ZAMBIA has in the last three years attracted a total of US$5.2 billion worth of Foreign Direct Investments (FDIs).
On a yearly basis, the local economy has been recording steady increase in these actualised FDIs, signifying some growing investor confidence in the country’s economic scenario.
This year, the investment promoting wing of Government, the Zambia Development Agency (ZDA), projects to attract about $4 billion worth of FDIs mainly targeting priority sectors like agriculture, tourism, manufacturing, mining and infrastructure development.
Interestingly, by June 30, 2014, about $3.6 billion pledged investment had already been recorded with associated pledged employment standing at 13,694.
On face value, that looks encouraging but there is need for ZDA to look at the issue critically, what with the persistent low levels of actualised investments from the pledges.
For the agency to have been able to meet 90 per cent of its annual target within the first half of the year only means one of two things: It is either the annual target for 2014 was too low such that it was supposed to be the six months’ target or there were some new economic policy measures which triggered these pledges from the potential investors during the period under review.
We, therefore, cautiously join the ZDA in celebrating this feat as we share in the optimism about the investment environment in the country.
That, notwithstanding, we feel that ZDA should revisit the pledged FDI target to ascertain whether there is an under-estimation or not, given the performance for the first two quarters of this year.
Another issue which should be of concern to the ZDA is the somewhat huge gap between annual figures for pledged investments and the actualised ones.
In the last three years, for instance, huge amounts have been, every year, recorded as pledged investments out of which a paltry $1.8 billion stands out as having been the highest in 2013.
The question which begs an answer from the ZDA and other related authorities, therefore, is on the huge disparity between the values for pledges and those for actual investments.
Why is it that much higher value for investments is pledged as compared to the values of investments which materialise per annum?
Obviously, it is the Government and ZDA’s desire to have as high the value of actualised investments as possible because that is all that, at the end of day, counts.
As the ZDA correctly observes, there is a huge difference between pledged and actualised investments and everyone would like to see more actualised investments as investors implement their pledges.
The Government, through the ZDA, should fully study why some potential investors make their pledges and later abandon the idea of actualising them.
Could it be that there are some challenges within the investment legal framework or indeed in the economic environment which could be discouraging them from going ahead?
Or perhaps after they make their pledges, these investors do not get the required support in terms of availability of information!
Truly, there is need to also identify bottlenecks during implementation of these projects and find solutions to them to ensure that investors are implementing their pledged commitments.
Other than that, we strongly concur with the ZDA that there is need to place more emphasis on attracting investment for the rural parts of the country.
This is as it should be, given the levels of poverty in the countryside.
For that to be feasible, though, there is need for the agency to decentralise its operations to include all the 10 provincial centres, in addition to the One Stop Shop in Livingstone and the Lusaka offices. OPINION