Embed Size (px)
Citation preview
1
GLOBAL COUNTRY REPORT
On
Zambia
MBA BATCH: 2010-12
K. K. Parekh Institute of Management Studies – Amreli [722]
2
Part – I
1. Demographic overview of Zambia and India
Factor India Zambia
Nationality Indian Zambian
Population
121.01 Crores (2011
est.)
12.87 Crores (July-
2011 est.)
Currency
Rupee(Re)
kwacha(Rp)
Age structure
0-14 years: 29.7% (2011
est.)
15-64 years: 64.9%
(2011 est.)
65 year & over: 5.5 %(
2011est.)
0-14 years: 25.3% (2011
est.)
15-64 years: 65.5%
(2011 est.)
65 year & over: 6.1 %(
2011est.)
Religions
Hindu: 83%
Muslim: 11.4%
Christian: 3%
Sikh: 2%
Buddhist: less than 1%
Jain: 0.5%
Catholic: 53%
Christian: 30%
Muslim: 15%
Hindu: 2%
Major Industries
Sugar Industry, textiles,
Cement, paper, iron &
steel, leather, aluminium,
photo & film, glass,
chemical, locomotive,
automobile, fertilizer,
Agriculture, Beverages,
Cement, Chemicals,
mining, Fertilizers, Food
Processing, Iron and
Steel, Machinery,
Edible oil, Textiles,
3
plastic, petro-chemical.
Transport Equipment,
Stone cutting
Natural resources
Iron ore, bauxite, and
copper ore. The Gold,
silver, and diamonds
make up a very small
part of other natural
resources available in
India.
mining, natural gas,
bauxite, copper, fertile
soils, coal, timber
Per Capita Income
Per capita Income:
54527Rs.
(2010 est., PPP): 1461$
GDP
Annual growth rate (FY
2010 est.): 8.6%
Annual growth rate
(2010):6.8%
Education
Aged 25 or over and
having attained: no
formal schooling65.8%,
incomplete primary
7.1%,primary 10.9%,
incomplete secondary
6.2%, secondary 7.1%,
higher 2.9% (1981).
Literacy; literate
population aged 15 or
over 261,200,000 or
48.2% (1990)
Aged 25 or over and
having attained: no
formal schooling 30.3%,
incomplete primary
32.3%, primary 22.8%,
incomplete secondary
6.4%, secondary 7.1%,
higher 1.2% (1985).
Literacy; literate
population aged 15 or
over 80,233,132 or
77.6% (1987).
Literacy
Total population: 78.2%
Male: 73.4%
Total population 61%
Male: 85.6%
4
Female: 47.8%
Female: 71.3%
Inflation Rate
2010- 5.1%
2009- 4.8%
2008- 9.9%
2010- 11.7%
2009- 10.9%
2008- 8.3%
Birth Rate:
20.97 births/1,000
population (2011 est.)
44.08 births/1,000
population (2011 est.)
Death Rate:
7.48 deaths/1,000
population (2011 est.)
12.6 deaths/1,000
population (2011 est.)
Infant Mortality Rate
Total: 47.57
deaths/1,000 live births
Male: 46.18
deaths/1,000 live births
Female: 49.14
deaths/1,000 live births
(2011 est.)
Total: 66.06
deaths/1,000 live births
Male: 71.27
deaths/1,000 live births
Female: 61.78
deaths/1,000 live births
(2011 est.)
Languages
Hindi, Bengali, Telugu,
Marathi, Tamil, Urdu,
Gujarati, Kannada,
Malayalam, Oriya,
Punjabi, Assamese,
Maithili, others.
Bemba, English, fozi,
lunda. , Kaonde, Nyanja,
tumbkas, etc
2. ECONOMY OVERVIEW OF THE COUNTRY
5
� Zambia Economy Profile
� GDP (purchasing power parity)
$20.04 billion (2010.)
$18.63 billion (2009.)
$17.5 billion (2008.)
� GDP - growth rate
7.6% (2010.)
6.4% (2009.)
5.7% (2008.)
� GDP - per capita (PPP)
$1,500 (2010.)
$1,400 (2009.)
$1,400 (2008.)
� GDP - composition by sector
Agriculture: 21.5%
industry: 34.5%
services: 44.1% (2010.)
� INVESTMENT(GROSS FIXED)
20.4% of GDP (2010.)
� BUDGET
budget Revenues: $3.217 billion
budget expenditures: $3.76 billion in 2010
� TAXES AND OTHER REVENUES
19.9% of GDP in year 2010
6
� BUDGET SURPLUS (+) OR DEFICIT (-)
-3.3% of GDP (2010 )
� PUBLIC DEBT
26.7% of GDP (2010.)
25.9% of GDP (2009 .)
� INFLATION RATE (CONSUMER PRICES)
8.5% (2010.)
13.4% (2009.)
� CENTRAL BANK DISCOUNT RATE
8.39% (31 December 2009)
14.49% (31 December 2008)
� AGRICULTURE - PRODUCTS
Corn, sorghum, rice, peanuts, sunflower seed, vegetables, flowers, tobacco, cotton,
sugarcane, cassava (tapioca), coffee; cattle, goats, pigs, poultry, milk, eggs, hides
� INDUSTRIES
Copper mining and processing, construction, foodstuffs, beverages, chemicals,
textiles, fertilizer, and horticulture
� INDUSTRIAL PRODUCTION GROWTH RATE
11.2% (2010 est.)
� ELECTRICITY - PRODUCTION BY SOURCE
fossil fuel: 0.5%
hydro: 99.5%
nuclear: 0%
other: 0% (2001)
� EXPORTS
$7.181 billion (2010 est.)
$4.319 billion (2009 est.)
� Exports - commodities
7
The export commodities such like thatCopper/cobalt 64%, cobalt, electricity;
tobacco, flowers, cotton
� IMPORTS
$4.676 billion (2010.)
$3.413 billion (2009.)
� Imports - commodities
An import commodities as given that Machinery, transportation equipment, petroleum
products, electricity, fertilizer,
foodstuffs, clothing
� RESERVES OF FOREIGN EXCHANGE AND GOLD
$2.094 billion (31 December 2010 est.)
$1.892 billion (31 December 2009 est.)
� DEBT - EXTERNAL
$3.456 billion (31 December 2010 est.)
$3.049 billion (31 December 2009 est.)
3. Overview of Industries Trade and Commerce
Zambia’s trade policies
Since 1992, the government has implemented a complete trade reform programmed
in the context of brooder liberalization in world package. The elimination of
quantitative control and export taxes duties. The introduce of market determined
exchange rate. The beginning of a system of export incentive and the created of and
export promotion bond. Those reforms started to establish a more appropriate
environment for encouraging diversification away business from copper and for
augmented the growth rate in Zambia. Based on these reforms, and using the trade
restrictiveness index of the international monetary fund , Zambia has one of the most
liberal trading regimes in Africa country .
8
Trade policy Formulation
The formulation and implementation of Zambian business trade policies is a
preserve of the Zambian government through the ministry of commerce trade and
industry. Depending on nature of the issue the MCTI consult with relevant ministry
and other institutions in Zambia. The ministry also consults with the private sectors
through various such as a policy and sensitization campaign session to which
various stake holders are invites other stack holder. The implementation trade policy
is done by the ministry’s statutory bodies in Zambia.
4. Overview Different economic sectors of selected country
The expected 6.6% growth in Zambia's Gross Domestic Product in 2010 is up
on or after 6.4% in year of 2009. An many sector such like that Agriculture, tourism,
construction, manufacturing and mining are driving growth which is expected to
expand by 6.5% and 6.7% in year 2011 and 2012 respectively.
The Overall, primary industries performed better in year 2010 with agriculture
growing by 7.6%. In year 2011 and year 2012 agriculture growth is estimated at
3.2% and 4.6%, respectively. The leading contribution to 2010 growth came from
maize manufacture. The return reached 2.8 million tons compared to 1.9 million tons
in the previous period. Zambia is Africa's biggest copper product producer and the
mining sector's big improvement was due to improved global copper prices. The
sector is estimated to have grown by 7.4% in year 2010.
The Manufacturing product, which in history have to contribute about 10% of
GDP, grow-up by 2.5% in year 2010. The Zambian government has completed
extensive progress in infrastructure facility, construction and has invested into
manufacturing sector through the organization of the Multi Facility Economic Zones.
Tourism sector, which was firm hit by the financial problem in Zambia, is estimated to
rebound strongly with expected growth rate of 25% in 2010. Construction was
estimated to expand by 10% in 2010 and maintain double-digit development in the
next few years.
9
The Monetary policy is focused on sustaining stability by maintaining solitary digit
inflation while ensuring sufficient liquidity for the grow-up an economy. Annual
inflation declined to an expected rate 7.9% at the end of 2010 year, down from 9.9%
in month of December 2009. Annual food inflation decrease sharply from 8.0% in
month of December year 2009 to 2.8% in September 2010.
The Zambian government is running insistent business improvement to support to
increased private investment and reduce business costs in Zambian economy. The
Private Sector and public sector Development Reform Programmed is intended to
ease private sector development. The barriers include:
i) inadequate and high cost credit;
ii) Excessive ritual trade procedures due to the participation of numerous
government agencies and border clearance systems
iii) Lengthy examination and certification processes;
iv) unfortunate border IT (information technology);
v) out-of-date customs techniques;
vi) insufficient skilled personnel;
vii) Poor infrastructure.
The Progress in humanizing public financial management has led to the
publishing of work project by government agencies, and the introduction of a
Treasury Single Account to recover budget implementation and cash management.
In the earlier period few years, donor assistance has shifted from developed
countries to budding economies, especially from Asia. Zambia has build new
partnerships with China and India country.
10
Present domestic and International trade of Zambia
Exports
Export goods: export goods is copper/cobalt 64%, cobalt, electricity; tobacco,
flowers, cotton, copper cables, Maize, Sugar.
Main export partners: the main export partner country is South Africa 24.2%,
Switzerland 13.7%, China 12.4%, Tanzania 6.9%, Democratic Republic of the Congo
6.6%, Zimbabwe 5.5%, Thailand 4.7%.
Import
Import goods: the import goods is machinery, transportation equipment, petroleum
products, electricity, fertilizer; foodstuffs, clothing
Main import partners: South Africa 53.1%, UAE 8.6%, Zimbabwe 6.9%, UK 4.1%.
TATA Group in Zambia
Initial Stage of business in Zambia by Tata group of company
The Tata group commitment with Africa country began in Zambia
back in the mid-1970s. Tata Zambia, formed in 1977 as a joint venture between Tata
Zug and Tata Exports in Zambia country, was engaged primarily in the imports of
Tata vehicles, marketing and providing after-sales services.
Beside spending 9 to 10 years at Tata Precision Industries
Singapore, in 1982. During the year Tata Company Exports bought out the
shareholding of Tata Zug and Tata Zambia became its 100 per cent subsidiary.
11
5. Present Trade Relations and Business
Volume of different products with India
Rank Description
Zambia's
Imports from
India
in 2009
Zambia's
Imports
from India
in 2010
% Growth
from
2009/2010
All products 844.55 1,315.47 55.76
1 Mineral fuels, oils, distillation products, etc 277.55 502.89 81.19
2 Nuclear reactors, boilers, machinery, etc 77.00 160.47 108.38
3 Pharmaceutical products 67.76 115.53 70.49
4 Electrical, electronic equipment 82.22 108.39 31.81
5 Iron and steel 49.94 70.54 41.23
6 Vehicles other than railway, tramway 33.22 36.26 9.12
7 Plastics and articles thereof 27.37 33.31 21.66
8
Salt, sulphur, earth, stone, plaster, lime and
cement 9.03 20.19 123.41
9
Paper & paperboard, articles of pulp, paper
and board 12.01 20.17 67.90
10 Articles of iron or steel 14.6 19.444 33.18
12
6. SWOT ANALYSIS
PARTICULAR India Zambia
STRENGTH
• Specialist marketing expertise
• New, innovative product or service
• Location of your business
• Cost advantage through proprietary know-
how
• Quality processes and procedures
• Strong brand or reputation
• Provide high quality
• Govt. support
• Fiscal Constraint
• Surging Working Age
Population
• Economic Strengths:
commodity and
mining resources
WEAKNESS � High unemployment rate
• Unequal distribution of wealth
• Rural-urban divide, leading to inequality in
living standards
• Huge population leading to scarcity of
resources
� High unemployment rate
• Unequal distribution of
wealth
• Rural-urban divide, leading
to inequality in living
standards
• Huge population leading to
scarcity of resources
OPPORTUNITIES • Developing market (, the Internet)
• Mergers, joint ventures or strategic
alliances
• Moving into new attractive market
segments
• A new international market
• Loosening of regulations
Removal of international trade barriers
• A market that is led by a weak competitor
• Zambian are generally
regarded as high quality
products in Zambian
consumers.
• Zambian Battles Graft
• Urbanization
• New markets for products
• Financial or legal trouble for
competitors.
THREAT • A new competitor in your own home
market
• Price war
• Competitor has a new, innovative
substitute product or service
• New regulations
• Local customs increase the
import fees and this may
hurt the cost of our
business.
• Potential for religious
Extremist
13
• Increased trade barriers
• A potential new taxation on your product
or service
• Privacy on water
14
Part - II
Introduction of Power Sector
The power sectors are most important sector for developing any country because
electricity are help to infrastructure, Agriculture, contraction, education, etc. A
continue of rapid economic growth and increasing living standards in many parts of
the developing world is that the demand for power is rising faster than ever. When
this grow-up demand is set beside the critical need to limit climate change, the
challenges face the world’s power-generating industries sector are only too clear.
The developing a new technology is helpful some of the possible less-damaging
sources of energy battle economically with those existing estimated new techniques
that are depend upon the burning of vestige fuels. The Stainless steels have a vital
role to play in many of these new technologies and in this section of the library you
will find out the examples of its use in such important low-carbon or zero-carbon
processes as nuclear power generation, signal energy, solar panels, geothermal
energy and many more energy sources.
The continued use of fossil fuels is inescapable; stainless steels can help limit the
emissions per KWH through the using of more efficient turbines and recently-
introduced “combined-cycle” power generators.
The Zambia country has a profusion of energy resources that have not been fully
exploited. The most significant source of power generate is electricity, there is
generated by three major Zambian hydroelectric power stations with installed
capacity of 1608 Mega wote (MW). Today increase in economic activities has raised
the demand for energy, especially electricity, to support mining, construction
education and manufacturing activities, thus opening up opportunities for private
sector investment. With the liberalization of the economy, Government has amended
legislation affecting generation, transmission, distribution and supply of electricity
thus allowing private sector entry.
15
Today create larger Potential opportunities identified are Kafue Gorge Lower
Hydroelectric Project, Itezhi-tezhi Hydroelectric Project, Zambia-Tanzania
Interconnector, the Zambia and Namibia country are Interconnector and numerous
potential mini generating plants at waterfalls around the Zambia country. Exploration
estimating for hydrocarbons (oil and gas) is one of the area that has not been
tapped fully – hydrocarbon source rocks are proven and are preserved in all basin
areas of Zambia country . Zambia power industries has possible hydro power
capacity of about 6,000 Mega wote . though, the Zambia country has an installed
power plant for generation capacity of only about 1,788 MW, which is just a third of
its potential. Currently, the country is predominantly hydro and the majority of the
power stations (1,640 MW) are state owned through ZESCO company Ltd, which is
participated in power generation, transmission, distribution and supply of electricity.
Load forecast, Zambia, 2010–2030
The energy Demand for in Zambia has been grow-up steadily over the past few
years and at present stands at around 1,300 MW. The power Generation capacity,
on the other hand, has remained fairly over the past 30 years. The Lunsemfwa
Hydro Power Company (LHPC) situated in Kabwe is the only self-regulating power
generated in the Zambian country with an installed capacity of 38 MW. The stability
16
of 110 MW is generated by private mining companies for endorsement purposes.
Only for 25% of the Zambian country population has access to electricity sources.
In the undeveloped rural areas, the level of access is less than 6%. Given that
cardinal role electricity plays in expansion of socio-economic, the Electricity
Regulation Bord is working with all industry stakeholders to promote investment in
power infrastructure. It is currently expected that Zambia country will run out of
capacity by the year of 2010 when demand is expected to outstrip supply.
Privatization of electricity-sector assets:
In 1996, as part of the economic reform programmed in Zambia, the Zambian
government initiated the sale of its majority interests in its mining and some of its
electricity assets. The most significant of this electricity assets was ZCCM’s Power
Division, the privatization of which was now possible since the 1995 Electricity
regulation Act had liberalized the sector. There was considerable international
interest in the Power Division, and in since 1997, it was purchased for $50 million by
a consortium and renamed the Copper belt Energy Corporation (CEC) (Craig, 2001).
With this, the first private company entered in Zambia’s electricity market since 1970.
In 1995 to 1996, ZCCM’s power consumption, which was supplied by Copper belt
Energy Corporation (CEC), was approximately 5 000GWh with a peak demand of
500MW. This meant that CEC was purchasing a important two-thirds (2/3) part of
ZESCO’s total generation (Coakley, 1997). This agreement was anchored on a bulk-
sale agreement entered into between CEC and ZESCO at the time of privatization.
Later, in 2006.
The National Grid Company. and the Cynergy Corporation divested from CEC and
their interests were taken up by a consortium of mainly local investors known as the
Zambia Energy Corporation in Zambian power market. Also included in the assets
earmarked for privatization were the Mulungushi and Lunsemfwa power generation
stations. These two plants be acquired by Lunsemfwa Hydro Power Company
(LHPC) in 2001, which was owned by a consortium comprising Eskom (51 per cent),
17
local investors Degarnier (29 per cent), and Wand Gorge Investment (20 per cent).
In year 2008, Eskom disposed of its interests in LHPC to local investors and the
management team. At that time of writing, LHPC with an installed capacity of 38MW
was the only private generator of electricity in Zambia
Role of power sector in Zambia
The Energy is one of the major inputs in economic improvement of any country. In
the case of the emergent countries like Zambia the energy sector assumes a critical
significance in view of the rising energy needs requiring huge investments to meet
them. Zambia country’s per capita electrical energy consumption is targeted for 40%
growth in year 2015. Electricity is one of the convenient, efficient, versatile forms of
commercial energy and is therefore considered as backbone of industrial &
agricultural growth.
Presently Zambia country are facing serious challenges on energy security threat
due to short fall of peak power supply by 16.6% & energy supply by 9.6%, Crude oil
meets only 23% of demand, coal based thermal power plant is being focused as
major source of commercial energy. To manage the demand of potential energy
requirement, not only development of power sector is required but best possible
utilization of existing resources is important. In power basket, hydro sector is
considered for serving peak load only, causing decreasing trend of specific
generation per unit of installed capacity.
