Address to the Zambia Business Forum Conference on the Zambia Development Agency Act of 2006, held in Lusaka on 19 June 2007.
At the World Economic Forum Summit on Africa in Cape Town last week one of the main questions posed was just how the private sector could be brought to the African investment and development party. There also came the usual clarion call for the imposition of the same standards of governance in Africa as elsewhere. As I am involved in tourism and rural development, and in efforts to attract investment into our rural areas – in particular protected areas, I am not happy to hear what a prospective investor in tourism said to me recently, “Zambia is such a great country that you have to risk half a million bucks to get a business going in what must be one of the most inhospitable environments for such things, especially for newcomers”. Is this the common perception of our country, does this reflect reality, and if so will the Zambia Development Agency Act No. 11 of 2006, as presently framed, help rectify the situation?
The dissembling and examination of the ZDA Act in isolation will certainly not solve the Zambia investment problem – and there very obviously is a problem. We must take the holistic view. The Act is but one bird in a motley flock of bills, acts, statutory instruments and policy, many of which by stealth and the total absence of consultation swoop upon civil society, published or unpublished, contradictory or not. Investors, most of the people in this country after all, not just the Englishman in baggy tweeds, cigar clamped in jaw in his luxurious tourist lodge, or the Chinaman flogging fish in Kamwala market – where be his investment certificate I may ask, but also the villagers investing their labour to support their children in a world rather devoid of medicine or education, all are affected by such laws as the Lands Act, the Wildlife Act, the Immigration and Deportation Act, Customary law, the Citizens’ Economic Empowerment Act, the Environmental Protection and Pollution Control Act, the Labour Act and so on.
My experience as a small investor and corporate member of Business Action for Africa and dedicated supporter of its program against corruption, find that Zambia presents at times a forbidding investment landscape; perhaps explaining why in a country that 43 years ago at Independence had the same GDP as the Asian tigers – is now 75 times poorer, and still has about the same number of people employed in the formal sector as it did at Independence.
This Act, which has taken the place of the repealed Investment Act, Privatization Act, Small Enterprise Development Act, Export Processing Zones Act and the Export Development Act, and which is the midwife of the quango, The Zambia Development Agency, attempts a number of things, articulating national investment objectives based on generally accepted international norms being one of them. However, it is clear that they are not the result of true consultation with civil society conducted in a transparent and participatory manner as they do not address the cultural and social wellsprings, needs and political utterances and aspirations of contemporary Zambian society. They will therefore remain an idealistic goal ever clamped on the horizon. In plain terms, the objectives should deal more directly with the common refrain of urban Zambians, “ Zambia for the Zambians”.
Government responsibility to foreign investors is poorly delineated, leaving the investor, should anything go wrong, at the mercy of the Arbitration Act, a process anyhow able to be avoided by a Government Executive in which power remains highly centralized, where foreign investors have on the whim of the powerful been in the recent past deported under special powers still in place, powers introduced under a state of emergency by the Chiluba regime. There therefore needs to be introduced an Ombudsman as well as a special committee of the judiciary, set apart from the Executive, to deal with matters affecting investors who are targeted by corrupt elements able to make use of the state security apparatus to serve their own ends. In my case, having served in the Kaunda regime as a warden and biologist in the Department of National Parks and Wildlife with responsibility for empowering local communities in the ownership and sustainable use of the wildlife resources, and having returned here five years ago after a stint as Chief Technical Advisor to the South African Department of Environmental Affairs and Tourism in order to develop a suitable model so that investors could enter into smart partnerships with communities – but without alienating customary land, surely something having the highest development priority, I find that championing communities and safeguarding their land and that of protected state land from the corrupt, ignorant or rapacious, rather than receiving the thanks of Government, is strongly resented. Protecting customary land from alienation by corrupt chiefs and writing a weblog on illegal land alienations which criticizes Government, is sufficient to have one placed on the deportation list, have one’s phones and email tapped, mail opened, be subject to sinister phone calls, and have vehicles of the Office of the President parked outside the house gate. As an angry Minister, objecting angrily to my criticism, said, “Zambia is not a democracy like Britain and America”. The message is plain. Come here, but remain silent. But as the author Paul Theroux wrote in his essay, Tarzan is an Expatriate, “A person should not agree to work in a country that demands silence of him”.
The issue of investor freedom of speech needs to be aired and debated, and provisions made for the protection of investors who follow the law, stay out of party politics, but, who because of their work and affiliations, their heritage, their social conscience, insist on certain standards of governance, and voice it. After all many of us come from countries which over the years have provided 40% or so of Zambia’s budget. This should deserve some respect.
