Doing Business in Zambia: Opportunities and Challenges for German Entrepreneurs

Durban – Johannesburg, September 2016

Content

A.Zambia Office of the Southern African German

Chamber of Commerce and Industry

B. Economic Development

C.Business Opportunities and Challenges

D.Outlook and Next Steps

A. Zambia Office of the

Southern African-German

Chamber of Commerce and

Industry

Algeria|Angola|Argentina|Australia|Austria|Azerbaijan|Baltic States|Belarus|Belgium|

Bolivia|Bosnia-Herzegovina|Brazil|Bulgaria|Canada|Central America|Central

Asia|Chile|China|Columbia|Costa Rica|Croatia|Czech Republic|Denmark|

Dominican Republic|Ecuador|Egypt|El Salvador|Estonia|Finland|France

Ghana|Greece|Guatemala|Honduras|Hongkong|Hungary|Iceland|India|Indonesia

Iran|Iraq|Ireland|Israel|Italy|Japan|Kazakhstan|Kenya|Korea|Latvia|

Lithuania|Luxemburg|Macedonia|Malaysia|Mexiko|Morocco|Myanmar|Netherlands|

New Zealand|Nicaragua|Nigeria|Norway|Oman|Panama|Paraguay|Peru|

Philippines|Poland|Portugal|Qatar|Romania|Russia|Saudi-Arabia|Serbia|

Singapore|Slovakia|Slovenia|Southern Africa|Spain|Sweden|Switzerland|

Taiwan|Thailand|Tunisia|Turkey|Ukraine|United Arab Emirates|

United Kingdom|Uruguay|USA|Venezuela|Vietnam I Zambia

Support worldwide - 130 locations in 90 countries

Zambia Office:

Representation I Trade Promotion I Networking

Services NetworkingTrade Promotion

The three pillars of the Chamber

Service provider to companies

Service brand: DEinternational

e.g. Market Studies, Events,

Workshops, etc.

Official representation of

German industry and commerce

Promote interests of German

companies in Southern Africa

Promote, inform about the

German economy

Member Organisation

Collective strength of the members

Over 600 companies are part of our

network

+ link to Development Corperation

B. Zambia: Economic

Development & Business

Opportunities

Zambia – Macroeconomic Data

Comments GDP - Composition by Sector

Source: GTaI 2015

- GDP: 27,02 Mrd. USD (2015)

- Growth Rates 2005 – 2015: average 6,6 %

- Current Growth: 3,6%

- Growth Projection 2017 – 2018:

4,2 % - 4,6% (EUI)

- Netdebt 2015: 57%

- Inflation (YoY): 21,1 %

- Currency: Kwacha (1 EUR = 11,53 ZMW)

21%

33%

46%

0%

Agriculture Industry Service

SWOT Analysis of Zambia

Above average GDP Growth

Relatively political stable

Good Road Network

Strengths

Land Locked Country far from a harbour

Energy shortages: Problems for energy

intensive industries

Weakness in Administration and Legal

System

Weaknesses

Opportunities

Commodities

Infrastructure Investments

Rising consumption through a growing middle class

Subsidies from development banks

Rising demand for electricity provides

opportunities for renewable energy

Greater demand for import of machinery and

equipment

Threats

Source: GTaI

Economy is to reliant on copper

Energy Shortages

Chicken and Beer Problem

Germany in Zambia

International Treaties Private Sector

25 German Companies in Zambia

Amatheon Agri only FDI

BayWa AG, Munich & Barloworld

Limited, Johannesburg recently

formed a Joint Venture in

Zambia

BASF & Bayer supply Agrisector

Many German Companies operate

out of South Africa: e.g. Endress

& Hauser / Siemens / Bauer

Development Cooperation since 50+ years

• 1974 bilateral Investment

Protection Treaty

• 1975 bilateral Doubetaxation

Treaty

C. Zambia: Opportunities and Challenges

Energy

Business Opportunities in Zambia

Agribusiness

Manufacturing: Food Processing

Energy

Zambia waiting for Cost Reflective Energy

Prices – 5,64 vs 11 US-D Cents per kWh

Water Power Companies are Waiting in

Line to realise Projects funded by

Development Banks (KfW/AfDB/EIB)

Huge Potenial for Solar Energy in On-and-

off-Grid Sector: Tenders of ZESCO and

CEC for Solar Power

KfW to support Renewables Sector with

Get-Fit Mechanism

Point of Contact

- Renewables Made in Germany

- KFW Get-Fit Program

- Scalling Up Solar – Worldbank

Agriculture

Vast Agricultural Potential – 13 mio.

Hectar can still be Explored

40 % of Fresh Water Reserves in Southern

Africa

A Number of International Agribusinesses

Already Active in Zambia

700 Commercial Farmers Already active in

Zambia

German Exporters of Agricultural

Equipment can profit of the

mechanisation of the Zambian Agriculture

Point of Contact

• Agricultural Knowledge Training

Center Zambia

• German Pavillion @ AgriTech

Expo

Manufacturing: Food-Processing

Relatively Broad Developed Food

Processing Industry

70 % of the 300 Members of the Zambian

Manufactures Association are into Food

Processing

Power Cuts and Supply Chain Deficits are

Threats to Manufacturing Industry

Push in Modernization can be offered to

through Solutions in Energy Efficiency and

Supply Chain Management

Chicken and Beer Problem

Point of Contact

• Zambian Association of

Manufactures (ZAM)

• Zambian Nationals Farmers

Union (ZNFU)

Why Zambia?

What´s next?

• IMF Package will Bring New

Impulses and Opportunities

• Development Bank Investment

on the Rise

• Busienss Opportunities in

numerous Sectors

• Easy Access via South Africa

• Good network = Good results

German-Zamian Business Forum 2017

Thank you for your attention!

Johannes Kurt

Representative - Zambia Office

Tel. +260974252091

E-Mail: lusaka@germanchamber.co.za

Contact person