Three years ago this month, thousands of Zambians flocked into Lusaka’s National Heroes Stadium to celebrate the inauguration of President Hakainde Hichilema, whose landslide election victory had been built on the promise of growing the economy, creating jobs, and lifting citizens out of poverty.
At the time Zambia’s economy was making headlines for all the wrong reasons. In late 2020 it became Africa’s first coronavirus-era sovereign default. By the time of the 2021 elections, inflation stood at well over 20% and Zambia owed more than $17 billion to foreign lenders, with a large portion of that debt hidden from the public accounts.
The country’s future looked bleak. The mining sector, which accounts for over 70% of total export earnings, 30% of government revenues and 8% of formal employment, was in disarray and the outgoing government’s heavy-handed approach to the industry had seriously spooked investors. While Zambia had long been considered a bastion of stability and progress in the region, its reputation had suffered a serious blow.
Fast forward three years and Zambians once again have good reason to be optimistic about the future. In 2023 the Zambia Development Agency (ZDA) recorded US$39.97 billion in pledged investments – up from US$8.11 billion in 2022 and US$3.3 billion in 2021. The number of jobs committed has also risen dramatically, from 24,585 in 2021 to 160,280 in 2023. As President Hichilema told the European Parliament in 2022, “Zambia is back in business”.
More investors are putting more money in, not just in the mining sector but also agriculture, manufacturing, energy, tourism and infrastructure. Of the US$39.97 billion pledged by investors last year, manufacturing accounted for US$19.72 billion, followed by energy at US$8.9 billion. Investment came from all over the world, from the US to China and from the UK to the UAE.
This turnaround has been achieved through a combination of measures: a mixture of practical reforms and ambitious initiatives designed to drive economic activity and diversify the country’s economic base, while at the same time playing to its strengths and seeking to leverage global trends such as the green energy transition.
President Hichilema has set an ambitious target of increasing copper production to 3 million tonnes annually over the next seven years. This gauntlet that has been picked up by major mining houses such as Mopani Mines and Konkola Copper Mines, who are ramping up production in response to growing demand for copper in industries like electric vehicles.
The President is also seeking to positon Zambia as the breadbasket of southern Africa, transforming more than one million hectares of the country into agricultural land through an innovative farm block program that would help feed the 500 million population of Zambia and her neighbours.
The foundation for everything, however, is good leadership. President Hichilema, who made his name in business before turning his hand to politics, refers to himself as the country’s Chief Marketing Officer. Investors have responded positively to the transparent and consistent policy environment he has fostered, as well as efforts to more actively engage and consult business through initiatives such as the Public Private Dialogue Forum (PPDF) and the Presidential Delivery Unit( PDU).
President Hichilema has been steadfast in prioritising the stabilisation and improvement of the economy so that government can increase spending on public services and raise citizens’ living standards. Over the past three years a huge amount of energy has been channelled into tackling Zambia’s debt – and with good reason. Not only did the 2020 debt default seriously damage Zambia’s reputation among investors but critically between 2018 and 2021 debt repayments increased from 20% to 38% of the national budget, while the allocation to areas such as health and education fell.
In August 2022 the government secured an agreement with the International Monetary Fund (IMF) for a US$ 1.3 billion extended credit facility which has recently been increased to around US$1.7 billion. Government has since restructured US$13.6 billion in debts, cut US$ 900 million from the total and spread payments over a longer time period to ensure the country has a sustainable route forward that gives it the space to invest in public services.
Meanwhile, a robust programme of business reforms and support systems has been rolled out, from boosting market access for local exporters to aboliting double taxation in the mining sector, and launching online applications for both local and international investments through the ZDA.
Hichilema’s government has also positioned the country for long-term, sustainable growth, clamping down on endemic corruption and introducing free education for all primary and secondary school children to become the business leaders and entrepreneurs of tomorrow.
Those who follow Zambia’s progress closely will know that despite all this progress, 2024 has brought unprecedented challenges for the country in the form of an historic drought. This is one of the biggest natural disasters to hit Zambia in modern times, not only threatening food security for more than a million households but also creating challenges in the energy sector, given the prominence of hydropower in our supply.
As the saying goes you should ‘never let a crisis go to waste’ and government has quickly responded by rolling out a raft of measures that are designed to not only alleviate pressure on struggling citizens but also to make the country more resilient against future disasters. These strategies range from promoting early maize cultivation and drought resistant crops, to removing import duty and VAT on solar equipment, as well as fast-tracking large-scale solar plants like the 100MW Chisamba Solar Project in Central Province.
