August 23, 2005, The Post
Lusaka
And United Nations Conference on Trade and Development (UNCTAD) policy review section chief Taffere Tesfachew has said Zambia could net at least US $300 million (about K 1.5 trillion ) in foreign direct investment (FDI) annually if the investment policy was fine-tuned.
Annually if the investment policy was fine-tuned.
Meanwhile, Patel has directed all heads of department in the Ministry of Commerce, Trade and Industry (MCTI) to remain in Lusaka until the draft Trade and Industrialisation policies were ready for presentation to Parliament by December this year.
Officiating at an investment policy review Stakeholders’ workshop yesterday, Patel however said the failure could have been because the privatization programme’s implementation was hasty.
“In the early 1990s, we were under a lot of pressure to liberalise the economy. One aspect of this was privatization, which made the country deindustrialise rapidly within a decade,” Patel said. ‘But now as we move forward, we are guarded so that we can rebuild what was lost. At the World Trade Organisation (WTO) level, we are negotiating for policy space that will enable us enact policies that can protect local industries while enabling is to participate fairly and competitively in the international market.”
Patel’s comments come barely a week after he vehemently supported the privatisation of Zambia National Commercial Bank (ZNCB) in parliament.
Debating a motion moved by FDD president Edith Nawakwi to restrict the sale of 49 per cent ZNCB shares to Zambians, Patel argued that the bank’s sale was not debatable because we it was under performing, and described its recent performance as cosmetic.
President Levy Mwanawasa has since ordered that ZNCB’s sale must be stopped.
On the investment policy review process, Patel admitted that despite repeated commitments; the government has not practically delivered on improving the investment environment.
He noted that while various initiatives have been mooted, including last year’s Private Sector Development (PSD) initiative, most of the policy documents that could support the enactment of a comprehensive investor-friendly Investment Policy were still in draft form.
“In fact, it is sad to note that some of the documents have been in draft form since 1995. Now, I must admit that we have held too many meetings and workshop0s and the time has come for action,” Patel said.
“Last night (Sunday), I was discussing this same issue with my permanent secretary (Davidson Chilipamushi) and we agreed that all heads of department should remain in Lusaka until the relevant policies are finalized for incorporation into the legislation that we shall be tabling before Parliament either in December or during the budget session.”
Later, Tesfachew urged the government to work at strengthening the domestic private sector for Zambia to enhance her benefits from FDI.
He said worldwide, it has been established that a dynamic and vibrant domestic private sector was a critical incentive to attracting FDI because it opened up opportunities for partnership between foreign and local investors.
“Although FDI flows into Zambia have increased since the country embarked on liberalization, the volumes have remained too low compared with its resource endowment among other positive things,” Tesfachew noted.
“But even this increase has been volatile and erratic because of the dominance of large-scale and one-off investments like mining, which accounts for over half of the investment flows. However, if all things are put right, especially regarding the Investment Policy, Zambia can attract a minimum of US$300 million every year in FDI alone.”
He also stressed the need to urgently address the high cost of doing business in the country especially by investing in transport and communications infrastructure and addressing the high costs of energy and accessing capital.