RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/TPR/G/219 
22 June 2009  
 
(09-2920) 
Trade Policy Review Body Original:  English 
   
 
  
 
TRADE POLICY REVIEW 
 
Report by 
 
ZAMBIA 
 
  
 
Pursuant to the Agreement Establishi ng the Trade Policy Review Mechanism 
(Annex 3 of the Marrakesh Agreement Establishing the World Trade 
Organization), the policy statement by Zambia is attached. 
 
 
Note: This report is subject to restricted circ ulation and press embargo until the end of the first 
 session of the meeting of the Trade Policy Review Body on Zambia. Zambia WT/TPR/G/219 
 Page 3 
 
 
CONTENTS 
 
    P a g e  
I. INTRODUCTION 5 
II. ECONOMIC DEVELOPMENTS 5 
 (1) M ACROECONOMIC DEVELOPMENTS  5 
 (2) P ERFORMANCE OF MAJOR SECTORS  7 
 (i) Agriculture 7 
 (ii) Mining 7 
 (iii) Manufacturing 8 
 (iv) Services 8 
 (a) Financial services 8 
 (b) Tourism 9 
 (c) Transport 10  (d) Energy 10 
III. TRADE DEVELOPM ENTS AND POLICY 11 
 (1) T
RADE POLICY OBJECTIVES  12 
 (2) D OMESTIC LAWS AND REGULATIONS GOVERNING TRADE  12 
 (3) I NVESTMENT MEASURES  14 
 (4) R EGIONAL TRADE ARRANGEMENTS  14 
 (i) SADC 14 
 (ii) COMESA 14 
 (iii) SADC-EAC-COMESA Tripartite Framework 15 
IV. ZAMBIA AND THE GLOBAL TRADING SYSTEM 15 
 (1) I MPLEMENTATION OF WTO  AGREEMENTS  15 
 (2) I MPLICATIONS OF OTHER TRADING ARRANGEMENTS  16 
 (i) Economic partnership agreements 16 
 (ii) Everything but arms 16 
 (iii) Africa Growth Opportunity Act 17 
 (iv) Generalized System of Preferences 17 
 (3) T HE DOHA DEVELOPMENT AGENDA  17 
 (4) Z AMBIA AND THE GLOBAL FINANCIAL CRISIS  18 
V. CONCLUSIONS  18 
 
  Zambia WT/TPR/G/219 
 Page 5 
 
 
 I. INTRODUCTION 
1. Zambia has continued to maintain a trade policy aimed at enhancing   productivity and 
competitiveness of Zambian products in both the dom estic and international markets. This objective 
has been strengthened during the review period w ith the launch of the Fifth National Development 
Plan (FNDP) in 2006 for the period 2006-2010 and the Vision 2030, which articulates the country’s 
long term development objectives.  The FNDP focus is to enhance rural development, especially 
agriculture; strengthen the linkages between the resource sectors with manufacturing; foster a 
competitive and outward-oriented economy; and improvi ng infrastructure and social service delivery. 
2. In recognition of the importance that trade plays in achieving higher levels of economic 
growth and development, the FNDP mainstreamed tr ade into Zambia’s national development plan for 
the first time. In line with the vision, the country  has positioned commerce and trade sector to become 
an export driven, competitive and viable commerc ial sector. The goal is to improve the quality of 
locally produced goods and services and to increase the country’s share in the word exports.  
3. In 2004, Zambia embarked on the Private S ector Development Reform Programme (PSDRP) 
for the period 2004 to 2008.  The aim of the programme is to reduce the cost of doing business in the 
country and encourage competitiv eness in the private sector.  
4. On the fiscal front, since 2004, Zambia h as undertaken initiatives to improve financial 
accountability, good governance and pub lic expenditure management including,  strengthening the 
Public Finance Act, the public procurement system and its institutional framework and the adoption of 
the Medium Term Expenditure Framework (MTEF)  and Activity Based Budgeting (ABB) system, 
The country  continued to pursue these reforms de signed to improve the management of the public 
sector and increase the competitiveness of the priv ate sector during the review period. This has 
introduced efficiency into the manageme nt of public financial resources.  
5. In 2005, Zambia reached the HIPC Completi on point and qualified for the Multilateral Debt 
Relief Initiative (MDRI). This resulted in a re duction in Zambia’s total external debt from 
US$7.1 billion in 2002 to US$1.05 billion in 2007. This reduction of the public debt contributed 
significantly to the attainment of relative macr oeconomic stability, including exchange rate stability 
and the accumulation of reserves.  
6. Zambia has continued to work towards the wide r integration agenda by  participating actively 
in the SADC, COMESA, SADC-EAC-COMESA Tripartite Framework, and WTO.  
7. Zambia’s third trade policy review is taking place at the time of great uncertainty about the 
overall effects of the global financial crisis on deve loping countries. The current crisis began at a time 
when the country was becoming increasingly optimistic  about the prospect of sustained real growth 
and poverty reduction. If the crisis is severe and its resolution longer , this will negatively impact on 
Zambia’s trade performance as a country which depe nds on a single export product. In this regard, 
Zambia underscores the urgent resolution of the Do ha negotiations so as to further strengthen the 
WTO and avoid prospects of protectionism. 
II. ECONOMIC DEVELOPMENTS 
(1) MACROECONOMIC DEVELOPMENTS  
8. Zambia has achieved positive growth GDP during 20 02-08.  The real rate of growth has been 
positive and increasing.  It increased from 3.5% in 2002 to 6.0% in 2008.  This was an average growth WT/TPR/G/219 Trade Policy Review 
Page 6 
 
