FOREIGN direct investment into Zambia soared 158% in 2022 to US$8.5 billion, highlighting changing investor sentiment towards the country.
Market optimism is spurring a rush of investments into Zambia’s agriculture and mining sectors, giving the economy new growth impetus.
Investors include KoBold Metals – a consortium linked to tech leaders Bill Gates, Jeff Bezos and Richard Branson – which is expected to bring new investment to Zambia’s copper mining sector.
The California-based mineral exploration firm is eyeing the country’s mines for electric vehicle components, leveraging reformist President Hakainde Hichilema’s efforts to revitalise the economy.
Upon his landslide poll victory in 2021, part of Hichilema’s economic blueprint entailed placing an electric vehicle battery and components supply chain at the centre of Zambia’s economic transformation architecture.
Electric vehicle batteries are heavily dependent on minerals buried beneath the surface of Africa, with Democratic Republic of Congo and Zambia possessing some 70% of the world’s cobalt reserves.
KoBold uses artificial intelligence and machine learning to identify battery metal deposits.
Meanwhile, agricultural output is also benefitting from renewed investor confidence. In January, Munkotachi, a modest-sized business in the Chongwe district of Lusaka province, was due to start raking in profits from agricultural exports to Europe.
This follows certification from GLOBALG.A.P, a farm assurance programme, paving the way for Zambia’s Hass avocados and avocado oils to be sold in the European Union and other foreign markets.
According to Mining Weekly, Zambia is also on course to expand its poultry farms. Munkotachi Investments MD Christopher Lesa told the publication that plans are underway to create over 90 agricultural cooperatives, all with at least 20 members each.
Lesa, who aspires to create an “avocado belt,” said the project had government support.
“The government is trying to support SMEs in so many ways, as well as cooperatives so that people out there can benefit and improve their livelihoods,” he said.
According to the World Bank, the Zambian economy began to rebound in 2021 following Hichilema’s election as president, with GDP growing at 4.6%, from a contraction of 2.8% during the pandemic in 2020.
High copper prices, post-election market confidence, and a continued recovery in the agriculture sector have driven wider economic recovery.
Fitch Solutions forecasts that while real GDP growth in Zambia slowed to 2.5% in 2022, growth will accelerate again in 2023, driven by a recovery in mining exports and strong private investment.–How We Made It In Africa.