Renewable energy required special attention with giving special emphasis on wind
power generation plant. Nuclear power occupies only about 3% of energy basket,
but it is targeted as one of the significant source of power in coming years.
Special focus should be given on optimization advance of power plant unit
performance and power sector as a whole to achieve energy security. Some of the
key suggestion for realization are like specific generation per unit installed capacity
of power plant, for performance rating evaluation, implementation of condition based
maintenance for ensuring availability, increasing share of higher size unit for
18
improving national average of PLF, efficiency. Energy conservation approach is also
focused because one of the powerful tool for achieving energy security.
� Agriculture
� Bulk power supplies to farm blocks and small scale decentralized power
for small/medium smallholders.
� Post-harvest processing in major processing centers
� Vaccine and other veterinary services delivery, refrigeration,
� ICT services for marketing and trading at major trading centre and for
farmers.
� Mining
� The Power supplies for mining and processing.
� Information and Communications.
� Provision of reliable power supplies to both urban and rural areas.
� Tourism
� Power supply options consistent with the environmental goals of the
parks.
� Manufacturing
� Ensure availability of reliable and low cost power supplies to major
manufacturing centers.
19
� Ensure availability of reliable and low cost power supplies at agricultural
farming blocks, industrial estates, and out grower schemes in order to
establish industries close to the raw material source.
20
� Education
� Power supplies in rural schools to support ICT and training services
delivery.
� Power supplies to schools and teaching staff quarters including for ICT,
improved quality of life, access to teaching aids and water supply.
� Distributed power supplies to support internet and other ICT services.
� Health
� Reliable electricity services for vaccine refrigeration,
education/awareness, lighting and communications.
� The Power for communications services and for health worker facilities.
� Power for communications services, health worker facilities and for
medical services delivery.
� Provision of reliable electricity services at key health care facilities.
� Power for borehole water pumping and water disinfections.
� Refrigeration services, communications services for improved stocking,
inventory management and quality control of medical supplies.
Structure of power sector
The Zambian electricity power structure is operated as part of an interconnected
power system linking with South Africa, Zimbabwe, and Democratic Republic of
Congo (DRC). The Zambia Electricity Supply sector is run by a single state owned
company, the Zambia Electricity Supply Corporation former to the liberalization of the
sector during an Act of Parliament in since 1995 so as to attract private companies to
contribute in the generation, transmission and distribution of electricity in the Zambia
State. In order to promote this policy, Government create two new institutions
Energy Regulation Board (ERB) and the Office for the Promotion of Private Power
Investors (OPPPI) to regulate operations, set pricing and promote new players to the
electricity market.
21
Three major players in the ESI including ZESCO Limited, Copper belt Energy
Corporation (CEC) and Copper belt Energy Corporation (CEC). The ZESCO Limited
a vertically integrated company which generates, transmits, distributes and supplies
electricity throughout Zambia country , Copper belt Energy Corporation (CEC) based
in Kitwe which is a net transmitter of electricity purchased from ZESCO at high
voltage and distributed to the mining industry based on the Copper belt, and
Lunsemfwa Hydro Power Company based in Kabwe which is an self-governing
energy producer generating 48 MW of power that it sells to ZESCO Limited under
the Power Purchase Agreement.
ZESCO Limited
The ZESCO is the main electricity supplier in the Zambia country, with a customer
base of about 300, 000. The utility is occupied in the all power business chain, for
example. generation, transmission, distribution and supply. The ZESCO produces
22
its power from three main power plants such as hydro power plants, namely Kariba
North bank, Kafue Gorge and Victoria Falls power stations. In addition, the company
generates limited amounts of power from its 4 small hydro power stations located in
the northern part of Zambia and 10 isolated diesel stations in some remote parts of
the country that are not yet connected to the grid.
Copper belt Energy Corporation (CEC)
The Copper Beltenergy Corporation Company was started than government give a
permission to enter a private sector in power industries in Zambia. The Copper
Beltenergy Corporation (CEC) is a privately owned company. The company are
owns as transmission and distribution networks in the Copper belt region of Zambia.
CEC purchases 55% of the power generated by ZESCO Company and supplies it to
the mines.
Lunsemfwa Hydro Power Company (LHPC)
The Second Private Company Lunsemfwa Hydro Power Company are entered in
Zambia power sector. This company is a privately owned independent power
producer created after the privatization of the Zambian Mining conglomerate, ZCCM.
Lunsemfwa Hydro Power Company has an installed capacity of about 40MW and
currently sells all its power to ZESCO under a power purchase agreement (PPA)
Comparative Position of Power Sector in Zambia and India
A. Position of Zambia Power Sector
The comparative position is significant in the Zambia and India for power sector. The
Indian power sectors are more developed rather than Zambian power sector. In
Zambia currently ZESCo Company are distribution, transmission, generation power
sector. The transport infrastructure includes road and rail networks as well as boat
transport on Lake Tanganyika. Total energy consumption in the sector was roughly
12 PJ in 2000. The Zambian electricity sector is the responsibility of the Ministry of
Energy and Water Development. Generation, transmission and distribution of
electricity are carried out by Zambia Electricity Supply Corporation (ZESCO).
23
The Government has actively encouraged to private sector involvement since the
early 1990s and Zambia has been one of the front-runners in Africa in terms of ESI
reform. In 1994 Zambia introduced a new energy policy, making way for the
liberalization of the energy sector. The transmission structure is run by ZESCO and
to some extent by the Copper belt Energy Corporation’s (CEC), who operates a
220kV system in the Copperbelt area. The transmission system has several
international links. There are high voltage interconnection with Zimbabwe and the
DRC, and also cross border links with Botswana, Namibia and Tanzania. A high
voltage interconnection with Tanzania and Kenya is projected to come online in
2005. Local powers that be do not supply electricity, but they do have limited rights
related to the supply of electricity in their municipal areas.
The 200 MW interconnection with Tanzania is erected in year 2005, but capacity is
not extended until year 2032 by a further 200 MW. Zambia has a strategically central
position as it is the node were the transmission lines from the DRC, Zimbabwe and
Tanzania meet. Considerable volumes of electricity is thus wheeled though the
country. Under the free trade situation there is a slower expansion of domestic
generation plant and the country become more reliant on imports
2. Position of power sector in India
The Indian power sector is responsible for the production and delivery of electrical
energy in adequate quantities via a power grid. A given the power demand is uniform
across all domestic, industrial and commercial operations; power is viewed as a
public utility and essential infrastructure.
The electrical power industry is commonly split up into four way processes, namely,
electricity generation (e.g. power station), electric power transmission, electricity
distribution and electricity retailing. In many countries, electric power companies own
the whole infrastructure from generating stations to transmission and distribution
infrastructure. For reason that, electric power is viewed as a natural monopoly and is
thus heavily regulated.
24
There has been great concern over the past 2 decades about the scarcity of energy
resources, and the need to focus on option fuel and renewable energy options. In
spite of environmental concerns, there hasn’t been much traction thus far for these
‘greener’ options. Though, there are indications that renewable energy and
distributed generation of energy, which have usually been less cost effective are
finally becoming more feasible in economic terms. Additionally, a diverse mix of
generation sources reduces the risks of electricity price spikes.
Indian power sector is acknowledging a large demand-supply gap. At present, the
energy scarcity in the India is 10% but there are some States where the energy
shortage is as high as 25%. To combat this, over 80,000 MW of new generation
capacity is planned in the next 4-5 years. A corresponding investment is required for
the Transmission and Distribution networks.
Ministry of Power has set-up a goal, “Mission 2012: Power for all” and released a
wide range sector development blueprint. The main objectives, in addition to
providing a 100% access to power, are to provide adequate power to attain targeted
GDP rate of 8%, in provide reliable and good quality power and to enhance
commercial viability.
Enormous capital investment of about $ 200 billion is required to meet Mission 2012
targets. This mission has welcomed a numerous global companies to establish their
operations in India under the well-known public and private partnership (PPP)
programs. Additional huge capital investment is further required over the ensuing
years with the country’s power requisite expected to touch 800,000 MW by potential
year 2031-32.
25
Production of electricity in Zambia and India
Year 2005 2006 2007 2008 2009 2010 2011
Zambia
Production
(Billion
KWH)
8.17 8..35 9.96 9.29 9.29 9.75 9.75
India
Production
(Billion
KWH)
547.2 556.8 630.6 665.3 670.3 723.8 729.7
Electricity - consumption (billion kWh) of India and Zambia
Year 2006 2007 2008 2009 2010 2011
Zambia
consumption
(billion) kwh
5.35 6.69 8.63 8.63 8.84 9
India
consumption
(billion) kwh
519 587.9 517.2 547.8 578 595.7
Electricity Import-Export in Zambia with other country
Year 2006 2007 2008 2009 2010 2011
Import
(million
KWH)
0 403 68 68 222 222
Export 2000 2975 255 255 268 268
26
Electricity Import-Export in India with other country
Year 2006 2007 2008 2009 2010 2011
Import (million
KWH)
1400 1500 3189 3198 5270 5292
Export 187 60 378 378 810 810
There is no relationship between India and Zambia for import- export of energy
product. So that Indian government is build a relationship with Zambia for power
sector and create larger opportunities.
Policies for Power sector
Policies for power sector of Zambia
Presently, the ministry of Zambian power sector is preparing a National Development
Plan (NDP) in which each industry is represented. The draft presented the
development plan to achieve the target set up in the Zambia Poverty Reduction
Strategy Paper (PRSP), 2002-2004, it was developed under the guidance of the
World Bank and the IMF (International Monetary Fund) in year 2002. According to
the PRSP, the development policy and strategy for the power sector are as follows:
(1) National policy for the power sub-sector
� Electricity: Increase accessibility in its utilized as well as the most cost-
effective generating plants for domestic and export markets.
� New and Renewable Sources of Energy: the Promote a wider application of
proven NRSE technologies in meeting energy needs, mainly for remote
areas.
(2) Programs in the power sector
A Programs in the power sector to put in to poverty reduction will aim at the
following:
27
� Electricity access rate from 20 %to 35% by year of 2010: rural area 15% and
urban area 50%
� Increase in electricity exports to neighboring countries by 300% by year of
2010 from the present level.
(3) PRSP strategies for poverty reduction in the power sector
� The Enhancing the capability of current power delivery infrastructure through
rehabilitation and refurbishment to ensure reliable and effective power supply,
and to ensure access by more and more people.
� A Creating new energy delivery infrastructure through, for example,
construction a new power stations, transmission lines, etc. to cater to
increased domestic demand and export power. Three hydropower station
development projects are being planned and financial negotiation is ongoing
with private investors from China and Iran country. An International
interconnection projects extending to Tanzania by 300 kV with 700 km length,
and to DRC are being planned.
Policies for power sector in India
� Electricity is an essential requirement for all aspect of business and our life. It
has been recognized as a basic human need. It is a vital infrastructure on
which the socio-economic developments of any country depend. The Supply
of electricity at reasonable rate to rural India is essential for it’s largely
development. Equally important is availability of reliable and quality power at
competitive rates to Indian industry to make it internationally competitive and
to enable it to develop the tremendous potential of employment generation.
The power sector has made significant contribution over the years to the
growth of our economy. Availability of quality supply of electricity is very
crucial to sustained growth of this part.
� The policies is Recognizing that electricity is one of the type drivers for rapid
economic growth and scarcity alleviation, the Indian nation has set itself the
28
target of providing access to all business and households in next five years.
As per Census year 2001, about 44% of the households do not have access
to electricity. Hence meeting the target of providing widespread access is a
daunting mission requiring significant addition to generation capacity and
development of the transmission and distribution network in India.
� An Electricity industry is capital-intensive having long growth period.
Resources of power generation are unequally dispersed across the Indian
country. Electricity is a commodity that cannot be stored in the grid where
demand and supply have to be continuously balanced economy. The widely
power distributed and rapidly increasing power demand requirements of the
country need to be met in an optimum manner.
Foreign Investment Policy in India:
The government has created a liberal environment for foreign investment in
renewable energy.
Key highlights of the foreign investment policy are:
� The Foreign investors can enter into joint venture with an Indian partner for
financial and technical partnership and for setting up of renewable energy-
based power generation plants.
� Liberalized foreign investment approval regime to facilitate foreign investment
and transfer of technology through joint ventures company .
� Proposals for up to 74% foreign equity participation in a joint venture qualify
for automatic approval
� 100% foreign investment as equity is permissible with the approval of Foreign
Investment Promotion Board (FIPB) in power sector.
� Various chambers of commerce and industry associations in India can be
approached for providing guidance to the investors in finding appropriate
partners
� Foreign investors can also set up a liaison office in India
29
Potential for import / export in India:-
In our country India our government provides a good opportunity for export and
import and reducing hard rules and acts for export and imports. The government
also provides SEZ (special economic zone) to develop the power sector. The
government also not takes taxes and duties for 5 years to develop the industry
growth of India.
The power company like TATA POWER, RELIANCE POWER, ADANI POWER and
etc. Were also wants to expand the business of their company at global level? And
for that they day by day see the good opportunity in their business. So that we can
say that the growth of power sector in India were is good and bright.
Business opportunities in India and Zambia for Power sector
Business opportunities in India
The many factors that make India a great investment destination for new and
Renewable energy firms across the world are:
� Electricity demand growing: @ 8% annually
� Capacity addition of about: more than 92,000 MW required in the next 10
years
� The Size of the Indian Market and the unmet demand: India has a large
domestic market with massive absorptive capacity for electricity. According to a
study by the McKinsey Global Institute (MGI), India's consumer market will be
the world's fifth largest (from twelfth) in the world by year 2025 and India's
middle class will swell by over ten times from its current size of 50 million to 583
million people by year of 2025.
� The Largest number of listed companies - 10,000 across 23 stock exchanges,
India has the third largest investor base in the worldwide.
30
� Healthy banking system with a network of 70,000 branches is among the largest
in the world.
� Large pool of skilled, talent and English speaking workforce: India's chief
strength comes from its huge pool of well-educated, managerial, technical,
scientific and skilled people, adept in the English language with innovative skills
and talent. India has been mentioned as one of the most favorable locations for
investments according to the World Investment Prospects Survey carried out by
UNTAD for during 2009-11. According to the World Fact Book, India is amongst
the world's youngest nations with a median age of 25 years as compared to 43
in Japan and 36 in USA. Of the BRIC—Brazil, Russia, India and China, India will
see 70 million new entrants to its workforce over the next 5 years.
� Cheap labor: Cheap labor has been cited as another factor for favorable
destination for investments by the TNCs in India according the above UNTAD
survey.
Business Opportunities in Zambia
� The Zambian government has embarked on efforts to develop its power industry
to meet the rising demand for power. Efforts are underway to attract private
companies to participate in the country as independent power producers (IPPs)
or form public-private partnerships with the Zambian Government.
� The Zambian Electricity Industry, finds out that the market earned revenues
from power sector of $188 million in year2008 and estimated this to reach $285
million in potential year 2013.
� The Zambian country’s thriving mining sector has significantly raised the overall
demand for power in Zambia. The Zambian government has currently embarked
on upgrading and expanding installed power generation capacities, while also
inviting the private sector to build new plants in Zambia.
� The Zambian Government currently be short of the ability to develop the
needed generation capacity to meet the incresing local and export demand. As a
result, it has launched attempt to attract the sharing of private companies in the
power industry.
31
� While these are promising trends, major obstacles remain. Key challenges to the
growth of the Zambian electricity industry are the dominance of the state utility,
ZESCO limited, in power generation, transmission and distribution and the
existing low tariffs.
� Power generation is a high-capital cost activity. Therefore, IPPs need an
assurance that their investment in the Zambian power industry will yield positive
returns.
� The Zambian government’s instant focus should be on improving the level of
tariffs to attract investment from both local and international companies.
Moreover, private companies should regard as strategic private with public
partnerships with Zesco to develop new power plants and investigate ways to
leverage the potential export market in the Southern African country power pool.
SUGESSION
• Power sector helps all kinds of the business and services so Zambia has to
more focus on power sector.
• Power sector in the Zambia having a good opportunity for our Indian company
so we have to consider it.
• The power sector grows very high and that must adopt the good strategy so
they can able to achieve good.
• In the Zambia there is no more competition in the power sectors so it is good for
India.
32
CONCUSION
• The need and important of energy sector reform in Zambia and indeed most
developing countries in Africa is not debatable. Though several positive
outcomes have been observed, there are also many serious problems that
must be tackled.
• The Zambian Government or ZESCO cannot rise this funding and it is
therefore necessary that the private sector be involved and also the
syndication of Donor support will be crucial for the programmed to succeed.
• It is also important that the Zambian Government commits itself by annual
budgetary allocation apart from the Rural Electrification Fund Levy.
33
Textile Industry
The textile industry of Zambia are totally based on the cotton include the cotton
gaining, spinning, weaving, dying and printing. It is giving an importance to the
economy through the contribution in Zambian GDP, employment In textile, foreign
exchange earnings, and increase the investment and develop an industry through
the backward linkage in cotton gaining and the forward linkage in weaving and
garment production. The competitive advantage of Zambian textile producers
heaving that the rich good arable land and high growth of the fibre cotton in Zambia.
The Zambian government shows the potentials growth of the textile sector and giving
a much attention to the textile industry growth and development through the
development of various schemas. The Zambian textiles producers are customized
producer they are tailor the products as per the buyer’s changing requirement in the
export markets
Today most of the companies of Zambian textile industry are making a efforts for
increasing relationship with his customer and expand the business and increasing
contribution in economy.
Under the African growth and opportunity of the united states of America it is a high
growth opportunity for the garment producers to develop his business. For AGOA
production Zambian textile industries are heaving a best investment opportunity. The
Zambian textile industry at present at the growing stage. For increasing the
attractiveness of the buyer towards the textile products of the Zambia most of the
Zambian manufacturer heaving or develop WRAP, which is a certificate to represent
or giving a regard to the consumers health, environment safety and social concerns.
NUMBER OF TEXTILE COMPANIES
The number of textile companies is operating in Zambia like
year Number of companies
2005 140
2011 330
34
In 2011 less than 150 of the companies had a ability to compete in domestic market
as well as international markets also. Many of the companies are surviving by
providing a niche markets, like as a uniform school, wear for protection and becomes
a table for surviving in markets
.
Names of textile companies in Zambia
1) Kafue Textiles
2) Towels Textiles
3) Ndola Knitting Mills
4) Excel Textiles
5) Swarp Spinning Mills
6) Sakiza Spinning Limited
7) Mulungushi Textiles
8) Lint taxtile Company (Lintco)
The final result shows that the textile and clothing industry from external competition
reduce the role of the market and increase state attention in establishing the level,
composition and quality of investment in the industry. Through the paying much
attention and supports of the Zambian government the textile sector growth are
increasing, 2000 and the 2010s. As the World Bank (2010) reports, Zambia’s textiles
contribution to total manufacturing Value-added rose from 24.4 per cent in 2008 to
30.1 per cent in 2010..