 
 rate of 5% per annum. This performance is much better than that achieved during the last review 
period.  This good economic performance was main ly due to the favourable external economic 
environment, e.g. high copper prices, debt relief,  increased FDI, particularly in mining sector and 
improved macroeconomic management.  The incr eased growth was driven by the mining; 
construction; transport, storage and communications; and trade Sectors.  
9. Inflation declined from 26.7% in 2002 to 8.2% in 2006. Zambia achieved a single digit 
inflation rate for the first time in three decades in 2006. This was as a result of sound monetary and 
fiscal policies, strong external sector performance and the appreciation of the kwacha against major 
trading currencies.  However, the Inflation rate  increased to 8.9% in 2007 mainly as a result of a 
liquidity overhang in the banking system.  In 2008, in flation rate increased to 16.6% mainly as a result 
of rising food and oil prices and the depreciation of  the kwacha.  The depreciation of the kwacha was 
mainly caused by the fall in commodity prices caused by global financial crisis. 
10. During the review period, Zambia continued to  pursue prudent fiscal policy with an objective 
of consolidating fiscal discipline by maintaining lower levels of borrowing,  reducing on non-priority 
expenditures so as to direct more resources to pr iority areas and prudent budget execution.  This 
entailed improved cash and treasury management, enhanced resource mobilization and effective 
coordination with the monetary authorities. Con sequently, the domestic budget deficit decreased from 
3.3% in 2002 to 2.7% in 2008. The sharp decline in  the price of copper and consequent reduction in 
export earnings will without doubt negatively im pact the Zambia’s economy and constrain the 
country’s effort to reduce poverty. This will also affect economic growth and the export prospects of 
the country and will make job losses inevitable, par ticularly in the mining sector.  Subsequently, it 
will reduce Government tax revenue , which is required to finance infrastructure development and 
expenditure on social services and poverty reduction.  
11. Following the introduction of the broad based in ter-bank foreign exchange market (IFEM) in 
July 2003, the exchange rate of the kwacha agai nst major foreign currencies remained relatively 
stable, particularly against the US dollar, tradi ng within the range of K4,400 to K4,800/US$. The 
kwacha during the second half of 2005 to August 20 07, exhibited significant volatility against major 
international currencies. In 2005, the kwacha appr eciated by 26.4% against the US dollar on an 
overall basis, while in 2006 the kwacha reversed so me of the gains recorded in 2005 as the domestic 
currency depreciated by 20.7% against the US do llar mainly due to increased demand for foreign 
exchange. Year-to-date movements in the exchange rate of the kwacha against the dollar indicated an 
appreciation of 3.5% in 2007.  The developments in the exchange rate over the period were mainly 
due to an increase in the supply of foreign cu rrency as a result of improved external sector 
performance, budget support, and foreign direct a nd portfolio investments, attainment of the 
Enhanced HIPC Initiative Completion Point, which r esulted into significant external debt, write off, 
leading to lower debt service obligations. 
12. In August 2007, the kwacha went on a deprecia ting trend largely on account of instability in 
global financial markets, which dampened investor  sentiments in emerging market economies. This 
resulted in the kwacha depreciating and recording a depreciation of 4.3% in August 2007.  In the first 
half of 2008, the kwacha exhibited an appreciating tr end against the US dollar mainly due to sales of 
foreign exchange by the mining sector on the foreig n exchange market.  From October 2008, it began 
to depreciate and on an annual basis, the kwacha de preciated by 25.7% agains t the US dollar to close 
the year at K4832.26/US$. 
13. The weighted average lending base rate signifi cantly declined from 42.5% in 2002 to 18.3% 
in 2007. This rose slightly to 20 .8% in 2008. These outcomes are a reflection of the developments in Zambia WT/TPR/G/219 
 Page 7 
 
 
 inflation rate, yield rates in government securities a nd the reductions of the statutory reserve ratio. The 
statutory reserve ratio was reduced from 17.5% in 20 02 to 8.0% in 2007. This has adversely affected 
the cost of credit in the private sector. 
14. Zambia’s external position impr oved tremendously compared to the period during the first 
and second trade policy reviews. Total foreign ex change reserves increased from 0.9 months of 
import in 2001 to 2.5 months of import in 2007. Simi larly, the current account balance as a percentage 
of GDP including grants rose from a deficit of 13.0% in 2001 to a surplus of 3.4% in 2006. The increase in the foreign exchange reserves can mainly  be attributed to high copper prices and debt 
relief.  However, in 2008, the current account as a pe rcentage of GDP declined to -5.7%.  This was 
due to the fall in export earnings arising from th e effects of the global financial crisis.   
(2) P
ERFORMANCE OF MAJOR SECTORS  
(i) Agriculture  
15. Enhanced agriculture productivity is the focu s of Government policy in promoting growth, 
food security and poverty reduction. The sector is dom inated by the production of cash crops such as 
maize, tobacco, sorghum, groundnuts and cotton. Th e major exports are sugar, floriculture and 
horticulture.  During the review period, the agri cultural sector’s average contribution to GDP was 
6.4%. The real growth rate in the sector has been fluctuating significantly ma inly due to the sector’s 
high dependence on seasonal rainfall, periodic floodi ng and low productivity. The sector experienced 
a marginal growth of 0.02%. 
16. In order to increase agriculture production and productivity in the sector Zambia aims to 
increase infrastructure development and availability of land. For instance, Zambia has set aside 
165,000 hectares of land for agricultural farm blocks  and has continued to rehabilitate dams and 
weirs, and aims to create livestock disease free zones. 
(ii) Mining 
17. The mining sector has continued to be the most  important economic sector for Zambia. The 
sector is dominated by copper production. The majo r export is copper which contributed on average 
60.75% to total exports during the review period. It  is also potentially a major source of government 
revenue.  The sector’s contribution to GDP increased from 7.9% in 2002 to 8.4% in 2008.  The sector 
grew significantly during the period.  It grew on average by 8.36% per annum. The growth of the sector can mainly be attributed to increased priv ate investment and increased capacity utilization in 
the privatized mines. As of 2008, over US$4 billion had been invested in the mining sector. 
18. In addition, the sector enjoyed high copper prices. These increased from US$1, 554 per tonne 
in 2002 to US$8,985 per tonne in July 2008 before falling to US$2,902 per tonne in December 2008. 
19. Growth in the mining sector is expected to signi ficantly slow down as a result of the global 
financial crisis.  However, this is likely to be  moderated by the increased production from new mines 
such as Lumwana and Kansanshi copper mines. 
20. The Mines and Minerals Act of 1995 was repeal ed and replaced with the Mines and Minerals 
Development Act of 2008 to streamline the licensing system and provide clarity with regard to the 
mining of uranium and other radioactive minerals . Additionally, the Petroleum Act of 1985 was 
replaced with the Petroleum Act of 2008. This is e xpected to increase oil exploration activities in the WT/TPR/G/219 Trade Policy Review 
Page 8 
 
