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The Zambia Country Private Sector Diagnostic draws on data and interviews to identify concrete policy actions that can be taken in the near term to help create commercially-viable investment opportunities for the private sector.
In just four sectors — copper mining, solar power, tourism, and maize production — policy reforms could generate up to $21 billion in private investment and 300,000 jobs by 2030.
In the mining sector, private investors are discouraged by an uncertain tax regime, policy unpredictability, an opaque licensing regime, and outdated geological data. Among other things, government can improve the situation by digitalizing the cadaster, streamlining and clarifying criteria to qualify for the issuance of standardized licenses, and by collecting, digitizing, and disseminating geological survey data.
Private investment in solar power is discouraged by unclear regulation and insufficiently transparent permitting processes. Among the actions government can take to improve the investment climate are to: 1) consistently enforce market rules for access to the grid; 2) separate accounting for generation, transmission and distribution for ZESCO; and 3) enhance private participation in transmission activities via Independent Transmission Arrangements and tenders to develop priority transmission corridors.
In agribusiness, investors are discouraged by pervasive market distortions, difficulties accessing large tracks of land, and inefficient subsidies. The situation can be improved by reshaping government programs that distort agricultural markets, removing export bans, and revising the Lands Act to simplify land acquisition. Reallocating scarce public resources toward investments in crucial infrastructure like all-season roads and irrigation systems that would improve market access, productivity, and resilience to climate shocks.
To remove constraints on investment in tourism, there is a need to reduce excessive licensing requirements, and improve management of protected areas. Concrete actions that can improve the environment for private investment in this sector include reducing tourism relate licenses and digitizing their processing via the e-business online platform, and enabling private sector management of wildlife areas through Collaborative Management Partnerships.