35
Distribution of Manufacturing Value-added, 2008-2010 (Percentage of total)
Sector 2008, 2009, 2010
PARTICULARS 2008 2009 2010
Food Beverages and Tobacco 14.69 15.5 16.1
Textiles, Wearing Apparel and Leather 24.4 26.2 30.1
Wood, Wood Products and Furniture 5.3 5.9 4.2
Paper and Printing 4.11 5.1 5.7
Chemicals and Chemical Products 4.7 6.2 7.1
Non-metallic Mineral Products 16.7 10.3 5.9
Basic Metals and Products 28.04 30.1 33.2
Other Manufacturing 0.5 0.7 0.4
Total 100 100 100
The table is clearly shows that the Zambian textile industry is continuous
growing year after year.
36
PRODUCT RANGE OF TEXTILE
Cotton lint
cotton yarn
acrylic yarn
loom state cotton fabrics
polyester fabrics
poly/ viscose fabrics
cotton canvas fabrics
polypropylene cloth and beg
Export Markets
Germany
Switzerland
UK Belgium
South Africa
Tanzania
Zimbabwe
Spain
Malawi
Portugal
Mauritius
Italy
37
Namibia
ROLE OF TEXTILE SECTOR
� Zambia exports more manufactured goods than it imports—
At present the Zambia’s textile exports contribution are increasing then its
imports,
particulars 2010
Exports 180 millions
Imports 116 millions
Exports earnings from textile
Year Earning
2010 37$ millions
2011 42.4$ millions
The main export for textile products was the EU countries, which consumed 80
percent, and regional African countries with 15 percent.
� Have decrease as a share of total imports -
Year percentage
2010 60
2011 40
38
Role in GDP and an employment
Year GDP (%) Employment (%)
2010 4.5 7.4
2011 6.0 6.3
Non-traditional exports including engineering and agriculture processed foods
and textile are increasing and becoming a double in past four years and growth
rate is 15% in 2010.
� .Zambia’s governments becomes a liberalize and apply no export taxes, levies
or charges and grant no direct subsidies to exports.
� Zambian textile industry play major role in cheap labor cost and high level of
production so it is a competitive advantage of the textile industry.
STRUCTURE OF TAXTILE INDUSTRY IN ZAMBIA
TEXTILE INDUSTRY STRUCTURE
Organized sector Unorganized sector
1) Spinning mills 1) Hand looms
2) Composite mills 2) Power looms
3) Hosiery and khadi
4) Processing Units
(Spinning and weaving)
39
a) The textile industry consists of two categories in the organized sector
These are
a) Spinning mills: manufacturing a yarn.
:
b) Composite mills: producing both spinning and weaving.
Spinning mills
Spinning machines are creating thread in to the cotton, takes the roving, thins its
and twists it creating yarn which it wind in to bobbins. In textile manufacturing three
type of fiber are converted into yarn, fabric, and last textile
Mule spinning Mule spinning
40
Weaving
Weaving is the process of filling a thread in to one another and making a cloth
through the weave to the yarn.
The way the warp and filling threads interlace with each other is called the weave.
The majority of woven products are created with one of three basic weaves: plain
weave, satin weave, or twill. Woven cloth can be plain (in one colour or a simple
pattern), or can be woven in decorative or artistic designs.
.
Handloom
In textile manufacturing and weaving using a handloom, a handloom is a simple
machine for using weaving purpose and weaves the yarn, it’s simply says that
BHARATKAM
Power loom
A power loom is using foe weaving the yarn and using for convert the yarn in the
textile. It is a mechanized tool that uses a drive shafts for power.
41
Hosiery & Khaddi
Hosiery are also called to leg wear, describes garments worn directly on the
feet and legs. The term originated as the collective term for products of which a
maker or seller is termed a hosier; and those products are also known broadly as
hose. The term is also used for all types of knit fabric, and its thickness and weight is
defined in terms of denier or opacity.
BUSINESS ACTIVITIES
Fair trade practice programmed
The Zambian textile industry are using a fair trade practice programmed and
maintain a transparency in his business and doing a legal activity for the business
development and sustaining in the markets for longer periods of time and maintain a
accountability in his organization.
E-business strategy programmed
Today most of the Zambian textile companies are using a E- business strategy for
the development of the textile business and meet the requirement of the buyer’s
outside of the country the main aim of using the E- business strategy to supports the
42
marketing activity and the logistic management, and through the e-business profits or
earning capacity are increasing and increasing the competitive advantages.
.
Create an open electronic supply chain management system
Become a knowledge-based/electronic business
Achieve high profits and enlarge market share
(Quick Response/Business Process Reengineering)
Corporate Social Responsibility programmed
Zambian textile industries are actively contributed to the social and trade and industry
development of the communities in which textile industry operates. In so doing build a
better, sustainable way of life for the weaker sections of society and raise the
country’s human development index”.
Jobs and poverty reduction programmed
Zambian textile industry are providing a more jobs opportunity to the Zambian people
for doing a jobs in textile companies and also create a activity for the poverty
reduction in the Zambia like providing a free cloth, shelter to the poor people,
providing a free education to the children for the poverty reduction purpose in
Zambia.
43
Develop creative skills programmed
Textile industry are making a help to a person creates something new (a product,
solution, artwork, literary work, etc. through the creative skill development
programmed the employees management skill are increasing and to learn how to
solve a problem in very easy manner.
COMPARATIVE POSITION OF TEXTILE INDUSTRY
PRODUCT WITH INDIA AND GUJARAT
� The textile sector in India is one of the world’s largest. The textile industry
today is divided into three segments:
1. Cotton Textiles
2. Synthetic Textiles
3. Other like Wool, Jute, Silk etc.
India has more than 450 small & large mills employing more than 5 lakh
workers. Big names like Raymond’s, Reid and Taylor, Reliance etc. are
operating in India.
� Zambia is a one of the large textiles producer in over world. And they also
produce cotton textiles, Synthetic textiles, and silk in Zambia minimum 178
big and small textiles mills and total employer is 2.78 lakh.
44
Indian yearly textiles productivity data:-
Zambian yearly textiles productivity data:-
Year
Production:-
-------- 1,000 480-lb bales --------
2007 16,000
2008 20,020
2009 15.000
2010 20,000
2011 21,500
Interpretation:-
Above table shows that yearly textiles productivity data of Zambia and India.
Year Production:-
-------- 1,000 480-lb bales --------
2005 19,050
2006 21,800
2007 24,000
2008 22,600
2009 23,000
2010-11 25.400
45
Indian import export data of textiles:-
Year Export:-
-------- 1,000 480-lb bales --------
Import:-
-------- 1,000 480-lb bales ---
2006 4,875 465
2007 7,500 600
2008 2,360 800
2009 6,550 480
2010-11 5,100 450
Zambian Yearly import export data;-
Year Export:-
-------- 1,000 480-lb bales --------
Import:-
-------- 1,000 480-lb bales ---
2006 2,877 670
2007 3,500 600
2008 4,740 550
2009 5,500 480
2010-11 6.800 325
CONCLUSION:-
At present the Zambian textile industry are not making any type of export or
import activity with the India or Gujarat so India or Gujarat having opportunity
46
to develop a trade relationship related to textile with Zambia and increased the
international trade.
PRESENT POSITION AND TREND OF TEXTILE
INDUSTRY
India's Position in Global Textiles and Clothing Industry
• India's position in the World Textiles Economy Second largest producer of
raw cotton.
• Second largest producer of cotton yarn.
• Second largest producer of cellulosic fibre/yarn.
• Second largest producer of silk.
• Fourth largest producer of synthetic fibre/yarn.
• Largest producer of jute.
The Indian textiles industry is one of the largest textiles industries in the world.
With the abolition of quotas in 2010, Indian Textiles and Apparel exports grew
by 20% to reach US$ 17 billion in 2009-10. Indian exports increased in both the
major destinations of US and EU. Indian exports to US increased by 27% to
reach US$ 4.6 billion, while exports to EU increased by 18% to reach US$ 6.2
billion. Despite falling prices, Indian exports were able to maintain their UVR
to US and EU. Indian exports also benefited in the latter half of the year due to
safeguards on China. On the account of increasing exports, most of the Indian
companies experienced healthy growth in their top and bottom lines. The
exports of Textile and Garments have reached to US $ 19.2 billion in 200-10.
47
Textiles and Garments Exports from India
The share of textiles and garments exports in India’s total exports in the year
2009-10 stood at about 20 percent, amounting to US $ 17 billion. The quota
countries, USA, EU and Canada accounted for nearly 70 percent of India’s
garments exports and 44 percent of India’s textile exports. Amongst non-quota
countries, UAE is the largest market for Indian textiles and garments; UAE
accounted for 7 percent of India’s total textile exports and 10 percent of India’s
garments exports.
In terms of products, cotton yarn, fabrics and made-ups are the leading export
items in the textile category. In the clothing category, the major item of exports
was cotton readymade garments and accessories. However, in terms of share in
total imports by EU and USA from India, these products hold relatively lesser
share than products made of other fibers, thus showing the restrain in this
category.
Performance of the Textile Industry:
Percentage Growth in Textiles
Products 2005-
06
2006-
07
2007-
08
2008-
09
2009-
10
1. Cotton Textiles 8.5 14.8 4.3 -1.9 5.5
2. Wool, Silk & MMF Textiles 0.0 7.8 4.8 0.0 8.2
3. Textile Products(Including Garment) 16.3 11.5 3.7 5.8 8.5
4. Vegetable Fiber Textiles(Expect Cotton) 0.5 -15.8 33.1 -10.0 -24.4
Total Textile Section (1 + 2 + 3 + 4) 6.7 7.0 7.5 0.2 3.7
48
Textile Exports Statistics
Financial
Year
Textile Export US$
Millions
Total exports US$
millions
Percentage of textile
exports
2005-06 14026.72 83535.95 16.79%
2006-07 17520.07 103090.53 16.99%
2007-08 19146.04 126262.68 15.16%
2008-09 19558.53 143567.86 13.62%
2009-10 18519.96 153018.22 12.10%
2010-11 22418.00 178751.43 12.54%
Zambia's Position in Global Textiles and Clothing
Industry
49
Zambia’s textiles and clothing industry has had an important role to play in the
country’s development. During the import substitution industrialization (ISI) of
the 1960s through to the mid-1980s, Zambia’s textiles and clothing industry
received substantial government support through an incentive system that
favored the entire manufacturing sector. This incentive system was determined
by a combination of tariffs, quantitative restrictions and exchange rate
management. The ultimate result was to limit the degree of and shelter the
textile and clothing industry from external competition, reduce the role of the
market and increase state involvement in establishing the level, composition and
quality of investment in the industry.
Importance of textile exports for Zambia
Textiles are part of Zambia’s non-traditional exports. Evidence shows that the
value of such exports has increased from US $ 90 million in 1990 to US $ 450
million in 2010. This means that non-traditional exports have increased their
share in export earning from 8% in 1990 to 47% in 2010. A closer examination
of the export structure based on the value of sub-sector earning reveals that
there has been a dramatic change in the composition of manufacturing exports.
Specific to textiles, it can be that the contribution of textiles rose sharply from
16.7 percent in 1993 to 35.5 percent in 2000 before a slight fall to 39.2 percent
50
in 2009. The share of textile in non-traditional exports is, therefore, huge and
makes textiles exports very important for Zambia. As such it is imperative that
Access to markets for such a growing sub-sector should be secured if its
performance is to be enhanced.
Zambian Exports to Major Trading Partners, 2005-2010 (%)
Below table shows Zambia’s total market share by major trading partners over the past five years:
Region/Continent 2005 2006 2007 2008 2009 2010
SADC 23.8 29.1 29.9 37.2 43.7 48.1
Rest of Africa 1.6 1.3 2.1 1.1 1.1 0.8
Africa Total 25.5 30.5 31.3 38.3 44.8 48.9
Asia 6.5 1.6 5.9 6.1 11.2 7.9
European Union 53.1 55 55.4 47.6 34.5 26.2
Rest of Europe 14.2 11.8 6.5 6.7 8.1 16.0
Europe Total 67.3 66.7 61.9 54.3 42.6 42.3
Rest of World 0.9 1.1 1.0 1.4 1.5 1.0
World Total 100 100 100 100 100 100
From the above table it can be seen that while the European Union has
previously been major destination of Zambia’s exports, its percentage market
share has steadily declined from 53 percent in 2005 to 26 percent in 2010,
representing a decline of about 50 percent over the last six years. European
Union (EU) preferential access, therefore, becomes very relevant to reversing
51
this trend and spurring Zambian exports to the European market. On the other
hand, above table reveals that the Southern African Development Community
(SADC) has increased its percentage market share as a final destination of
Zambia’s export, rising from 23 percent in 2005 to 48 percent in 2010. In terms
of key export markets for Zambia, therefore, current statistics suggest that
SADC is biggest export market followed by the European Union. The rest of the
world accounts for about 1 percent of the total market share. In regard to
AGOA, it remains a potential target market for Zambian exports if exporters can
meet the demand and standards required by the USA market.
POLICY AND NORMS OF ZAMBIA
� Since late 2010, Zambia has essentially changed its trade and economic
policy. The trade government has been considerably liberalized and there has
been considerable decentralization and deregulation in other spheres of
monetary activity.
� During the reforms period, Zambian government try to clear the all tariff rate in
agriculture production, minimum rate is 97% and maximum rate is 125%. Tax
rate are apply in more then 180 non agriculture ranging form 30 to 60%.
M.F.N tax rate are apply average 13.6%.
� the Zambian government are making a tax policy that’s shows that in primary
and semi- finished products tax rate are as it is dose not making a any change
in this products but impose a tariff rate on finished products and goes up 16%.
� Zambian government is continues to making a efforts to decrease tariff rate on
textile products and becomes a lower 100% to 25% in last 5 year. tax rate are
decreasing as per the value of the goods like a 5%, 10%, 15&, 25%.
52
� in October 1995 the imports declaration fees are introduced and imposed a
tax rate 5% on the commercial good having a value at least 500$, the
Zambian government also apply excise duty rate 10% to 120% on producing
in domestic markets, vat are reduced by Zambian government form 23% to
20% in 2005 July.
� there are no quantitative import limitations but tariffs on some ending
products rate is 25%
OBJECTIVE OF ZAMBIA TRADE POLICY
1. Re-establishment of the Zambian economy.
2. Increase of rate of the manufacturing and agricultural sectors.
3. Civilizing and increasing economic infrastructure for FDI, visiting the
attractions and others.
4. Civilizing and growing community infrastructure to get better living
standards.
PRESENT TRADE BARRIERS FOR IMPORT
EXPORT OF SELECTED GOODS
PROBLEMS IN EXTERNAL MARKETS TRADE BERRIES
HIGH FREIGHT COST
To realize the problems face by Zambia in the outside market, it is needed to capture
into account the country's geographical place and the mold of her trade.. so Zambia
are facing barriers of high fright cost for exports and imports goods.
53
PRICE FLUCTUATION
Zambia are totally based on the copper so whenever any change arise in copper
price at that time it is affects to the overall markets of the Zambia.
REGULATIONS AND STANDARDS
This is the main barriers of the Zambian textile industry.. This is particularly so
in the export of farming products. These are subjected to strict rules and
regulations. Quantitative limitations Sugar; Rice and Textiles.
LOW SUPPLY
Zambian textile industry having a berries that law supply because of lack of
infrastructure, lack of supports of the governments and lack of development..
TARIFF RATES AND NON TARIFF BARRIERS
Zambia is a underdeveloped country so it is totally depends on the revenue of tax so
its tariff and non-tariff rate are high, and it is not good for the import and exports of
the goods.
LACK OF HUMAN CAPITAL
Developing country produce often lack manager with the essential skill
desirable to provide a full package service this skill include translating apparel
design in to production pattern, supply chain management know- how tertiary
learning in textile and clothing in often unavailable.
TELECOMMUNICATION AND ITS IMPEDIMENTS
Full package manufacture and fast replenishment demand adequate ICT systems
to connect the consumer ant supplier. This required a modern and reliable
telecommunication infrastructure and beck-up from IT professional.
TRANSPORTATION INFRASTRUCTURE
54
Good road railway and airports and ports are needed to facilitate swift order
delivery, especially form countries distant from their buyers markets.
POTENTIAL FOR IMPORT / EXPORT
INDIAN TEXTILE INDUSTRY SNAPSHOT
� Second largest producer of cotton in the world
� Second largest employer in India (after agriculture) – direct employment
to 35 mn people
� Constitute 13% of India’s exports
� Contributes 11.50% to industrial production
� Contributes 2% to GDP
� Increased in GDP - Would result in Increased in Consumption
55
SIZE 2010
PARTICULAR DOMESTIC EXPORTS TOTAL
Apparel 36.00 11.00 47.00
Home textile 4.00 3.00 7.00
Textile 12.00 11.00 23.00
Total 52.00 25.00 77
INDIAN TEXTILE VISION 2020 FOR EXPORT AND IMPORT
� The domicile textile market in India is predictable to increase from USD
52 bn. in 2010 to USD 140 bn. by 2020 at a CAGR of 10.5%.
� The export market in textiles is planned to grow from USD 25 bn. in 2010
to USD 80 bn. by 2020 at a CAGR of 12%.
� The total Indian Textile Industry is projected to grow from USD 78
bn. in 2010 to USD 220 bn. By 2020 at CAGR of 11 %.
� In order to meet the additional approximate demand (US$ 150 bn)
created for Textile and Apparel by2020,investments to the tune of
Rs.320,000 Corers (US$ 68 bn) across the Textile deliver chain will be
required.
� India has the potential to increase its export share in world trade from the
present 4.50% to 8.00% by 2020.
� The high growth for Indian exports is potential due to increased sourcing
shift from developed countries to Asia and India’s strengths as a suitable
alternative to China for global buyers.
56
BUSINESS OPPORTUNITIES IN FUTURE
TEXTILE INDUSTRY OPPORTUNITY IN INDIA
� The global textile and clothing industry refreshing after the current global
depression with increasing purchaser demand. With the encouraging outlook
the global textile and clothing trade has the potential to produce up to 1000$
Bn by 2020 from about USD 510$ bn in 2009.
� With the world population predictable to produce 1 bn by 2025, there
would be extra fiber consumption of roughly 20 mn. Tone.
� In the last 5 years, the whole market size of the Indian textile business has
developed by about 10% annually. The industry is projected to produce
further at a much superior rapidity principally motivated by strong home
consumption in the back drop of increasing per capita income.
� The department of textile is also expectant investments through growing on
schemes like, TUF scheme, cluster development activities etc.
