Zambia Amends Investment, Trade, and Business Development Law

On 18 April 2024, the Parliament of Zambia enacted a law, the Investment, Trade and Business Development (Amendment) Act, 2024 (Amendment Act), to amend the Investment, Trade and Business Development Act, 2022 (Principal Act).

Assented on 16 April 2024, the Amendment Act deleted the definition of a ‘rural area’. It introduced the concept of ‘expansion project’, which refers to a planned initiative to increase the size, capacity, scope, or reach of business operations facilities or infrastructure.

The rationale was that the definition of “rural area” was inadequate as it reduced the scope of beneficiaries for rural area incentives to facilitate economic development.

An investor shall be eligible for incentives under this Act if that investor invests in a new project or expansion project in a special economic zone, priority sector, rural area or farm block.

Section 3(1), Amendment Act

This means the Amendment Act extends the eligibility for incentives to investors who invest in an expansion project in a special economic zone, priority sector, or rural area, and extends the eligibility for incentives to investors who invest in a new project or expansion project in a farm block.

Background…

• 2005: The government introduced multi-facility economic zones (MFEZ) to enhance Zambia’s competitiveness and industrialization. The zones were initiated to foster an attractive business environment, promote exports, and enhance domestic trade.
• 16 November 2022: The Parliament of Zambia enacted Investment, Trade and Business Development No. 18 of 2022 to, among other things, foster economic growth and development by promoting trade, business development, and investment in the Republic through an efficient, effective, and coordinated private sector-led economic development strategy.
• 12 February 2024: The President of Zambia, Hakainde Hichilema, called for the 3rd Cabinet Meeting, at the State House, to deliberate on legislative and policy matters aimed at developing the country for the good of the people. Among the Cabinet resolutions was the approval to publish and introduce the Investment, Trade and Business Development (Amendment) Bill 2024 (Bill) in Parliament during the current sitting.
• 13 February 2024: The Bill was published in Gazette Notice No. 191 of 2024 for general information.