 
 country. The Act provides for oil and gas prospect ing and production licenses, as well as stronger 
legal provisions on environmental protection.  
(iii) Manufacturing 
21. The manufacturing sector also continues to be another key sector in the economy. Its average 
contribution to GDP is estimated at 10.6% during the review period. It grew by an average of 4.7% 
during the review period. The growth can be attri buted to the rapid growth in food processing, wood 
and wood products, paper a nd paper products beverages and tob acco and copper cables. However, the 
textiles sector continued to declin e during the period leading to th e closure of many companies. The 
major constraints in the sector include lack of adequate investment, high production and 
communications cost and inadequate infrastructure and support services.   
22. Zambia has finalized the Commercial, Trade and Industrial Policy which aims to improve and 
facilitate the investment in the manufacturing sector  that will lead to increased value addition and 
manufacturing exports.  To foster investment and participation of small- scale and medium scale 
enterprises, Zambia is in the process of finalisi ng a Micro, Small and Medium Enterprises (MSME) 
Policy and is expected to be appr oved in the first quarter of 2009. 
23. In order to facilitate domestic and foreign investment in the sector, government enacted the 
ZDA Act of 2006 which provides for the establishm ent of Multi-Facility Economic Zones (MFEZs). 
Investors will benefit from a variety of fiscal incentives, as well as high standards of transport, communications and energy infrastructure. Four s ites were earmarked for MFEZs and are currently 
under various stages of development. This includ es the already approved and operational Chambishi 
MFEZ with an investment of US$900million. This MFEZ will house between 50 to 60 companies and 
is expected to create at least 6,000 jobs. 
(iv) Services 
24. The services sector has continued to be the largest contributor to GDP and employment in the 
country. During the period under review, the sector contributed an average of over 60% to GDP. The 
major sources of the growth were in transport, storage, communicati on, tourism, construction and in 
wholesale and retail trade.  
(a) Financial services 
25. The financial sector in Zambia is relatively  underdeveloped as regard s its potential and as 
reflected in limited financial intermediation. Ne vertheless, the performance of the sector was 
satisfactory during the period under review. This is  evidenced by the satisfactory overall financial 
condition and performance of the banking sector. As at 31
st March, 2009, there were 14 commercial 
banks operating in Zambia, with an additional  fo ur banks  licensed and due to commence operations 
before the end of the year.  
26. In an effort to address constraints and strengt hen the financial sector, Zambia embarked on 
financial sector reforms in 2004. These are be ing implemented through the Financial Sector 
Development Plan (FSDP) for the period 2004 to 2009. The aim of the FSDP is to create a stable, 
sound and market based financial system that will  support efficient resource mobilization that is 
necessary for diversification and sustainable growth.  
27. Some of the reforms implemented as part of the FSDP include:  Zambia WT/TPR/G/219 
 Page 9 
 
