Zambia, China to sign free zone deal

LUSAKA – Fifty Chinese companies plan to invest over US$800 million in a tax-free zone in Zambia within the next five years under an agreement to be signed shortly, Zambia’s trade and commerce minister said on Tuesday.

Felix Mutati said the southern African country and China would sign an investment deal to allow foreign companies, mainly from China, to start construction at the Multi-Facility Economic Zone (MFEZ) in the Copper Belt town of Chambishi, 420 km north of Lusaka. Negotiations between Zambia and Chinese authorities were currently under way and an agreement was expected to be reached soon for the companies to start setting up in May, Mutati told Reuters in an interview.Zambia had planned to allow only Chinese companies to invest in the zone.But Mutati said there was a change in policy.”Initially we had agreed that this should only be a Chinese zone, but they (Chinese) want other foreign firms to come and invest in the multi-facility economic zone,” said Mutati.”We are looking for a cocktail of companies that will add value to our raw materials to use the Chambishi zone.China is helping to attract other foreign companies on our behalf.”Preliminary data provided by China indicated that the Chambishi zone would generate in excess of US$900 million per year in turnover by firms that would invest in the processing of copper into finished products.Zambian officials have not given details on which Chinese companies would invest in the zone but China Non-Ferrous Metals (Group) Co Ltd.is one of them.China has drawn fire from Western nations and aid groups, who accuse Beijing of turning a blind eye to misrule, corruption and human rights abuses.China argues it is spreading prosperity in the world’s poorest continent where the West has failed.Zambian President Levy Mwanawasa has vowed to fight political opponents who try to limit or frustrate Chinese investments in the mineral-rich southern African nation.The growing presence of Chinese firms in Zambia has prompted an anti-Chinese backlash in some parts of the country, with the main opposition party accusing Mwanawasa of allowing the Asian newcomers to exploit workers.Mutati said the Chambishi zone, which should be fully functional within five years, would initially create 6 000 jobs and offer incentives such as tax relief and easing customs duties on imported equipment and machinery.Zambia’s economy is predominantly driven by copper mining, which is a major employer in the southern African country of 10 million people.Zambia’s government would build roads and set up telecommunications, and water facilities in the zone, said Mutati.Nampa-ReutersNegotiations between Zambia and Chinese authorities were currently under way and an agreement was expected to be reached soon for the companies to start setting up in May, Mutati told Reuters in an interview.Zambia had planned to allow only Chinese companies to invest in the zone.But Mutati said there was a change in policy.”Initially we had agreed that this should only be a Chinese zone, but they (Chinese) want other foreign firms to come and invest in the multi-facility economic zone,” said Mutati.”We are looking for a cocktail of companies that will add value to our raw materials to use the Chambishi zone.China is helping to attract other foreign companies on our behalf.”Preliminary data provided by China indicated that the Chambishi zone would generate in excess of US$900 million per year in turnover by firms that would invest in the processing of copper into finished products.Zambian officials have not given details on which Chinese companies would invest in the zone but China Non-Ferrous Metals (Group) Co Ltd.is one of them.China has drawn fire from Western nations and aid groups, who accuse Beijing of turning a blind eye to misrule, corruption and human rights abuses.China argues it is spreading prosperity in the world’s poorest continent where the West has failed.Zambian President Levy Mwanawasa has vowed to fight political opponents who try to limit or frustrate Chinese investments in the mineral-rich southern African nation.The growing presence of Chinese firms in Zambia has prompted an anti-Chinese backlash in some parts of the country, with the main opposition party accusing Mwanawasa of allowing the Asian newcomers to exploit workers.Mutati said the Chambishi zone, which should be fully functional within five years, would initially create 6 000 jobs and offer incentives such as tax relief and easing customs duties on imported equipment and machinery.Zambia’s economy is predominantly driven by copper mining, which is a major employer in the southern African country of 10 million people.Zambia’s government would build roads and set up telecommunications, and water facilities in the zone, said Mutati.Nampa-Reuters