RESTRICTED  WORLD  TRADE  
ORGANIZATION  WT/TPR/S/219 
22 June 2009  
 
(09-2919) 
Trade Policy Review Body  
   
 
  
 
TRADE POLICY REVIEW 
 
Report by the Secretariat 
 
ZAMBIA 
 
  
 
This report, prepared for the third Tr ade Policy Review of Zambia, has been 
drawn up by the WTO Secretariat on its own responsibility.  The Secretariat has, 
as required by the Agreement establishing the Trade Policy Review Mechanism 
(Annex 3 of the Marrakesh Agreement Establishing the World Trade 
Organization), sought clarification from Zambia on its trade policies and 
practices. 
 
Any technical questions arising from this report may be addressed to Mario 
Kakabadse (tel:  0022 739 51 72). 
 
Document WT/TPR/G/219 contains the policy statement submitted by Zambia. 
 
 
 
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/S/219 
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CONTENTS 
 
    Page 
SUMMARY OBSERVATIONS ix 
 (1) E CONOMIC ENVIRONMENT  ix 
 (2) T RADE AGREEMENTS  x 
 (3) T RADE POLICIES AND PRACTICES  x 
 (4) S ECTORAL POLICY DEVELOPMENTS  xii 
 (5) A ID FOR TRADE  xiv 
 (6) O UTLOOK  xiv 
I. ECONOMIC ENVIRONMENT 1 
 (1) I NTRODUCTION  1 
 (2) R ECENT ECONOMIC PERFORMANCE  3 
 (3) M AIN POLICY DEVELOPMENTS  6 
 (i) Monetary and exchange rate policies 6 
 (ii) Fiscal policy 7  (iii) Poverty reduction strategy 8 
 (iv) Structural reforms 9 
 (4) D
EVELOPMENTS IN TRADE  10 
 (i) Composition of merchandise trade 10 
 (ii) Direction of merchandise trade 12  (iii) Trade in services 12 
 (5) F
OREIGN DIRECT INVESTMENT  12 
 (6) O UTLOOK  15 
II. TRADE POLICY REGIME:  FRAMEWORK AND OBJECTIVES 16 
 (1) I NTRODUCTION  16 
 (2) I NSTITUTIONAL AND LEGAL SETTING  16 
 (i) Constitutional developments 16 
 (ii) Court system 17 
 (iii) Institutional transparency 17 
 (3) T RADE POLICY FORMULATION AND IMPLEMENTATION  18 
 (i) Policy objectives 18 
 (ii) Implementation and monitoring 19  (iii) Main trade laws 21 
 (4) T
RADE AGREEMENTS AND ARRANGEMENTS  23 
 (i) World Trade Organization 23  (ii) Regional agreements 24 
 (iii) Other agreements and arrangements 26 
 (5) I
NVESTMENT POLICY FRAMEWORK  27 
 
    WT/TPR/S/219 Trade Policy Review 
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    Page 
 
III. TRADE POLICIES AND PRACTICES BY MEASURE 29 
 (1) I NTRODUCTION  29 
 (2) M EASURES DIRECTLY AFFECTING IMPORTS  30 
 (i) Customs procedures 30 
 (ii) Tariffs 31 
 (iii) Other charges affecting imports 36  (iv) Rules of origin 36 
 (v) Import prohibitions, restrictions, and licensing 36 
 (vi) Contingency measures 37 
 (vii) Government procurement 37 
 (viii) Import-related operations of state-trading enterprises 38  (ix) Standards and other technical requirements 38 
 (x) SPS measures 39 
 (3) M
EASURES DIRECTLY AFFECTING EXPORTS  40 
 (i) Procedures and documentation 40 
 (ii) Export taxes 40 
 (iii) Export prohibitions, re strictions, and licensing 41 
 (iv) Duty and tax relief 41 
 (v) Export promotion and finance 41 
 (4) M EASURES AFFECTING PRODUCTION AND TRADE  42 
 (i) Framework for registration and licensing of a business 42 
 (ii) Taxation 43 
 (iii) Other incentives 44  (iv) Role of state-owned enterprises and privatization 45 
 (v) Competition policy 46 
 (vi) Protection of intellectual property rights 47 
IV. TRADE POLICIES BY SECTOR 51 
 (1) I
NTRODUCTION  51 
 (2) A GRICULTURE , FORESTRY AND FISHERIES  52 
 (i) Main features 52 
 (ii) Policy framework 52 
 (3) M INING   55 
 (i) Overview 55 
 (ii) Main features of the copper industry 56  (iii) Regulatory and fiscal framework 57 
 (iv) Energy minerals 59 
 (4) E
NERGY   60 
 (i) Overview 60 
 (ii) Electricity 60 
 (5) M ANUFACTURING  61 
 (6) S ERVICES  62 
 (i) Financial services 62 
 (ii) Telecommunications 66  (iii) Transport 68 
 (iv) Tourism 72 
 Zambia WT/TPR/S/219 
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    Page 
V. AID FOR TRADE 74 
 (1) O VERVIEW  74 
 (2) I NTEGRATED FRAMEWORK  75 
 (3) B ILATERAL AID :  MILLENNIUM CHALLENGE  77 
 (4) WTO  TRADE -RELATED TECHNICAL ASSISTANCE  78 
 
