Foreign Direct Investment (FDI) in Zambia grew from US$1.7 billion in 2013 to US$3.2 billion in 2014 owing to an improved policy environment, the Bank of Zambia has revealed.
Speaking at the official opening of the 2015 dissemination workshop on Foreign Private Investment and Investor Perceptions in Zambia yesterday, BoZ Governor Denny Kalyalya said the Government’s economic reforms to promote private sector-led growth had continued to bear fruits.
Dr. Kalyalya noted that a number of areas of improvement had been raised by the private sector, including fiscal consolidation.
“The survey results show that Zambia’s net FDI inflows rose to US$3.2 billion in 2014 from US$1.7 billion in 2013, driven by a higher drawdown in FDI assets.
“There are various reasons cited for this upturn, ranging from the policy environment to institutional arrangements, thereby signifying the need for continued efforts at improving our economic environment,” Dr. Kalyalya said.
He said preliminary data gathered so far for the first half of 2015 indicated that there was an increase in investment in Zambia in 2015 compared to last year.
“Preliminary analysis of the available data for the first half of 2015 shows a notable pick-up in the investment momentum, with FDI inflows higher than recorded during the first half of 2014.
‘‘A number of areas of improvement have been raised by the private sector, including fiscal consolidation. Successful implementation of President Edgar Lungu’s recent measures will therefore go a long way to address this important matter,” he said.
He noted that Zambia’s rich natural endowments and Government’s commitment to maintaining macroeconomic stability and addressing the cost of doing business presented a menu for increased investment, both domestic and foreign.
He noted that the economic reforms that Government had embarked on were critical to sustaining growth and provision of employment.
“The on-going Government economic reforms have continued bearing fruit as evidenced by the notable amount of growth of both domestic and foreign investment. These investments are critical in generating and sustaining growth and employment.
‘‘Foreign investment also contributes to the supply of foreign exchange and necessary technology transfer in some sectors,” he said.
Dr Kalyalya said because of the importance of the survey, the bank had created a Foreign Private Capital Flows (FPCF) unit to spearhead the data capture and monitoring of private capital flows and an assessment of their impact on the economy.
‘‘This underscores Zambia’s commitment to catalysing the private sector development and investment promotion,” he said.