� Chinese Yuan has appreciated 4.3% in the last one year whereas the rupee
depreciated by 15.4% in the same period thereby creating a level playing field
for Indian exporters.
57
� China is facing twice challenges of meeting their growing home demand and
maintain its market share in the international market. As a result it has
emerged 4TH main importer of textiles after Europe, USA and Japan with
imports of about USD 52 bn.
� The out of the country buyers are now looking at India as first-rate a different
to de-risk their sourcing wants from China.
ZAMBIAN BUSINESS OPPORTUNITIES IN FUTURES
Your enterprise in this sector may primarily engage in manufacturing yarn or
textile fabric or finishing yarn, textile fabric or clothing, you may also be
engaged in manufacturing carpet and rug and curtains and linens or other textile
products
� Fibre , yarn and thread mills
� Fabric mills
� Textile and fabric finishing and fabric coating
� Carpet and rug mills
� Curtain and linen mills
� Textile beg and canvas mills
� Other textile product mills
58
CONCLUSION
� The report concludes that Zambia's fine-tuning efforts have inspired
rapid development in non-traditional exports and have begun to help
Zambia to spread its economy away from its dependence on copper. The
report notes that Zambia’s hard work to continue the implementation of
reforms could well bolster -confidence and helps attract foreign
investment. It will also be dangerous, states the report, that Zambia's non-
traditional exports, including textile and engineering, floricultural and
food products do not meet new protective barriers and that the
multilateral trading system continues to support Zambia's efforts.
� Government should bring in more disciplinary tariffs and quantitative
restriction against the import worn clothing
� Zambia should obtain benefit of trade conformity such as COMESA,
SADC, AGOA
� Opening of export processing zone should be implemented
SUGGESTION
� We can suggest that the India and Gujarat market having an opportunity
to increased his international trade with Zambia related to textile because
at present the India and Gujarat markets are not having a trade
relationship related to textile so it the opportunity for India to making a
foreign investment.
� If India or Gujarat markets are wants to increase the foreign investment
so it is the great opportunity to make an investment in Zambian textile
industry, at present the Zambian textile industry at the growing stage and
provide a better returns from the investment
59
Introduction of Telecommunications Company
Now a days, there are so many telecommunications company in the world like
CHINA MOBILE, VODAFONE GROUP, BHARTI ARITEL, RELAINCE
COMMUNICATION it provide various kind of services like a voice call, video call,
short message services ,e-mail, conference, internet service, multimedia messages,
post-paid, prepaid etc.
We know very well that the first telephone was invented by the Alexander Graham
bell in March 1876. And as time passed, there is more innovation in Telecom
Company and now a day, we saw one signal mobile can work like computer with the
help of telecommunication network.
It will be useful in so many ways like personal call, commercial call etc. The first
commercial telephone service was set up in 1878 and 1879 both side of the Atlantic
in the cities of New Haven.
Telecommunication Companies in Zambia
Zambia Telecommunications Companies offers fixed and mobile voice, data,
and Internet services. Its mobile services include prepaid, postpaid, roaming, and
closed user group services. The company also provides landline services,
conferencing, call forwarding, and speed dialing services. In addition, it offers
Internet and data services, such as multimedia messaging, and CDMA services.
1 Zamtel
60
2 Zain (Bharti Airtel Limited)
Airtel has also unveiled its new brand identity across its sixteen African operations
including Zambia.
3. MTN Zambia
4. Cell Z
5. ZamNet
6. Coppernet Solutions
7. UUNet Zambia Microlink Technologies
8. Comium
Telecommunication Companies in India
Telecommunication sector in India is primarily subdivided into two segments, which
are FIX SERVICE PROVIDER and CELLULAR SERVICES. Telecommunication
industry in India constitutes some essential telecom services like telephone, radio,
television and internet. Telecom industry in India is specifically emphasizing on latest
technology like GSM (global system for mobile communication), CDMA (code
Division multiple access), Fixed line.
61
List of telecom companies in India
1. AirTel is the largest GSM operator. AirTel is the most prominent of all the
GSM networks in India. AirTel is owned by Bharti Group.
2. Vodafone Essar group owned Vodafone has a pretty good user base
because of the many attractive packages it offers.
3. Idea Cellular Limited is part of Birla Limited.
4. BSNL’s mobile arm Cellone has a very good rural and suburban user
base.
5. Reliance, the no.1 operator in CDMA, introduced its GSM services in Jan
2009.
6. Aircel has very good, cheap and innovative offers.
7. Tata Teleservices Ltd.
8. UNINOR
9. Virgin mobile
10. The Videocon telecommunication Ltd.
Role of Telecommunication Companies
Everyone whether it is business user or personal is happy to accept that technology
has made unimaginable able things actually happen. Telecommunications device
has allowed us to communicate and having great convenience. Now business
associates don’t need to travel far from meetings. The modern communication
infrastructure has made all the impossible things possible.
62
Today mobile phone has become one of the advance equipments that are not limited
only for calling purposes. It become beyond that invented earlier. It has variety of
functionalities. We can access internet using mobile phones. Function such as chat
video call phoning is counted among its major functions.
It provides much for the world. In business, it helps in the stability of money, market
and business. It allows us to exchange information quicker that also helps the whole
market. Development in telecommunication provides a foundation to enhance
technology. Without it, we can never imagine traveling by ships, airplanes and trains
because communication through radio telecommunication technology, it is easy to
communicate. It is an evident what telecommunication has done for the world.
Business activities
1. Business data services
2. Internets
3. Voice calls
4. Different types of Broadband services
5. M-banking
6. Develop the economy of Zambia
7. Introduction on new services
8. Fined new opportunity
1. Business data services
Services provider currently offers many types of data services to business users.
These data services typically offer products which allow business users connectivity
between their various sites or offices for instance connecting a warehouse or
production facility to a sales office etc.
63
2. Internets
This is very simple use of any organization to find out any data and to get information
and advertise, communication, research etc
3. Video calls
Now a day business is not related with local level but it is going far from not only
state level but international level so when to MNC companies communicate they can
use also video call to gat easy way to meet each other it is very chipset way to
communicate face to face.
4. Different types of Broadband services
The broadband technology you choose will depend on a number of factors. These
may include where you are located (urban or rural area), how broadband internet
access is bundled with other services (such as voice telephone and home
entertainment), price, and availability.
Structure of Telecommunication Company
64
This is very simple structure of Telecom Company shown in the chart. We saw that,
top authority will be lying with MD after that Deputy managing Director. Now they
divided in 5 part like office manager, secretary, telecommunication manager,
commercial manager & legal manager, project manager. So they all can do their
work there according to their department like telecommunication manager handle
their department activity, project manager can handle new project of company and
so on.
Zambia Mobile Subscription Rates
Year Subscribers Per 100
Inhabitants
Growth Rate
(%)
2000 49,957 0.505 31.5
2001 97,900 0.97 96
2002 1,39,258 1.338 42.2
2003 2,04,150 1.895 46.6
2004 4,13,120 3.725 102.4
2005 9,49,558 8.299 129.8
2006 16,63,051 14.369 75.1
2007 26,39,026 22.539 58.7
2008 35,39,003 26.955 21.5
2009 41,65,101 32.28 17.67
65
Comparative position of telecommunication sector in Zambia with
India
ZAMBIA:
The high cost of transportation continues to cause challenges to private sector
development in Zambia. This is basically related to the poor quality of road and rail
communication, primary to more regular replacement costs for transportation
providers. Private sector participation is important to the rapid improvement of
transportation services. Over the medium term, it is envisaged that a number of
economically possible and essential tax roads will be constructed.
Aware of the high cost and poor quality of telecommunication infrastructure in the
country, the government has embarked on the partial privatization of ZAMTEL.
Further, international telecommunication gateway fees have been discounted to
regional averages, these measures are expected to create significant growth
potential for the telecommunication industry, while all together improving service
quality and reducing costs. In addition, the completion of the fiber optic network
infrastructure will bring higher quality data and internet services to the country, at a
significantly lower cost.
Government is also working in rural area and the service providers to develop rural
connectivity. And the launch of the National ICT policy in2007, an ICT Bill has been
developed to improve the regulatory framework, addressing barriers to entry and
attractive competition in the sector. Media and broadcasting have experienced
unprecedented additional private sector participation and the coming out of new
organizations.
According to the communications Authority of Zambia, the number of subscribers
increased to 54000 in 2006 and the current number of subscribers is at 10.843. Most
of the ISPs provide broadband services. Given the low distribution rate of fixed
telephony and the inherently low speed of dial up connections
The performance indicators in this review were obtained from various institutions
such as the communication authority of Zambia and the ministry of communication
66
and Transport, the ministry of finance and development planning, the central
statistics office and the a variety of telecommunications operators.
In 2005, the telecommunications sector a significant growth rate of 23.2% very much
above the national growth rate and the growth rate of 5% reported in 2004
The first mobile phone operator telecell launched its in 1997 its cellular service using
Code Division Multiple Access (CDMA) technology. The incumbent national
operator, ZAMTEL, launched its internet service in may 1997, while the second
mobile operator, celtell started its provision of cellular services in 1998.
Major telecommunication industry:-
1. ZAMPOST – Zambia Postal Services Corporation
2. ZAMTEL – Zambia Telecommunication Company Limited
3. ZESCO – Zambia Electricity Supply Company Limited
4. ZNBC – Zambia National Broadcasting Corporation
Telecommunication industry in India
The telecom industry has been divided into two major segments, that is, fixed and
wireless cellular services for this report.
In today’s information age, the telecommunication industry has a critical role to play.
Considered as the back of industrial and economic development, the industry has
been aiding delivery of voice and data services at rapidly increasing speeds, and
thus has been revolutionize human communication.
Most of the peoples in the rural areas, so government takes steps to develop rural
teldensity, no doubt the government has taken sure policy initiatives which include
the creation of the universal service obligation Fund, for improving rural telephony.
These measures are expected to improve the rural tele-density and bridge the rural
and urban gap in telecommunication density.
This fast growth has been possible due to various helpful and positive decisions of
the Government and contribution of both by the public and the private sector. The
67
rapid strides in the telecom sector have been facilitated by liberal policies of the
administration that provides easy market entrée for telecom tools and a fair
regulatory framework for offering telecom services to the Indian consumers at
sensible prices.
Major telecommunication industry:
1. BSNL and MTNL its state owned companies
2. Reliance and Tata Teleservices its private Indian owned companies
3. BPL mobile, spice communications its foreign invested companies.
Present Position and Trend of Business in Zambia
Trend towards a Monopolistic Market Structure
Mix rivalry structure was present in the first development stage of the industry. After
a successful start, the telecommunication industry developed slowly into a state
owned industry without competition. The reason for this development was that
private telecommunications companies determined their activities on the portable
areas. The focus and strategy of the companies created an increasing gap between
the regions. Because a difficult communications system inspired the economic and
social activities in a region, it was important to have an up-to- date network for the
whole country. Without a firm and innovative infrastructure, the country could not
reach the optimal welfare level. Due to this development s governments felt the
improved need to take up responsibility and control the telecommunications industry.
In the second half of the industrial revolting, the telecommunications industry turned
into a government owned business. The monopolization of the industry was a global
trend.
ECONOMIC TRENDS
Zambia has a comparatively stable macro-economic surroundings. The inflation rate
dropped to single digit levels in 2007 for the first time in decades and the Kwacha
has remained strong and relatively constant over the last few years. Growth has
been optimistic since the turn of this century. A further important trade and industry
development is that in 2005 Zambia was among the countries that reached the
Highly Indebted Poor Countries (HIPC) completion point, next being selected to
68
benefit from the multi-lateral debt relief initiative that resulted in a important reduce of
the country’s external debt from $7.1 billion to $500 million.
Telecommunication industry and the open markets
In the last three decades, the environment in which the telecommunications industry
was operating started to change. As globalization set the stage, the
telecommunications industry became slowly a more global industry through
increasing competition. In addition, new technology developments such as mobile
telecommunications and digitalization have a significant impact on the change of the
industry. Consequently governments have started to privatize their state owned
telecommunications companies to open competition and o to establish independent
regulatory agencies
DISTRIBUTION OF MOBILE SUBSCRIBERS IN URBAN AND RURAL AREAS
However, remarkable that mobile telecommunication has slowly penetrated some
rural parts of the country. This is mainly due to the vital and motivated expansion
force undertaken by mobile operators in recent years. Celtel is now operating in all
the nine provinces and 72 districts of the country. This is a major expansion in the
telecommunications sector given the fact that these areas had had no
communications services. In 2006, the company (Celtel) invested US$60 million
towards expansion and improvement of its network compared to ZMK160 billion
(US$ 46 million) spend in 2005.
69
MOBILE TELEPHONY MARKET SHARE
Market contributes to of Zambian telecommunication industry on Mobile Telephony
in that the Celltel has been 8%, MTN has been 12% and the Cell Z has remaining
80%.
Present Position and Trend of Business in Zambia with India
The Indian governments to liberalize their telecommunications industry, although
Asian region generally lagged behind in starting this course of action in comparison
with Europe or North America, when competition was introduced in Asia, it happened
only partially for certain regions or certain services,
MOBILE TELEPHONY
India is among the highest growing mobile markets in the world: mobile market in the
world is also in the middle of the fastest growing mobile markets globally.
The total number of mobile subscribers in India has increased from 6.4 million in
March 2005 to around 350 million compounded annual growth rate (CAGR) of 81%,
aided by a significant increase in network coverage and a recurrent decline in tariffs
and handset prices.
70
Zambia presents telecommunications investment opportunity
Opportunity to buy into the world’s emerging telecommunication market and their
vast expansion potential are becoming scarcer.
As such, the outlook sale of Zambia current zamtel could attract significant interest
from expansionist telecommunications. Whether investors will prove attractive to
those companies with money to spend,
The Zambia development agency formally opened the request for a majority stake in
Zambia telecommunication business, or zamtel.
Interested parties have been invited to apply for pre requirement for a competition
that will see up to 75% of the Telco sold off. Would be bidders have to submit their
applications.
Companies and group may submit bids for a stake of any size up to 75%. The
government funds the right to dispose of all or part of its outstanding stake via IPO
on the Lusaka stock exchange.
There has been little speculation around possible buyers so far. However, it is now
certain that two of the Middle East and African region’s most ambitious players, MTN
and zain, will not be in the frame
The document released by the ZDA specifies that the country exists mobile
operators, and companies associated with them, Will be excluded from the process.
In addition to its fixed line business, Zamtel owns GSM mobile operator cell Z, which
competes with the local units of MTN and Zain.
Zain is by far the largest of the three. It had 2.82 million customers at the end of June
which it claims is around 73% of the market. MTN has yet to release its second –
quarter numbers, but had 778000 customers as of the end
71
Problems and prospects of telecommunication industry in Zambia:
Communication and the economy:
One pointer of a country’s economy and particularly, its foreign switch over earnings
is the large size of its newspapers. All over Zambia, the papers have become
thinner. Because of scarcity of newsprint and main fact of the news print is
manufactured locally. The circumstances even more important in book publishing
and other scarcities which affect communication, the photographer finds it difficult to
buy films, in Zambia including most people have to rural areas so not developed the
rural area and most of people no educated so confusion to using high knowledge
product, And when some villages including not have to power so not start the high
technology system.
Communication and technology:
When some home had a telephone and people could directly dial any other home in
the country, and every call would be free of charge, in sense of security and
community it would give us, an Indian space scientist told technology feasible, with
battery powered telephones sets, and system of worldly relay stations which are
connected to a satellite.
Communication and politics:
A lot of decisions in communication technologies are political because there is a lot
of political use in, and misuse of, the media. When any new telecommunication
starting then affected to politics because its power of the country and other
telecommunication to have side of politics person so any newly company easily not
running the business and always to run business under the rules and instruction of
government.
When Zambia country including government power is high level and the any new
company starting then do work of business under the management and to have high
level of taxation.
72
Communication and ideology:
In Zambia counting most people living to rural area, then most of people mind not
shifting then to use one type of the product and it’s not philosophy other product
related, and main problems is the uneducated people, they are the manual labor ,
mainly farmers, they are the millions of women, without whose energy we would be
lost. And they are the youngster’s lots of whom have fairly clear ideas about the
Zambia they want, these are the people who nearly have no voice in the public filed,
yet who should be the communicator’s level fineness.
Policy and natural barriers:
In Zambia, guidelines and normal barrier more affected to telecommunication
industry in broader sense non tax measure include unfair measures or misuse of
policies such as technical barriers to trade and unfair government policies and others
illegal practice and technical necessities could be found include custom valuation
which comprises the set of measures to check that the quality, price, origin, And
other features of imports are in accordance with the in sequence provided by foreign
exporters, which measures to protect human, creature health and safety
Findings
We are analysis of different sector in Zambia and demographic including the
most of people living in rural area. And most of the people are uneducated in
all over country.
There are only 7 to 8 companies of telecommunication in Zambia so there are
new opportunities to established telecommunication company.
GDP Growth is good and stable so it is good for country in other businesses.
In Zambia mobile subscriber rate is very good and in since 2004 and 2005
growth rate is 102.4% and 129.8%.
73
We find that there is no development in rural area so it will good for
established company in rural area.
Zambia government is also encouraging FDI so it is good for country’s
development.
Zambian economy is on growing stage so it is better option to entrepreneurs
for the investment telecommunication.
New president of zambiya michale sata is Liberal and also encouraged the
new company for establishing zambiya.
ZAIN and ZAMTEL company recently launce the 3G service in Zambia.
Suggestion
On the basis of our research we can suggest that new liberalization policy can
help full for telecommunication business.
The telephone users are increase from 2007 to 2010 so it is also one
business opportunity for investor.
The major players or competitors in the telecom industry so Indian
entrepreneur must have to adopt merger and acquisition strategy for enter in
to Zambian market.
When any investor wants to enter in to Zambian market at a time they must
know about the political, social, economic and geographical environment.
74
CONCLUSION:
After completion of our GCR project, we know that Zambia is under developing
country and also their GDP rate is constraints, it good for the new company and we
find that the telecommunication company growth rate is good.
We also find that their telecommunication no development rural area of country so it
will opportunity for them to focus on rural area of Zambia
When in Zambia including major telecommunication company ZAMTEL, ZAIN,
ZAMNET, its high develop overall the urban level. It’s company to have personal
monopoly, so sustain in the market
75
ANALYSIS OF PHARMACEUTICAL INDUSTRY OF ZAMBIA
Introduction
Zambia, which gained its self-government from Britain in 1964, is a land-
locked country bordered by Angola, Botswana, and the Democratic state of the
Congo, Malawi, Mozambique, Namibia, Tanzania and Zimbabwe. With an area of
752 614 square kilometres, the population was estimated at 11.2 million in 2005. In
the 1980s and 1990s, declining copper prices (the main engine of what had been a
robust economy prior to the price decline) and long-lasting drought damaged the
economy harshly. The real growth rate of GDP was estimated at 4.6 percent in 2004,
and public debt was 127.5 percent of annual GDP. The infant mortality rate was
estimated at 88 per 1,000 live births. Life expectation was estimated to have plunge
from 50 years at independence to a contentious 37 years by 2000, among the lowest
in the world, above all the result of underlying poverty combined with HIV/AIDS,
which had an estimated prevalence rate of 16.5%.