 
 - A review of The Insurance (Amendment) Ac t in 2005 and the review of the Pension 
Scheme Regulation (Amendment) Act in 2006. These acts harmonize the various 
pieces of legislation that govern pensio ns and insurance industry in Zambia. 
- The Bank of Zambia is currently worki ng on legislation on the establishment of a 
Deposit Protection scheme and on specific guidelines on the lender of last resort 
facility. 
- Risk Management guidelines and Corpor ate Governance Guidelines for the banking 
and non-bank sector have been issued. 
- In 2004, the Zambia Institute of Charte red Accountants adopted the International 
Financial Reporting Standards for all comp anies operating in Zambia. The Bank of 
Zambia, in this regard, issued guidelines on the IFRS to Banks and Non Bank Financial Standards. The Securities and Exchange Commission and the Pension and 
Insurance Authority have also adopted the new standards. 
- A Credit Reference Bureau has since been  established to reduce credit risk in the 
market. 
28. Zambia continues to undertake measures aimed at harmonise the financial sector legislation 
and thereby address the aspect of fragmented pieces of legislation in the sector. As of 2005, 
amendments were made to the following Acts:  Bu ilding Society Act, Development Bank of Zambia 
Act, National Savings and Credit Bank Act, The Banking and Financial Services Act 
(b) Tourism 
29. Tourism is potentially an important export ear ner for the country.  During the period under 
review, the sector grew at an average rate of 8. 75%. Its average contribution to GDP during the period 
under review was about 2.6%.  The tourist arri vals increased from 565,082 in 2002 to 805,059 in 
2007. The key factors that led to the growth of th e sector include improved marketing and investment, 
infrastructure development and product diversif ication by the private sector-service providers. 
However it is faced with several constraints that th e Government is currently trying to resolve.  These 
include under-developed tourism infrastructure, envi ronmental management, and the need to further 
streamline the licensing procedures 
30. In 2004, Support to Economic  Expansion and Diversifi cation (SEED) programme was 
commenced. The major objectives are to improve th e business environment for sustainable tourism in 
the Greater Livingstone area and gemstones sector a nd to reverse biodiversity erosion in the Kafue 
National Park and Musi-oa Tunya National Park and its surrounding areas. The programme runs up 
to 2010.  A Notable achievement is the launch of the web portal www.victoriafallzambia.travel aimed at increasing market access for tourism Small and Medium Enterprises. 
31. To improve the competitiveness of the sector, Za mbia continues to undertake reforms. The 
most significant include enactment of the Touris m and Hospitality Act No. 23 (2007) and the Zambia 
Tourism Board Act No. 24 (2007) to provide a regulat ory framework for private sector participation 
in tourism development.  WT/TPR/G/219 Trade Policy Review 
Page 10 
 
 
 (c) Transport 
32. Transport is another important sector among the services sub-sectors in the Zambia economy 
due to its role in facilitating trade as well as operati ons in other sectors of the economy. In 2002, the 
Transport Policy was approved. The policy is designed to provide for the active support and 
participation of the private sector in air, rail, road , maritime and inland water transport in order to 
facilitate sustainable growth and de velopment of the sector and ensure the provision of the efficient, 
safe, quality and adequate services. The hallmark of this policy is Public Private Partnership and an 
enabling environment.  
33. With the approval of the Transport Policy in 2002, the sector has experienced some 
institutional and financial reforms mainly in the Road sector. The overall objective for reforms in the 
sector was to reduce Government’s involvement in the running of the sector, increase investment and 
the participation of the private sector. In the same year, legislation to transform some road sector 
institutions was passed in 2002, namely the Road Development Act No. 13 of 2002, the Road Traffic 
Act No.11c of 2002 and Road Fund Act No. 12 of 2002. 
34. Following the enactment of the new legislation,  Roads Department which was responsible for 
road development, regulation and licensing of road transport, has been transformed into two semi-
autonomous bodies namely the Road Development Agency and the Road Transport and Safety 
Agency.  The National Roads Board which was respons ible for administering and management of the 
Road Fund was transformed into the National Road  Fund Agency.  The three agencies became fully 
operational in 2005.  
35. However, the transport sector experiences a nu mber of challenges bordering on inadequate 
capacity in terms of satisfying increasing transpor t demand as well as sustenance. Having recognized 
this fact and in an attempt to address these sector challenges, Zambia has adopted a holistic, integrated 
and sequenced approach nationally and regionally. On e of the main programmes in this regard is the 
North-South Corridor, a regional initiative under COMESA-SADC-EAC Tripartite Framework where 
Zambia has recognized and prioritized among others ro ad, rail, and hard and soft infrastructure needs 
of the transport sector. Zambia has committed some resources internally, while additional resources 
are being mobilized through cooperating part ners to develop this infrastructure. 
(d) Energy  
36. Zambia faces major constraints in the energy sector which is adversely affecting 
competitiveness and growth prospects. During the revi ew period, for example in the electricity sub-
sector, demand for hydro power outstripped the ge neration capacity resulting in increased power 
outages particularly between 2007 and 2008.  In or der to improve the financial viability of the 
electricity sector as well as to attract more i nvestment, electricity tariffs were adjusted. 
37. Zambia’s focus on the energy sector is to develop the enormous potential in the sector by 
increasing options and exploitation of the country ’s indigenous energy and human resources for 
sustainable development. This resulted in the revi sion of the National Energy Policy in 2008. Other 
steps include:  
- The establishment of the 2004 Rural Electrification Authority (REA) through the 
enactment of the Rural Electrification Act No. 20 of 2003. The Authority was established to speed up the rate of elect rification and create conditions for the 
development of rural areas.  Zambia WT/TPR/G/219 
 Page 11 
 
