• Country outlines

ECONOMIC PROFILE  

ggjhk   Thanks to its mineral resources, after its independence Zambia was considered one of the richest Sub Saharan Africa countries. However, during the 1970s and the 1980s, different factors (i.e. the adoption of a state controlled economy model, copper prices crisis, excessive indebtedness and a generalized inefficient management of the economy) triggered a serious economic and financial crisis. During the 1990s, President Chiluba’s government put in place several reforms which aimed at the liberalization of the Zambian economy under the aegis of the International Financial Institutions. These reforms succeeded at least in a partial improvement of the macro-economic indicators and in the creation of an economic environment conducive to foreign investments. Nonetheless, for a long time Zambia recorded growth rates which were not enough to bring about a significant improvement of the living condition of the Zambian population. This failure was determined above all by the crisis of the traditional mining production (copper) which was followed by the reduction in world market prices. President Mwanawasa, who was elected in December 2001 and was reconfirmed in September 2006, has undertaken an economic diversification, at the same time encouraging the development of the agricultural sector and of tourism. Moreover, since 2001 mining production showed a progressive recovery, promoted by new investments, increased productivity, the privatization of the major Zambian mining company, the Konkola Copper Mines, the inauguration of new mines and the rise of the copper prices on the international markets. In 2005, Zambia reached the “completion point” in the sphere of the “Heavily Indebted Poor Countries” (HIPC) initiative. In this way, it obtained approximately 3.9 billions of dollars as cancellation of its foreign debt. After the 1990s hyper-inflation, in the last years the growth rate of the prices slowed and in 2006 it has reached the lowest value in the last decades dropping under the 10% for the first time in thirty years.Notwithstanding the recent improvements, Zambia is still deeply dependent on the production of copper, zinc and cobalt whilst it is not able to diversify its economy and to create a wider manufacturing base. Hence, macroeconomic stability remains fragile and the good growth percentages are largely due to exogenous factors.             

Macroecnomic Data

Data	2003	2004	2005
GDP (billions of USD)	4,3	5,4	7,3
GDP growth (%)	5	5	5
Pro capita GDP (Usd)	350	400	490
Inflation rate (%)	21,4	18,0	18,3
Exchange rate* (1 Usd=KwZ)	4.733,3	4.778,9	4.463,5
Exports* (millions of Usd)	1.081	1.810	2.127
Imports* (millions of Usd)	1.393	1.727	2.068
Export/Import Balance* (millions of Usd)	-416	-286	-419
Foreign debt* (billions of Usd)	6,4	6,4	4,6

Source:  World Bank - *Source: Economist Intelligence Unit (EIU)

GDP composition 2004* (%)

Agriculture 22,6

Industry 28,3

Services 49,1

Italian Companies in Zambia

In 1998, Parmalat merged with Bonnita - a South African company dealing in dairy products - and gained the control of the subsidiary Bonnita Zambia Ltd. The new company expanded its production through new investments and enlarging its network of local milk suppliers, consisting  mainly of small scale producers.
A growing number of products have been introduced by Parmalat Zambia, the latest one being the wide range of fruit juices commercialized with the brand Santal.
Also important also is the activity of other Italian companies, namely Giacomini Comm. A. S.p.A. a mining company and Brunelli Construction (Zambia) Ltd, a subsidiary of Brunelli Italia envolved in the building sector.
A good number of small and medium size companies, over sixty, are owned or partly owned by Italians operating in agriculture, tourism, building, consulting, services, transport and fishing. 

Commercial relations with Italy

Values (thousands of euros)	2003	2004	2005	2005 Jen/Jun	2006 Jen/Jun
Exports	3.706	4.433	9.509	3.206	14.908
Imports	3.740	10.200	34.063	4.997	92.938
Balance	-1.370	-34	-5.769	267	-806
Normalized Balance (%)	-9,97	0,46	-39,43	14,96	-18,82

Variation in comparison with the preceding year	2003	2004	2005	2005 Jen/Jun	2006 Jen/Jun
Exports	-40,1	19,61	114,52	67,01	365,04
Imports	-50,5	172,74	233,93	314,49	1.759,96
Balance	1.336	-5.73	-18.79	-2.51	-76.24

Source: ICE/ISTAT

Istituto per il Commercio Estero (ICE):

ICE Office responsible for Zambia, Malawi e Botswana is the Johannesburg one, in South Africa.
ICE Office of Johannesburg (RSA)
42 Chester Road, Parkwood,
2193 P.O. Box 1261 Parklands 2121
Tel.: +27.011.880.8383
Fax: +27.011.880.9040/1
E-mail: johannesburg@johannesburg.ice.it

Web site: www.ice.it/estero2/johannesburg 

Bilateral Agreement for the Promotion and Protection of Investments. Legal background

In the effort to contribute towards the creation of a suitable climate to promote direct investments from Italy and to strengthen the economical cooperation between the two countries, a Bilateral Agreement for the Promotion and Protection of Investments was signed on 30th April, 2003 in Lusaka. The agreement has yet to be ratified. A bilateral agreement to avoid double taxation was signed in Lusaka on 27th October, 1972 (Amended in Lusaka on 13th November 1980).

 Link utili:

Rapporto Congiunto (Zambia, Malawi e Botswana) [In Italian]

Rapporto Congiunto Zambia [In Italian]

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