Zambian Pharmaceutical Sector
The pharmaceutical business in Zambia is regulated by the Pharmaceutical
Act No. 14 of 2004. The Act found the Pharmaceutical Regulatory Authority (PRA)
which is responsible for registration and directive of pharmacies; register and
regulation of drug, herbal medicines and related material intended for human use
and for animal use; regulation and control of the manufacture, importation,
exportation, control, storage, distribution, supply, promotion, sale and use of
medicines, herbal medicines and allied substances. The key functions to achieve this
include the registration of medicinal products, inspections of facilities and products,
licensing of pharmaceutical building (retail, wholesalers, and manufacturing sites)
and issuing of import and export licenses and permits. However, the Act does not
regulate the practice of pharmacy professionals. Pharmaceutical staffs are registered
under another piece of legislation (GRZ, 2009).
76
Registration of pharmaceutical products for use on the Zambian market is
done by the PRA through the directorate of Product Registration. The directorate
further submits evaluation reports to the Medicines group for thought before inclusion
of products on the register. The formation of medicines committee is provided for
under section 9 in the Pharmaceutical Act No. 14 of 2004.
Forecasting and quantification is done by the Ministry of Health’s Directorate
of Clinical Care and Diagnostics Pharmacy Unit in liaison with cooperating partners.
The unit is also responsible for ability building in pharmaceutical management in
public sector health institutions. The procurement of medicines for government
health institutions is done by the Procurement and Supplies Unit of the Ministry of
Health. Currently the Ministry of Health has undergone restructuring which has also
included the procurement supplies unit. The Head of Procurement reports directly to
the Permanent Secretary. Under him are now three chief procurement officers of
whom one is a pharmacist specifically for procurement of medicines and other
pharmaceuticals. Under the chief procurement officer are two senior purchasing and
supplies officers, again one of the two is a pharmacist.
The Ministry of Health in its procurement operations is guide by the Zambia
Public Procurement power (ZPPA 2009) laid down events for public procurement. All
procurements above the authorized threshold (US$1,000,000 for MOH) are
channeled through procurement methods as per ZPPA guidelines. The procurement
method recommended by ZPPA includes: the International spirited Bidding (ICB);
Limited International Bidding (LIB) and; National Competitive Bidding (NCB).
Procurement of pharmaceuticals and related provisions is one of the key roles of the
MOH Procurement and Supplies Unit. The storage space and distribution of
pharmaceuticals and medical supplies is done by the national medical stores
(Medical Stores Ltd), a parastatal company owned by the Ministry of Finance and the
Ministry of Health. The management of Medical Stores Ltd has been contracted to
circlet Agents. Medical Stores Ltd’s permission is storage and distribution of
medicines and allied products to district health offices and hospitals. District
management teams in turn deal out to health centers and clinics within their districts
77
PRESENT RELATIONSHIP WITH INDIAN TRADE AND COMMERCE,
INVESTMENT, IMPORT-EXPORT
PRESENT RELATIONSHIP WITH INDIAN TRADE AND COMMERCE
Lusaka (Zambia): India and Zambia have emphasised the need to improve their
two-sided ties and collaboration in deal and trade while referring the special and
significant relationships between both the countries.
India's partnership with Zambia is an vital component of the country's larger
dream of close, helpful and multi-sectored partnership with African countries
surrounding political, security, economic, science and technology, human resource
development and cultural sectors, Vice President Hamid Ansari said at a dinner
given in his respect by his Zambian balance George Kunda last night-time.
"India and Zambia tear common awareness on the major issues before the
international neighbourhood today. Our actions have comprehensive to regional and
global forum including the UN, the Non united group, Southern African Development
Communities, Common marketplace for Eastern and Southern Africa, and the
African Union.
"Together the countries look for to ensure that in all these matters, the
interests of developing countries are kept uppermost and the socio-economic
developmental needs of our countries are certain," said Ansari.
Zambian Vice President George Kunda said India's financial growth continue
to be an idea for Zambia and the rest of the world. "We in Zambia are arrogant to be
linked with a country like India.
78
INVESTMENT
1. TATA Zambia
TATA Zambia was recognized as a completely own corporation in 1977 and is part
of the TATAGroup. Very lately a motor vehicle meeting plant was specially made by
the then Late President Mr. Levy P. Mwanawasa in Ndola. Due to its achievement in
other sectors, TATA Zambia has shown interest in construct a hydro power station at
an estimated cost of US$ 120 million.
2. Taj Pamodzi Hotel
In 1997, the TATA Group took over Pamodzi Hotel which had been Government
owned, and run to turn the property around and make it an efficient and successful
process.
3. Vedanta Mining Resources
Vedanta is an Indian direct company which is registered in London, it registered in
2003 and their principal process are in India. The center of Vedanta’s benefit
dishonesty in India, where they are home producer of aluminium, copper, zinc and
lead. It acquired 51% shares of Konkola Copper Mines (KCM) which is the largest
copper mining company in Zambia. They also have considerable assets in Australia
with two copper mines.
4. Lifeline Hospital
Lifeline Hospital of India (Chennai) is finalize tactics to set up a elevated tech “key
hole” surgical centre in Lusaka.
79
IMORT & EXPORT
According to the 2009 data, the total volume of Zambia’s exports stand at
$4.388 billion, while import come in at $4.131 billion. During the cooperative
government, the country experienced bottomless scarcity and though consecutive
governments devised incomplete improvement events, Zambia stagnate till the late
1990s. The year 2007 recorded the 9th successive year of the country’s economic
improvement. These growth years also witness progress in Zambia’s trade.
In 2003, nonmetal sell abroad increased by 25% and accounted for 38% of
the export earnings, from the previous 35%. Copper and nickel are Zambia’s top
sound export goods and the government has been yielding licenses to sources out of
the country for more searching of these and other metals, including tin and uranium.
Export and Import
Zambia have economic growth absolute till the 6%-7% spot in 2007. Prior to
that, in 1975, there was a slump in copper prices, primary to massive decrease in
export earnings, since the value of the metal almost halved at a worldwide level. The
6% to 7% mark was important to counter the extensive shortage of the country.
Since 2004, copper production has increased with time due to the recently found
stonework reserve sites and higher copper prices.
80
IDENTIFICATION OF POSSIBILITIES/ NEW OPPORTUNITIES OF
BUSINESS WITH ZABMIA
Manufacturing Opportunity
� Zambia – raw materials & primary goods
� VAD: Agro-processing, Mineral processing
� Occasion in processing of agricultural and mineral products.
� Plentiful phosphates-fertilisers
� Lime deposits-Cement
� Mineral Ore processing-New mines/DRC
� jewel polishing
� Textiles/Clothing
� Metal/Engineering works
� lumber processing
Agriculture Opportunity
� Fish undeveloped
� stock: processing of hides, skin, leather and leather products; meat
processing and dairy; production of veterinary drugs and vaccines. Investment
new/partnership
� Agricultural inputs, Machinery and Equipment: Investment in the manufacture,
supply and distribution of a choice of agric. inputs, equipment and gear e.g.
seeds, fertilizers, agro-chemicals, ploughs, tractors etc.
� sweetie: Investment required in sugarcane and sugar processing, ethanol
production from sugar result (molasses) for blending with diesel.
� Opening up of new farm wedge in provinces
� Irrigation Development Fund (IDF) has been set to develop irrigation
� Tea Production and Processing: Irrigation Out- Grower Scheme (Kawambwa)-
new/partnership Agriculture & Agro Processing Sector
81
� Floriculture/Horticulture, Fruits e.g. pineapples, mangoes, bananas, citrus etc.
� Palm Oil Production: business of farm for seed increase and processing of oil.
Communication Opportunity
� All ICT equipment is imported from principally Asia
o Semi-skilled labour, land etc
� Infrastructure – Multi Facility financial Zones
o contain – tech parks
� ICT policy aims to develop local talent in software extension
o By ICT know-how/Hub parks
Pharmaceutical Opportunity
� There are only 7 developed companies in Zambia.
� Most of these Manufacturing Companies are engaged in the developed of
Basic Pharmaceutical Formulations (Medicines).
� The Majority of Drugs required under the Essential Drug List is still being
imported, mostly from India.
� Only the University of Zambia provides training of medical officers, with a
commencement rate of 40 per year.
� There is no private medical school inspire of the high demand.
� There is only one public school of licentiates, which offers superior
programmed for clinical officers; no private training school yet.
82
PROBLEMS & PROSPECTS OF BUSINESS/TRADE WITH THE
ZAMBIA
Internal Organizational Problems and Trade Union answer
The hastily changing labour market environment has brought a number of
challenges to the labour movement. The liberalisation of the economy coupled with
privatisation resulted in a substantial decline in trade union membership. This
weakened the labour movement’s vigour and financial capacity as it draws most of
its income from membership subscriptions.
The want for of sufficient resources partial or reduced the number of forces
that trade unions are capable of providing to the general membership. In the same
vein, very few unions have been in a position to attract and keep hold of well-
qualified personnel, who can assist in the formulation of viable responses to policy
issues. The political right is usually weighed down with a lot of work and thus don’t
find time to draft union positions and policies. Therefore very few unions has policies
on issues that involve their members such as labour policies, HIV/AIDS, Social
sanctuary etc.
Due to lack of adequate resources also, small trade unions like the
amalgamated House and Domestic Workers’ Union of Zambia (UHDWUZ), Airways
and Allied Workers Union of Zambia (AAWUZA), Bankers Union of Zambia (BUZ)
etc have difficulties to afford office space or engage full-time technocrats. That
makes it even more difficult to contact these unions as they rely on individual
officials’ phones and workplace addresses. They are not just their sometimes. It is
also difficult for some of the unions to frequently call for constitutional meetings as
they do not have the resources to do so. Others delay the holding of vote and are
only bailed out by endowment from the federations.
83
External challenge and Trade Union Response
Most of the challenges of the labour group in Zambia are a product of external
factor; which are caused by amongst other things:
Critical Labour Laws
The labour laws do not adequately protect workers from violation of their
rights from employer. One of the reasons for amending the Laws was to make them
conform to the say of a liberal system. This has given employer, especially new
investors, a leverage to violate workers’ rights at will. Some of the innovative
employers have taken advantage of loopholes in the labour laws by running away
from the obligations that go with long-term employment by using casual labours. And
because the law no longer makes it and duty for employers to identify trade unions,
convenient has been growing anti-union tendencies among new investors, some of
whom are on record of abandoning workers without paying them terminal benefits on
repatriation or closure. The current instruction booklet labour laws are also weak on
the engagement of expatriate staff by new investors and the differences between
their income and those of local staff. Most new investor have taken advantage of the
circumstances by recruiting their nationals in management positions and paying
them heftily, compared to local experts of similar suggestion and experience.
Loss of Membership through Retrenchments and
Redundancies
As alluded to in section 3.4, trade union strength has been affected by the
reduction in membership numbers due to neo liberal economic policy. The strength
of a trade union lies in numbers; therefore reduction in membership means that trade
unions have little impact it terms of action to force out their demands from
employers. Their diminished resource base also means that their capacity to offer
84
inclusive services has been constrained, and therefore has to rely on external
support to offer even the basic services.
HIV / AIDS
The high HIV / AIDS disease rates among the productive age group have
impacted negatively on labour in terms of productivity and medical costs. For the
trade union, the challenge lies in the resulting loss of membership through the death
from the plague. On the other hand, trade union resources are done in when they
lose leaders to the disease in whom they invest a lot of resources in terms of
training.
Growing relaxed Economy
The growing informal economy as a result of recoil formal economy employ
continues to pose a great challenge to the labour movement which has to find ways
or means of intervening. The informal economy is diverse and has plentiful problems
such as rising reports of violation of workers’ rights which requires the trade union
movement to extend its treatment to include informal economy workers. Regrettably,
the current legislation on provides for formal employment workers to join trade
unions and most constitution of trade unions have similar restrictions. On the other
hand, there is need for the trade union movement to partake in providing retrenched
workers with services such as skills training. All these demand extra resources, but
correspond with the general fall in resources.
Lack of National Policy on Employment
The lack of a countrywide policy to help direct the activities of the labour
market has also posed a great challenge to the labour movement. This lack of policy
makes it difficult for trade unions to follow up government on a number of labour
issues as things are done unsystematically or without aiming to achieve any goal.
Monitoring and evaluation of labour market performance is a near impossible thing
with no guiding policy.
85
Economic and Social Policy and the Attendant Policy Measures
Most national policies have little content of the safe guard of jobs or their
creation. Restructuring of the public service, for instance, accounts for more job
losses than those created. The PRSP on the other hand has no comprehensive
outline on how more jobs are to be created. It is only hoped that the policy measures
it contains will also lead to employment creation.
Lack of true Consultation in the midst of Social Partners
Though institution of social dialogue exist, such as the Tripartite Consultative
Labour Council (TCLC), the resolutions of the council are not officially binding.
Therefore social partners do not usually feel obliged to adhere to the counsel.
Government is on record of having changed the contents of the recommendations
some Statutory Instruments from the TCLC. This and other similar actions have
brought the credibility of the Council in to question (Fashoyin, 2002).
In their reaction to these and other challenges, trade unions have undertake a
number of measures aimed at protecting their members. Some of the measures
include capacity building programmed through education and training of trade union
officials and members in labour and other issues; research on socio-economic
issues for policy response and alternative obedience; operation for social justice;
social dialogue to Name but a few (ZCTU, 2002).
The trade union movement also works together on issues of common
concern. Public service workers for illustration fashioned a loose grouping in
pressing for improved working conditions which declared an all round public service
strike in August 2003. Such alliances though viable are not a promise of join up as a
number of issues such as leadership; policy issues etc. have to be tackled.
86
Prospects
In spite of the ever-mounting challenges as a result of globalisation and
accompanying neo-liberal policies that trade unions have to put up with, they still
have a vital role to play on the labour market. There is however need to reposition
themselves if they have to score some success. The predictions for trade union
effective image are bright with the current review of labour legislation, which is going
on through wide consultations with stakeholders. It is only hoped that stakeholders’
inputs will be taken seriously and adopted so that there could be strong labour laws.
On the other hand, the reorganization of the Ministry of Labour, if follow by improved
funding will contribute to the strengthening of the institutional and legal enforcement
framework of the labour market. It is likely that these will donate to the reduction in
the number of violations of workers’ rights and anti trade union tendencies. However,
these measures alone will not guarantee trade unions a smooth ride, especially if
they don’t undertake internal steps to keep up with the challenges.
These should include:
Capacity building
Trade unions need to strengthen further their capacity to understand and
undertake long-term social economic policy response measures.
Intensive Recruitment and Organising
The unionisation density is still low for the formal sector. There is as a result
great need for trade unions to reach the un-reached workers by allocate a lot of
resources to staffing and organising of new members. This will not only help build
their numbers but their financial faculty also.
87
Democratisation of Trade Union Structures and Prudent Management of
Resources
There is need for trade unions to increase the wide participation of their
members in the activities in order to build wide ownership of their organisations. The
available resources should be managed cautiously in order to gain the confidence of
the general membership and cooperate partners.
Amalgamation / Mergers of Trade Unions
In order to gain the lost strength, small unions should be encouraged to
merge in order to come up with viable unions which can counteract employers’
coercion.
Networking / Unity of Purpose
Trade unions need to work together by networking and sharing of experiences
on how they are tackle their difficulties. There is great need for rival unions to work
together in the fight against victimisation and for improved working conditions of
service. The labour movement in Zambia has bright prospects for the future, they
only need to be focused in their work and ensure that they do not conciliation their
self-government.
88
FINDINGS AND STRATEGIC SUGGESTION
� There are only 7 pharmaceutical industries in Zambia. So we would like to
suggest that Indian Pharm Company have opportunity to more invest in
Zambia.
� The rapidly changing labour market environment has brought a number of
challenges to the labour movement. So that in Zambia there is a need of big
investing company that can get easily labour.
� There is no private medical school in spite of the high demand so that
opportunity in Pharmaceutical with reference to medical college.
� Zambian government encourage private sector investment so it is batter to
investment in private sector.
89
RETAIL AND WHOLESALE SECTOR
INTRODUCTION
The retail sector in Zambia consists of non-formal and formal sectors. The non-
formal sector consists of producers who produce for continuation and sell surplus to
their neighbours and neighbouring markets. That also consists of street vendors,
hawkers and those traders selling products in housing. The formal retail sector in
Zambia consists of supermarkets and neighbourhood stores.
Shoprite Holdings Ltd holds the majority of the food retail share within the dynamic
current retail sector at 7% with other actors being Massmart and Woolworths. The
latter hold together some 1% of the retail market share by Planet Retail. The store
concepts are parallel to those in South Africa and include in-store bakeries. Even
though food retail accounts for 90% of sales in supermarket stores, this still
represents as small proportion of overall food retailed where other market channels
from tiny self-governing stores to street vendors control the market.
Zambia’s Retail and wholesale Industry
Zambia’s wholesale and retail sales sector is cashing in on a sustained spending
bender by the country's increasingly wealthy consumers
Shopping centres are all over the place. Some are very huge they shall give you a
good day's hike from one end to the other. In Lusaka there's Eastgate and Cresta,
amongst others, and just outside Durban the mammoth Gateway Shopping Centre
offers 150 000 square meters of shopping - that's over 37 acres.
A ascend in the expenses command of black clientele is boosting key retail sectors.
A 2004 report by the monetary Mail says motor vehicles, media, furnishings,
chattels, clothing and cell phone retailers are all benefiting from Zambia's new
90
"buppy" group. In 2006 the wholesale and retail trade, hotels and restaurants sector
grew by 6.1%, contributing around 1% to GDP.
Wholesale and retail sales in Zambia
Retail is subjugated by Woolworths, Shoprite, Cashbuild and Massmart, giant
companies profiting from the local boom and with operations spreading across the
Zambian continent.
Clothing and Food retailer has situated away an additional Rs109-million to make
larger and modernize its stores. At the same time, Shoprite is to spend on capital
projects of worth Rs800-million.
Role And Benefits Of Wholesale Markets
Role of Retail and Wholesale sector in economy
Retailing in Zambia is one of the pillars of its economy and its contribution in GDP
about 15% held. The Zambia retail market is projected to be 50 US dollar billion and
Zambia’s retail market is top five retail markets in the Africa as economic value.
