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Zambia: Foreign investment a thorny issue

Glory Mushinge
July 27, 2017

The Zambian government places attracting foreign investment at the top of its development agenda. Critics say investors are only interested in making profits and not the country's development. Glory Mushinge reports.

A white Zimbabwean-born tobacco farmer in Zambia
Image: AFP/Getty Images

Phillip Mwanza, a good governance activist and founder of  the 'Young Involved' youth movement, feels the type of investors currently in Zambia depletes the country's natural resources and that some foreign investments even endanger people's lives.

He points to a mining company that allegedly polluted rivers that serve as sources of drinking water for a community in Chingola, a town in the Copperbelt province.

Copper mine in Zambia
A copper mine in ZambiaImage: picture-alliance/Bildagentur-online/Tips-Images

 "This is a community where the people have been drinking water from this place. The mines have been trying to use this technology to exploit their minerals and they are polluting the communities. The people just discovered that they have been having funny infections, they went to the clinic and they were told that the water they've been drinking is contaminated," said Mwanza.

 He added that the mining company in question apologized but neither rectified the situation nor compensated the affected people. 

"As the investors are coming, we need to look into how it's going to benefit an ordinary citizen. If not, then there's no use having these investors. You find that for all the top positions; they will come with their own human resources when here in Zambia we have qualified personnel who can do the same job that they are doing here. These investors are business personnel; all they are interested in is making a profit," Mwanza said.

Ngobola Cengelo Muyembe is a small business owner and one of the directors of NGM Consulting Engineers. He agrees with Mwanza and cites construction, manufacturing, and mining as some of the areas where investors reap huge profits at the expense of the country and its citizens.

"I get very concerned when the government borrows money to do a road and a larger chunk of that money is given to some so-called investors, who come and invest as contractors. They are not investors, they are parasites who are just feeding off the government," he said.

Copper mine on the Copperbelt in Zambia
Most of the copper mines in Zambia are concentrated in the Copperbelt province Image: picture-alliance/WILDLIFE

In Muyembe's view, when investors engage in business that locals can do such as making pots, crushing stones or agriculture, they congest the market for locals. "This is supposed to be where the Zambian companies have to grow the small businesses. These kinds of work can be done by local people," he said.

Muyembe is convinced that the country needs to look to local people for investment and he frowns upon the practice of attracting foreigners to invest in agriculture when there are a lot of home farmers. "We have our own farmers in the southern province, so why would somebody go all the way to France to get farmers?" 

Among the incentives that certain categories of foreign investors are given in Zambia is a five-year tax exemption. This does not sit well with many Zambians, who are urging the government to impose stricter measures. "If the investor is not paying tax to the local revenue authority, then the government and everyone is losing," said Gershom Kabaso, the Coordinator of the Zambia Social Forum.

Kabaso is generally in favor of investment but emphasizes that it has to be a win-win situation for both foreign investors and the Zambian people.

All efforts to get a statement from the Zambia Development Agency (ZDA), the body responsible for fostering economic growth and development in Zambia, through promoting trade and investment, failed as the official spokespeople were not available to comment.

According to the agency's 2016 investor guideline handbook, available on its website, Zambia's central location in the region, as well as a combination of key strengths, such as abundant natural resources, manpower and guarantees and security to investors, make the country an ideal investment location.

Even though investment concerns cut across various economic sectors, mining is the biggest foreign exchange earner for the southern African country, which is the second largest producer of copper in Africa and seventh in the world.

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