 
 - The amendment of the Electricity Act Cap 433 of 1995 in 2003 which was aimed at 
improving the operations of the electricity industry. The Act regulates the generation, transmission, distribution and supply of electricity.  
- The Power Rehabilitation Project to rehabilita te and up-rate generators at the main 
Power Stations (Kafue Gorge and Kariba North Bank) in order to improve power 
generation and mitigate the power deficit.  With regard to new power generation 
projects, works on Kariba North Bank ex tension commenced in 2008 and will be 
completed in 2010.  In addition, preparatory work on the development of the Itezhi-tezhi hydro-power commenced in 2008. 
III. TRADE DEVELOPMENTS AND POLICY  
38. Zambia remained committed to pursuing liberal policies aimed at promoting the expansion of 
markets at bilateral, regional and multilateral levels  as well as the diversification of Zambia’s export 
products. The Government continued to engage with partners with in the region under the frameworks 
of the Common Market for Eastern and Southe rn Africa (COMESA) and the Southern African 
Development Community (SADC) as well as at c ontinental level through the SADC-EAC-COMESA 
Tripartite Framework and African Union integrat ion programme.  Zambia is in the process of 
negotiating an Interim Economic Partnership Agreement with the European Union under the 
framework of the Eastern and Southern Africa (ESA) configuration, and continues to actively 
participate in the multilateral trading system a nd ongoing negotiations under the Doha Development 
Agenda.  
39. Zambia experienced trade deficits over the period 2002 to 2005.  However, in 2006 this trend 
reversed, with the country posting a trade surplus of US$866.7 million.  In 2007 and 2008, surpluses 
were also recorded valued at US $610.5 and US$38.2 million, respectively. 
40. Between 2002 and 2008, Zambia con tinued to pursue trade policy aimed at diversifying into 
non-traditional exports (NTEs) to move away from overdependence on the export of copper. During 
the review period, NTEs grew from US$334 milli on in 2002 to US$935 million in 2008. The gap 
between NTEs and mineral exports  widened between 2007 and 2008 due to the favourable price of 
copper on the global market until the third quarter  of 2008. Exports of non-traditional products 
increased by 12.2% between 2007 an d 2008, driven by cement, lime, wheat, gas oil, tobacco, 
gemstones, fruits and vegetables.  
41. Notwithstanding the development of Zambia’s NTEs, Zambia’s copper exports exhibited 
strong growth during the review period, and account ed for 60.75%of Zambia’s total export earnings. 
The average price of copper per ton increased from US$1,554 in 2002 to US$8,985 per ton in July 2008, before plummeting to US$2,902 by the end of 2008. As evidence of government policies 
designed to encourage backwards and forward li nkages with the mineral sector, value addition 
increased by 2.3% from 2007 to 2008. 
42. Zambia’s major trading partners between 2002 and 2008 were SADC member states 
(receiving 28.9% of Zambia’s exports), COMESA member states (non-SADC countries receiving 13.2%), Asia (18.9%, of which 5% was r eceived by China), and the EU (7.4%).   
43. Customs duties continued to be revised downwar d on an annual basis in line with Zambia’s 
commitments.  While tariff reductions at the World Trade Organisation (WTO) are optional for 
LDCs, Zambia has regional commitments within both the SADC and COMESA free trade areas, as 
well as commitment with international financial in stitutions.  To ease the impact of the financial WT/TPR/G/219 Trade Policy Review 
Page 12 
 
 
 crisis, the excise duty on diesel was reduced from 30% to 15%, and on petrol from 60% to 45%, in an 
effort to reduce input costs across productive sectors in early 2009.  
44. High transport and communications costs continue to be the most pressing barrier to 
progressing with integration within regional and global markets.  This is due to inadequate and poor 
state of infrastructure in Zambia and the region.  Utility costs, particularly related to limited energy 
infrastructure, remain a supply side constraint.  Finally, the combination of non-tariff barriers in 
regional and international markets, institutional cap acity limitations to effectively deal with sanitary, 
phytosanitary and other technical regulations and st andards, inhibit Zambia’s ability to fully exploit 
the opportunities in the export markets. 
(1) TRADE POLICY OBJECTIVES  
45. Ministry of Commerce, Trade and Industry is responsible for trade policy formulation and 
implementation. This is done with the participa tion and consultation of the private sector, various 
executive institutions and organs of government that  administer other trade policy measures and civil 
society. Zambia’s judiciary plays a role in the in terpretation of statutes and laws as well as resolution 
of trade related disputes. The role of the private sector has been institutiona lized through consultative 
forums and committees which meet regularly to discuss trade and related issues affecting the 
economy as a whole. 
46. The primary objectives of Zambia’s trade policy are as follows: 
- To maintain an open economy with a liberalized import and export regime that 
supports industrial development; 
- To encourage the production of exportab le products and continue the process of 
diversifying the export base; 
- To support and encourage exports of value added goods; - To seek new markets and strengthen Zambia’s trading ties with regional and other 
international markets; 
- To ensure efficient customs administra tion and fair trade practices;  and reduce 
poverty through sustainable economic growth. 
(2) D
OMESTIC LAWS AND REGULATIONS GOVERNING TRADE  
47. Zambia has continued to pursue structural  reforms designed to improve and promote 
economic development by reducing the cost of doing business.  There are indications that these reforms are bearing fruit. Between 2007 and 2008,  Zambia’s Doing Business ranking improved from 
116 to 100, ranked 3
rd out of 18 COMESA countries (following Mauritius and Kenya), and 4th out of 
14 SADC countries (after South Africa, Botswana, Namibia, and Mauritius).  
48. The Government has implemented various re form programmes aimed at improving and 
enhancing the investment climate in Zambia.  These are the Private Sector Development Reform Programme (PSDRP), the Triangle of Hope and the Millennium Challenge Account (MCA) 
Threshold Project. Zambia WT/TPR/G/219 
 Page 13 
 
