Monday, February 10, 2014

Policy changes won't affect FDIs - Gondwe
By Gift Chanda
Wed 20 Nov. 2013, 14:01 CAT

FOREIGN Direct Investments to Zambia will not slow down next year following policy changes in the 2014 national budget, says Central Bank governor Dr Michael Gondwe.
Dr Gondwe said FDI flows would continue as Zambia's investment climate and opportunities remain favourable despite recent policy changes.

Under the 2014 national budget, the government scrapped incentives under the import duty exemptions obtained by new investors through the Zambia Development Agency (ZDA) mechanism.

Earlier in May, the government also introduced a law to allow the Central Bank to monitor financial flows between Zambia and the rest of the world in a bid to curb capital flight and manage external risks.

"The changing face of global private investment and international business requires adjustments to domestic policies and strategies, in order to effectively harness private investment flows," Dr Gondwe said yesterday at a discussion organised by the American Chamber of Commerce in Zambia.

"If you look at the trends in policy changes, the idea has been to create a business friendly environment. The government is not discouraging investment, it is actually looking for investment."

He said the government had, for instance, raised the minimum capital requirement for commercial banks to ensure private sector access to financing.

Zambia attracted more than US $3 billion in foreign investment in the first half of this year, above the government target for the whole year.

Ministry of Finance data also shows that investment pledges into Zambia soared to US $5 million in the first nine months of this year.

Dr Gondwe called for more investment into Zambia.
He said concerns that the government wanted to reintroduce exchange controls or increase its stake in doing business in the country were not true.

"We want investors to come and explore opportunities here...we do not see the rationale, for example, for bolts and nuts to be imported," said Dr Gondwe.

He added that the policy changes were merely meant to allow the government respond to the external environment in a bid to sustain existing investments and attract new ones.

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