Once again, we are confident that good leadership will see us through this crisis and that the end result will be more sustainable and resilient agriculture and energy sectors that are ready to meet the challenges of tomorrow. There is still much to do in the remaining two years before Zambia’s next general elections and so this momentum must be maintained at all costs. After all, we have a fast-growing population, so strong economic growth and job creation are essential. Today, however, it is worth recognising just how far Zambia has come since we re-opened for business.
By Albert Halwampa
Director General of the Zambia Development Agency
Source:African Business
The greatest risk to economic growth and job creation is the preventable loadshedding. If this is not urgently addressed, all will come to naught.
What business is this? Corruption?
I’m giving up on these propaganda spreaders. Why don’t you wait until this pledge is actualised? You can even say 40 trillion dollars… that won’t soothe our suffering souls.
It won’t even improve the dollar
My message is consistent. With no trickle down effects benefitting the common man and with the population continuing to wallow in abject poverty which is worse now and was worse even before the drought, these stats may mean nothing. It is like that standard statement which all Political leaders from all regimes since 1964 give at the tarmac of an airport when they arrive from abroad and are asked how the trip was, with the standard answer being ” successful” . Which statement by the way should even be banned by the constitution. It is good to be optimistic but in order to be realistic, don’t just excite us but we hope you are factual and we will see the fruits
As a business owner and currently doing business in Zambia i can tell you that this is reckless Propaganda….lies and and deceit….ask any business man in Zambia and they will tell you that UPND has completely failed….honestly how can you run a business on a Genset…..impossible…..loadsheding is wrecking havoc and things are getting worse….they keep on trying to explain what they have done because they can have done nothing
Zambia is now officially 5th world country…..
Yes if he is part of the thieving clique then yes Zambia is back in business because he is getting brown envelopes…
THE TRUTH IS ZAMBIA HAS BECOME WORSE THAN IT WAS 3 YEARS AGO….and am not PF
A conflicted writer
The only business Zambia is in is Monkey Business
We thank the upnd govt for making the economy pick.
Mikalile has also committed $1million. Provided you first pay his $400million plus interest.
We love and praise mediocrity. It’s not possible to develop with people who are so shallow minded just because their bellies are full and they think everyone has a full belly. Thinks with your brains author not your belly please!
1st red flag of the article : $40b is more than Zambia’s entire GDP so where’s the corresponding economic growth?Last yrs numbers don’t lie.
@kavhasu, it’s a pledge not that the monies are in the banks…u vmust read carefully. Nothing to celebrate about until the money is In the bank
Pledged investments?
They pledge so that in the meantime they can be mining our gold undercover.
With the current prices of copper, increasing current production will result in an increase in foreign exchange. Zambia remains a net importing country which means that an improvement in the exchange rate likely reduces inflation. However, for all this to be attained and maintained, the small businesses that support large businesses need to enabling policies. I would suggest a reduction of turnover tax to 2%. Limit CEEC loans only to established small business with guaranteed supply chains or contracts with a focus on transactional lending. In addition, exempt exports to avoid government owing mines VAT for everything they purchase. Reduce PAYE to 25% regardless of earning bracket.
Comment reserved.
Nalader Pandor Iron like a lioness.
Does the writer of this article live in Zambia and interact with SMEs?
…………
The problem zambia as a country faces is the mindset of the people ………..
We have unavoidable load shedding. The privious regime spent billions on the same hydro power , now there is no water……..
With all the indiscriminate cutting of trees and no serious indigenous tree planting programme, there will be erratic rain fall……
And the lazy culture of expecting something from no work………….together with over zealous democracy where we even forget about developing the country……..
Maybe we need to ban all politics in the first 3 years. Only strenthen civil societies and watch dogs for checks and balances and Concentrate on development.
We are going nowhere fast otherwise……..
For as long as there is blind tribal allegiance there will always be a disconnect between economic growth on paper and real economic growth on the ground that benefits the majority of the people of Zambia. One down fall for Hakainde is that despite all the tribal appointments for appeasement and praise singing, the development is only in community house and in the circles of those that pick crumbs under his table. Hakainde must be real and come to earth. One would question the ingenuity of these praise singers who have no shame.