Zambia

Zambia is an amazing country located in southern Africa. The state has a rich history and culture. The country also offers good investment and business opportunities. Zambia is rich in mineral resources. Tourism business, mining, manufacturing and other areas are also promising.

General information

Official name of the country — Republic of Zambia. The state occupies an area of ​​752,614 km² (38th in the world). The population is 20,435,101 people (as of 2024).

About 90% of the country's indigenous population belongs to the nine largest ethnolinguistic groups — Nyanja Chewa, Bemba, Tonga, Tumbuka, Lunda, Luvale, Kaonda, Nkoya and Lozi.

The official language of Zambia, adopted in correspondence, education, culture, government, office work, business, media and everyday communication, — English. At the same time, the importance of local languages ​​is preserved. In addition to official English, the country's 73 ethnic groups mostly speak various dialects of the Bantu language.

According to the Constitution, Zambia is a Christian nation, while maintaining the human right to freedom of conscience, faith or religion. The country professes Christianity (Catholics, Lutherans, Anglicans, Adventists, Pentecostals, etc.) and Christian-African cults of 50-75% of the country's population, including Catholics 28%, Muslims make up about 5%.

The official currency of the country is the Zambian Kwacha.

Lusaka — the largest city and capital of Zambia, its political, industrial and cultural center. The city is home to the Lusaka Stock Exchange, founded in 1993. Lusaka — cultural center of Zambia. Most of the country's educational institutions are concentrated here.

Ndola — Zambia's second largest city. The administrative center of the copper-producing province of the Copperbelt.

Kitwe-Nkana — a city in central Zambia, the third most populous, a transport hub and an important industrial center of the country. Near the city there is a large deposit of copper and copper-nickel ores. Zambia's largest copper smelter is located here, producing up to 200,000 tons of copper per year. The city also has machine-building enterprises, chemical, furniture, food and clothing industries.

Livingston (local name — Maramba) — city ​​in Zambia, in the Southern Province of the country. Over the past 10 years, despite the decline of industry and the closure of textile factories that are unable to compete with Asian goods, the city has experienced a renaissance in tourism. Tourists are mainly attracted by the Victoria Falls, the bridge named after it and the Mosi-ao-Tunya National Park. The city is attracting a flow of investment into the hotel chain and the infrastructure of shops and restaurants.

Chingola — a city in central Zambia, in the Copper Belt province. The main branch of the economy — mining of non-ferrous metals in the Nchanga deposit, the largest copper quarry in the country. Copper ore is a source of raw material for the mining and metallurgical plant located next to the deposit.

The territory of Zambia is divided into 10 provinces (the 10th province of the country, Muchinga, was formed in 2011 as a result of the division of the Northern Province), whose administrations are headed by leaders with the rank of minister. The provinces, in turn, are divided into municipal districts, the total number of which currently amounts to 103 units.

History, geography, culture, mentality

The state of Zambia takes its name from the Zambezi River. The area was originally inhabited by the Khoisan people. About 2,000 years ago, the Bantu people migrated from the Congo Basin and gradually replaced them.  The first Europeans to arrive here were Portuguese explorers following routes established centuries ago by Arab slave traders.

The famous British explorer David Livingstone, traveling up the Zambezi in search of a route deep into Africa, described these amazing places and nature, magnificent lakes and waterfalls. Livingstone's works and writings inspired missionaries to come to the Zambezi region. Beginning in 1855, explorers, hunters and prospectors flocked to Zambia, seeking whatever riches the country had to offer.

In 1890, the area became known as Northern Rhodesia and was administered by the British South Africa Company, owned by Cecil John Rhodes.

At about the same time, extensive copper deposits were discovered in the area now called the green copper belt. The indigenous population has mined ore here for centuries.

The colonists began mining copper ore on an industrial scale. The main sources of labor were Africans, who had to earn money to pay the “hut tax” imposed by the colonists. European settlers, freeing up land for expansion and development of new mines, began to expel the local population. In 1924, the colony was placed under direct British control.

On October 24, 1964, the country declared independence.

Landlocked Zambia has borders with eight countries: in the northeast — with Tanzania (338 km), in the east — from Malawi (837 km), in the southeast — with Mozambique (419 km), in the south — from Zimbabwe (797 km), in the southwest — with Botswana (2.6 km) and Namibia (233 km), in the west — with Angola (1110 km) and in the north with the Democratic Republic of the Congo (1930 km).

On the Zambia-Zimbabwe border, on the Zambezi River there are waterfalls, including the famous Victoria Falls.

Zambia's most important mineral resources: coal, copper ore, cobalt, lead, zinc, tin, gold. There are deposits of iron ore, uranium, nickel, fluorites, some precious stones, etc. Coal deposits are located in the south of the country, near the northwestern coast of Lake Caribou, as well as in the central regions of Zambia. In terms of copper reserves, Zambia occupies one of the leading positions among all countries in the world. Copper deposits are confined to the copper belt of Central Africa, on the border with the DRC. Tin deposits — quite small, all of them are located in the south of the country.

