Newly elected Zambian President Michael Sata’s incumbency bodes well for investment in the landlocked country. This is despite pre-election rhetoric that threatened the status quo of usual business practice in both the private sector and the State, said Yusuf Dodia, chairperson of the Private Sector Development Association of Zambia, at a Frontier Advisory seminar, in Johannesburg on Thursday.

“Most of Sata’s campaign promises have not been implemented yet and he’s adopted a more liberal policy towards the economy, which was originally predicted before his election”, explained Dodia.

Sata adopted a three-pronged election campaign centred around promises that were generally pro-poor, such as less personal income tax, a higher minimum wage, greater local ownership of the economy and stepping up the fight against corruption. Although the talk of a tougher stance against corruption was welcomed, business was worried that Sata’s policies would adversely affect their assets and create an unfriendly business environment.

Investor nervousness was compounded by the State’s cancellation of South African bank First Rand Group’s acquisition of Zambian local bank Finance Bank.

Dodia pointed out that, although the deal was never actually formalised, there was a general feeling of suspicion about the way business was done under the previous regime, under former president Rupiah Banda. In this regard, Sata plans to accelerate infrastructure development in the country, but not necessarily limit the development of local service providers. He intends to make the process more efficient and transparent, said Dodia.

This was illustrated by perceived anti-Chinese sentiment, specifically from labourers in the Copperbelt in the runup to the election. Sata has since approached Chinese investors and assured them of their Zambian assets. He also indicated that he welcomed any foreign presence in Zambia, provided it is accompanied by local social upliftment.

Dodia noted that although infrastructure development and social upliftment were high on Sata’s priority list, he argued that local and regional investment was becoming increasingly constrained due to the competitiveness of China.

Zambia’s economy is expected to grow by over 6% in the coming year on the back of robust copper prices. “This growth provides a wealth of opportunity, not just in copper extraction, but also in local beneficiation and services that accompany the commodity,” said Dodia. Besides this, Zambia has a major energy deficit, thus presenting attractive opportunities for energy providers. “It is these sorts of opportunities that bode well for investment in the country,” he concluded.