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Report: Zambia Classified as One Of The Risk Places To Do Business In
In the latest review of our operational risk model for Zambia the score for one category has deteriorated and another category has been downgraded.
The score for government effectiveness risk has worsened by four points, to 68. Recent developments have pointed to an increase in policy risk in Zambia. A number of new regulations have been introduced, with limited private sector consultation, including a 67% increase in the basic minimum wage.
Furthermore, the government has proposed a series of revisions to the Companies Act, which include major restrictions on foreign-owned firms, including on their right to borrow funds locally. The revised Companies Bill also gives an unspecified cabinet minister the right to prescribe, by regulation, that a certain sector is not open to foreign investment, and does not explain what would happen if the minister were to nominate a sector in which foreign firms were already present.
The Economist Intelligence Unit’s central scenario is that the more radical measures proposed under the new Companies Bill will not get through parliament, but this is not certain.
The score for foreign trade and payments risk has weakened by four points, to 43. Only weeks after the president, Michael Sata, said that the government had abandoned previously mooted plans to restrict the repatriation of profits, senior government officials have indicated that these plans are back on the table.
Mr Sata and his government came to power on a mandate of raising the extent to which Zambians (as opposed to foreign investors) benefit from the country’s mineral wealth, and are likely to face continued public pressure to introduce controls on the repatriation of earnings from exports (which consist predominantly of copper).
Following recent statements by senior officials, the likelihood of some capital controls being introduced is now high.
Owing to these changes, the overall risk score for Zambia has worsened by a point, to 52.
NO NET CHANGE
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Posted by Editor
on October 19, 2012. Filed under LATEST NEWS.
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NASILELE MUTALE YAAULU
October 19, 2012 at 8:29 am
THIS IS NOT SURPRISING. THE FIRST ONE YEAR WITNESSED ISSUING OF STATEMENTS BY H.E. AND SOME MINISTERS THAT ALARMED INVESTORS AND BROUGHT DOWN THEIR CONFIDENCE.
haha
October 19, 2012 at 9:13 am
Fake report.Any learned economist knows the dynamism of governments and any investor factors in risk assessment in the worst case scenario.Right now the world knows Banks have almost brought big economies down on their knees.Of course economic policies have their own impacts on investors but you have to also benefit from resources being exploited.
Grant
October 19, 2012 at 9:15 am
Bufi ubu. The recent World Bank/IMF report published in July praised Zambia for its economic stability ..it depends on whose report you want to believe.
Wanyafye FC
October 19, 2012 at 10:10 am
That could be true but Zambia, just like most of Africa, gives you far better returns on your investment. We are better than Greece, Palestine, Egypt or RSA where they shoot strikers!
Eric
October 19, 2012 at 10:15 am
This is in sharp contrast to what the World Bank Country representative was saying just this week; if this article had any fibre of truth in it Zambia’s Debut Euro Bond was not going to go through and was not going to be oversubscribed like it was.
Journalists need to be good readers and analysts of data.
am a serious PF DIE HARD.
October 19, 2012 at 11:02 am
This is good for zambia. PF is going a good job. why should zambians siting on natural resources be paid nothing.
Hero
October 19, 2012 at 11:20 am
Lol
Jabulani
October 19, 2012 at 12:04 pm
Ba PF you have chosen to bury your heads in the sand.
Joyce Ndaje
October 19, 2012 at 12:25 pm
Jabulani how come your HH is telling us that no windfall tax budget no support? The PF is just doing a little bit to protect us there you go bababa. By the way investors are flocking here like flies so where did this rubbish come from?
Emmanuel Chilekwa
October 19, 2012 at 12:26 pm
We are on the right path. Wait next three years, you will have difficulties on what to criticize.
Emmanuel Chilekwa
October 19, 2012 at 12:24 pm
This is good for us Zambians. Whats wrong in the gvt proposing that agreeing investor on our soil should not borrow cash from our banks? You find this offensive as a Zambian? An investor is just that, he should bring in the bucks. Go to RSA that’s when you can appreciate that we citizens are not enjoying our priviledges of carrying our NRC. They can downgrade us, we will upgrade ourselves. Japan did it after the bombing of Hiroshima and Nagasaki.
Pelekelo
October 19, 2012 at 1:03 pm
Its true Zambia is too risky for crooked businessmen. Lets hope govt continues making more risky for crooks and their sympathizers….
REAL MAN
October 19, 2012 at 1:49 pm
Only crooked businessmen are fearing to invest in Zambia.
MaxMbizo
October 20, 2012 at 7:51 am
If this is true, how did Zambia get the Eurobond?
Big Ken
October 20, 2012 at 9:06 am
This is the case always. When ZZambians are empowered the foreigners fill offended. This measure can be interpreted also that “there is a risk that Africans are waking up”
Prof; Zick
October 20, 2012 at 1:06 pm
Only useless people can look at this and encourage saying it is yes risk,my fellow Zambians hear to this,if u as an individual have money,go to western countries and invest in companies,open companies and let us see is if u will pay the local people of that country u will pay them $100 per month,rich people are greedy not everyone but the majority are greedy,they can’t support Sata because he chosen to provide to the needy,Sata and PF we love u,come rains and come dry season,we love u,for better for waste