Forced Local Ownership Will Scare Investors, Hurt Economy – Dodia Warns

“Forced Local Ownership Will Scare Investors, Hurt Economy – Top Economist Warns

Prominent economist Yusuf Dodia has issued a stern warning against renewed calls for local content legislation that would force foreign investors to cede equity stakes to Zambians, describing the proposal as a threat to the country’s economic stability.

Speaking at a business forum in Lusaka, Dodia argued that such measures would undermine investor confidence, trigger capital flight, and derail Zambia’s fragile economic recovery.

“Legislating ownership in a free-market economy is not just misguided,it’s dangerous,” he said. “Zambia abandoned state-controlled business models decades ago for a reason. We cannot now demand foreign investment while simultaneously creating an environment of uncertainty.”
The push for local content laws has gained traction in recent months, with some advocacy groups and trade unions arguing that Zambians are not benefiting enough from foreign-owned enterprises, particularly in mining, agriculture, and retail.

However, analysts caution that similar policies in the past led to economic stagnation. In the 1980s, Zambia’s reliance on parastatal companies resulted in inefficiency, debt accumulation, and eventual collapse, prompting the shift toward liberalization in the 1990s.

“We must learn from history,” Dodia said. “Countries like Nigeria and Malaysia implemented local content rules within heavily regulated economies. Zambia no longer operates that way. Forcing equity transfers now would send entirely the wrong signal to investors.”

With regional competition for foreign direct investment (FDI) intensifying, economists warn that aggressive policy shifts could make Zambia a less attractive destination. Neighboring countries such as Tanzania and Mozambique have been actively streamlining regulations to attract capital.

“Investors have options,” Dodia noted. “If Zambia introduces unpredictable ownership rules, businesses will simply take their money elsewhere. The consequences—job losses, reduced tax revenue, and slower growth would be severe.”

Rather than imposing equity requirements, Dodia proposed a more sustainable approach to economic inclusion:

• Enhancing skills development to prepare Zambians for high-value roles in foreign firms

• Encouraging public-private partnerships that facilitate knowledge and equity transfer without coercion

• Improving the business environment through stable policies, tax incentives, and regulatory clarity

“Empowerment should come from capability, not confiscation,” he said. “If we want Zambians to own more businesses, we must first equip them with the skills and capital to compete.”

The debate has sparked sharp disagreements among citizens. Some argue that foreign firms exploit Zambia’s resources without adequate local benefit, while others fear that aggressive policies could backfire.

“These companies profit from our land and labour Zambians deserve a fair share,” said a trade union representative.

But a Lusaka-based entrepreneur countered: “Ownership without expertise is meaningless. We need partnerships, not forced takeovers.”

As the government weighs its options, Dodia urged policymakers to prioritize long-term stability over short-term political gains.

“The choice is clear: either we embrace policies that attract investment and create jobs, or we chase away capital with populist demands,” he said. “Zambia’s future depends on getting this right.”

With economic recovery still uneven, the decision on local content laws could determine whether Zambia moves forward or repeats the mistakes of the past.