Presentation to: BOTSWANA GLOBAL EXPO. 23 rd November2011 Mrs Margaret Chimanse, Manager, Communications and Public Relations (Zambia Development Agency) 1

PRESENTATION OUTLINE Introduction Policy Reform Business Ranking Doing Business 2011 Business Reforms Summary of Indicators Starting a Business CONCLUSION 2

Introduction Zambia’s reform path and programmes over the last decade have all been oriented at fostering private sector development and improving the overall economic and business climate to attract FDI into the country In fact the world Bank’s Second Investment Climate Assessment for Zambia in 2009 confirms that Zambia’s business environment has improved drastically since the first assessment in 2004 with more positive business survey results There are many reasons to Do Business with Zambia but most significantly, Zambia has an investment friendly environment and is consistently undertaking various measures to improve it’s business environment. Doing Business with Zambia3

Introduction continued Previously identified problems such as micro-economic stability, high taxes and corruption, among others, are being tackled and did not figure among the major or severe obstacles in subsequent surveys The ambitious Private Sector Reform Development Programme (PRSDP) is burnt on further streamlining business licencing processes and improving other administrative processes related to business establishment. A fundamental premise of Doing Business is that economic activities require good law. Consequently, the creation of the Zambia Development Agency (ZDA) in 2007 centralised and rationalised investment facilitation and promotion and through the ZDA, a generous incentive scheme for investors is also made available and aftercare services provided. Doing Business with Zambia4

Introduction continued Furthermore, the development of multi-facility economic zones provides investors with more secure and well-equipped environment to operate. Reforms are also continuing in the areas of automated registration, permits and visa processing, registration of land, and customs clearing Goal of the PSDRP was to lay the foundation for faster sustained private sector led growth by improving the investment climate Objective of PSDRP was to reduce the cost of doing business and make Zambian firms competitive through the Private Sector Development Programme (PSDRP) a number of polices such as the PPP Policy, Energy Policy, MSME Policy and ICT Policy were developed and approved by Government Doing Business with Zambia5

Policy Reform Policy alone is not enough to meet the objectives of reducing the cost of doing business; it requires a supportive legal and regulatory framework; Priorities in 2006 reforms were: Energy Reforms, Land reforms, Immigration reforms, Administrative barriers, Citizen’s economic empowerment, Labour law, Livestock, Small claims court, Telecommunications, Tourism, PPPs Prioritised reforms in 2008 were: Business Licencing, MSME Development environment and systems. Business licencing reform report completed with 517 business licences identified Recommendations made on, reducing both the number of licences and number of processes and procedures; focus licencing on regulation and not revenue raising; removing overlaps and duplications and reduce cost to businesses by 30% Doing Business with Zambia6

Policy Reform MSME Development: MSME policy launched, Credit Guarantee Scheme established, MSME tailored programme on Access to finance and markets developed and rolled out to all provincial centres Zambia Business Survey completed and MSME identify access to finance and access to infrastructure as top two constraints Small Claims Court Bill, and Industrial and Labour Relations Act enacted Outcome of reforms Increase in the number of businesses registered Number of days to register and start a business reduced World Bank DB report 2009 recognized reforms in Zambia, ease of doing business improving and ranking up 16 places Doing Business with Zambia7

Policy Reform Policy alone is not enough to meet the objectives of reducing the cost of doing business; it requires a supportive legal and regulatory framework; Priorities in 2006 reforms were: Energy Reforms, Land reforms, Immigration reforms, Administrative barriers, Citizen’s economic empowerment, Labour law, Livestock, Small claims court, Telecommunications, Tourism, PPPs Prioritised reforms in 2008 were: Business Licencing, MSME Development environment and systems. Business licencing reform report completed with 517 business licences identified Recommendations made on, reducing both the number of licences and number of processes and procedures; focus licencing on regulation and not revenue raising; removing overlaps and duplications and reduce cost to businesses by 30% Doing Business with Zambia8

Policy Reform World Bank DB report Zambia ranked Number 7 in Sub Saharan Africa World Bank DB report Zambia among the 10 top reformers The reforms have now entered the second phase and the goal of these reforms is to promote and facilitate the development of a competitive business environment in Zambia in order to contribute to job and wealth creation. Doing Business with Zambia9

Priority Areas The priority areas being addressed Business licensing reform implementation Public Private Partnership (PPP) Development MSME Development Labour Law Reform & Labour Productivity Trade expansion Capacity building Reform communication Doing Business with Zambia10

Benefits of Reforms Reduction in cost of Doing Business Increased access to regional and international markets Increased investment Improved ease of doing business Job and wealth creation Government has specifically improved the border facility at Kasumbalesa-Zambia- DRC by introducing automated facilities that reduce time at the border to 1-2 days instead of the one – two weeks spent at the border; this improvement in infrastructure and processing has made trade easier. Doing Business with Zambia11

