The role of the legal factor in realising the benefits of foreign investment

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Kunda, Iven Mulenga
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Foreign Direct Investment is one way of promoting international economic development because it has the potential to make substantial social and economic development bear both on the economy of the host nation and on the world economy at large. To Zambia foreign investment is not a new phenomenon, it stems way back form 1890 when the British South African (BSA) company started its operations in Northern Rhodesia. Through out history, Zambia has had little benefit from foreign investment ventures. Despite this, the government of Zambia has been trying to find ways of how to make the country benefit from foreign investment. Several reforms accompanied by legislation have been introduced at different periods of development but still not much has been seen in terms of social and economical development. This paper is concerned with the role that the law plays in realizing the benefits of foreign investment to the host nation, in this case Zambia. There is put the thesis that law alone is not enough when it comes to attracting foreign investment nor ot-is it enough to help in realizing the benefits there from. Other factors also need to be play. A This is not to deny the fact that the law has a role to play in bringing about these factors. Hence the title: "The Role of the Legal Factor in Realizing the Benefits of Foreign Investment".To explain the title a little bit is to say that the paper is concerned with the part that the law plays in realizing the benefits of foreign investment. It is shown that the role of law is only to the extent that it has to be used through social engineering to bring about the realization of all the other factors necessary to enable a country attract and benefit from foreign investment. In other words the function of the law cuts across all other factors, implying that for every factor to be in place, the law acts as a level to realize and actualize that factor. The paper is divided into five chapters. The first chapter is concerned with definition and concept of foreign investment. The chapter also looks at risks and benefits associated with foreign investment. The second chapter is concerned with other factors apart from the law that favours foreign investment. Chapter three gives the historical experience of Zambia in foreign investment ventures. Chapter four is an analysis of the law as a whole in relation to foreign investment. This chapter does not limit itself only to the investment act but goes to analyze other Acts related to the subject or those that regulate other factors that favour FBI. Chapter five is the conclusion of the paper. It gives observations and recommendations on the subject.