tax free zones


Choose Your Language Of Preference Below

French Version German Version Russian Version Spanish Version

Portuguese Version Chinese Version Arabic Version

NEW DELHI: After giving China a tax free zone, the southern African nation of Zambia wants to create a similar exclusive economic zone for Indian companies to bring “value-addition” to its mining industry. “We have had a long partnership in India, with investments in several areas. But what has been lacking was visibility. This zone will help in improving India’s profile (in Zambia),” visiting Zambian Minister for Commerce, Trade and Industry Felix Mutati said.

He said that the offer was specifically drawn up to mark his visit to India for the fourth India-Africa business conclave. “I have not yet told my president of my decision. But we need to make quick decisions nowadays,” he said, tongue-in-cheek. The landlocked African nation, whose economy has been traditionally dominated by copper mining, has already approved two multi-facility economic zones being developed by the Malaysians and the Chinese.

“If the Malaysians can do it, why not India, which is a bigger country,” he asked. Malaysia was the first to ink a deal for a multi-facility economic zone (MFEZ) last year, followed by China, which is currently negotiating an agreement with the Zambians.

The minister said that the Chinese planned to invest nearly $900 million to develop the tax-free zone. “We want the Indian zone to be at least $900 million. If it’s smaller, then it will not have the visibility,” he said, adding that 30 sq km land had already been identified in the central province of Kabwe, about 150 km from capital Lusaka, for the special economic zone.

The Zambian minister said that he would like Indian firms to focus on supply of equipment and processing of raw products. “While we have a lot of mining activity, we have to export all the raw materials for processing outside as there is no proper processing plant,” he said.

Pointing out that Zambia was surrounded by eight nations, who were also mineral-rich, Mutati said: “Our neighbours like Congo, Angola and Mozambique also have active mining industries, which could also be catered by this proposed economic zone.”

He said that he was already in talks with the Tata Group, which had shown interest in setting up a plant in the proposed zone, while another Indian industrial group will be visiting Zambia next week to survey the site. Mutati said that once Indian firms invested in the tax-free zone, they would act as “marketing tools” to attract more Indian investment in other parts of the economy.

Currently, India has a share of 50 percent of Zambia’s mining industry, while the Chinese have 15 percent – courtesy Vedanta Resources’ majority stake in the country’s largest copper mines, Konkola, at a cost of $1.2 billion. The total Indian investment in Zambia is estimated to be $2 billion, with capital flowing in other sectors like banking, health and education too.

While he does not foresee India losing its strong position in the Zambian mining industry, Mutati was clear that China’s “whole new way of doing business” in the continent had to be matched by the Indians. “The Chinese start to work behind the scenes, but they come and make a decision there and then. After that, they start to work backward, asking for data on the projects,” he said.

He cited the example of the Chinese MFEZ in his country to illustrate his point. “They have already constructed 30-40 percent of the buildings, but it is only now that they are negotiating an agreement,” said Mutati. Similarly, he said, the Chinese had announced an investment of $1 billion in the mining sector, but were yet to see the land. “Chinese do and assess, while Indians assess and do,” said Mutati.

He was also appreciative of the Chinese strategy to combine their acquisition of licences for resources with development of infrastructure. “In a neighbouring country, the Chinese have offered to build 3,000 km of road in a swap for a mining concession of 20 years,” he said. “Indian firms need to be more aggressive, otherwise they are losing out,” warned Mutati.

Source: Economic Times

Choose Your Language Of Preference Below

French Version German Version Russian Version Spanish Version

Portuguese Version Chinese Version Arabic Version 

ü      Create A New People Driven Constitution

The greatest single most achievement the Zambian Enterprise can accomplish for 2008 as a milestone is to produce a new constitution using the National Constitution Conference (NCC) as a vehicle.  

If all stakeholders felt that their constitution provided for equal opportunities, guaranteed civil liberties and protection for all, the enterprise would have achieved strides worth thousands in light years.  

In that regard it is highly palatable that peace loving individuals will give the NCC delegates all the needed support to achieve this milestone. The October 6, 2001 issue of the Economist magazine carried a story about Turkey’s Constitutional Amendments.