Doing Business presents quantitative indicators on business regulations and the protection of property rights that can be compared across 183 economies, from Afghanistan to Zimbabwe, over time. A set of regulations affecting 9 stages of a business’s life are measured: starting a business, dealing with construction permits, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts and closing a business. Data in Doing Business 2011 are current as of June 1, 2010*. The indicators are used to analyze economic outcomes and identify what reforms have worked, where, and why. 12 Business Ranking

The data set covers 183 economies: 46 in Sub-Saharan Africa, 32 in Latin America and the Caribbean, 25 in Eastern Europe and Central Asia, 24 in East Asia and Pacific, 18 in the Middle East and North Africa and 8 in South Asia, as well as 30 OECD high-income economies. The following presentation is a summary of Doing Business indicators for Zambia. The data used for this economic profile comes from the Doing Business database and are summarized in graphs. These graphs allow a comparison of the economies in each region not only with one another but also with the “good practice” economy for each indicator. The good-practice economies are identified by their position in each indicator as well as their overall ranking and by their capacity to provide good examples of business regulation to other countries. These good-practice economies do not necessarily rank number 1 in the topic or indicator, but they are in the top

Zambia – Compared to global good practice economy as well as selected economies 14

Zambia's ranking in Doing Business Doing Business 2011 Ease of Doing Business76 Starting a Business57 Dealing with Construction Permits158 Registering Property83 Getting Credit6 Protecting Investors74 Paying Taxes37 Trading Across Borders150 Enforcing Contracts86 Rank97

Summary of Indicators - Zambia 16 Starting a Business Procedures (number)6 Time (days)18 Cost (% of income per capita)27.9 Paid-in Min. Capital (% of income per capita) 0.0 Dealing with Construction Permits Procedures (number) 17 Time (days) 254 Cost (% of property value) Registering Property Procedures (number)5 Time (days)40 Cost (% of property value)6.6

Summary of Indicators Getting Credit Strength of legal rights index (0-10) 9 Depth of credit information index (0-6) 5 Public registry coverage (% of adults) 0.0 Private bureau coverage (% of adults) 3.0 Protecting Investors Extent of disclosure index (0-10) 3 Extent of director liability index (0-10) 6 Strength of investor protection index (0-10) 5.3 Ease of shareholder suits index (0-10) 7 17

Summary of Indicators 18 Paying Taxes Payments (number per year)37 Time (hours per year)132 Profit tax (%)1.7 Labor tax and contributions (%)10.4 Other taxes (%)4.0 Total tax rate (% profit)16.1 Trading Across Borders Documents to export (number)6 Time to export (days)44 Cost to export (US$ per container)2664 Documents to import (number) 8 Time to import (days) 56 Cost to import (US$ per container) 3315

Summary of Indicators 19 Enforcing Contracts Procedures (number)35 Time (days)471 Cost (% of claim)38.7 Closing a Business Recovery rate (cents on the dollar) 27.2 Time (years)2.7 Cost (% of estate)9

5- Year Measure of Cumulative Change The 5-year measure of cumulative change illustrates how the business regulatory environment has changed in 174 economies* from Doing Business 2006 to Doing Business Instead of highlighting which economies currently have the most business friendly environment, this new approach shows the extent to which an economy’s regulatory environment for business has changed compared with 5 years ago. This figure shows the distribution of cumulative change across the 9 indicators and time between Doing Business 2006 and Doing Business This snapshot reflects all cumulative changes in an economy’s business regulation as measured by the Doing Business indicators -- such as a reduction in the time to start a business thanks to a one-stop shop or an increase in the strength of investor protection index thanks to new stock exchange rules that tighten disclosure requirements for related-party transactions. 20

Doing Business Change Score Five year cumulative 21

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Zambia shares borders with eight countries in the South-eastern sub region. As a member of the SADC-FTA Zambia has expanded its market’s reach to over more tan 170 million with a regional market of $360 billion. In addition, as a member of COMESA, investors have ready access to the largest regional economic grouping in Africa comprising over 400 million people. Regional infrastructure cooperation projects, such as the most recent North –South Corridor project, which links the Port of Dar es Salaam, Tanzania to the Copperbelt-Zambia and through to the southern ports of South Africa strategically positions Zambia as a land-linked transit hub to it neighboring countries. Improvements in road rail travel along this corridor will also help ensure more fluid movement of goods and people within the sub region. Doing Business with Zambia29 Market Access

In addition to its welcoming business environment, Zambia has a stable political and social environment and has a yet-to-be explored resource endowment and opportunities. Since 1991, political transfer of power has been conducted peacefully through multi party elections. Clearly, investors are welcome and we await them to become part of our promising economy. Thank you for Attention Doing Business with Zambia30 Why Zambia