The culture of Zambia is special and unique. All the art of the country is embodied in architectural structures and painting. The visual arts of the republic, which originated even BC, are also considered ancient. In the rock paintings you can see animals, people, and various types of professions. Zambian customs and traditions are closely related to music and dance. Ritual actions that are performed to the accompaniment of drums are considered unusual here. Mediums or sorcerers must participate in them. The country's culture also features colorful mask dances that represent spirits. National peculiarity of Zambia — massive spread of superstitions (for example, a chameleon is considered a cursed animal that brings various misfortunes) and belief in magic among the country's residents (especially in rural areas).

Zambians amaze visitors with their extraordinary friendliness. The streets of Zambia's towns and villages are always full of smiling faces. Regardless of what nationality they belong to, Zambians will always be happy to help a guest of their country and give him a surprisingly warm welcome.

During your stay in Zambia, you must follow the standard rules of behavior characteristic of African countries: it is advisable not to walk along the central streets of the city in the dark, when visiting densely populated areas of the city, do not wear jewelry made of precious metals and stones, monitor the safety of travel bags and other personal items.

Power

Form of government: Zambia is a presidential republic. The President is the head of the executive branch (cabinet of ministers) and commander-in-chief of the armed forces.

The highest legislative body: the National Assembly is a unicameral parliament consisting of 164 deputies.

Economy

Over the past decade, Zambia continues to confidently demonstrate high rates of economic growth, compared with the relatively moderate overall background of most other countries of the African continent located south of the Sahara. During this period, the country's economy showed relatively high resistance to the negative factors of the ongoing global recession.

The main driver of growth remains investment activity in the mining sector, the sustainable development of which has a stimulating effect on such industries as construction, energy and transport.

The most significant factor in economic growth is the sustainable development of the processing industry, mining industry, construction sector, transport and communications. And although copper production continues to maintain its traditional role as the main pillar of the economy, providing up to 70% of export earnings, in recent years there has been a noticeable increase in the volume of “non-traditional” copper production. export. In the medium term, the main macroeconomic indicators will remain at a high level.

Investment in infrastructure development, primarily in mining, energy and road construction, and, in particular, large-scale investment in projects under the five-year road infrastructure development program, which includes the construction of 1,500 kilometers of roadway, will contribute to maintaining sustainable growth of the economy as a whole. Increasing government spending on infrastructure, with over $5 billion allocated to road construction projects, ensures continued growth in the construction industry.

In socio-economic policy, the state will have to focus special attention on implementing programs to ensure employment of the population (primarily youth), improving the system of accounting and control over the activities of the state apparatus and strengthening the fight against corruption.

The manufacturing sector generates only about one tenth of GDP. Such a distinctive feature of the country's geographical location as the lack of access to the sea expectedly affects the high level of transport costs, which significantly increase the cost of the final product (on average by almost 40%).

The food processing sector (production of food and beverages) accounts for more than two-thirds of value added in manufacturing.

In general, the progressive growth in industry over the last decade is associated with the relatively dynamic development of agribusiness, and, in particular, its leading industry — food (food and beverage production) and tobacco industries, as well as the growing need for raw materials and supplies from the construction sector.

Agriculture, from a socio-economic point of view, remains the most important sector of the economy, providing jobs for 60% of the total informally employed population of about 4.9 million people in Zambia, and for 8% of all formally employed (total the number of formally employed people is 625 thousand people).

Zambia has extensive mineral resources — metallurgical raw materials, primarily copper and cobalt, as well as zinc, lead, silver and gold, precious stones, energy raw materials — coal, uranium. The country has significant potential hydropower resources, allowing it not only to meet the energy needs of the national economy, but also to export electricity to neighboring countries in the southern African region (the current volume of electricity generated is estimated at 2,200 MW, while the volume of peak domestic demand does not exceed 1,900 MW). Over half of all energy consumed in Zambia comes from the country's extractive sector.

The mining industry remains the main source of export earnings, while the potential for its further development is largely limited by optimizing the cost structure within the mining sector. While the growth of competitiveness of the corresponding processing industries is constrained by such objective factors as logistics costs and the relative remoteness of the main markets for finished products and semi-finished copper products.

The Copperbelt and Northwestern provinces, which contain Africa's largest reserves of some of the world's highest-grade copper and cobalt ores, are the main centers of investment activity in the country's mining sector. Most copper deposits located in Zambia are characterized by a high metal content in the ore (2-3% compared to the global average of 0.8%).