“… MANY Turks have long thought of their parliament as a bunch of buffoons interested mainly in making money, not laws. That may change, as the 550-member chamber keeps up a marathon session to pass a set of reforms that are intended to clean the face of Turkey’s constitution and reinforce the country’s still rather wobbly democracy.”

At issue was the fact that both political philosophies represented in the Turkish parliament approved what seemed on paper as the best brand of policies any mid eastern nation would espouse but the ideas only looked great on paper.

We are hoping the great genius minds of the smart people of our enterprise respresenting us in NCC will come up with a document that can stand the test of time. These delegates are the framers; we are hopeful they will envision a Zambia that will be there for centuries to come because they framed the right manuscript on behalf of us all. 

ü      Deliberate Infra-Structure Investment

Infra-structural development is about capacity building and very critical to national development. Without capacity economies don’t grow with healthy veracities.

Capacity enables a country to handle tasks with great ease and lack thereof creates auxiliary derivatives such as development of shanty compounds in the middle of a metropolitan area.  

In this modern day and age infra-structure capacity does not refer to road, railways, subways, modern airports, etc. alone, it also refers communication apparatus such as turning Mwembeshi into a super information highway, for instance. 

It involves well stocked libraries in city centers, schools, colleges and universities with a deliberate attempt to have all these connected to the internet.  Tunisians did it and their population is one of the most literate on our continent, it is no wonder they have poverty levels at 4% of their population with nearly a tenth of natural resources when compared to us. 

It involves well planned town, cities and provinces with town planners whose eyes are on the ball. Japanese planners have 15 year projections with simulations accompanying … it is no wonder they enjoy one of the highest qualities of life in the entire world.  

With a billion dollars in reserves, the Zambian Enterprise has more than enough in it’s back pocket to invest into infra-structure that matters …

ü      Create Economic Zones In Each Province

One of the greatest achievements of the UNIP government was the creation of provincial economic zones deliberately planned to urbanize rural areas. They were not termed that way but their objectives met all the prerequisites of such.  

Livingstone had ITT Supersonic and Livingstone Motor Assemblers, Mansa had Mansa batteries, lead and manganese mines, Chipata had Eastern Industries that made Eagle bicycles, Mongu had canneries and so did Mwinilunga; the copperbelt was an economic engine, the list is endless. 

When the MMD came into power they literately had no clue what they wanted to accomplish except privatization. In fact, they mistook democracy in many instances with privatization. They abolished the office of National Planning because they thought it advocated for a command economy. 

Using other forums at the time we advocated for national planning that had a neo-spin to it, laid down the benefits of such schemes but it wasn’t until the current president came into office that they reinitiated planning mostly tailored on proposal of this author. 

Well planned economic zones not only mitigate urban migration en masse, they also help accelerate national development at exponential rates well across the board.  Besides if you fail to plan, you are in an essence planning to fail …  

One reason, Malaysia stood out among the Asian tigers was because it deliberately initiated economic zones and today the world’s tallest buildings are not in Western Europe nor are they in the Americas but in Central Asia.  

ü      Continue Keeping Macro-Economic Factors Under Control

Macro-economic factors and dwindling investor confidence are always behind corporate underperformance.  Among the macro factors concerns over interest rates, high oil prices, staple commodity prices and jitters over the reserve currency weakness impact economic growth … 

These factors lead to markets savagely punishing companies thus failing to produce the goods and services at optimal capacity. Companies that record profits tend to be tarred with the same brush and their share price don’t respond to their profits.  

When the market starts to focus back on company-specific issues rather than the macro-economic picture and look at those that are turning themselves around, performance picks up. 

There is no doubt that Fundanga at BOZ and Mangande at Finance have been among the best choices our enterprise has picked for their respective jobs but short term gains can easily blur one’s focus. 

It is therefore extremely necessary that they keep their eyes on the ball with the big picture in mind because if we don’t continue keeping the macro-economic factors under check, the unprecedented 85% growth LuSE experienced last year might be lost … 

Strict investment philosophies in the market tend to sometimes make publicly traded companies to under perform but investor confidence makes people start looking at companies showing above average growth so long macro-economic factors are in favor.  