Zambia’s retail market is the fastest growing in Africa, with 1.2 million people.
Zambia's retail industry is basically landlord manned tiny shops. In 2010, larger
format handiness stores and supermarket share for approximately 4% of the
industry, and these were shown only in huge urban centers. Zambia’s retail and
wholesale industry engaged approximately 3.3% of total population of Zambia.
91
Zambia also accepted reforms for inviting anyone in the globe for single-brand stores
with 100% ownership, but they have to source of its goods 30% of Zambia.
1. Wholesale markets, price discovery and market integration
Wholesale and retail markets helps to improve competence in food supply by
cheering rivalry through creating conditions for transparent price recovery at
comparatively little costs and by enhancing access to promote information for
different actors. Where multiple balance prices occur for a single product because
there are no wholesale markets, price lucidity is damaged and deal costs increase,
under such circumstances, retailers straight contract with a huge number of farmers,
thus losing any gains from economy of scale. Wholesale markets therefore play a
crucial role in the food markets, equilibrating supply with demand and facilitating
price formation.
Wholesale and retail markets fundamentally have to carry out the following five
functions cost effectively:
� Physical exchange of produce
� Risk management and hedging.
� structure of an balance price for produce;
� Exchange of information between suppliers and buyers.
2. Benefits derived from the physical functions of wholesale markets
The physical infrastructure and facilities at wholesale and retail markets facilitate the
reduction of post-harvest losses and promote increased productivity by farmers
through:
� manufacture guard: goods are secured from the element (rain, wind and
sun) and stored under more disinfected situation, thus reducing spoilage;
� Enhanced treatment of operation: the market significantly reduce loading
and unloading times as well as frequent treatment of goods between
92
unloading and display; vehicles are also parked and unutilized for shorter
period.
� Easier beginning of novelty and new machinery: the physical attention of a
vast group of operator at the same place makes it easier to set up modernism
and to develop improved luggage compartment, handling and management
technology and tectics.
Zambia’s economic pulse has quickened, infusing the continent with a new
commercial vibrancy. Real GDP rose by 4.9 percent a year from 2000 through 2008,
more than twice its pace in the 1980s and ’90s. banking, Telecommunications, and
retailing are flourishing. Construction is booming.
Retail and whole sector playing significant role in Zambian economy because from
the above chart we can say that the in country’s GDP the major portion is retail and
whole sale sector 14% in its total GDP after the country’s resource.
3. Employment
Retailing and wholesaling also one of the nation’s largest sectors in terms of
employment. More than approximately 18 percent people were employed in retailing.
93
Between 2004 and 2012, the retail industry expects to add 20% jobs, making it one
of the largest sectors for job growth in the Zambia.
4. Global Retailers
Retailing and wholesaling is becoming a global industry, as more and more retailers
and wholesaler pursue growth by expanding their operations to other countries. The
large retail firms are becoming increasingly international in the geographical scope of
their operations. Amway, Avon, Ace Hardware operate in more than 20 countries.
The share of the global retail market accounted for by retailers operating in more
than one country also is increasing, because these global retailers are growing at an
even faster rate than are global retail sales. International operations account for a
larger proportion of sales by these large firms, as is particularly apparent in
European firms with their longer internationalization experience. Wal-Mart, Carrefour,
Royal Ahold, Metro, and Schwarz each generate more than $20 billion annually in
sales from their international operations.
STRUCTURE OF RETAILING
The nature of wholesaling, retailing and distribution supply chains in various areas
around the world differs. Some critical differences among the retailing and supply
chain systems in the United States, European Union, China, and India are, For
example, the U.S. supply chain scheme has the utmost retail thickness and the
supreme attentiveness of large retail firms. Many U.S. retail firms are huge sufficient
to work their own warehouses, eliminating the need for wholesalers. The mixture of
big stores and big firms consequences in a very competent supply chain. The
Chinese and Indian supply chain systems are characterized by little stores run by
comparatively little firms and a large self-governing wholesale industry.
94
Malls In Zambia And Challenges To South African Expansion
There has been a fundamental socio-economic transition over the last 40 years in
Zambia and in Lusaka more specifically. This has been from an era of imposed
colonial/British town planning, investment and control, through a period of economic
disconnection to the present era of post- and neo-colonialism. The present is marked
by increasing South African investment or at least the presence of their differing
degrees of ‘connectedness’ to global capitalism, a gradually exploration of South
African urban planning policies and an evolving urban form which, in the wealthier
areas, is starting to mirror the retail decentralization of western and South cities, with
the associated reinforcement of a zone of privilege. While the cause of this shift
cannot be levelled solely against South African capital interest, as local
entrepreneurs are in fact often key drivers in the process, the former none the less
either directly through investment, or indirectly through franchising opportunities are
influencing both investment and up market retail behaviour in Lusaka.
95
Since 2007, retail opportunities have been radically transformed for Lusaka’s upper
income residents with the building of three new, large, out-of town retail centres. The
three centres are:
[1] Manda Hill opened in 1999,
[2] Arcades opened in 2003 and
[3] Crossroad opened in 2006.
In addition, the city’s first major decentralized business park was under construction
at the time of writing. All four of these development are located in the wealthier
eastern section of the city, three of which lie on the key Great East Road transport
corridor.
There are significant variations in the ownership profile of the three centers which
reflect differing local histories and control. Manda Hill was initially established by
Manda Hill Centre Limited, a property development agency with three local directors
and one South African. The complex was 20 percent owned by Zambia Venture
Capital and 80 percent by Commonwealth Africa Investment. In 2005 Manda Hill
Centre Limited were bought out by a South African.
BUSINESS ACTIVITY IN ZAMBIA
Providing Assortments
Supermarkets specifically carry 20,000–30,000 different items made by more than
five hundred companies. present an collection enables their customers to select from
a wide selection of brands, designs, flag, sizes, and prices at one place.
Manufacturers specialize in producing specific types of products. For example,
Dannon makes dairy products, Frito-Lay makes snacks, Skippy makes peanut
butter, and Heinz makes ketchup. If each of these manufacturers had its own stores
that only sold its own products, consumers would have to go to many different stores
to buy the groceries needed to prepare a single meal. All retailers offer assortments
of products, but they typically in the assortments they offer.
96
Holding Inventory
A major activity of retailers and wholesale sector is to keep inventory that has been
broken into accessible sizes so that the products will be offered when consumers
want them. Thus, consumers can remain a slighter catalog of products at home
because they know local retailers will have the products obtainable when they need
more. By maintaining an supply, retailers offer a crucial benefit to consumers: retail
and wholesale sector reduce the cost consumers would have to pay to store
products. This activity is particularly important to consumers with limited storage
space and those who want to purchase perishable merchandise, like meat and
produce, just before they consume it.
Providing Services
Retailers and wholesale sector afford services that make it easier for customers to
buy and utilize products. i.e. they propose credit so consumers can have a product
now and disburse for it afterward. They show products so consumers can see and
examin them previous to purchaging. Some retailers employ salespeople in stores or
maintain Web sites to answer questions and provide additional information about
products.
COMPARATIVE POSITION OF RETAIL AND WHOLESALE SECTOR
IN INDIA
INDIA
Term
In India, Organized retailing and wholesaling, depict to trading activities undertaken
those retailer who hold licensed, that is, those retailer are nominated for sales tax,
income tax, etc. These contain the publicly-traded supermarkets, retail chains,
corporate-backed hypermarkets and also the privately hold huge retail and
wholesale businesses.
97
Whereas Unorganized retailing, depict the habitual formats of inexpensive retailing,
i.e., local mom and pop store, convenience stores, owner manned general stores,
hand cart and pavement vendors, paan / beedi shops, etc.
Growth 1997 – 2010
In India from 1997 permitted foreign direct investment in retail and wholesale
business. Then, it necessary to take government approval. The approval
requirement was stress-free, and routine permission was granted in 2006. Indian
retail fascinated approximately 1.8billion US dollar in FDI, presenting a very little
1.5% of total outlay into India.
Single brand retailing attracted 94 proposals during 2006 to 2010, amongst which 57
were accepted and implemented. For a country, this is a very little number. Some
claim one of the primary restraints inhibiting more compatible participation was that
India need single brand retailers to limit their holding in Indian outlets to 51%. China
in contrast accepted 100% holding by abroad companies in both multi-brand and
single brand retail business.
A 2007 report shows that an growing number of people in India are turning to the
services sector for employment due to the relative low compensation presented by
manufacturing sector and agriculture sector. The organized retail and wholesale
market is upward at 35% annually while growth of unorganized retail and wholesale
sector is at 6%.
98
Growth after 2011
In 2011, one report projected that Indian retail market as generating sales
approximately $470 billion per annum, of which $27 billion from organized retail such
as chain stores, supermarkets with centralized operations in malls. The starting of
retail industry to free market competition, some claim will allow rapid growth in retail
sector of economy of India. Others believe taht Indian retail and wholesale industry
will take time for growing, with organized retail possibly needing a 10 years to grow
to a approximately 25% contribution. A 25% market share, given the predictable
growth of Indian retail industry by 2021, is anticipated to be over $250 billion per
annum: revenue equal to revenue (in 2009) from Japan for the world's 250 major
retailers and wholesaler.
In 2011, food contributed for 70 percent of retailing in india, but was under-
represented by organized retail. A.T. Kearney projected India's organized retail had a
31 percent contribution in clothing and wear, while the home supplies retail was
emergent between 20% to 30% a annum.
Major Indian retailers
99
The low-intensity entrance of the diversified Mahindra Group into retail is because it
plans to focus on daily life products. The Mahindra Group is the 4th biggest Indian
business group to enter the business of retail after Reliance Industries Ltd, the
Aditya Birla Group, and Bharti Enterprises Ltd. The other three groups are in either
on groceries and perishables, or a range of products, or combination thereof.
• Future Groups-: Food Bazaar, Fashion Station, Pantaloons, Big Bazaar, Central,
etc.
• Raymond Ltd.: The Raymond Shop, Textiles, Park Avenue, Park Avenue Woman
Neck Ties & More, Shirts & More etc.
• REI AGRO LTD Retail: kirana stores
• Reliance Retail : Reliance SUPER, Reliance Living, Reliance FRESH, Reliance
MART, Reliance Jewelry, Reliance Footprint, Reliance Digital, Reliance Trends,
Reliance AutoZone,
• Reliance ADAG Retail: -Reliance world
• "More" Outlets from Aditya Birla Group
Challenges
McKinsey lessons claims retail efficiency in India is extremely small compared to
international peer measures. i.e., the labor efficiency in retail was just 6% in Indian of
the labor efficiency in US in 2010. Labor productivity in food retailing is about 5%
against Brazil's 14%; while labor productivity in non-food retailing is approximately
8% in India against to Poland's 25%.
In India Total retail employment, both organized and unorganized, approximately 6%
of Indian labor work force at presently – and most engaged in unorganized retailing.
And that is approximately a third of levels in Europe and United States; and
approximately half of levels in other budding country. Training and development of
labor and organization for higher retail efficiency is likely to be a challenge.
100
Employment
The Indian retail sector is highly fragmented with 97 per cent of its business being
run by the unorganized retailers. The organized retail however is at a very nascent
stage. The sector is the largest source of employment after agriculture, and has
deep penetration into rural India generating more than 10 per cent of India’s GDP.
Indian retail market with that of the global retail market in addition to providing not
just employment but a better paying employment, which the unorganized sector have
undoubtedly failed to provide to the masses employed in them.
The employment in both retail and wholesale trade rising from 6 percent in 2001 to
approximately 9 percent in 2010.
Total market share in GDP
In India retailing is work as its pillar of the economy and contributed in GDP 14-15%.
The Indian retail and wholesale market is anticipated to be US$ 450 billion and one
of the biggest five retail (By economic value) markets in the world. India is one of the
fastest emerging retail markets in the world.
India's retailing industry is significantly owner manned tiny shops. In 2010, huge
convenience stores and supermarkets accounted for approximately 4% of the
industry, and these were present only in large urban centers. India's retail and
logistics industry engaged approximately 40 million Indians.
Infrastructure services
India required trillions of dollars to construct its infrastructure, hospitals, housing and
schools for its rising population. Indian economy is small, with limited surplus capital.
Government of India is already facing of budget deficits. It is simply not feasible for
Indian investors or Indian government to fund this development, growth and job
creation at the rate India required. abroad investment capital through FDI is required.
Beyond capital, Indian retail and wholesale sector required global integration and
knowledge.
101
Organized retail is also anticipated to instigate infrastructure development creating
millions of urban and rural jobs for India’s rising population. One research argue that
if these post-harvest food staple losses could be remove with better retail network
and infrastructure in India.
ZAMBIA
Growth
The retail sector was affected by these changing consumer patterns, posting slowing
growth in 2010 with majors outgrowing non-majors. Overall sales under retail sector
grew 3.3 percent in 2010 compared to last year. By contrast, growth in 2009 was up
14.6 percent from 2008. Price increases accounted for about half of the growth in
2010 compared to almost 82 percent in 2009.
Major Zambia’s retailers
Zambian Shops
A healthy entrepreneurial culture ensures that Zambian have a huge and interesting
selection of retail options when they go shopping. A great deal of buying and selling
happens on the streets of the major urban centers where street-side vendors sell
their goods, and city authorities set up mini markets.
Major retailers tend to be located either in busy shopping precincts or in the world
class malls that populate all of Zambia's major cities. While a wide variety of
international retailers have outlets in Zambian shopping malls, Zambian are also very
supportive of local retailers, which has allowed a number of national franchises to
proposer and even expand in overseas markets.
Supermarkets
Four major supermarkets dominate the Zambian market, with up to several dozen
franchises accessible in any Zambian city. Pick n Pay and Shoprite Checkers are the
two largest supermarket chains, and aim to give value to the average Zambian
shopper.
102
Wholesalers
While major worldwide retail and wholesalers like Wal-Mart are yet to set up
franchises in Zambia, Zambia have access to a number of wholesale shopping
outlets, with Game and Macro considered being the major players in the Zambian
retail, wholesale and discounting goods market.
Clothing
A number of franchised fashion retailers are available in any Zambian mall. These
Zambian stores attempt to combine value with quality, offering shoppers both
identified international clothes as well as cheaper household brands. Truworths,
Edgars, and Foschini are just three of the style retailers popular in the middle of
Zambia shoppers, offering shoppers the chance to benefit from zero significance
store cards and other valuable services.
Licensing policy
The licensing authorities below the Trades Licensing proceed are confined
authorities. A person who wants to apply to a licensing authority for a trading
(wholesale) licence or a trading (retail) licence must provide perceive of such
purpose. The notice must be in a prescribe form and must be in print in the
government gazette and in two issues of a broadsheet circulate in the district where
it is proposed to sell the goods under such licence at least fourteen days before the
request The licensing authorities may in certain cases let off candidates from
complying with this obligation where the applicants are before now holders of the
pertinent licenses.
When a notice of object to apply for licence is in print, any person who wishes to
object to the issue of such a licence must within twenty one days from the last
newspaper of the notice of purpose give his objection in a prescribed from to the
licensing authority and to the applicant named in the notice. Grounds of the objection
must be declared clearly.
103
PRESENT POSITION AND TRENDS OF BUSINESS WITH ZAMBIA
TATA Group in Zambia
Initial Stage of business in Zambia by Tata group of company.
The Tata committed with Africa began in Zambia back in the mid-1970s. Tata
Zambia, formed in 1977 as a joint venture between Tata Zug and Tata Exports, was
engaged primarily in the imports of Tata vehicles, marketing and providing after-
sales services.
After spending 10 years at Tata Precision Industries Singapore, in 1982. During the
year Tata Exports bought out the shareholding of Tata Zug and Tata Zambia
became its 100 per cent subsidiary.
At present Tata group in Zambia
Tata Zambia Ltd. (Whole sale sector)
Tata Exports Limited is holding company of Tata Zambia limited a member of Tata
Group of Companies. Tata Zambia Limited is a holding company for such companies
as Tata Farms and Foods, Townap Textiles Zambia Limited, Makumbi Agricultural
and Technical Services Limited and Pamodzi Hotel which has lately been takenover
under the Zambian privatization.
Tata Zambia Limited is a top name in the agriculture, engineering, hotels and textile
industries. The takeover by Tata Zambia Limited of the bicycle plant in Chipata and
Lusaka marks the final stage in the Tata Zambia purpose of establishing Luangwa
Industries Limited as a key manufacturer of quality bicycles to cater for both
domestic as well as export markets.
Company description
Wholesale: Tata Zambia hold in four business areas: The general trading division
deals in bicycles, steel, tyres, water treatment chemicals, pipes, roofing, steel
sheets, electrical supplies, school furniture and miscellaneous projects. The vehicles
division handles sales of vehicles and spare parts, and manages the workshops and
104
training centre. The mining division supplies products to the mining industry, and the
investments and property division looks after Taj Pamodzi and other properties. The
Taj Pamodzi is a premium hotel owned by Tata Zambia and handled by the Taj
group from 1997.
POLICIES AND NORMS OF INDIA FOR IMPORT OR EXPORT TO ZAMBIA
INDIA
Expor T & Import Policy Of India (ministry of Commerce). India’s EXIM policy, in
general, Introduction aims at developing export potential, improving export
performance, encouraging foreign trade and creating favorable Meaning balance of
payments position.
Export Licenses
When you need an Export license and from whom in order to export your products
from the INDIA. Export licenses are issued for individual transactions determined by
the product, the country, the end-use and the end-user.
For Exporting To Zambia The Licensing Permission Is Require For Wholesale
And Retail Business.
1. Registration with central Bank of India (RBI)
Former to 1997, that was required for every first time exporter to get IEC number
from central bank of india (RBI) ahead of appealing in any kind of export transaction.
But now this activity is being done by DGFT.
2. Registration with Director General of Foreign Trade (DGFT)
For each and every exporter, that is mandatory to obtain registered with Director
General of Foreign Trade ministry of commerce from government of India.
105
Director General of Foreign Trade assigns exporter a unique IEC Number. IEC
Number is a 10 digits code necessary for the purpose of export - import. No
exporter-import is allowed to export or import his good abroad exclusive of IEC
number.
Though, if the goods are exported or imported to Myanmar, or to Nepal throughout
Indo-Myanmar occupant then it is not essential to obtain IEC number provided the
CIF value of a single consignment does not go over Indian amount of Rs. 25, 000
If you want export to Zambia then you must need your IEC number.
3. Registration with council for export promotion
catalog under the Indian Company proceed, Councils for Export carry or EPC is a
non-profit group for the encouragement of a variety of goods exported from India in
worldwide market. EPC works in close link with the Ministry of Commerce and
Industry, Indian government and act as a stage for interface between the
governments the exporting community.