REFERENCES   83 
 
APPENDIX TABLES  87 
 WT/TPR/S/219 Trade Policy Review 
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    P a g e  
CHARTS 
 
I. ECONOMIC ENVIRONMENT 
 
I.1 Product composition of merchandise trade, 2002 and 2008 11 
I.2 Direction of merchandise trade, 2002 and 2008 13  
III. TRADE POLICIES AND PRACTICES BY MEASURE 
 III.1 Average applied MFN tariff rates, by HS section, 2002 and 2008 33 
III.2 Distribution of MFN tariff rates, 2002 and 2008 34 
III.3 Tariff escalation by 2-digit ISIC industry, 2008 34  
 
 
TABLES 
 
I. ECONOMIC ENVIRONMENT 
 
I.1 Basic economic indicators, 2002-08 2 I.2 Selected macroeconomi c indicators, 2002-08 4 
I.3 Trade in services, 2003-07 14 
I.4 Inward FDI, 2002-07 14  
II. TRADE POLICY REGIME:  FRAMEWORK AND OBJECTIVES 
 II.1 Zambia's main trade policy programmes, objectives and strategies, 2006-10 18 
II.2 Trade-related legislation in Zambia, 2009 21 
 III. TRADE POLICIES AND PRACTICES BY MEASURE 
 
III.1 Tariff structure in Zambia, 2002 and 2008 32 III.2 Government shares in public enterprises, as of September 2007 45 
 
IV. TRADE POLICIES BY SECTOR  
IV.1 Maize production, prices and trade, 2001-08 53 
IV.2 Subsidies for agricultural inputs  for small-scale farmers, 2002-08 54 
IV.3 Volume of cobalt and copper production, 2002-08 55 
IV.4 Zambian mines:  ownership structure and levels of production 56  
IV.5 Refined copper:  average world price, 2002-09 57 
IV.6 Banking institutions in Zambia, 2007 63 
IV.7 Financial soundness indicators, 2002-08 64 IV.8 Structure of non-bank financial institutions, 2005-06 64 
IV.9 Telecoms data, 2000 and 2006 66
 
 
V. AID FOR TRADE 
 V.1 Trade capacity building in Zambia, 2002-07 75 Zambia WT/TPR/S/219 
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    P a g e  
APPENDIX TABLES 
 
I. ECONOMIC ENVIRONMENT 
 
AI.1 Merchandise exports by product group, 2002-08 89 
AI.2 Merchandise imports by product group, 2002-08 90 AI.3 Merchandise exports by destination, 2002-08 91 
AI.4 Merchandise imports by origin, 2002-08 92 
 
II. TRADE POLICY REGIME:  FRAMEWORK AND OBJECTIVES  
AII.1 Status of selected notifications to WTO, September 2008 93 
 III. TRADE POLICIES AND PRACTICES BY MEASURE 
 