 
 49. In 2006 Zambia embarked on the implementation of the Private Sector Development Reform 
Programme (PSDRP) whose objective was to redu ce the cost of doing business and encourages 
competitiveness in the private sector.  The following were the six reform areas of the PSDRP:  policy 
environment and institutions, regul ations and laws, infrastructure development, business facilitation 
and diversification, trade expansion and local em powerment.  These reforms are aimed at laying the 
foundation for faster, sustained private sector-led growth. 
50. The PSDRP was designed as a partnership between the government and private sector with, 
support from the Cooperating Partners.  The privat e sector was represented by the Zambia Business 
Forum (ZBF). The programme was monitored at the highest level by the Zambia Business Council, a 
Private Public Dialogue body chaired by the Pr esident.  The second phase of the PSDRP will   
commence in mid 2009. 
51. A number of Zambia’s recent changes in the bu siness environment can be attributed to the 
PSDRP. These include the establishment of the Zambia Development Agency (ZDA), Citizens’ 
Economic Empowerment Commission (CEEC) and Sm all Claims Court in Ndola and Lusaka; 
approval of the ICT policy, energy policy, MSME Policy; enactment of the Tourism and Hospitality 
Act, Zambia Tourist Board Act; reduction in the da ys taken to register a business, reduction in the 
days taken to obtain a visa or employment permit and reduction in the number of days to export or import goods. 
52. A key aspect of the reforms is the business licen sing reform. The reform has so far identified 
the number of licenses existing in Zambia and a report with recommendations regarding which 
licenses should be eliminated, retained reclassified  and amalgamated has been submitted to Cabinet 
for approval.  
53. In 2006, the Patents and Companies Registration Office (PACRO) introduced a web-based 
license free software application. PACRO also automated the business registration process and opened a Customer Service Centre to serve as a one stop-shop for business customers.  An interactive 
website was established which allows customers to  download application forms and complete them 
before visiting the office.  During the period under review the government further instituted measures 
to decentralise company registration to Ndola and Livingstone.  Between 2005 and 2008 the time it 
takes to register a business was reduced from over 30 days to one day.   
54. In 2008, the Public Procurement Act was pas sed to separate the functions of the Zambia 
Public Procurement Authority (ZPPA) from those of  ministries and parastatals. ZPPA will provide 
oversight and be better placed to address appeals made by aggrieved parties.  Additionally, the Public 
Procurement Act provides for arbitration to reduce the cost of litigation. 
55. The Immigration Department has reduced the time it takes to process permits and visas for 
would-be investors by creating a customer service centre. 
56. A legal and regulatory framewor k to facilitate public private partnerships (PPP) in the 
provision of infrastructure has been put in place.  This framework for PPP will be under the oversight 
of a new department at the Ministry of Finance and National Planning. 
57. In 2006, the Ministry of Lands initiated a prog ramme that has reduced the total time required 
to register or transfer property from 52 days to 16 days in 2008.  In 2007, a series of initiatives were 
instituted to streamline and make transparent the re gistration of lease, transfer and issuance of a new 
certificate of title at the lands and Deeds Register. Zambia computerized its lands registry and set up a 
customer centre to eliminate the backlog of regi stration requests.  Access to land for investment WT/TPR/G/219 Trade Policy Review 
Page 14 
 
 
 purposes is being addressed through the Land Bank Pr ogramme under which land suitable for various 
investment projects has been identified and reserved. 
58. Customs clearing procedures continue to be streamlined to facilitate the importation of 
machinery and other primary inputs for the expansi on of the industrial sector. Reforms include the 
establishment of a one-stop border post at Zambia’s  busiest border post (Chirundu border post with 
Zimbabwe), pre-clearance facility, accreditation of compliant clients and the automation of custom 
systems. Registration for VAT, previously requiring twenty-one days can now be done in three days.  
(3) INVESTMENT MEASURES (SME  POLICY AND WHAT IT AIMS TO ACHIEVE , 
 A CHIEVEMENTS ) 
59. During the period under review, Government established the Zambia Development Agency 
(ZDA) through the ZDA Act No. 11 of 2006 to act as a one stop facility for local and foreign 
investors. The Agency is mandated to promote a nd facilitate exports, establishment of Multi-Facility 
Economic Zones (MFEZs), investment and the de velopment of Small a nd Medium Enterprises 
(SMEs). 
(4) REGIONAL TRADE ARRANGEMENTS  
60. Zambia has continued to pursue regional inte gration within the SADC, COMESA and SADC-
EAC-COMESA Tripartite frameworks.  Zambia remains committed to these regional integration 
commitments, and continues to benefit from incre ased access to neighbouring markets.  Zambia 
extends increased market access to SADC members based on their respective commitments, and to 
COMESA members on a reciprocal basis.  
(i) SADC 
61. Between 2002 and 2007, the SADC region recei ved 33% of Zambia’s exports, and accounted 
for 60% of Zambia imports. SADC launched its free trade area in August 2008 after gradually phasing 
down tariff schedules throughout the review period. In preparation for the scheduled launch of the 
SADC Customs Union in 2010, Zambia is actively providing input into Custom Union policies and regulations.  
(ii) COMESA 
62. Thirteen percent of Zambia’s exports were exported to COMESA member states during the 
review period (2002-2007), incr easing from 9% in 2002 to 14% in 2007.  Zambia acceded to the 
COMESA free trade area in 2001, and by the en d of 2008 was extending duty free, quota free access 
to products originating from the 13 other memb ers of the COMESA FTA.  Eleven percent of 
Zambia’s imports were sourced from COMESA memb er states over the review period (2002-2007). 
63. In preparation for the launch of the COM ESA Customs Union in 2009, Zambia actively 
participated in the negotiation of the COMESA Co mmon External Tariff, as well as the creation of the 
Customs Union’s broad range of policies and regulations. 
64. Additionally, Zambia continues to actively participate in the COMESA services trade 
negotiations, established a one stop border post w ith Zimbabwe at Chirundu, and adopted the 
COMESA Common Investment Area and COMESA Competition Policy.  Zambia WT/TPR/G/219 
 Page 15 
 
