Suitability of multi-facility economic zones in attracting foreign investment: the case of the Lusaka South Multi-Facility Economic Zone.

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Hamankolo, Nchimunya Apronia
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The University of Zambia
This dissertation investigated the suitability of Multi-Facility Economic Zones (MFEZs) in attracting foreign investment. The general objective of this research was to examine the suitability of the MFEZ in attracting foreign investment. To do so specific objectives were investigated which are examining the suitability of the legal framework in attracting foreign investment at Lusaka South Multi-Facility Economic Zone (LS-MFEZ); examining the suitability of the administrative structures in attracting foreign investment at LS-MFEZ and assessing the extent to which the LS-MFEZ has attracted foreign investment in manufacturing activities. This research was a case study of the LS-MFEZ. This research used primary and secondary sources of data. Purposive sampling was used to select 47 participants. Of these, seven were key informants and the remaining 40 were respondents who are officials from investing companies. Questionnaires and semi-structured interviews were used to collect quantitative and qualitative data. Statistical Package for Social Sciences (SPSS) software was used to analyse quantitative data while narrative analysis was used to analyse qualitative data. The finding from this research show that not all the laws, rules and regulations are favourable for investment. The research showed that most foreign investors were not happy with some of the laws, rules and regulations. The research established that most of the administrative structures at LS-MFEZ are suitable for attracting foreign investment. Furthermore, five major challenges were identified by the investors namely; long periods of connectivity to water and electricity, long procedures, transportation, high tariffs and high tax rate. There are also two major challenges faced by management at LS-MFEZ in attracting foreign investment. These are the long procedures taken by ZEMA and PACRA to issue permits and licenses and understaffing. The research therefore, concludes that LS-MFEZ is suitable in attracting foreign investment. This can be attributed to some of the suitable aspects of the legal framework and administrative structures that have contributed to an increase in manufacturing activities. The research recommends enhanced collaborations with the private sector.
Multi-facility economic zone. , Foreign investment.