The Zambia Finance and Investment Conference

Euromoney brought together over 300 policymakers, businessmen, financiers and investors at the Zambia Finance and Investment Conference, held in Lusaka on 2 and 3 September 2015.

Over the past decade, the country has enjoyed one of the world’s fastest economic growth rates, averaging roughly 6.7% per annum. However, the past few months have certainly been challenging for Zambia’s economy and public finances. A few weeks before the conference took place, the government completed its third international bond issue for $1.25bn which set a new high for yields on outstanding African sovereign bonds. Its dependency on copper has also made Zambia amongst the countries that was hit the most by the recent Chinese slowdown; and the fall in commodity prices have affected the country balance sheets and exchange reserves.

Of course this is not the first time that Zambia is facing economic difficulties and the current challenges are not unusual according to Hon Mr Alexander B. Chikwanda, MP, Minister of Finance, Republic of Zambia. The Minister said during his address that the slowdown in China should not come as a surprise and that the Zambian economy is resilient enough to withstand the storm. Improving the budget deficit, re-asserting a commitment to prudent fiscal policy and stabilising the economy are key priorities for Zambia’s government in the next 12 months.

Dr Caleb Fundanga, Christopher Garnett and Hon Mr Alexander B. Chikwanda

Opening the conference, Dr Bwalya K. E. Ng’andu, Deputy Governor – Operations, Bank of Zambia delivered an insightful address on how Zambia could better weather global shocks by restructuring its economy through industrialisation and by diversifying FDI.

Hon Dr Michael Kaingu, MP, Acting Minister of Commerce, Trade and Industry, Republic of Zambia agreed with Dr Ng’andu’s message and told the audience that the government is trying to improve the investment outlook by implementing policies that will attract investment across various sectors of economy.  

Taking a closer look at the country’s economic fundamentals, panellists from IMF, AfDB, Afreximbank and Premier Consulting on the first discussion agreed that Zambia cannot be so depend on copper and a diversified economy is the key - coupled with sustainable growth and reliable power supply. This can be achieved, they argued, by finding the right fiscal policies and alternative solutions.

Kwacha depreciation has caused many to propose the adoption of the US dollar as an official currency. However, according to Dr Caleb Fundanga, Executive Director, The Macroeconomic and Financial Management Institute of Eastern and Southern Africa (MEFMI), this would be catastrophic. The solution is to improve the macroeconomic environment.  Minister Chikwanda and the Bank of Zambia also confirmed that they will not try to control foreign currency exchange because that will only make the situation worse.

Speaking on the role of the banking sector in developing the capital markets, the Bank of Zambia said that the industry is adequately capitalised and they encouraging commercial banks to venture into innovations to reach the unbanked population. The implementation of digital platforms seem to be the answer and Zanaco, Citibank and BankABC are using information technology to bring everyone on board.

Over the two days, panellists focused on key investment areas including banking, technology, infrastructure, agriculture, mining and tourism. They all agreed that the answer to industry-led economies such as Zambia is diversification. The partnership between The Zambian Commodity Exchange (ZAMACE) and Johannesburg Stock Exchange (JSE) to boost liquidity in the local agro-commodity market were among some of the positive steps mentioned. The agriculture sector could also play a bigger role nationally and regionally. It offers great opportunities for investors to tap into because it has the potential of providing resources that the rest of the world is lacking - not just Zambia, but Africa as a whole. 

The conference provided an open platform for analysis and debate on the finance and investment environment in Zambia. Some of the keynotes and panels are available online – please click here.

Euromoney Conferences would like to thank our co-host, the Ministry of Finance, and Zanaco and Old Mutual for their support for our Zambia Finance and Investment Conference. We look forward to seeing you all again next year.

Wed 02 - Thu 03 Sep 2015

Taj Pamodzi Hotel, Lusaka