 
 (iii) SADC-EAC-COMESA Tripartite Framework 
65. In light of the complexities associated with  multiple REC membership and the need for 
coherent planning and implementation of de velopment programmes and regional initiatives, 
collaborative work between SADC and COMESA was initiated in 2001 to harmonise their 
programmes by establishing a joint taskforce. Th e harmonization programme by EAC, SADC and 
COMESA which commenced in 2005 culminated into  the first joint Summit in 2008 at which the 
SADC-EAC-COMESA Tripartite. Fr amework was launched.   
66. To address its acute transport, communications a nd energy infrastructure needs, especially for 
land-locked countries, Zambia and the region de veloped a common regional Aid for Trade Strategy 
through the Tripartite Framework. This strategy consists of a coherent package of interrelated 
infrastructure investment projects, as well as othe r trade facilitation interventions. The North South 
Corridor is the Aid for Trade Strategy’s pilot project , to which Zambia attaches great importance. As 
such, Zambia successfully hosted the North-South Co rridor Donor Pledging Conference in Lusaka in 
April 2009.  
IV. ZAMBIA AND THE GLOBAL TRADING SYSTEM 
(1) IMPLEMENTATION OF WTO  AGREEMENTS  
67. Zambia is committed to the WTO framework and has continued during the period under 
review to implement and domesticate the various WTO agreements. These include the Agreement on 
Trade Related Intellectual Property, the Sanitary  and Phyto-Sanitary (SPS) Agreement, and the 
Agreement on Trade Remedies, the Agreement on Tec hnical Barriers, and Customs Valuation to trade 
among others.  
68. In the case of trade in services, Zambia is curre ntly in the process of developing a policy and 
a strategy that will allows Zambia to develop a position and policies for engagement in trade in 
services at a national, regional and multilateral leve l in order to secure the full benefits of the 
multilateral liberalization of global trade in services. 
69. Safeguard legislation was enacted in 2006 under the Control of Goods Act CAP 421 in 
compliance with WTO, SADC and COMESA provi sions on safeguards. Several companies have 
applied for safeguards measures, though so far none have been found to warrant the imposition of 
safeguard measures.  
70. In 2008 PACRO led the drafting of a national inte llectual property policy to guide the review 
and revision of Zambia’s intellect ual property legislation. The review and revision will commence in 
2009, and is intended to result in a regime that is  TRIPS compliant and promotes both the creation and 
dissemination of new knowledge.  
71. However, challenges remain in Za mbia’s ability to guide and implement the legislation that is 
in place and develop negotiating positio ns. Despite the tremendous effort  taken by Zambia to develop 
the capacity of officials to be able to implement these agreements, limited resources, institutional and 
technical capacity, and high turnover within  the civil service remains problematic.  
72. Zambia’s private sector also faces supply side c onstraints, with limited hard infrastructure and 
low productive capacity. The high costs of transpor tation, communication and energy make it difficult 
for Zambia’s private sector to effectively and competitively participate in the regional and global 
economy to take full advantage of the benefits of integration.  WT/TPR/G/219 Trade Policy Review 
Page 16 
 
 
 73. Notwithstanding these challenges, through the PSDRP, a consultative framework is now in 
place to provide a platform for dialogue on all trade related issues between the private sector, 
government and cooperating partners.  
74. During the period under review, Zambia c ontinuously benefited from support provided 
through the Enhanced Integrated Framework, JI TAP and other cooperating partners, as well as 
workshops and training led by WTO Secretariat. 
75. Moving forward, Zambia is in need of suppor t under the trade facilitation framework – major 
transport, communications, energy, and borde r infrastructure programmes will increase the 
competitiveness of Zambia’s productive sectors and drastically reduce the cost of utilizing the 
region’s transport corridors. 
(2) IMPLICATIONS OF OTHER TRADING ARRANGEMENTS  
(i) Economic partnership agreements 
76. Zambia is engaged in a negotia tion of an Economic Partnership Agreement with the European 
Union under the framework of the Eastern and S outhern African (ESA) group. Countries in the ESA 
configuration are negotiating on trade in goods and se rvices, agriculture, fisheri es, trade-related issues 
and development. The objective of the negotiations is  to foster the development and the integration of 
ACP countries into the global economy.  
77. On the 30th September 2008, Zambia initialled its  market access offer in the context of the 
Interim Economic Partnership Agre ement (EPA), which only covers trade in goods, fisheries and 
development.  
78. Negotiations have since con tinued on the remaining outstanding issues, including the 
operationalization of the Aid for Trade component unde r the EPA. Zambia’s priorities in this respect 
include building domestic and regional capacity to develop and enforce legislative and regulatory 
frameworks as well as tackling domestic supply-side  constraints, such as trade facilitation and 
physical and services infrastructure. It also aims at tackling barriers in export markets, including SPS, 
technical regulations and rules of origin.  
(ii) Everything but arms 
79. Zambia is entitled to benefit from the Everyt hing But Arms (EBA) Initiative and has been 
exporting under this scheme. With the inception of the EBA Zambia could decide whether to export 
under the EBA or under the Cotonou regime.  In January 2008, the Cotonou regime expired and 
Zambia continue to access the EU market under the EBA. With the initialling of the Interim EPA in 
September 2008, Zambia will benefit from almost complete duty free quota free market access under 
the Interim EPA regime.  
80. Most of the exports under EBA consisted of unprocessed or minimally processed agricultural 
products; therefore the restrictive rules of origin under the EBA schem e did not affect current exports. 
As in the context of the market access grante d under the Interim EPA, Zambia attaches great 
importance to flexible rules of origin and cumulatio n provisions with all Africa, in particular South 
Africa.  Zambia WT/TPR/G/219 
 Page 17 
 
