Foreign Investment In Zambia Up 158%

Foreign direct investment in Zambian companies grew by an astonishing 158% in 2022, totalling $8.5 billion and creating 74,000 new jobs.

The Zambian Development Agency announced that 351 investment ventures were recorded in the 2022 financial year, totalling $8.59 billion and 74,679 jobs. The financial year of 2021, half of which fell under the twilight of ex-President Lungu’s administration, yielded 255 ventures, totalling $3.33 billion and 24,585 jobs.

According to these statistics, the rate of investment grew by 157.96%, while the rate of employment grew by 203.76%.

The election of the New Dawn UPND Government in August 2021 has led to a reversal in Zambia’s historically poor fortune in the investor markets. The hard work of President Hakainde Hichilema and his cabinet to secure strong deals promoting economic growth, improving fundamental infrastructure and unlocking the potential of small and medium-sized enterprises (SMEs) has led to a shift in investor sentiment.

The much-needed return of foreign confidence in the Zambian economy spurred enormous growth across industries, especially the agriculture and mining sectors. The financial commitments made by globally recognised trailblazers are a further indicator of the stability and opportunity companies have identified, and will give other firms the confidence to invest.

One of the major success stories of 2022 was the arrival of KoBold Metals in the mining sector. The firm has links with major figures in the tech industry, including Bill Gates, Jeff Bezos and Richard Branson. KoBold Metals announced a $150 million pledge to develop the Mingomba copper-cobalt mine.

The project will utilise the groundbreaking AI technology, for which KoBold has become renowned in the industry, to scan for the largest and most stable deposits, maximising profit and sustainability.

Josh Goldman, president and founder of KoBold, was effusive in his praise for the state of Zambia when asked why KoBold had committed to a long-term partnership. Mr. Goldman described Zambia as a “safe and peaceful place where we can hire exceptional people, where the laws support investing for the long term, where we can operate in ways that protect the environment and support local communities and where government supports our investment with actions that are fair, transparent and fast.”

Zambia’s deal with KoBold illustrates the economic ripple effect the UPND Government continues to deploy in its policies. The global demand for copper is consistently growing, largely due to the arrival of electric vehicle batteries and renewable energy hardware – so much so that an estimated $100 billion of investment will be required in the copper industry worldwide to meet current demand by 2030.

A portion of the estimated 247 million tonnes of ore at the Mingomba site, which holds some of the highest-grade copper in the world, is likely to be used in the recently announced electric vehicle battery supply chain collaboration between Zambia and the Democratic Republic of the Congo. Collectively, Zambia and the DRC possess 70% of the world’s cobalt reserves, and account for roughly 11% of the global copper market. The U.S.-endorsed Memorandum of Understanding between the two nations will make use of Congolese and Zambian cobalt and copper to meet worldwide demand for electric battery components, and will invite further, richer investment into the Zambian economy.

President Hichilema was invited to the U.S.-Africa Leaders’ Summit in Washington, December 2022. Asked about the driving factors behind the KoBold deal, he commented, “This investment today is not about Kobold and ZCCM, it’s not about Zambia […] it’s about all these and the rest of the world as we grapple with climate change issues, as we grapple with replacing climate damaging fuels with green fuels, and therefore electric vehicles, very, very important to us.”

In the agricultural industry, Zambia has turned its attention to nationwide outreach. The UPND Government is confident that diligent investment will accelerate growth in the sector, which already accounts for roughly 20% of Zambian GDP and 12% of national export earnings. Since 2021, the Government has committed funding to SMEs and cooperative projects via the Zambia Export Development Fund and National Savings and Credit Bank. The goal for 2023 is to develop a minimum of 90 agricultural cooperatives, each with a minimum of 20 member businesses.

Munkotachi Investments is just one example of SMEs blossoming under the new Government-granted GLOBALG.A.P. export certificate. January 2023 is the first month that Munkotachi will sell its hass avocados and avocado oils to overseas markets, including EU-member states, courtesy of the new certificate.

The increased returns will be reinvested into the planting of two million avocado trees across 5,000 hectares of Zambian land. The trees will form four orchards in different regions of Zambia, and it is estimated that 30,000 small-scale farmers will be employed in conjunction with Schweizer Agriculture. Munkotachi hopes to achieve a 3-4 ton harvest for 2023, and to double production annually from 2024.

Last week, President Hichilema met with the U.S. Treasury Secretary, Janet Yellen, as part of the Biden Administration’s first official visit to Africa. She commended the UPND Government’s success in revitalising the Zambian economy, combatting the African hunger crisis, and tackling the legacy of historically systemic corruption, highlighting “the broad economic reforms that [Zambia’s] government is undertaking to deliver sustainable growth and reduce poverty”. She recognised Zambia’s promise as a “regional food hub”, looked forward “to growing our economic cooperation in the coming years”, and noted “Zambia’s impressive progress on a broad set of economic reforms”.

Image via Mining Technology.