The ZDA Act and the Immigration and Deportation Act appear to have arrived here from different planets. The now repealed Investment Act - under which most recent investors were ushered in, confirms that an investor who brings in a minimum of fifty thousand United States Dollars shall be entitled to a self employment permit or resident permit. In actual fact what one receives is a self-employed permit which has annually to be renewed following an inspection of the business premises by a cabal of six representatives – all Government, drawn from the Zambia Investment Centre, Anti-Corruption Commission, the police, immigration and so on, who have to be collected from their scattered hide-outs and transported to wherever one is. And unlucky the investors far away from Lusaka. This temporary status is then held for three years – each year requiring re-validation, in which Immigration, consider one not yet a resident of Zambia until one has obtained an Entry permit (there being no more Resident permits issued). Therefore for three years the investor is made to pay for various licenses normally charged to non-residents. For example, a license to conduct hunting safaris is charged at the non-resident rate of $6000, rather than the $600 resident rate. And no one, not the Zambia Investment Centre (ZIC), not the Zambia Wildlife Authority (ZAWA), nor the Department of Immigration appear prepared to change this, sticking to the letter of the law and not its spirit. Surely an investor who moves to Zambia, as elsewhere in the world, obtains the necessary investment certificate and self-employed permit, is a resident. And the lack of clarity and contradictions between the ZDA Act and Immigration Act of what is required of the investor to renew his self-employed permit may lead him into a laborious exercise to provide an audit of all his accounts, one which actually needs to take in the period prior to the issuing of an investment certificate, which if delayed – something not in the interests of the investor, may result in him receiving a letter, as I have, which says that my application for an extension of a self-employed permit is rejected ‘for the company is not viable’. From the Immigration Department’s point of view they are merely following procedure, but receiving such a document obviously places an investment in peril and a deportation notice imminent. I have now to appeal to the Minister of Home Affairs against the rejection, pay $500 for a temporary permit in the meantime, and if he refuses, I am left with the Arbitration Commission, and if that fails, I will petition the High Court. And if that does not work, what then? Does this kind of treatment and process best serve investors, and Zambia?
On the matter of investor incentives, I find the ZDA Act lapses into total confusion. Article 65 renders the attainment of an investment certificate and self-employed permit, as well as the necessary work permits, impossible, for to qualify one has to invest a minimum of $250K and employ 200 people in managerial and technical positions. I have tried to think of one such tourism enterprise currently in existence which would qualify for this. A recent letter from the Netherlands Embassy to the Permanent Secretary of Commerce, Trade and Industry presents the problem more clearly: “It is our understanding that the current minimum threshold for investor status is an investment of USD50,000. The higher thresholds mentioned above are understood to simply add further incentives, without affecting this minimum threshold. However, it appears that there is some confusion over this matter, as well as over the difference between the USD250,000 and USD500,000 thresholds. The confusion appears to be affecting the way that applications are being handled. It has come to our notice that various foreign investors are apparently being required to show proof of a minimum investment of USD500,000 as a condition for obtaining self-employment status and that government has in fact stopped issuing self-employment permits and extending residence permits to companies that are unable to meet or comply with this regulation”.
And what of the development investor such as myself and my partners, we who are hybrids of the made-in-heaven coupling of NGO and capitalist, where profit remains subservient to human upliftment and biodiversity conservation. What Act, what Agency is there to see that incentives are in place for it? My experience of investing in the safari hunting industry in order to support our overall objectives of biodiversity conservation and villager upliftment has been deeply unpleasant. Dealing as a partner in a Hunting Concession Agreement with the Zambia Wildlife Authority, the statutory body who hand out hunting and tourism concessions and who are mandated to conserve our wild life and wild places, particularly the regime of the present Director-General’s predecessor, has been one of the more unpleasant experiences of my life: a trail of corruption, deceit, incompetence, administrative bungling and neglect, endless and pernicious litigation, the failure to negotiate in good faith, the use of blackmail, a shocking disregard for the principles of wildlife management, and a complete neglect of the Community Resource Boards and the impoverished communities whom they should be serving. My past criticisms have now been vindicated and laid hideously bare by the Auditor-General’s report on ZAWA published a few days ago. This brings me no great pleasure. Quite clearly, the Act requires some mechanism to protect an investor who has entered into such agreements with dysfunctional and poorly managed parastatals.
Finally, in assessing the Act and the future Zambia Development Agency itself, we should take care not to become bogged down in the detail. Investment does not require a manual of rules, an instantly obsolete grand investment plan. What it needs is openness and honesty, a sharing of knowledge, and crucially, admitting that Zambia will never grow unless it confers citizenship on residents in accordance with Western standards, unless it takes in suitable immigrants, and most importantly of all, unless investment directly targets the rural poor. Yes, Zambia for the real Zambians.