 
 (iii) Africa Growth Opportunity Act 
81. Zambia is also keen to derive maximum bene fits from the African Growth and Opportunity 
Act (AGOA).  Zambia worked with the office of the United States Trade Representatives (USTR) to 
undertake pest risk assessments to  facilitate the approval of four agriculture products for the United 
States (US) market, including snow peas, which we re exported under AGOA. However, due to supply 
and trade constraints, exports to the US under AGOA have been minimal. Efforts to seek approval for 
additional products were undertaken during the revi ew period; however the rule-making process is 
still outstanding. 
(iv) Generalized System of Preferences 
Chinese Initiative 82. The Government of the Peoples Republic of China granted Special Preferential Tariff 
treatment in 2005. This scheme has about 442 tari ff lines that can be exported to China duty free. 
Exports to China increased from US$190.9 million in  2005 to US$255.4 million in 2006. Overall 
exports to China as a proportion of Zambia’s total e xports have been on the increase. Zambia’s major 
exports to China include:  wood and wood products , copper, other minerals, and metal products.  
(3) T
HE DOHA DEVELOPMENT AGENDA  
83. Zambia continues to actively participate in th e ongoing Doha round of trade negotiations as 
conduit to attaining full and effective integration in the global trading system. 
84. In an effort to ensure that the negotiati ons are concluded on time, Zambia assumed the 
responsibility of coordinating the LDC Group at  the WTO from November 2004 until July 2006, 
playing an active role in defining the negotiating posi tions of the group.  Zambia is also a member of 
the ACP Group, African Group, and G33.  
85. As an LDC, Zambia looks forward to an early  conclusion of the Doha Development Agenda 
(DDA), and a final outcome which embraces the developmental dimension in all areas of the negotiations. Key areas of interest to Za mbia as and LDC include the following: 
86. The effective implementation of Duty Free Quot a Free (DFQF) market access, with rules of 
origin for non-agricultural products which are "user-friendly" for LDCs, along the lines of the 
proposal tabled by the LDC Group in the WTO. 
87. Access to a Special Safeguard Mechanism (SSM ) that should have additional flexibilities for 
LDCs. 
88. An expeditious and ambitious solution to cotton i ssues, including the elimination of all export 
subsidies on cotton and subsidies that distort international cotton markets. 
89. Reduction of trade-distorting agricu ltural subsidies and domestic support; 
90. Addressing Non Tariff Barriers (NTBs) that affect  LDC export trade, particularly agricultural 
NTBs, in a manner that is comprehensive and lasting; WT/TPR/G/219 Trade Policy Review 
Page 18 
 
 
 91. The conclusion of trade facilitation negotiations in a way that provides technical assistance 
and capacity building to land-locked countries such  as Zambia, as well as sufficient flexibility for 
LDCs to undertake commitments as and when  sufficient capacity has been acquired; 
92. Support to transport, communications and energy infrastructure projects in line with the 
North-South Corridor Aid for Trade pilot project, Regarding services trade, special and differential 
treatment by granting of special priority to sectors and modes of interest to LDCs; 
93. Transfer of technology in a practical sense under the TRIPS Agreement. 
(4) ZAMBIA AND THE GLOBAL FINANCIAL CRISIS  
94. Zambia has during the review period register ed strong macroeconomic gains with economic 
growth rates averaging 5% annually, with inflati on declining to single-digit levels in 2006.  The 
country experienced increased investment in-flows in many sectors including mining, manufacturing, 
tourism, transport and construction. However, th ese gains have been somewhat eroded by the global 
financial crisis.  
95. Several mining companies have scaled down th eir production or closed down.  This has 
resulted in reduced employment and government resources to finance the growth process.  The 
deepening of the global financial crisis lead to in creased risk aversion to emerging market financial 
assets. 
96. In the case of Zambia, the effects of the crisis have been reflected in the reduction in demand 
for financial assets such as Governme nt securities and equities, particular ly by foreign investors. This 
has resulted in a net outflow of foreign exchange in  the later part of 2008. Additionally, the tourism 
sector has recorded a significant slowdown. The hor ticulture and floriculture sectors have recorded 
losses due to low export volumes as result of diminish ed demand and low prices in European markets. 
V. CONCLUSIONS 
97. Zambia remains committed to ma intaining an increasingly open economy, the agreements of 
the multilateral trading system and the conclusion of  a timely, development-friendly conclusion to the 
Doha Development Agenda. 
98. However, as a least development country faci ng supply-side infrastructure and productivity 
constraints and highly suscep tible to fluctuations in commodity prices, the shocks of the global 
financial crisis are exacerbating the challeng es Zambia faces in achieving its Vision 2030.  
99. As such, Zambia is hopeful that member states  and cooperating partners will assist Zambia 
mitigate the shocks of the financia l and economic crisis in order to take full advantage of market 
opportunities created at the multilateral level.  In addition, the continuation of technical assistance and 
capacity building, as well as the build up of produc tivity-enhancing infrastructure will help Zambia 
develop an economy that is better able to ab sorb commodity price shocks in the future. 
__________