The main reserves of zinc and lead are concentrated in the area of Kabwe (Central Province), 130 km from the capital of the country, Lusaka. Mining in this area continued for 90 years until the richest reserves of sulfide ores containing lead and zinc were depleted by 1994. At the same time, according to existing estimates, about 1.1-1.6 million tons of silicate ore, also rich in lead and zinc, should remain in the suspended mining area. In addition, extensive rubble of mineral-rich waste and slag remains at the site.

Zambia has significant reserves of emeralds (the country, the world's third largest producer after Colombia and Brazil, accounts for about 20% of total world production), coal (current production has decreased in recent years to 1000 tons, although at the beginning of this century the level of coal production exceeded 200 thousand tons in some years, in the future — production volumes will return to the previous level), uranium, etc.

For the past seven years, Zambia has been pursuing a policy of accelerated industrialization, encouraging the creation of industrial parks and multi-facility economic zones modeled on the Chinese model. Currently, six such economic zones are in the design stage, aimed at creating clusters of enterprises united by industry. Reaching the level of “critical mass” in creating enterprises — operators and providers of various services, in addition to creating new jobs, is expected to help bring the country's industrial development to a qualitatively new level and, ultimately, ensure Zambia's more active participation in the development of global commodity chains. Such chains, already quite well established in Zambia, include copper production, beef production and sugar production. The production of precious metals and cotton has significant development potential in this context.

Zambia — member of more than 40 international and regional organizations, including:

• United Nations (1964); 
• Non-permanent member of the UN Security Council in 1970, 1980, 1988;

Zambia is also a member of a number of organizations under the auspices of the UN: FAO, ICAO, UNESCO, UNIDO, IAEA, WHO, WMO, Group of 77, and others.

• World Trade Organization (1995)
• (British) Commonwealth of Nations (1964)
• African Union (1964)
• Southern African Development Community/SADC (2008)
• Common Market for Eastern and Southern Africa / COMESA (1981); COMESA Center (Secretariat) is based in Lusaka
• African Development Bank / ADB
• World Bank / IBRD
• International Monetary Fund/IMF.

Russia and Zambia

The first impetus for the development of active interaction in the trade and economic sphere was the signing in May 1967 of the intergovernmental Agreement on Economic and Technical Cooperation. Already in January 1968, the Parties reached agreements on the construction of diesel power plants in four cities in the North-Western Province of Zambia.

The trade agreement concluded by the Parties in 1971 ensured the formation of most favored nation treatment in trade between the USSR and the Republic of Zambia and contributed to the gradual increase in mutual trade turnover.

Trade turnover between Zambia and Russia in 2021 amounted to 20.2 million US dollars (2020 21.1 million US dollars). The main items of Zambian imports to Russia in 2021 were tobacco ($13.3 million) and iron and steel ($2.3 million), and exports — nitrogen fertilizers ($4.1 million), land transport and machinery ($1.6 million).

The level of trade and economic interaction between the two countries is negatively affected by factors such as Zambia’s lack of access to the World Ocean, distance from major seaports and relative distance from Russia’s main economic partner in the southern African continent — SOUTH AFRICA. Limiting factors also include the lack of mutual awareness of business in both countries, the limited financial capabilities of potential counterparties, the lack of direct banking connections and a well-functioning system of mutual settlements between the two countries.

In April 2022, the Russian IT company Yandex launched an online taxi ordering service under the “Yango” brand in Zambia. Currently, in addition to the capital, its services are available in a number of other major cities of the country, including for grocery delivery.

In general, the Zambian market may be of interest to Russian business communities that are committed to establishing partnerships in the areas of mining, development of railway and energy infrastructure, healthcare and education.

Business climate

Local legislation regarding the acquisition of property by foreigners in Zambia is regulated by the Land Use Act 1995.

The right to use the land plot is granted by a lease agreement valid for 99 years with the possibility of further extension. To purchase a house or other property (except land), you must apply to the Zambian Ministry of Lands to obtain the appropriate permit. There is no possibility of obtaining Zambian citizenship with real estate.

In accordance with local legislation, conducting business requires the availability of an appropriate work permit in the host country (issued by the Department of Immigration Control of the Ministry of Internal Affairs of Zambia). In addition, you must apply to the Investment Committee of the Ministry of Trade to obtain the appropriate permission to create a legal entity. In this case, a mandatory condition must be met: one of the co-founders (shareholders) must be a citizen of Zambia.

The Zambian government, with the support of collaborating partners, has introduced economic reforms to improve business facilitation and attract foreign investors, including steps to support more transparent policies and encourage competition.

The Zambia Business Regulatory Review Agency (BRRA) operates Regulatory Services Centers (RSCs), which serve as a one-stop shop for investors. DGCs provide an effective regulatory approval system by optimizing business registration processes; ensuring a unified licensing system; reducing the procedures and time required to complete the registration process; and increasing the accessibility of business registration institutions by placing them under one roof.