AIII.1 Summary of the tax system, October 2007 95  
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SUMMARY OBSERVATIONS 
(1) ECONOMIC ENVIRONMENT  
1. The mining sector plays a critical role 
in Zambia's economy, exercising a heavy 
influence over growth, job creation, poverty 
reduction, and the external accounts.  Since mid 2008, world copper prices have fallen by more than 60% and there have been cutbacks in production in Zambia.  Adjusting to this 
external shock has confronted the Zambian 
Government with a major economic policy challenge.   
2. From 2003 to mid 2008, Zambia's 
economy moved from stagnation towards steady growth, greater prosperity, and better 
access to foreign investment.  Real GDP grew 
at an annual average rate of 5-6% led by the mining, construction, and services sectors.  FDI inflows increased nearly six-fold, reaching an estimated US$1.3 billion by 2007, 
with the mining sector attracting more than 
half of the foreign investment.  The resulting increase in copper production, the five-fold  rise in world copper prices, and debt relief allowed Zambia to improve its external position significantly.  The current account 
deficit declined from 17.4% of GDP in 2002 to 
7.4% in 2008, and external public debt declined to less then 10% of GDP by end 2007, down from nearly 179% in 2002.  This resulted in an increase in international 
reserves, which, at over US$1 billion in 2008 
represented nearly three months of imports, compared with barely one month in 2003. 
3. Zambia has had a history of high 
inflation, persistently averaging over 20% and 
sometimes substantially exceeding this (50% 
in 1996), mainly due to lax fiscal policy,  currency depreciations, and varying food supply.  Owing to improved  monetary and fiscal discipline as well as the growth of domestic food supplies, inflation fell from 
26.7% in 2002 to 8.2% in 2006, its lowest 
level in three decades.  It has since risen, to over 12% in 2008, largely due to rising food and fuel prices but monetary policy continues to be aimed at reducing inflation to single 
digits over the medium term.  
4. Nevertheless, even after several years 
of robust growth, the economy's increasing 
dependence on mining means that large 
sections of the population have not been able to benefit from the commodity boom.  At US$934, per capita annual incomes are low, placing the country among the world's poorest 
nations. As a consequence, almost two thirds 
of Zambians (approximately 7.5 million people) still live in poverty, and rural people persistently lag behind ur ban dwellers in most 
measures of social welfare.  For example, only about 3% of the rural population have access 
to electricity and only 0.3% of Zambia's rural 
households (accounting for 65% of the population) own a telephone.  Low labour productivity, and thus poverty, is acute in the smallholder agriculture sector, where poverty 
is concentrated.    
5. Between 2003 and 2008, merchandise 
exports fluctuated in value terms,  accounting for between 25% and 40% of GDP, and merchandise imports for between 25% and 32% of GDP.  Copper, Zambia's primary 
export commodity, accounts for over three 
quarters of total exports, up from two thirds in 2002.  However, some diversification has occurred as non-traditional exports such as  wire, electricity cables, cement, scrap metal, 
gemstones, high value crops like paprika and 
cauliflower,  and fresh flowers have been growing at an average annual rate of 20% since 2002 although their share of total exports in value terms declined from 38% in 2002 to 
21% in 2008.  Agricultural exports registered 
the strongest growth amongst non-mineral exports with a sharp increase in exports of cotton, tobacco, spices, horticultural products and, more recently, honey. 
6. Diversifying out of copper into 
agriculture, tourism, and services has been an 
often-stated objective of Zambian governments for years, including under the current  national development plan (2006-10).  The Government has been carrying out much-
needed reforms across several sectors, in WT/TPR/S/219 Trade Policy Review 
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programmes such as the Financial Sector 
Development Plan and the Private Sector Development Initiative, and is committed to overhauling the expensive system of fertilizer 
subsidies, increasing investment in agriculture, 
improving the efficiency of the state-owned power company (ZESCO) and reforming the telecommunications sector.  Despite such reforms, the poor quality and limited 
availability of infrastructure services and 
associated high prices, a cumbersome licensing and regulatory framework, and limited access to finance continue to contribute to the high cost of doing business, dragging down productivity, impairing 
competitiveness, and limiting economic 
diversification.   
(2) T
RADE AGREEMENTS      
7. Mindful of Zambia's small domestic 
market, the Government has sought to promote 
trade diversification through active 
participation in multilateral, regional, and bilateral trade.  In the WTO Doha Development Agenda negotiations, Zambia has coordinated the work of the group of 50 LDCs.  At the forefront of their concerns is 
access for their exports in overseas markets, 
both in terms of expanded access to developed and developing country markets, and minimizing the effects of the erosion of the trade preferences currently enjoyed by their 
limited number of exports.   
8. Regionally, Zambia is a member of 
the Southern Africa Development Community (SADC) and the Common Market for Eastern and Southern Africa (COMESA) but, despite 
these regional trading agreements, Africa's 
share of Zambian exports declined from 38% in 2002 to 28% in 2008.  Further integration is planned: SADC and COMESA, together with the East African Community, have agreed to the expeditious establishment of a common 
free-trade area with the goal of establishing a 
