A critical analysis of the investment ACT and the Zambia investment centre
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Date
2013-09-26
Authors
Nchito, Sashi
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Abstract
Attracting Foreign Direct Investment (FDI) is an important policy goal for all countries to enhance productivity and economic growth. FDI apart from income generation facilitates technology transfer and improvement of skills. The main issues critical to investment promotion and attraction are economic, political and legal. An investor must be assure of profitability and availability of market. Political stability provides security for an investor. There must be a sound legal framework for investment that addresses such issues as tax policies and repatriation of profits that are of interest to an investor.Zambia like many other developing countries has been making efforts to make itself more attractive to FDI by adopting liberal economic policies that require input from the private sector. However, there are a number of issues pertinent to investment that have to be straightened. At the core of these problems is the lack of a national investment policy which is crucial in charting the course for investment attraction. Because of this deficiency, the Investment Act (no.39 of 1993) does not have any policy guidelines and therefore does not set any goal for investment such as requirement for minimum investment and the types of investment falling under it.Furthermore, the Act establishes the Zambia Investment Centre an investment promotional agency as a one-stop support facility for investors but does not provide for inter institutional coordination. The lack of such provision has hampered the operations of the Centre.Another issue affecting the flow of investment to Zambia is the instability of the currency that is constantly fluctuating and has a high inflation rate.From the foregoing, there is need for the Government to put in place a national investment policy, amend the Investment Act so that it can have guidelines and adopt better financial regulatory policies that will strengthen the currency.
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Investments, Foreign --Law and legislation--Zambia , Commercial law--Zambia