ü      Reform Tax Rules

The old adage of two things one should be sure of being taxes and death remains true to this day. So weaknesses in the institutional framework need to quickly be identified to make necessary adjustments. 

One of the most important factors in good policy-making is the strengthening of the institutions that contribute to it. The tax policy-making process should heavily rely on institutional strength to see it through periods of major transitions such as our Enterprise is going through right now … 

Dealing with enforcement and operational policies is not only a good initiative when it comes to strengthening the treasure, it also helps narrow the role of the other revenue  collecting units thereby reducing excesses while increasing proceeds. 

Parliamentary scrutiny of tax proposals tends to be increasingly ineffective as tax legislation becomes more complex. This is because our current Members of Parliament have no dedicated independent groups of economists and lawyers to support them on budgetary matters. 

Outside the framework of government,  institutions like the University of Zambia’s economic studies should provide virtually more and not just research-based independent economic analysis on taxation policy.  

Business leaders should also be encouraged in the systematic use of consultations, at least on business tax issues. Drawing business in to contribute to the refinement of ideas emerging from government helps fill the gap left by the broader weakness of institutions.  

But business should not be responsible for developing tax policy as this leads to signs of consultation-fatigue. Their role should be limited to consultancy and be used as a barometer that measures what impact tax proposals have on operational efficiencies. 

Given the importance of institutional strength to consistency and stability in policy-making and the classy-daddy-3.gifimportance of that consistency and stability in maintaining economic growth and development, there is a strong case for more comparative inter-jurisdictional work to be carried out on the institutional framework of tax policy-making.  

That’s this week’s memo from us at the Zambian Chronicle … thanks a trillion. 

Brainwave R Mumba, Sr.

CEO & President – Zambian Chronicle

Copyrights © 2008 Zambian Chronicle. All rights reserved. Zambian Chronicle content may not be stored except for personal, non-commercial use. Republication and redissemination of Zambian Chronicle content is expressly prohibited without the prior written consent of Zambian Chronicle. Zambian Chronicle shall not be liable for any errors, omissions, interruptions or delays in connection with the Zambian Chronicle content or from any damages arising therefrom.

Zambian Chronicle is a wholly owned subsidiary of Microplus Holdings International, Inc.

Copyrights © 2008 Microplus Holdings Int., Inc.     

Choose Your Language Of Preference Below

French Version German Version Russian Version Spanish Version

Portuguese Version Chinese Version Arabic Version

UNCTAD’s Blue Book on Best Practice in Investment Promotion and Facilitation of Zambia has won Africa Investor Magazine’s 2007 award in the category of ‘Smart Regulation’.

The award represents an important endorsement of UNCTAD’s Blue Book programme, which assists African governments to strengthen their investment environment by developing action plans of clearly detailed and practical measures that can be implemented within a year.

The Blue Book of Zambia, which recommends investment promotion activities and minor legislative or regulatory changes, was specifically designed to help the Government achieve the objective of, in its own words, “creating a vibrant private sector that would be exposed to competitive best practices at the international level.”

Zambia’s Blue Book is the seventh produced by UNCTAD with financing from the Japan Bank for International Cooperation.Blue Books have been produced for five countries in Africa (Ghana, Kenya, United Republic of Tanzania, Uganda and Zambia) and two in South-East Asia (Cambodia and Lao PDR).
Zambian Vice President Rupiah Banda presents the Blue Book at its launch in March 2007

Zambian Vice President Rupiah Banda presents the Blue Book at its launch in March 2007.

Since the Blue Book was launched by Zambian Vice President H.E. Rupiah Banda in March this year, seven of the ten measures are either under implementation or have been completed, some with direct UNCTAD assistance.

This includes an investor forum for Indian pharmaceutical companies and the design of a business linkages programme. The book also led to strong debate between the government and the private sector on the liberalization of the international voice gateway.

The high rate of implementation is in no small part due to the personal commitment of the Vice President to the project; high level leadership is a key feature of UNCTAD’s Blue Books.

Source: UNCTAD

Choose Your Language Of Preference Below

French Version German Version Russian Version Spanish Version

Portuguese Version Chinese Version Arabic Version

President Mwanawasa says Portugal which holds the rotating presidency of the European Union (EU), has assured him that all African leaders are invited to the EU-African Union (AU) summit.

