Why should Start a Business in Zambia?
Here are some of them Zambia has one of the fastest growing economies in Africa and has enjoyed high rates of economic growth for over ten years. According to UNDP’s Human Development Report, Zambia’s gross national income per capita increased from $39 (PPP) in 1980 to $700 (PPP) in making it one of Sub-Saharan Africa’s most rapidly developing countries.
The country is rich in Natural Resources including copper, cobalt, uranium and other precious metals. There are more than 2 million scale businesses in Zambia. Businesses play a vital role providing goods and services. These factors make Zambia an ideal place to start a business. The World Bank classifies a country as being upper middle income when it’s GNI per capita reaches US$1,045.
What are the Natural Resources in Zambia?
Mining accounts for 12.5% of GDP and copper is a major export. Other Natural Resources include coal, cobalt, iron ore, bauxite and tantalum. Agriculture is an important part of Zambia's economy. Major agricultural exports include maize and tobacco but other commodities such as sugar, sesame seeds and sunflower seeds are also produced to meet local consumption demand. Food imports amounted to 1.3% of total.
What are the Manufacturing Business Opportunities in Zambia?
There are various starting sectors which an individual can venture into upon moving in Zambia. These are: agriculture and forestry, mining and quarrying industry, manufacturing industry, water supply and sanitation, construction (which includes energy), transportation & storage industry and financial services.
Some of these industries have a number of industrial sub-sectors where you can find suitable manufacture businesses. Agriculture is Husbandry, Crop Production and Fisheries while Forestry is divided into Timber Production, Logging and Plywood.
Mining & Quarrying has four sub-sectors namely Copper Mining, Gold Mining, Iron Ore Mining and Limestone Quarrying. Manufacturing sector consists of seven sub-sectors namely Food Processing, Beverages, Textiles and Apparel, Wood Products, Paper Products and Printing.
The Water Supply & Sanitation sector has five sub-sectors namely Sewerage Services, Water Supply Services including Operation and Maintenance Services for Water Treatment Plants. Construction Industry is also made up of several sub-sectors such as Building Construction, Civil Engineering Construction and Infrastructure Construction.
Transportation & Storage Sector covers Air Transport Services, Rail Transport Services, Road Transport Services and Sea Transport Service. Financial services consist of Banking Sector, Insurance Sector and Securities Exchange Market.
What Businesses are Successful in Zambia?
There are some industries that struggle in many developing markets because of political or economic instability. The following is a list of successful businesses that are currently being run successfully in Zambia * Retail * Automotive * Agriculture * Mining * Forestry (timber). These industries were have been successful in Zambia.
Is Zambia good for business?
Start a business in Africa, there’s no better place than Zambia. The country is growing at an impressive rate—more than 5% per year—and its economy is relatively stable. Yet despite all of these positives, many investors are interested in Zambia. Market that has tremendous potential for growth and development. According to projections from the World Bank, Zambia will have one of the highest growth rates in sub-Saharan Africa over the years.
Business-Friendly Policies and Government Initiatives of Zambia:
The Government of Zambia has adopted several policies and initiated numerous initiatives to encourage a conducive environment for conducting businesses. These include: trade liberalization reforms; a reduction in red tape; an increase of electricity generation capacity and distribution; privatization of state-owned enterprises; tax breaks for investors. There is no doubt that these developments have played a big role towards improving investor confidence.
President Edgar Lung continued policies such as creation of special economic zones (SEZs) and encouraging private sector participation in infrastructure development. It initiated major economic reforms to encourage private sector development, diversify economic activity and attract investment into strategic sectors such as mining, construction and manufacturing.
The country also lowered trade barriers to expand markets. These initiatives have helped attract large-scale investments into several industries like cement production, agricultural processing.
Zambia Industrial Infrastructure:
Industrial infrastructure of Zambia is developed and there are large-scale industries of mining (copper, coal and emeralds) and light manufacturing. The service sector comprises 50% of GDP but most employment is concentrated in subsistence agriculture. The country has a wide range of mineral resources including copper, cobalt, uranium and emeralds. There is hydropower development and tourism.
Agriculture accounts for about 30% of GDP. It is also main source of investor earnings through cotton, cashew nuts, sugarcane and tobacco. Rice production accounts for 12% of agricultural .Livestock production accounts for 10%. Exports were US$1 billion while imports were US$1.7 billion with trade deficit at US$0.7 billion.
Imports include machinery, petroleum products, chemicals and transport equipment. Export commodities include gold, timber, coffee and fish. International reserves stood at US$2 billion. The currency is Kwacha which was introduced in 2006 replacing Zambian kwacha (ZMK). Inflation rate stood at 6%.
Bank loans to private sector grew by 23% while annual growth rate of money supply was 9%. The fiscal policy was expansionary. Government expenditure increased by 19% while tax revenue increased by 15%. Current account balance recorded a surplus of 2%. Investment was $US 500 million.
What are the steps for Starting a Business in Zambia?
Starting a Business in Zambia steps are mention below:
Check the company name for uniqueness.
The declaration of compliance (Companies Form 11) must be signed by a Commissioner of Oaths.
Obtain a tax ID number.
Register for Social Security.
Register for VAT.
Get an investment registration certificate
Open a bank account.
And get permit license for business.
Market size of Zambia:
Zambia is a politically stable, multi-party democracy, rich in Natural Resources. Estimated population of 17.2 million – 42 percent urban population. Positive economic growth for 14 years. Estimates indicate the economy grew by 4.1 percent in 2017, compared to 3.8 percent in 2016. Among the key sectors, agriculture, tourism, manufacturing, mining, and electricity generation improved from a 2015-2016 slump. In the monetary sector, the Bank of Zambia (BOZ) continued its monetary easing resulting in more commercial bank liquidity.
Inflation remained within the BOZ’s medium target range of 6-8. The economy enjoys liberalized prices on most items, a stable foreign exchange rate, and no currency controls. In 2017, Zambia’s main export partners was Switzerland which accounted for 44.2 percent of total exports (due more to the location of commodity traders, rather than actual exportation). Others include: China (14 percent), Singapore, South Africa, and the Democratic Republic of Congo (DRC). During the same period, Zambia’s main import partner was South Africa followed by DRC, China, Mauritius, and Kenya.
Zambia’s total imports from the United States were $83.9 million. These consisted primarily of machinery, rubber, and vehicles. $66.1 million in Zambian exports went to the United States. These consisted almost entirely of copper, cobalt, precious stones (primarily emeralds), and cotton. Zambia is a member of the Southern Africa Development Community (SADC) and the Common Market for Eastern and Southern Africa (COMESA).
Industrial Growth of Zambia:
Industrial output in Zambia is dominated by the food, beverages and tobacco sectors. These contributed 67.6 % of manufacturing GDP. The remaining sectors contributed less than 35 % of GDP. Mining, Copper mining and processing contribute over 85% to the country's exports, Agriculture.
Agriculture plays a vital role in the Zambian economy than the mining sector. Tourism is one of the primary and growing sectors in Zambia and Energy. Five factors that spurred industrial growth in the late 1800's are Abundant Natural Resources (coal, iron, oil); Abundant labor supply; Railroads; Labor saving technological advances (new patents) Business government policies.