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Country Commercial Guides for FY 2000: Zambia Report prepared by U.S. Embassy Lusaka, released July 1999   Note*

CHAPTER I: Executive Summary

This Country Commercial Guide (CCG) presents a comprehensive look at Zambia's commercial environment, using economic, political and market analysis. The CCGs were established by recommendation of the Trade Promotion Coordinating Committee (TPCC), a multi-agency task force, to consolidate various reporting documents prepared for the U.S. business community. Country Commercial Guides are prepared annually at U.S. embassies through the combined efforts of several U.S. government agencies.

Zambia is a landlocked southern African country of 10 million people, with good mineral resources, extensive arable land and normally adequate rainfall. The country's GDP per capita in 1998 was $380, and the latest Zambian Central Statistics Office (CSO) survey (1997) indicated that 65% of Zambians live below the poverty line. Zambia has one of the highest urban populations, at 46%, in sub-Saharan Africa, with high unemployment. Agriculture accounted for 15% of GDP and 71% of employment in 1998, while Copper and cobalt exports accounted for 77% of export earnings.

Zambia began an economic reform program in 1991, and has made significant progress in liberalizing the domestic economy, foreign trade, and privatizing parastatal enterprises. More than two-thirds of Zambia's 330 parastatal companies were privatized by January 1998, including portions of the dominant copper conglomerate ZCCM. The remaining parastatals are slated for privatization over the next two years. The tariff structure is designed to facilitate imports of certain raw materials particularly in the agriculture and energy sectors. There is no discrimination against foreign investors, and no restrictions on repatriation of capital or profits. However, the reform program and economy seriously stumbled in 1998-99, due to the failure to complete privatization of the giant ZCCM copper mining parastatal. A number of instances of government interference in the private sector, a weak court system, and inadequate law enforcement tarnish in practice Zambia's liberal investment framework.

In 1998, GDP dropped by 2%, after a growth of 3.5% in 1997. The Inflation rate fell from 35% in 1996 to 19% in 1997, but rose to 30.6 in 1998. Zambia's social indicators are below average compared to other sub-Saharan and low income countries.

There is a fair presence of U.S. companies in the Zambian market. Bilateral trade, however, is limited by high transportation costs, the relatively small domestic market, and low incomes. Zambia is a member of the WTO.

Country Commercial Guides are available for U.S. exporters from the National Trade Data Bank's CD-ROM or via the Internet. Please contact STAT-USA at 1-800-STAT-USA for more information. Country Commercial Guides can be accessed via the World Wide Web at http://www.stat-usa.gov, www.mac.doc.gov, and http://1997-2001.state.gov. They can also be ordered in hard copy or on diskette from the National Technical Information Service (NTIS) at 1-800-553-NITS. U.S. Exporters seeking general export information/assistance and country specific commercial information should contact the U.S. Department of Commerce, Trade Information Center by phone at 1-800-usa-TRADE.