single customs union and harmonizing member states' trade arrangements.  At the bilateral level, Zambia is currently engaged in 
negotiations on  realizing an Economic 
Partnership Agreement with the EC, under which Zambia will gradually open its domestic 
market to European products in return for duty-free access to Europe.    
(3) T
RADE POLICIES AND PRACTICES  
9. Trade policy has remained 
substantially unchanged during the review period, indeed since Zambia undertook a comprehensive reform programme in the 1990s, removing exchange controls, reducing 
import duties, eliminating import and export 
licence requirements, abolishing export bans and introducing a number of export incentives, removing subsidies, and decontrolling prices.  
10. The simple average applied MFN 
tariff of 13.4% is the same as in 2002.  The 
large gap between the average applied rate of 
13.4% and the bound rate of 105.7%, and the absence of bindings for over 83% of tariff lines, creates a significant degree of unpredictability for trad ers in the sense that 
there is scope for the authorities to raise 
tariffs;  however, with one notable exception (cellular phone handsets), applied tariffs have 
not been increased during the review period. Zambia has so far made no commitments to reduce the ceiling bindings.  Ad valorem  tariffs 
account for 97.8% of all tariff lines, which 
lends a high degree of transparency to the tariff,  although for the remaining 2.2% (up from 1.3% in 2002) ad valorem equivalents 
are not available and may conceal relatively 
high rates. 
11. The coefficient of variation of 0.7 
indicates continued modest dispersion of tariff rates from one category of products to another.  The most common rate of 15% applies to 
some 32% of tariff lines.  Close to two thirds 
of all lines bear a tariff rate of either 15% or 25%, while around 22% of tariff lines are duty free.  Virtually all raw materials and most industrial or productive machinery fall within the 0% to 5% tariff categories, and nearly 70% 
of mining and quarrying-related tariff lines 
attract the 5% tariff rate.  Agriculture  remains the most protected sector with an applied average MFN tariff rates of 19.1%.  In aggregate, Zambia's tariff structure shows Zambia WT/TPR/S/219 
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negative escalation from first-stage processed 
products (15.8%) to semi-finished goods (9%) and positive escalation to finished products (16.1%).  Positive escalation is present notably 
on paper and paper pr oducts, with average 
applied MFN tariff rates rising from 50% on first-stage processed products, to 9.4% on semi-processed products, and 16.8% on fully processed products.   
12. Regarding other charges affecting 
imports, excise and 16% VAT on imports are collected at the border with the same tax rates levied on imported and domestically produced goods.  There is also a refundable 6% advance tax on commercial imports, a measure 
intended to broaden the tax base by capturing 
unregistered businesses who make commercial imports.   
13. Zambia has both preferential and non-
preferential rules of origin. Regarding 
preferential rules, while COMESA provides 
for four alternative criteria for determining origin, SADC rules of origin are negotiated, in many cases, on a product-by-product basis, making them complex and varied across products.   
14. Government procurement is governed 
by the Public Procurement Act No. 12 of 2008 and associated tender regulations, applicable to government ministries and departments, parastatal and statutory bodies, and local 
councils.  The Act does not have a threshold 
for international tenders as the authorities believed, until recently, that they could obtain all necessary goods and services primarily from Zambian suppliers.  Zambia is not a 
member of the WTO Agreement on 
Government Procurement. 
15. In order to facilitate trade, Zambia has 
focused on strengthening the standardization, certification, and inspection units of the Zambia Bureau of Standards so that they can 
provide more efficient services for importing 
and exporting, thus helping to ensure conformity with international and regional standards and technical requirements.  It seems, however, that Zambia does not have the capacity to properly test all imported 
products (for example, there is only minimal testing on electrical products), which provides considerable scope for exporters to find a 
market for substandard products in Zambia. 
Like other LDCs, Zambia faces numerous challenges related to compliance with standards required by its trading partners, due to limited technical, human, and financial 
resources.  In addition, effective 
implementation of the WTO SPS and TBT Agreements remains a challenge.  Zambia needs technical assistance in reforming its regulatory framework and to effectively implement these Agreements. 
16. Regarding export measures, the 2008 
Budget encouraged local value addition by introducing a levy of 15% on the export of copper concentrates and cotton seed (the latter was subsequently raised to 20%), in 
recognition of the availability of local capacity 
to process these products.  An export tax also exists on scrap metal, which is considered an important input for manufacturing.  Export prohibitions apply to certain types of logs under international agreements, and 
occasionally for grains (during drought years).  
There are no general export licensing requirements.    
17. A duty drawback scheme and a 
temporary admissions system (manufacturing 
under bond) are meant to provide exporters 
with relief on import duty paid.  In 2002, the Government passed the Export Processing Zones (EPZ) Act to provide incentives for investors in export processing zones.  
However, implementation of the EPZ Act was 
suspended in 2004 because of concern about its impact on revenue, and the authorities have now abandoned efforts to establish export processing zones. Instead, they are focusing on multi-facility economic zones (MFEZs), which 