Dr. Mwanawasa who is also SADC Chairman, has appealed to British Prime Minister, Golden Brown to attend the summit if Zimbabwean President, Robert Mugabe is invited.

He said as a former colonising empire of most African countries, Britain must reconsider its stance to boycott the summit if Mr. Mugabe attends.

The President said all SADC heads of state and government are happy that Mr. Mugabe has been invited and are all willing to attend as long as Mr. Mugabe will be in Lisbon.

Dr. Mwanawasa was speaking at Lusaka International Airport, Tuesday upon arrival from New York where he had gone to attend the UN General Assembly.

Many African leaders, who want President Mugabe to attend the summit to help tackle his country’s problem, say they will boycott the summit if he is barred.

Mr. Brown said neither he nor any senior member of his government would attend the summit alongside, Mr. Mugabe.

At a news conference in London, Mr. Brown reiterated his determination to boycott the first European Union Africa Union summit in seven years, on account of Mr. Mugabe.

This is on account of accusations among them, Mr. Mugabe’s poor, human rights record, election rigging and the Land issue..

Mr. Mugabe blames Western powers for the economic crisis and accuses them – and former colonial ruler Britain in particular – of plotting with the opposition to oust him.

Currently he is subject to a European Union travel ban but that could be suspended to allow him to attend the December meeting.

Meanwhile, President Mwanawasa arrived home, Monday from a successful visit to the U.S and Britain.

The President arrived aboard a British Airways plane at Lusaka International Airport.

He was met on arrival by Vice President, Rupiah Banda, Cabinet Ministers, Senior government officials and Movement for Multi-Party Democracy (MMD) party members.

The President was in New York to attend the 62nd
session of the United Nations General Assembly.

While there, he participated in high level meetings on climate change and called on developed countries to do more about their industrial emissions.

President Mwanawasa who also attended the General Assembly as SADC Chairman, was the First among African Presidents to address the Assembly.

While in the US, President Mwanawasa also received an Honorary Doctorate Degree in Law at the Harding University in Arkansa, Little Rock.

He was honoured for his exemplary contributions to the development of Laws in Zambia as well as in the areas of democracy.

In London, President Mwanawasa addressed a business meeting organized by the Duetche Bank, where he encouraged potential investors to invest in Zambia.

Source: ZNBC

Choose Your Language Of Preference Below

French Version German Version Russian Version Spanish Version

Portuguese Version Chinese Version Arabic Version 

Seattle Times business reporter

GREG GILBERT / THE SEATTLE TIMES

Zambian President Levy Mwanawasa battles stereotype of Africa in chaos.

Even for a country with a relatively stable democracy and growing economy, Zambia hasn’t had much luck finding Americans willing to invest there.

Zambian President Levy Mwanawasa said he hopes to change that by introducing more Americans to his country and fighting the stereotype of Africa as a place defined by war and chaos.

Speaking to local business leaders Monday, Mwanawasa said Zambia has become a center of peace and prosperity in the region. The country has emerged from a long period of economic decline to achieve an average annual 5 percent growth in gross domestic product for the last five years.

“It’s the first time the country is experiencing such strong positive results,” the Zambian leader said, adding that sustaining the success could bring about an economic transformation to improve the lives of ordinary people.

The landlocked country of 12 million people in southern Africa still suffers from high unemployment and crippling poverty, with about 68 percent of the population falling below the poverty line of $1 per day.

Zambia has taken a strong stance against corruption and created a foundation based on the rule of law and respect for private property, Mwanawasa said.

The country’s main industries are copper mining, agriculture, manufacturing and tourism.

A former British protectorate that gained independence in 1964, Zambia is encouraging more foreign direct investment and growth of the private sector to help reduce poverty.

“When you invest in Zambia, you’re putting GDP in the pockets of Zambian people,” Mwanawasa said.

Mwanawasa, 59, was in the United States for a meeting of the U.N. General Assembly. He traveled here at the invitation of the Seattle-based Initiative for Global Development, a national network of business leaders promoting policies to end global poverty.

He and a delegation of senior government officials and business leaders were scheduled to visit the Bill & Melinda Gates Foundation, PATH, Microsoft, Boeing and Starbucks on Monday.

