerment Funds by women, increased from 18% in 2011 to 36% in 2014.
• Access to Empowerment Funds by Youths, also increased from 6% in 2011 to 35% in 2014.
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21. SECTOR PERFORMANCE
(e) Companies Registration
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Number of companies being registered is increasing due to various initiatives such as online name search, one stop shop and also
since PACRA is now situated in every provincial headquarters.
14,867
17,754
16934
9,678
10,143 10200
43 44 49
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
2012 2013 2014
Business Registration 2012-2014
Business Names Local Companies Foreign Companies

22. SECTOR PERFORMANCE
(f) Competition and Consumer Protection
• Cartels: Since 2011 the CCPC has carried out four dawn raids in the garages, banking,
architectural and fertiliser sectors. In the fertiliser sector the intervention of the
Commission has resulted in reduced fertiliser prices with savings of US$30 million.
• Mergers and Acquisitions: seen as a new way for foreign direct investment and the
commission facilitated the transactions in the Mining, ICT and Agriculture sectors. Zambia
has continued to receive FDI through mergers and acquisitions.
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Year Number of Mergers
approved
Notification fee Minimum Value of
transactions brought in
Zambia.
2011 19 K3,100,000 $ 95,000,000
2012 19 K2,500,000 $153,000,000
2013 24 K2,358,072 $ 511,000,000
2014 23 K4,120,999 $ 112,496,981

23. SECTOR PERFORMANCE
(f) Legal Metrology
• From 2012 to 2014, ZWMA has procured measuring equipment and motor vehicles to
facilitate inspections and verifications valued at K5 million.
• Since 2012, the Agency has been increasing its geographical coverage for verification
services especially in rural areas. e.g. it is now able to verify all Food Reserve Agency
(FRA) scales and all filling stations in all districts across the country.
• ZWMA now has offices in 5 Provinces
• Number of instruments verified per year has increased from 12,631 in the year 2011 to
24, 482 in 2014, an almost 100% increase.
• At a cost of K1.04million, the Agency is in the process of constructing modern
laboratories to enhance its capacity for verification.
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24. EASE OF DOING BUSINESS
Zambia ranked number 83 in 2013, 11 places up from 94th position in 2012.
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70
75
80
85
90
95
100
2009 2010 2011 2012 2013
Doing business Ranking

25. EASE OF DOING BUSINESS (2)
Zambia ranked 4th in COMESA after Mauritius, Rwanda and Seychelles.
Ranked 5th In SADC after Mauritius, South Africa, Botswana and Seychelles.
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0
50
100
150
200
250
2013 Ease of Doing Business Ranking, COMESA and SADC
COMESA
SADC

26. SUMMARY OF OTHER ACHIEVEMENTS
Key Undertakings and Achievements
LEGAL AND REGULATORY FRAMEWORK ACHIEVEMENTS AND STATUS
1.1 Repeal and replacement of the Companies Act of
1994
- To address weaknesses in the current law and align the law with modern
trends in corporate law
- To facilitate the harmonisation of company law with other relevant legislation
governing investment and economic empowerment of citizens
Revised Companies Bill drafted and awaiting final review
before cabinet circulation and approval processes
1.2 Revision of the Zambia Development Agency Act of
2006
- to redefine the mandate and functions of the ZDA as well as address
matters of harmonisation with other relevant legislation such as the
Citizens Economic Empowerment Act and the Immigration Act
Review of legislation underway
1.3 Revision of the Citizens Economic Empowerment Act
of 2006
- to harmonise it with other existing legislation such as the Zambia Public
Procurement Act
Review of legislation underway
1.4 Enactment of the Business Regulatory Act
- to create and efficient and effective business licensing system
Enacted as the Business Regulatory Act No. 3 of 2014 and
awaiting full operationalisation
1.5 Review and formulation of Industrial and Trade Policy Zero Draft Industrial policy prepared and awaiting further
consultation.
Trade policy formulation earmarked for 2015.
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27. THANK YOU
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