4. Registration with Income Tax Authorities
Goods exported out of the country are qualified for free from both Value Added Tax
and Central Sales Tax. So, to take the gain of tax release it is momentous for an
exporter to catch registered through the Tax Authorities.
Export charges:
A limited number of items, mostly primary commodities or processed agricultural
products, are subject to duties. Currently, the only products subject to an export tax
(at the rate of 10%) are sheep and bovine leathers. Products may also be subject to
a minimum export price. The list of products subject to minimum prices includes
106
basmati and non-basmati rice, cotton, and hard and soft cotton waste. Most
minimum export prices are specified in dollars on a fob basis.
Zambia
From one side, Zambia has a fairly intricate licensing method which necessary most
industrialized and trading (retail and wholesale) commercial actions to be licensed.
However, the result of this system upon SMEs is alleviated by the petite Enterprises
Development Act of 1996 which exclude tiny and micro enterprises from the require
to get a license for the first five years of action.
All trading (retail and wholesale) and manufacturing businesses to be licensed
In terms of the Act, the following types of license may be issued:
� A Trading (Wholesale) Licence;
� A Trading (Retail) Licence;
� A Manufacturing Licence
� A Stall Licence;
� A Hawker's Licence;
� A Restricted Licence;
� A Peddler's Licence;
� An Agent's Licence; And
A licensing committee sits every month to scrutinize and consider applications before
recommending or rejecting them for issue of a license.
Business entry compliance
New business entrants are required to comply with 6 procedures before they can
establish their businesses in Zambia. On a comparative basis, this is not too
onerous. They include:
1. Obtaining a pre-approval of a business name
2. Opening a bank account
3. Registering a company
107
4. Registering with ZRA
5. Registering for VAT
6. Registering with social security
The cost of compliance and the time it takes to obtain approvals are major
disincentives especially for the informal sector business owners. The time of 40 days
given below for accomplishing these procedures is conservative and does not
include the bureaucratic inertia and inefficiencies of the system.
Corporate Tax
Exporters of cobalt and copper are levied at 35% of taxable income while other
mineral and "non-traditional" commodities (i.e. excluding cobalt and copper) attract a
levy of 15%. Those Companies are listed on the Lusaka Stock Exchange they need
to pay tax at 30%.
Other taxes include the following:
Non-resident preservation taxes, all charged at 10% include; rents, dividends,
management fees, contractors, interest, and royalties.
POTENTIAL FOR IMPORT / EXPORT IN INDIA
Exports have boosted the growth of Indian economy substantially and Indian exports
in the current year has earned nearly US $ 125 billion and is expected to earn US $
160 billion for the next fiscal year. The major export products of India include
leather, medical appliances, equipments, textiles and so on.
List of Potential product Export of India
Auto parts
Carpet
Chemicals
Coffee
108
Confectionary products
Detergent
Fashion jewelry
Rise
BUSINESS OPPORTNITY IN ZAMBIA
Wholesale Trade
This sector may be basically affianced in wholesaling merchandise and providing
related logistics, marketing and support services. The wholesaling process is an
intermediate step in the distribution of merchandise.
Business opportunities:
� Farm Product Wholesaler-Distributors
� Personal and Household Goods
� Petroleum Product Wholesaler-Distributors
� Food, Beverage and Tobacco Wholesaler
Distributors
� Wholesaler-Distributors
� Motor Vehicle and Parts Wholesaler-
Distributors
� Building Material and Supplies
Wholesaler-Distributors
� Machinery, Equipment and Supplies
Wholesaler-Distributors
� Miscellaneous Wholesaler-Distributors
� Wholesale Agents and Brokers
109
Retail Trade
This sector may be basically engaged in retailing merchandise, generally without
conversion, and representing services incidental to the sale of merchandise. The
retailing process is the final step in the distribution of merchandise; retailers are
therefore organized to sell merchandise in little quantities to the common public
Business opportunities:
� Motor Vehicle and Parts Dealers
� Health and Personal Care Stores
� General Merchandise Stores
� fittings and Home Furnishings Stores
� Electronics and electrical device Stores
� Gasoline Stations
� Building Material and Garden Equipment and
Supplies Dealers
� Food and Beverage Stores
� Clothing and Clothing Accessories Stores
� generous Goods, Hobby, Book and Music Stores
� Miscellaneous Store Retailers
� Non-Store Retailers
CONCLUSIONS AND SUGGESTIONS
Finally, we can say opportunity is exist in Zambia for retail and wholesale sector.
Economy of Zambia is one of the fastest growing economies in the Africa. Zambian
growth rate in 2010 was 7.6% retail and wholesale sector from 2005 continuously
increasing because country increasingly prosperous consumer. Retail and wholesale
sector having contribution in total GDP ranked second after it resource. For starting
retail and wholesale sector in Zambia and in India both countries have required to
take license, infrastructure facilities also available in Zambia for transportation which
involved in retail and wholesale sector. Licensing policy also liberal for starting a
retail and wholesale sector.
110
Potential export to Zambia Auto part, chemical, detergent, rise etc. so the India
business having export opportunity in Zambia.
Zambia had also developed business area for the foreign country’s business through
which they can attract the foreign investor. They have developed super market. For
the well-coming the foreign country. For enhance more investment in Zambia.
111
Mining Industry
Introduction
The mining industry has been the economic and social backbone of Zambia since
the first step of development in the early 1930. There are mainly two types of
resources discovered one is metal and the other is non-metal. Zambia is gifted with
various mineral deposits they areYYYY..
1) HYDROCARBONS
In Zambia Limited exploration for hydrocarbons to date has been unsuccessful
but evaluation of existing data and re-interpretation of the sequence
purposefully point out major potential in the lower and mid-Karoo sequences of
the Mid-Zambia.
2) GEMSTONES/DIAMONDS
There are resources of diamonds and a display mineral in Zambia highlights the
considerable good opportunity in this field. The most favourable land is the
stable cratonic which are available in western Zambia where resource
diamonds are not in scare and easily available.
3) GOLD
Zambia has huge resource in gold mining on a relatively small scale. There are
twenty larger companies having produced of gold since modern mining begin in
1902. The largest past producers are Dunrobin (990kg gold), Sasare (390kg),
and Matala (225kg).
112
4) COPPER
Copper mineralization was first discovered before many years ago but large-
scale production only originate in the 1930's with the start-up of Roan Antelope
(Luanshya - 1931), followed rapidly by Nkana (1932) Copper production
exceeded 400 000 tons per annum in the late 1950's and passed the 600 000
tons per annum mark in the mid-1960's before beginning a progressive decline
in 1976-77 and sinking to a 1996-low of 350 000 tons per annum.
However, the move to privatization of Zambia Consolidated Copper Mines
(ZCCM) should stop the progress of this decline and, with a total mineral
resource of at least two billion tones on the Copper belt alone, there is huge
copper mining and so, copper and cobalt production will soon begin a dramatic
upward trend.
5) IRON
The large resources of iron are kept in central and western Zambia, occurring
as ironstones deposits but have yet to be exploited. it is also a good resource
for Zambia.
The complex geological evolution of Zambia, together with the large quantity
and variety of mineral place and other natural resource place, are indicator
towards the substantial potential for the discovery of new occurrences through
discovery based on experiential models driven by known deposits and
discovery formulated on theoretical models. They clearly show the large
opportunities for further discovery and mining.
113
6) INDUSTRIAL MINERALS
There are many more industrial minerals are available in Zambia which are feld
spar, silica sand, talc, barite, phosphate, limestone, clays (mostly ball clay and
brick clay), graphite, and many varieties of possible dimension stone.
ROLE OF MINING INDUSTRY IN ECONOMY OF ZAMBIA
The mining industry has been the economic and social strength of character of
Zambia since last many years. Mining play a very vital role in the economy of
Zambia in different way these roles areY
� ROLE IN ECONOMY DEVELOPMENT
For the past sixty years the Zambian economy has been deeply dependent on
the mining of copper and cobalt and in spite of the positive steps taken to vary
the industrial and manufacturing base, the trust remains. The mining sector
contributed US$822 million to the total export.
The other important metal production has been zinc and lead from the carbonate-
hosted place of Kabwe which, with a total of 11Mt of ore include 40% combined
zinc and lead, ranks as one of the highest rank Zn-Pb place in the world. Similar
types of mineralization have been predictable over a wide area to the north of
Kabwe.
� TAXES AND WEALTH REALLOCATION
Taxation is one of the primary means by which governments finance their
expenditure, by commanding charges on citizens and corporate body. One of the
most important reasons taxes are said to be collected, is to finance public goods
and services. Necessarily, taxes collected by the government are not spent on
114
taxpayers in proportion to their contribution, hence the concept of income
redistribution through taxation. The substantial taxes paid by Zambia mining
companies are therefore a contributing factor to the withdrawal and reallocation
of wealth in Zambia through government’s fiscal activities.
� ROLE IN GDP
Zambia's economy possibly grow 7.1 percent in 2010, the Central Statistics
Office said pinnacle a government predict and helped by increasing copper
production as demand for the metal rush forward.
Zambia is Africa's biggest copper producer and the makeshift economic growth
estimate for 2010 knock the economy's 6.4 percent expansion last year. Zambia
aims to double the contribution of mining to gross domestic product by 2015 by
create a center of attention investment in the sector.
"Because of the rising output, the contribution of mining to GDP has also been
increasing,"
- Chibamba Kanyama, a member of the Economic Association of Zambia
(EAZ)
� EMPLOYMENT
The mining industry’s involvement to employment creation for the locals is more
than ever important. Large-scale mining could attract up to 20% of the
employable labour force and attain market wages in line with movement.
Small scale mining is not hold up by any legal or regulatory frameworks and yet it
is this subsector that has the capability to offer livelihood chances to a large
number of people. As small-scale mining is usually labour intensive, it is an
115
successful way of generating employment, much more so than large-scale
mining.
In mining, there is the establishment of direct and indirect employment, and this
improve the local economy in which the mining project work. Often, many of the
jobs created go to people from outside the area in which the mine activate due to
lack of skills in the local area.
� POVERTY REDUCTION
It is clear that the matter of poverty in Zambia is directly correlated to the aspect
of lack of achievement on part of the government of the basic requirements
concerning the protection of human rights. Some of the human rights in difficulty
are those connected to social, economic, environment and cultural issues and
these rights have a direct force on the levels of poverty in all its variety.
In addition to the above Zambia’s government has to demonstrate that it has
been capable to use all accessible resources at its removal to meet its minimum
commitment on the economic and social rights of the citizens.
The more organized types of small-scale mining have a number of advantages
for minor communities as the income create goes directly to the people involved,
not to a company or government. There should be augmented involvement to
export earnings as well as government revenue from royalties and other taxes
from mining.
STRUCTURE OF MINING INDUSTRY
Small-scale mining is normally connected with informal, unregulated,
undercapitalized and under-equipped procedure where technological and
management skills are missing. In Zambia this sector is dominated by the mining of
gemstones namely emeralds, amethysts, aquamarines, and garnets. Gemstones are
mostly produced in rural areas. In Zambia gemstones are normally produced in three
116
provinces: emeralds from Ndola Rural (or Kafubu) area, aquamarine from the
Lundazi and Nyimba areas and amethyst from Siavonga, Kariba area. Large-scale
mining companies should be encouraged to develop mineral land for resulting
utilization by small-scale operators.
� Mining can be divided in to below basic types:
A). ARTISANAL MINING
The artisanal mining is the smallest and simplest mining function. It entails the
use of simple tools and the lack of a formal enterprise. Many times this is
carrying out as informal operations on registered claims (Kambani M. S. 1997).
Kambani further states that artisanal miner’s view for gold, diamonds and
colored gemstones. Because of the informal character of this procedure, even
survival farmers get involved on a seasonal basis.
117
B). TRADITIONAL SMALL-SCALE MINING
The traditional small-scale mining includes licensed and registered non-
mechanized or semi-mechanized mining operations. These may be run by
individual or organized cooperative societies. They employ labor and apply
essential management rules in their action.
C). ADVANCED SMALL-SCALE MINING
The third group involves the legally constituted small-scale mining companies
that are highly organized and utilize advanced equipment and mining methods.
D) LARGE-SCALE MINING
Large-scale mining companies should be encouraged to develop mineral goods
for succeeding development by small-scale operators. A good example of this is
in the quarrying of limestone, where operators could engage themselves. In
some parts of Lusaka, communities surrounding disused quarries subsist on
extracting and breaking limestone rock for building purposes.
FUNCTION & BUSINESS ACTIVITY OF MINING INDUSTRY IN ZAMBIA
Mining has led to the making of economic activity and financial and social
infrastructure, created skilled workforces and contributed to sustainable wealth
creation.
118
� SKILLS DEVELOPMENT PROGRAM
Zambia possesses a pool of skilled workers, both technical and professional,
which underpins the mining industry, and has a well-established system of
tertiary education that will ensure a stream of properly trained people to meet
the predictable development of discovery and mining activities.
� BUILDING HUMAN AND INSTITUTIONAL CAPACITIES
The last decade has seen an augment in technical assistance by
development partners to support mining restructuring in Zambia. In addition to
policy-making support, support programmes have included support for
environmental programmes and management support, such as the training of
regulators on computerized licensing management systems (mining
cadastres).
� FINANCIAL BENEFIT OPTIMIZATION
� The execution of a revenue generation (taxation and royalties) scheme
� administer human and intellectual resources
� combination of fiscal instruments and policy objectives
� Addressing the issue of the allocation of benefits
� LEGAL AND POLICY ENVIRONMENT
� The continuing generation of and entrance to geological information
� The amendment and periodic updating of mining codes and standards
� TECHNICAL TRAINING PROGRAM
Mining and correlated industrial skills have mostly been gained in-house
through training schemes offer by the larger mines and, although industry-
wide formal qualifications do not yet exist, the pool of expertise is sizeable.
119
The combination of theoretical and practical training guarantees a rapid
uptake of the graduating Technologists into the mining industry.
� ENVIRONMENTAL MANAGEMENT
� management of water
� keep away from and minimizing potential adverse effects to biodiversity
� managing mining wastes
� expansion and accomplishment of an disaster preparedness programmed
� TRANSPARENCY AND ACCOUNTABILITY
Zambia has increasingly signed up to global initiatives, including the EITI,
EITI++ and the Kimberly Process Certification Scheme, to improve
transparency and accountability in the mining sector. In Africa EITI candidate
countries include Burkina Faso, Liberia, Ghana, Mozambique, the Niger,
Nigeria, Madagascar, the United Republic of Tanzania and Zambia.
� SOCIO-ECONOMIC BENEFIT OPTIMIZATION
� need to incorporate community, local and national issues
� Making education a national priority
� concentrate on community health
� guaranteed high standards for work-related health and safety
� build business development opportunities
� Optimizing employment opportunities at the mine
� attend to potential security issues
COMPARATIVE POSITION OF MINING WITH INDIA
� MINING IN INDIA
� OVERVIEW
120
The Mining industry in India is a most important economic action which adds
drastically contribution to the economy of India. The GDP contribution of the
mining industry varies from 2.2% to 2.5%.
The economic reforms of 1991 and the 1993 National Mining Policy
additionally helped the growth of the mining sector. D.R. Khullar holds that
mining in India depends on over 3100 mines, out of which over 550 are fuels
mines, over 560 are mines for metals, and over 1970 are mines for taking out
of non-metals.
� MINING COMPANY IN INDIA :
o Bharat Gold Mines Limited
o Gujarat Mineral Development Corporation Limited
o Hindalco Industries
o Hindustan Copper Limited
o Indian Rare Earths Limited
o National Mineral Development Corporation
o Sesa Goa
o Sterlite Industries
o Vedanta Resources
o Reliance Industries Limited
o Oil and Natural Gas Corporation
o Bharat Petroleum Corporation limited
o Hindustan Petroleum Corporation limited
o Indian Oil Corporation
121
� CONTRIBUTION OF INDIAN MINING INDUSTRY
Commodity Unit of
Quantity Production
Contribution
(per cent)
India's
Rank in
Order of
Quantum of
Production
World* India*
MINERAL FUELS
Coal and Lignite million
tonnes 6938 566 8.1 3rd
Petroleum (crude) million
tonnes 3714 33.6 0.9 25th
METALLIC MINERALS
Chromites '000
tonnes 18700 3372 18.0 2nd
Iron Ore million
tonnes 2248 213 9.5 4th
Manganese Ore '000
tonnes 33400 2396 7.2 5th
INDUSTRIAL MINERALS
Magnetite '000
tonnes 24300 285 1.2 11th
Rock phosphate '000
tonnes 159000 1450 0.9 14th
Talc/Steatite '000
tones 7400 1063 14.3 2nd
METALS
Aluminum '000 36900 1302 3.5 7th
122
tonnes
Copper (refined) '000
tonnes 18300 500 2.7 10th
Steel (crude) million
tonnes 1224 63 5.1 3rd
Lead (refined) '000
tonnes 8900 197 2.2 10th
Source: World Mineral Production 2005-2009, British Geological Survey * - Figures
related to 2009.
� MINING IN ZAMBIA :
� OVER VIEW :
The mining industry has been the economic and social strength of character
of Zambia since the first most important phase of development of the
Copperbelt's Cu-Co deposits begin in the early 1930's. Since that time a wide
range of other metals and non-metal resources have been exposed in Zambia
and, although operation of these has been partial, they clearly display the
significant opportunities for additional discovery in mining.
� MINING AREAS :
o COPPER- Solwezi at Kansanshi, Lumwana mines
o Lead and zinc in Kabwe.
o Coal in Maamba.
o Silver in Kabwe.
o Limestone in Kabwe and Lusaka.
o Iron in Kansanshi
o Hydrocarbons.
o Gemstones
123
� MINING COMPANIES :
o Equinox Minerals
o Meteorex
o Mopani copper mines
o Konkola Copper Mines
o Zambia Consolidated Copper Mines
o First Quantum Minerals
o Vale
PRESENT POSITION AND TREND OF BUSINESS
(IMPORT / EXPORT) WITH INDIA
According to the 2009 figures, the total size of Zambia’s exports stand at $4.388
billion, while import came in at $4.131 billion. During the collective system, the
country practised deep poverty and though straight governments devised limited
reform measures, Zambia is unoccupied till the late 1990s. The year 2007 recorded
the 9th successive year of the country’s economic growth. These growth years also
witnessed development in Zambia’s trade.
In 2003, non-metal export increased by 25% and accounted for 38% of the export
earnings, from the previous 35%. Copper and nickel are Zambia’s top metallic export
goods and the government has been yielding licenses to sources abroad for more
discovery of these and other metals, including tin and uranium.