Mwanawasa said he had dinner Sunday at the house of former Microsoft executive Paul Maritz, a Zimbabwe native who lives on Mercer Island.

While Zambia has had a rush of investment from China recently, attracting U.S. business has been an uphill battle.

On previous visits to the U.S., “the response hasn’t been encouraging,” Mwanawasa said.

“So far Africa has been known only for the bad news,” said Felix Mutati, Zambia’s minister of commerce. “In Africa, we’ve got problems with HIV/AIDS, malaria and other diseases,” he said, “but we’re not a diseased country.”

In Zambia, the Gates Foundation funds a malaria-control program run by PATH that aims to cut malaria cases by 75 percent and become a model for the rest of Africa.

Zambia has introduced incentives to encourage foreign enterprises, such as tax-free profits for the first five years and duty-free imports of capital equipment, said Mutati.

Energy, IT infrastructure, agriculture and eco-tourism are promising areas for development, he added.

“We don’t want help,” Mutati said. “We want investment. We want partnership.”

Zambia’s slide into poverty began after world copper prices fell in the 1970s. Since then, the economy has become somewhat more diversified, even as the price of copper has climbed.

The government began privatizing the copper industry in the 1990s. Copper contributed 75 percent of the GDP in 2002 but only about 45 percent last year, said Mutati.

Asked about the political and economic crisis in neighboring Zimbabwe, Mwanawasa called the situation “extremely worrying” but added that economic sanctions will not help.

He threatened to boycott a European-African summit meeting in December if Zimbabwe President Robert Mugabe was excluded, saying Western leaders must be willing to talk to the leader widely considered an international pariah.

The chaos in Zimbabwe has choked off tourism, diverting more visitors to Zambia to see Victoria Falls, the spectacular milewide waterfall on the border between the two countries.

With room for only about 1,500 visitors, hotels in nearby Livingstone can’t cope with the influx, Mutati said. Its tiny airport, which had just a few flights a week three years ago, has 28 flights a week now. Several new hotels are under construction.

While Chinese companies have been criticized for labor practices in Africa, overall the influx of investment from China has been a good thing, Mutati said.

Cautious Western companies have hesitated too long. “They would go on their computers and do spreadsheets about risk,” he said, while “the Chinese make a decision first.”

Chinese have invested $900 million in Zambia for two economic zones focused on copper and agricultural processing, creating 60,000 jobs.

“Now we can see the West is saying we must run to Africa because if China dominates Africa, that sphere of influence can become critical as we go forward,” Mutati said.

Zambia also needs American-style business, said Wamulume Kalabo, chairman of the Zambia Association of Chambers of Commerce and Industry.

U.S. companies tend to hire and train local people, with English as a common language. Chinese companies tend to hire their own citizens to work in Zambia’s mines and manufacturing sites because of the difficulty of communicating.

“The local people are not seeing the benefit initially,” Kalabo said, “because very few of them are being absorbed into the system, and the main reason is the lack of communication.”

Kristi Heim: 206-464-2718 or kheim@seattletimes.com

Copyright © 2007 The Seattle Times Company

Choose Your Language Of Preference Below 

French Version   German Version   Russian Version   Spanish Version 

Portuguese Version           Chinese Version            Arabic Version    

Last month the Seattle based Boeing Corporation rolled out their 787 Dreamliner with a tag “made out of plastic” and this time around it is the West Bengel State’s Tata Motors Limited turn to roll out their own automobile made out of the same.  

Carbon fiber composites are ruling the world. Carbon fiber or carbon fiber can refer to carbon filament thread, or to felt or woven cloth made from those carbon filaments. By extension, the term is also used informally to mean any composite material made with carbon filament, such as carbon fiber reinforced plastic.

Carbon fibers find many uses because of their strength and light weight. Carbon fiber was invented in the early 1960s at the Royal Aircraft Establishment at Farnborough, Hampshire (UK). In the US, ORNL researchers are seeking ways to reduce the costs of making lightweight carbon-fiber composites for use in advanced vehicles.

