Attracting investment by conceeding possible gains: Evaluating the rational of Zambian investment legislation

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Chulu, Japhet W.
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In the quest for national development, developing countries have almost always looked outside themselves for investment in the belief that the coming in of foreign investment will be the means with which to improve their economies and thereby enable them to uplift the standard of living of their citizens and achieve national development in general.1 Therefore, Zambia has since independence enacted successive pieces of legislation to govern and regulate as well as to encourage, control and monitor the entry and operations of foreign investment into the country. However, a perception has emerged that Zambia, as a host state, has been too generous and has conceded too much for the sake of attracting investment with the result that no significant gains or benefits have accrued to the nation from these efforts.2 Another view is that economic and social objectives of what qualifies as an investment policy in Zambia are obscure because the country does not have a clearly defined investment policy.3 It has also been observed that the 'give and take' spirit that characterised the early post independence Zambia, starting with the Pioneer Industries (Relief from Income Tax) Act of 1965, has since been lost and that instead, the quest for investment has lost focus and meaning and seems only to benefit investors, who are mainly foreigners.4 In the search for a solution to the problem of underdevelopment, the government appears to have opted to hand over social policy and the public sector to international institutions or the private sector5 although the interests of these entities are usually at variance with national interests: on the one hand, national development and on the other, profit.6 This study examines these concerns in relation to the quest for equitable investment legislation and flows into an assessment of whether the campaign for foreign direct investment has translated into national development.
Investment,foreign--law and legislation--Zambia , Capital movements