� INFORMATION ABOUT ZAMBIA’S EXPORT AND IMPORT
1) EXPORT
The country ranks 106 in terms of the total export volumes. The 2008 reports
state that goods exported to countries were as follows:
124
2) IMPORTS
Zambia ranks 117 in terms of total import volumes. According to the 2008 data,
import partners are:
NO. CONTRY PERCENTAGE
1 South Africa 52.5%
2 UAE 8.2%
3 China 6.9%
4 India 4.4%
NO. CONTRY PERCENTAGE
1 China 13.8%
2 South Africa 8.2%
3 Democratic Republic of the Congo 7.8%
4 Saudi Arabia 7.6%
5 South Korea 7.6%
6 Egypt 7.4%
7 Italy 6.7%
8 India 4.6%
125
DETAILS YEAR
2006
YEAR
2007
YEAR
2008
VALUE IN
BILLION US $
OVER 5YRS
(%AGE)
Zambia's Total Trade with the world 6.84 8.59 9.91
27.70
% growth Over Previous Year 56.71 25.50 15.42
Zambia's Total Imports from world 3.07 3.97 5.11
24.11 % Share of imports in Total Trade 44.91 46.23 51.50
% Growth Over Previous Year 20.18 29.17 28.57
Zambia's Total Exports from world 3.77 4.62 4.81
32.17 % Share of exports in Total Trade 55.09 53.77 48.50
% Growth Over Previous Year 108.34 22.50 4.10
Zambia's Total Trade with India 0.22 0.22 0.24
37.13 India's % Share in Zambia's Total
Trade 3.21 2.50 2.41
% Growth Over Previous Year 108.91 -2.16 11.08
Zambia's Total Imports from India 0.09 0.16 0.21
42.07 India's % Share of imports in Total
imports 1.26 1.89 2.09
% Growth Over Previous Year 7.58 89.40 27.09
Zambia's Total Exports to India 0.13 0.05 0.03
17.64 India's % Share of exports in Total
Exports 1.96 0.61 0.33
% Growth Over Previous Year 427.17 -60.86 -38.57
126
� ZAMBIA’S TRADE WITH WORLD AND INDIA OVER 3-5 YEARS
POLICIES AND NORMS OF ZAMBIA FOR MINING INDUSTRY
In the context of Mining Policy, the Government of Zambia has act out new mining
act - the Mines and Minerals Act (1995) this act really makes licensing procedures
simple, places minimum reasonable restriction on viewpoint and mining activities,
and generate a very favourable investment atmosphere, while permission for the
international negotiation to be written into contract means this will be consider
necessary. A structure for responsible expansion for mining has also been formed
through the publication of the ENVIRONMENTAL PROTECTION AND POLLUTION
CONTROL (ENVIRONMENTAL IMPACT ASSESSMENT) REGULATIONS, 1997.
� LICENSING SYSTEM
� There are Three types of license presented for the large-scale mining company
� RETENTION LICENSE
This present the right to preserve an region in question to the Ministers
agreement on which feasibility studies have been ended but market
circumstances are unfavourable for expansion of a places at that time Size of
region may be that covered by a prospecting license or minor region as
redefined by the License owner.
� PROSPECTING LICENSE
The prospecting license is given to any mineral for any size of region for a
phase of 2 years which are renewable after this period.
127
� LARGE SCALE MINING LICENSE
These present special privileges to bring out mining business and other acts
realistically minor thereto in the region for an utmost (maximum) of 25 years.
The region to be supposed should not go beyond the region mandatory to
bring out the planned mining business. Applications require being an adjunct
to by environmental security plans and by applications for the employment
and guidance of people of Zambia.
� There are many such rights available these rights are given belowYYY..
� PROSPECTING PERMITS
These permits are given for areas of 10km² and for time period of 2 years
which are non-renewable.
� SMALL SCALE MINING LICENSE
These licenses are given for area not go beyond 400 hectares and this
license is renewable after time period of 10 years.
� GEMSTONE LICENSE
Owner of the license hold mining business over a region which is not greater
than 400 hectares for a period of not greater than 10 years.
� ARTISANS MINING RIGHTS
This right give the right to neighbouring people to mine on an artisanal basis
in a region not more than 5 hectares for a phase of 2 years non-renewable.
128
� EXPORT PROCEDURES
In all cases a Customs and Excise announcement form has to be completed,
regularly accompany by a letter of approval from the MINES DEVELOPMENT
DEPARTMENT. for different commodities some additional procedure followed
this additional procedure are given below.
� BASE METALS
Rather than for individual shipments the Mines Development Department
issued a one-year letter of authority.
� PRECIOUS METALS
Sample analysis is done before export will make.
� GEMSTONES
Valuation Certificate required from Government Recognized Valuer for
exports.
� ROCK AND SOIL SAMPLES OF NO COMMERCIAL VALUE
All the samples are checked before exports.
129
� MINING POLICY
The Government has accepted a reasonable mineral policy which is measured to
improve investment in the mining industry and to guarantee the expansion of a self-
sufficient minerals-based business. The privatization of a lot of state-owned
companies and particularly the copper mining industry, previously handle under the
umbrella of ZAMBIA CONSOLIDATED COPPER MINES LTD (ZCCM), is a
obviously show of this target. Performance of this policy is being encouraged by
the MINISTRY OF MINES AND MINERALS DEVELOPMENT by way of the
technological support offered as of its three fundamental divisions - Mines Safety,
Mines Development and Geological Survey.
Key objectives of the Zambian Government’s Mining Policy, published in 1995, are
as follows:
� To decrease the risk of environmental damage take place from mining
business as well as damage to the physical condition of workers and
residents of the neighbourhood throughout air, water and land.
� To build the private sector the major manufacturer and exporter of
mineral commodities by the way of putting in place a privatization program
and to support private sector programme in the enlargement of innovative
mines in order to boost and spread mineral and mineral-based commodities
and exports. So by this way this will take advantage of long-term economic
payback to the country.
� To support the discovery and development of industrial minerals and energy
minerals and to uphold the establishment of a ferrous industry.
130
� To promote the home country based produces and processing of mineral raw
materials convert into finished products for additional value.
� To encourage the development of gemstone mining and make easy liberalize
marketing activities in order to understand the industries likely to donate to the
development of the economy.
The policy is expected in particular at encourage private investment in discovery and
in the development of new mines. In addition to returning the major copper mines to
the private sector, thus encouraging cost-effective management and greater
exploitation of the huge copper resources, the policy seeks to direct attention to the
utilization of the very varied range of metal deposits, industrial minerals, gemstones,
and energy resources that are present throughout Zambia.
POLICES AND NORMS OF INDIA FOR IMPORT/EXPORT WITH ZAMBIA
� NORMS FOR IMPORT
� Documents to be submitted by Importer -
(a) Checkout the goods which are imported
(b) Decide the real value and its different classification
(c) To checkout that the import are not against any rules. The documents
which are submitted are given below:
� Invoice
� List of packing
� Bill of Lading or Delivery Order
� GATT statement form filled up accordingly rules
� Importers statement appropriately signed
131
� Import License or confirm copy when approval is underneath license
� wherever necessary submitted Letter of Credit or Bank Draft
� insurance policy or Insurance memo
� if required submitted Industrial License
� Certificate of country of source, if privileged rate is claimed.
� Technical literature.
� In case of chemical submit test report
� Advance License
� Split up of value of standby, components and equipment
� No commission announcement. – An announcement in agreed form
concerning rightness of information should be presented.
� NORMS FOR EXPORT
� PROCEDURES TO BE FOLLOWED BY EXPORTER
Every exporter take following original steps for export
� Obtain BIN (Business Identification Number). It is a PAN based number
� Open current account in the chosen bank for recognition of obligation
problem claims
� Register licenses or advance license at the customs station, if exports are
under Export encouragement schemes.
Exporter has to give in ‘delivery bill’ for export by sea or air and ‘bill of export’
for export by road. Goods have to be measure for duty; even if no duty is to be
paid for mainly of exports, as ‘Nil Duty’ evaluation is also an evaluation.
132
� DOCUMENTS REQUIRED FOR EXPORT
Exporter also has to submitted various documents like
� Four copies of business statement
� Four copies of Packing List
� where required give Certificate of source or pre-transportation check
� Insurance policy for export goods
� Letter of Credit
� statement of price
� Excise ARE-1/ARE-2 form as appropriate
� GR (guarantee)/SDF (statutory declaration form) form arranged by
RBI in photocopy
� Letter presentation BIN Number.
� INCOME TAX INCENTIVES FOR MINING INDUSTRY IN INDIA
� GENERAL PROVISIONS
� Availability of tax holiday
• Mining companies’ in particular backward regions are suitable for an
entire tax holiday for a time of five years from beginning of production.
� Depreciation allowances
• For tax purposes the benefits of accelerated depreciation are offered. As a
result of this, the whole amount of depreciation which is permissible as a
tax deduction which does not loaded on company but the company is
permitted to formulate such deductions in advance in the project’s life.
� EXPENDITURE OF PROSPECTING, EXTRACTION AND PRODUCTION OF
MINERALS
133
The spending made by an Indian company not free in any procedure relating
to prospecting for, or withdrawal or manufacturing of any mineral throughout
the five year period finished with the year of commercial manufacturing is
approved as a deduction from the entire revenue to the degree of one-tenth of
the sum of such spending.
� DEDUCTION IN RESPECT OF EXPORT TURNOVER
For export of particular minerals and ores deduction of 100 percent of export
income is determined. To maintain this deduction, the sales earning from
exports must be carry into India in exchangeable foreign exchange within a
particular time period.
� TAX AGREEMENT
Agreements for prevention of Double Taxation signed by India with different
nations are frequently thinkable point. They provide a favourable option form
for predicting taxable company profits, as contrast of techniques under the
domestic tax law.
� PRINCIPAL INDIRECT TAXES
� SALES TAX
Sales tax is also one type of tax charged on transaction of a product which is
manufactured for imported, and sold for the first time. Succeeding sale of the
manufactured goods exclusive of any procedure is not liable from Sales tax.
Sales tax is chargeable either under the State or the Central Sales tax Acts.
There is not any sales tax liable to tax on exports.
� CUSTOM DUTIES
The EXIM POLICY (export – import policy) 1997-2000 controls the import and
export of supplies. Goods which are declared in the unenthusiastic catalogue
134
of Imports add on to the EXIM Policy are either banned from being imported
or controlled through licensing.
Mining has been classified as an industrialized movement under the Export
Promotion Capital Goods (EPCG) Scheme. Capital goods imported for mining
would meet the criteria for concessional charge of customs duty subject
matter to some export requirements.
� EXCISE DUTIES
Excise duties are chargeable in provisions of the CENTRAL EXCISE AND
SALT ACT, 1944 and the EXCISE TARIFF ACT, 1985. The Minerals in their
ended from are excisable objects. However, they have been free from the
entire of the obligation of Excise chargeable on this.
� CORPORATE TAX RATES
PRESENT TRADE BARRIERS FOR IMPORT /EXPORT FOR MINING
There are several trade barriers for import/export for mining between INDIA and
ZAMBIA. So, let’s we can see some trade barriers for import/export for mining.
1) QUOTAS
Licensing of overseas deal is directly connected to quantitative restrictions –
quotas - on imports and exports. So, it can be also possible that the
Company Tax rate
For Indian Company 35 %
For Foreign Company 48 %
135
government of ZAMBIA changes regulations some times which will affect
import/export.
2) STANDARDS
Standards take a particular position amongst trade barriers. Countries usually
force standards on categorization, testing of goods in command to be capable
to sell household goods,
3) LICENSES
The most ordinary tool of direct control of imports (and also sometimes
export) is licensees.
In Zambia, mining is free of charge from import/export permit but not
completely. There are somewhat licensing is necessary for import/export of
such manufactured goods. We can also see in polices and standards for
mining in Zambia that there are dissimilar types of permits are required for
mining industry also.
4) TAXES
Double taxation is the levying of tax by two or more jurisdictions on the same
declared income. When a company not making double taxation agreement
than it is loss for that company.
POTENTIAL FOR IMPORT / EXPORT IN INDIA
� COUNTRY RISK RATINGS
� Export Credit Guarantee Corporation of India Ltd. (ECGC), which position
different nations in increasing categorize of risk in seven groups of A1, A2,
136
B1, B2, C1, C2 and D, positioned Zambia in Country Group B2 in June 2009
grades.
� The rating specified to Zambia group B2 point out that trade with ZAMBIA is
neither extremely risky nor extremely risk free but the country risk rating is
moderate risky for trade.
� MUTUAL TRADE RELATIONSHIPS WITH INDIA
2006-07 & 2007-08:
� India’s exports to Zambia greater than before increased by 22.0% and it
becomes US$ 132.2 million in 2007-08 from US$ 108.3 million in 2006-07,
mostly due to enlarged exports of machinery and instruments.
� India’s imports from Zambia decline by 13.2% and reached to a level of
US$ 74.8 million in 2007-08 from US$ 86.2 million in 2006-07, mainly as a
result of decrease in imports of metal ores & metal piece.
� Thus, India’s trade excess with Zambia trade, which becomes US$ 22.1
million in 2006-07, increased to US$ 57.4 million in 2007-08.
2007-08:
� major supplies in India’s export bin to Zambia in 2007-08
o Machinery and instruments - (40% of total exports)
o Pharmaceutical products - (18%)
o Electronic goods - (8%)
o Manufactures of metals - (7%) and
o Transport equipments - (7%)
� Most of goods in the Indian import bin from Zambia in 2007-08
o Metal ores & metal scraps shaped the most important things in the
Indian import basket from Zambia in 2007-08, accounting for 44.0%
of total imports.
137
1. Pearls, precious & semiprecious stones (36%), and
2. Non-ferrous metals (19% of totals imports)
2008-09:
� During 2008-09 (April-February), India’s entire export to Zambia reduced by
26.5% and becomes US$ 90.3 million as compared to US$ 122.8 million
throughout the identical era in the preceding year.
� During 2008-09 (April-February), India’s total imports from Zambia augmented
by 158.0% and it reached to a level of US$ 190.3 million as compared to US$
73.8 million throughout the equivalent time in the previous year.
� By the above trade relation we can conclude there is potential opportunity for
import export between INDIA and ZAMBIA. Some reasons areY..
� The rating given to Zambia group B2 indicate that trade with ZAMBIA is
say that Zambia is moderate risky country for trade so there is no high
risk in export/import with ZAMBIA.
� The import and export of mining product we can see above is in
increasing way. We can say above that 44% part of total import is mining
products and it is increased by future also.
� ZAMBIA is the leading country in South Africa which have huge source
of copper so, trade with Zambia for this purpose is necessary.
BUSINESS OPPORTUNITY IN FUTURE
The complex environmental progression of Zambia, jointly with the large quantity and
variety of mineral places and other natural resource places, are indicator in the
direction of the substantial probability for the exploration of new occasion during
138
discovery based on experiential models determined by known deposits and
discovery originated on theoretical models.
1) GEMSTONES
a) DIAMONDS
The incidence of diamonds and indicator minerals in Zambia point out the
substantial investigation possibilities. The most constructive lands are the
steady Block and perhaps the region of western Zambia where diamonds are
mainly abundant.
b) EMERALDS
Systematic exploration of the rural region make use of a mixture of
radiometric surveys and soil geochemistry, supported by full mapping which
presents significant possibility for the discovery of additional deposits of the
high-quality gemstones.
c) OTHER GEMSTONES
Pegmatite bodies of eastern Zambia are numerous and further discoveries of
aquamarine and tourmaline are likely. Amethyst is relatively common in
southern Zambia near Lake Kariba and exploration should focus on late-
Karoo and post-Karoo fault zones.
2) COPPER
Jointly minerals and resources of copper-cobalt ore (land in which metal
obtained) in functioning mines of the Copper belt go beyond two billion tones and
these have mainly been describe for development after privatization of the
industry has been finished. Respect that a amount of these places are hosted by
force zones, however, offers better opportunities for establishing deposits at
higher increase within the mid-zambia in general probable. Copper deportment
huge sulphide places of probable sources exposed in the Lusaka area and south-
eastern Zambia indicate to extra objective for discovery.
139
3) INDUSTRIAL MINERALS
a) URANIUM
The maximum possibility for uranium come into view to be layer and spread
mineralization hosted by Lower Roan and Upper Roan sequences and generally
usually going on inside the footwall of soil.
b) COAL
Additional coal resources are for the most part probable to be originating in
the fault-bounded Karoo bowl of the Mid-Zambia. Some incomplete probable
also survive in the Luangwa and Luano Valleys.
c) HYDROCARBONS
The petroleum prospective of Zambia can be measured unknown. The
Luangwa and Mid-Zambia have favourable olden times of lower-Karoo
hydrocarbon production and upper-Karoo expansion of structural catchs
throughout split.
4) GOLD
The huge widely held of gold places in Zambia are mesothermal lode places
(layer and more single occurrences in breakable and breakable- elastic cut off
zones). Most are restricted within configuration associated in the central Zambia.
5) OTHER BASE METALS AND RARE METALS
a) ZINC AND LEAD
Zinc and lead places exposed to date are hosted completely by carbonate
swing happening stratigraphically at the Lower Roan - Upper Roan evolution.
Extensive prospective leftovers in the Kabwe area and carbonate series
northwest of Mumbwa present an alike prospective.
b) MANGANESE
Manganese incidences also are recognized but there is possibility for the
detection of additional wonderful genetic material develops deposit during the
140
countryside of northern Zambia. No chief covered impositions have been
recognized in Zambia but the most likely.
c) TIN
The tin potential lies in a systematic re-evaluation of the Choma Tin Belt in
southern Zambia and in thorough outlook regions of eastern Zambia.
So, by the above discussion we can say that there are many material resources
in Zambia which are without use so there is a need for the mining companies to
discover this and take out from layer of earth. So, we can say that there is a great
business opportunity in Zambia for mining.
CONCLUSION & SUGESSIONS
� By the above discussion we can say that there is a huge opportunity for
mining in Zambia because we see earlier that there are huge resource for
which mining company are required to come out this resources from the layer
of land of Zambia.
� We can also say that there is opportunity for mining in Zambia because
Zambia makes privatization of mining also gives some tax incentives.
� SUGGESTIONS
We are giving some suggestions thatYYYl
1) Indian companies have huge opportunity in mining so establish mining
business in Zambia is profitable.
2) Indian investor also invests their money in mining in Zambia which gives
high return to investors.
141
3) There are population is high so workers are easily available at cheaper
rate for mining.
4) Zambia government also gives some tax-incentives to newly establish
mining company so it is easy to establish mining in Zambia.
BIBILOGRAPHY
www.zambiaembassy.org
www.zesco.co.zm/
142
www.erb.org.zm
http://www.mewd.gov.zm/
http://www.powermin.nic.in/
www.indiaenergyportal.org
www.mbendi.com