The government has established RSCs in Lusaka, Livingstone, Kitwe and Chipata and plans to establish additional RSCs, at least one in each of the country's 10 provinces.

The Companies Act No. 10 of 2017 was implemented through a statutory instrument (June 2018) and secondary legislation (February 2019) aimed at increasing accountability and transparency in the management of companies. Companies are required to maintain a register of beneficial owners, and persons holding shares on behalf of other individuals or entities are now required to disclose those beneficial owners.

To facilitate access to credit, the Patents and Companies Registration Authority (PACRA) has created the Collateral Registry System, a central database that records all registrations of collateral or collateral created by borrowers to secure loans provided by lenders.

In December 2018, Parliament passed the Border Management and Trade Facilitation Act. The law, among other things, calls for coordinated border management and control to facilitate the efficient movement and clearance of goods; enacts provisions on unified border posts; and simplifies the clearance of goods with neighboring countries.

Investment climate

In general, Zambian law does not restrict foreign investors in any sector of the economy, although there are several rules and practices that limit foreign control. Foreign direct investment (FDI) continues to play an important role in the Zambian economy. The Zambia Development Agency (ZDA) is tasked with attracting more foreign direct investment into Zambia, as well as promoting trade and investment and coordinating the country's private sector-led economic development strategy.

Zambia has undertaken certain institutional reforms aimed at increasing its attractiveness to investors. The first of these reforms is the establishment of the Public-Private Dialogue Forum (PPDF) by the President of Zambia in April 2022. The Forum is a peak body chaired by a Republican President and provides a structured, participatory and inclusive platform for public and private sector engagement on policy issues with a focus on leveraging partnerships and synergies to accelerate socio-economic development in Zambia. Second — this is the introduction of the Private Sector Development Reform Program (PSDRP), which aims to eliminate the cost of doing business through legislation and institutional reforms. Finally, the Millennium Challenge Account (MCA) addresses issues related to transparency and good governance. The Zambian government has committed to reducing the frequency of regulatory changes in the future and maintaining more frequent dialogue with investors. This commitment has indirectly led to the first major investment in Zambia's mining sector in over a decade.

• The judicial system of Zambia is based on the British common law system.
• In addition to the Constitution of Zambia Act, the Zambia Development Agency Act (2006, as amended) is the main law governing investment.
• Other texts: Companies Law (Cap. 388), Investment Law (388) and Public-Private Partnership Law (2009).
• Foreign investors can own 100% of an enterprise registered in Zambia.
• However, it is worth noting that international firms operating the domestic cellular telephone network must list 10% of the shares on the Lusaka Stock Exchange.
• Investors are allowed to invest in any sector open to the private sector. Only the production of weapons, coins, hazardous substances and security documents requires special permits.
• To be able to benefit from the ZDA Act, a foreign investor must obtain an investment certificate.
• The certificate is valid for 10 years from the date of issue and can be renewed.
• Subject to the approval of the investment council, it is possible to transfer the investment certificate from this company to the new owner.

Business and investment support structures

Zambia is actively developing infrastructure to support business and investment. The country has various programs and institutions aimed at creating favorable conditions for entrepreneurs and investors. Here are some key structures and programs:

1. Zambia Development Agency (ZDA).The ZDA is the main body responsible for attracting and supporting investment. The agency offers a variety of services, including assistance in obtaining licenses, providing information on market opportunities and assistance in finding partners.

2. Investment Zones and Special Economic Zones (SEZs). Zambia has established special economic zones such as the Lusaka Southern Multi-Functional Economic Zone (LS-MFEZ) and the Cherilebo-Parti Economic Zone. These zones offer preferential conditions for investors, including tax breaks and simplified administrative procedures.

3. Small and medium-sized enterprise (SME) support programs. Zambia is actively developing programs aimed at supporting small and medium-sized businesses. One such program is the Small and Medium Business Development Program (SME Development Program), which provides financial and technical assistance.

4. Financial Institutions and Microfinance Organizations. There are various banks and microfinance institutions such as Bank of Zambia and National Savings and Credit Bank that offer financial products and services to businesses.

5. Chambers of Commerce and Industry. The Zambia National Chamber of Commerce and Industry (ZNCCI) and other professional associations provide advisory services, training and business networking support.

6. Government initiatives and programs. The Zambian government is actively pursuing initiatives to improve the business climate, such as the Patents and Companies Registration Agency (PACRA) program, which simplifies the process of registering companies and patents.

7. Foreign Investment Initiatives. Zambia also partners with international organizations and countries such as China and the European Union to attract foreign investment and establish joint ventures.

Zambia provides many opportunities for investors and entrepreneurs, offering favorable conditions for business development. Support from public and private institutions, as well as international cooperation make the country attractive for investment.