Zambia has recorded a significant increase in Foreign Direct Investment (FDI), reaching a net inflow of US$641.1 million dollars compared to a net outflow of US$65.1 million dollars the previous year.
Bank of Zambia Governor, Denny Kalyalya attributed the rise in FDI to intercompany debt and accumulated retained earnings in manufacturing, wholesale and retail trade, as well as the mining and quarrying sectors.
This was said in a speech read for him by Bank of Zambia Deputy Governor for Administration, Rheka Mhango at the dissemination workshop of the 2024 foreign private investment and investor perception survey, in Lusaka.
Dr Kalyalya indicated that the increase in FDI flows resulted in a 24.3 percent rise in the stock of foreign liabilities in the private sector to $20.6 billion dollars in 2023.
The Governor added that the private sector foreign liabilities rebounded in 2023, resulting in a net inflow of $658.1 million, a stark contrast to the $190.9 million net outflow in 2022.
“In the first half of 2024, FDI inflows reached US$580.5 million, primarily driven by increased intercompany debt in the mining sector. This growth reflects improved investor confidence in the domestic economy,” Dr Kalyalya indicated.
He further revealed findings of the survey which showed that the private sector foreign assets grew by 5.9 percent to US$2.7 billion in 2023, indicating increased investments by Zambian companies abroad.
The Bank of Zambia Governor explained the data collected is vital for understanding external sector developments, which influence monetary, fiscal, trade, and investment policies.
He also stated that despite the increase in FDI flows, the stock of private sector foreign liabilities fell by 8.6 percent to US$16.6 billion in the first half of 2024 compared to the same period in 2023.
Dr Kalyalya stated that the rise in FDI is expected to boost exports, strengthen foreign exchange reserves, and stabilize the exchange rate, positively affecting price stability in the medium to long-term.
Zambia Statistics Agency Acting Statistician General, Sheila Mudenda stated that the government has placed the use of quality data at the centre of its development agenda.
Ms Mudenda therefore indicated the need to harness a culture of using statistical evidence and information gathered through use of internationally recognised methods.
She added that sustained development will mainly depend on the extent to which countries, Zambia inclusive, use statistical evidence to make informed decisions at all levels.
ZDA Director Albert Halwampa, who was represented by ZDA Assistant Director for Policy and Research Collins Sifafula, stressed the importance of fostering a conducive environment for investment by implementing transparent policies.
Mr Halwampa stated ZDA’s continued commitment to promoting and facilitating investment, trade and business development to the betterment of the nation.
Bank of Zambia Governor, Denny Kalyalya.
