CHINA was the largest contributor to employment in Zambia in 2017 with 18,525 workers, Bank of Zambia Governor Denny Kalyalya has said.

Dr Kalyalya told the Parliamentary Committee on Economic Affairs yesterday that Chinese companies contributed significantly to the Zambian economy in terms of employment, taxes and salaries.

Dr Kalyalya told the Parliamentary Committee on Economic Affairs yesterday that Chinese companies contributed significantly to the Zambian economy in terms of employment, taxes and salaries. “The assessment is based on a survey of 193 enterprises with 50 percent and above share capital attributable to foreign investors,” he said.

Dr Kalyalya said China was second after Canada in terms of value addition in 2017, with a contribution of US$2.1 billion out of a total investment portfolio of over US$9.3 billion. He said with regard to foreign direct investment (FDI) flows by industry, cumulatively, mining and quarrying accounted for the biggest share.

Dr Kalyalya said China accounted for 13.9 percent of the total flows after Canada and Switzerland, which had 17.1 percent and 15 percent respectively.“It is important to note that while FDIs from Canada, the United Kingdom and Switzerland have been declining in the recent past, the one from China and South Africa has generally been stable with a tendency to increase,” he said.

Dr Kalyalya said to maximise benefits from FDI, whether from China or elsewhere, Zambia should come up with measures to attract such investments and closely monitor real benefits to citizens. He, however, told the committee that China provides investment financed by Government through debt from that country.

Dr Kalyalya said this poses a challenge because external borrowing from China does not include financial resources to the host country because all aspects of debt contracts are executed by Chinese companies. He said this results in physical capital being built in the country but with minimal financial inflows.

When asked by Chembe Member of Parliament Sebastian Kopulande if the Bank of Zambia takes part in negotiations for loans, Dr Kalyalya said the central bank does not do so because its major role is to keep money on behalf of Government.
Dr Kalyalya said negotiations for loans are a preserve of the Ministry of Finance, which is mandated to contract debt on behalf of the country