To make a vehicle that gets 80 miles per gallon of gasoline to satisfy one goal of the U.S. Partnership for a New Generation of Vehicles (PNGV), the automobile industry is seeking a lighter structural material. Steel is the material of choice today because of its strength and low cost. But steel is heavy, so the industry is starting to use lighter materials instead.

Fiberglass has long been used extensively in the Chevrolet Corvette and more recently in some body panels of the Saturn car. Audi’s A8 automobile and the hood and engine parts of the Ford F150 pickup are made of aluminum. But now Tata Motors Limited of India is taking the lead; it has announced plans to build a five-seat car that it will bring to market for less than 100,000 rupees (around $2,200).

The company is set to build a $220 million dollar factory the communist state of West Bengal to build the discount offering, with hopes of having it on the market in two years.  The new vehicle could result in up to 10,000 new jobs at the plant and the company’s suppliers.

Tata did not disclose more specifics about the vehicle’s construction, or its name. Officials were similarly mum on production projections, as well export possibilities.

The Zambian Enterprise used to be at the cutting edge at one time with Livingstone Motor Assembliers, Ronhro’s Rover Zambia in Ndola, including Tata Zambia in Lusaka; just what went wrong is the trillion dollar question … thanks a trillion

Brainwave R Mumba, Sr.

CEO & President – Zambian Chronicle

Copyrights © 2007 Zambian Chronicle. All rights reserved. Zambian Chronicle content may not be stored except for personal, non-commercial use. Republication and redissemination of Zambian Chronicle content is expressly prohibited without the prior written consent of Zambian Chronicle. Zambian Chronicle shall not be liable for any errors, omissions, interruptions or delays in connection with the Zambian Chronicle content or from any damages arising therefrom.

Zambian Chronicle is a wholly owned subsidiary of Microplus Holdings International, Inc.

Copyrights © 2007 Microplus Holdings Int., Inc.

   

Choose Your Language Of Preference Below 

French Version   German Version   Russian Version   Spanish Version 

Portuguese Version           Chinese Version            Arabic Version  

By BRIAN HATYOKA

SOUTHERN Africa Development Community (SADC) member states are working on modalities for the establishment of a single currency unit for the region by 2018, deputy executive secretary, Joao Caholo, has said.

Mr Caholo said that SADC had already created a Macroeconomic Surveillance and Performance Unit at the secretariat in Botswana to facilitate for among other things, the creation of a monetary union.Speaking in an interview in Lusaka over the weekend, Mr Caholo said that SADC member states were also working on reducing the inflation levels for the SADC region to single digit.

He said the committee of central banks was monitoring the region’s direction towards single digit inflation. Meanwhile, SADC director of infrastructure development, Remmy Makumbe, has said that the provision of quality infrastructure is key to sustaining growth in trade and business in the Southern African region. sadcmap.jpg

Mr Makumbe who is based at the SADC secretariat in Botswana said that improved infrastructure was important to facilitate the handling of imports and exports among member states.

Speaking in Lusaka when he featured on ZNBC TV’s SADC special program earlier in the week, Mr Makumbe said that the challenge that SADC member states faced was to attract additional investments to support infrastructure development.

“Infrastructure development is one of the key challenges that we have in the region and we are putting up measures to attract investment in this area,” he said.Mr Makumbe said that there was need to strengthen the Public Private Partnerships (PPPs) in the provision of infrastructure. “PPP is key to infrastructure development hence we are encouraging a lot of players to participate in the sector,” he said.He noted that Zambia was one such country in the region that had put up measures to boost infrastructure development and cited the development of the Kafue Lower Hydro power plant as one of the facilities aimed at mitigating the impact.

Mr Makumbe said that SADC member states were developing a framework that would support infrastructure development in various sectors of the economies.

At the same meeting, Transport and Communications Permanent Secretary, Peter Tembo, said that Zambia would ensure the implementation of SADC programmes.

Retired Brigadier General Tembo also said that Zambia had many trading partners by the fact that the country was landlocked. “The fact that Zambia is a landlocked country is a blessing to us because some countries have fewer neighbors hence they have fewer trading partners,” he said.

Zambia is hosting the SADC Heads of States and Government Summit in Lusaka this week.

http://www.times.co.zm/news/viewnews.cgi?category=11&id=1186984762
 

Next Page »