The Benefits of Fdi in Zambian Economy

2542 Words Aug 22nd, 2012 11 Pages
The essay will discuss the extent in which the Zambian economy has benefited from foreign direct investment. Its will analyse the positives and negatives that has come with foreign Direct Investment in Zambia. Zambia has recorded a number of foreign investments coming in the country in various sectors. Zambia is one of the 33 countries in Africa which require Foreign Direct Investment (FDI) and integration into the global economy for their social and economic development. It is for this reason that assessment of FDI’s impact on the country’s economy becomes an essential element To understand the extent of the country’s socio-economic development. FDI is critical to the Low Development Countries (LDCs), because their income levels and …show more content…
In terms of the volumes of investment, most of these were individual projects of no more than US$10 million per project and indeed many were as little as a few thousand dollars. Investments into these Non-Traditional Exports (NTEs) were also spurred by a number of incentives, including the 100% retention of foreign exchange earnings and other traditional incentives, including the company tax for the agricultural sector and exemptions of agricultural machinery and equipment from import duties (ZDA, 2010).
Zambia has benefited economically from foreign direct investments (FDI) of Indian firms which has injected the capital investment exceeding US$3billion in the last five years in various sectors. These include Vedanta resources with capital investment of 2.6million in the mining firms thats Konkola Copper Mine(KCM), Bharti Airtel’s investment in the telecom which acquired airtel Zambia from Zain in 2010 and Taurian manganese which invested US$300million in a manganese processing plant in serenje.
China investment grew from US$144 million in 2003 to US$2.4billion in 2011. Such levels of investment entail that Chinese FDI will soon top the list source of Zambia’s FDI. The large-scale investments in their initial stages included, the Juchuan Mining Groups’ investment in Munali Nickel Mine at the height of the 2009 global financial crisis, which saved the mine from certain closure and NFC Africa Mining’s acquisition of Luanshya

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