offer a wider set of incentives, based on tax 
holidays, to exporting and non-exporting enterprises, including no tax on profits for five years from the first year profits are made.   
18. During the period under review, 
Zambia has not amended its intellectual WT/TPR/S/219 Trade Policy Review 
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property legislation.  However, the authorities 
are drawing up a national policy on intellectual property, with outside assistance, and have stepped up efforts to combat trade in pirated 
and counterfeit goods, although  many police, 
customs, immigration, and other officials lack the necessary knowledge on IP rights to enforce regulations adequately.  Competition law in Zambia is enshrined in the Competition 
and Fair Trading Act 1994.  This Act is 
enforced by the Zambia Competition Commission whose role is to prevent abuse of dominant position, predatory behaviour, discriminatory pricing, restrictions on distribution, and collusion.   
(4) S
ECTORAL POLICY DEVELOPMENTS  
19. The private sector now plays a greater 
role in the national economy, following a privatization programme initiated ten years ago.  Prior to privatization, the State was said 
to control over 80% of the country’s 
productive and service-related activities, a share that is now reduced to between 10% and 15% according to the authorities, since the bulk of the government-owned mining companies  were privatized.  However, the 
remaining problem areas concern the providers 
of electricity, telecommunications and transport services, which are largely state-owned and whose poor performance in supplying services make it difficult for 
Zambian enterprises to compete with those in 
neighbouring countries. 
20. Important policy changes have 
occurred in the mining sector, which used to be regulated by the Mines and Minerals Act of 
1995.  The Mines and Minerals Development 
Act 2008 entered into force in 2008 partly with the aim of ensuring that Zambians could own shares in large-scale mining companies.  In parallel, a  new tax  regime for mining entered into effect in 2008 to take account of 
the  recent environment of much higher copper 
prices, compared with those at the time of privatization.  Consequently, a revision of the mining tax regime was undertaken to capitalize on the windfall profits the mining 
companies were enjoying.  However, the deterioration of the gl obal financial situation 
in the latter half of 2008 created some  uncertainty and a severe credit squeeze, with mining companies claiming that the new taxes 
called into question the economic  viability of 
their Zambian operations.  As a result, Zambia’s revenue authorities felt compelled to review the tax measures in 2009 and remove the windfall tax  introduced the previous year.  
It remains to be seen whether the revised tax 
regime ensures that the nation as a whole receives a fair share of the country's natural resource rents, while maintaining a globally competitive mining industry. 
21. Agriculture accounts for less than one 
fifth of GDP, well below the average of 32% 
in sub-Saharan Africa, but its GDP contribution does not provide the full picture of its importance.  The sector absorbs about two thirds of the labour force and is thus the 
main source of income and employment for 
the majority of Zambians; furthermore, agri-processing industries, which depend directly on agriculture, constitute 60% of Zambia’s manufacturing.  Growth of agriculture, however, has remained low, and enhancing the 
productivity of small-scale farmers by 
reducing their dependency on rain-fed agriculture remains critic al to the development 
of the sector and the reduction of rural poverty. 
22. The national development plan sets 
ambitious objectives for agriculture:  guaranteeing sufficient food for at least 90% of the population; increasing the contribution of the sector to total foreign exchange earnings 
from the current 3-5% to 10-20% and 
increasing its contribution to GDP from 18-20% to 25%, while raising  incomes for those involved in agriculture.  The plan assigns a pivotal role to the private sector and especially to  the development of private-led 
marketing systems.  During the review period, 
however, the biggest share of the agriculture budget has financed the provision of subsidized fertilizers and the  buying of maize from farmers for the Food Reserve Agency, 
while spending on research and extension 
services has been inadequate, meaning that  Zambia WT/TPR/S/219 
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progress towards the goal of improving 
productivity and promoting diversification of agriculture has been slow.  
23. The performance of the services sector 
is also significant for growth and for poverty 
reduction in Zambia, given that it is the largest part of the economy.  Services, including construction, generate about 63% of GDP, a figure that has remained largely unchanged 
during the period under review.  In addition to 
their direct contribution to GDP, services – in particular infrastructural services such as transport, finance, and communications – are critical elements in the productivity of many industries.  Zambia’s services exports consist 
largely of tourism and transport, which 
together accounted for more than 80% of services exports in 2007.  In the Doha Round services trade negotiations, Zambia has not made an initial offer; GATS commitments 
were last made in the Uruguay Round when 
Zambia bound market access in certain business services, construction, and related engineering services, health care and social services, and tourism and travel-related services.  
24. The Government embarked on a 
financial sector development plan for 2004-09  to create a sound, well-functioning financial system that will support economic diversification and sustainable economic 
growth.  National treatment applies in the 
sense that regulatory conditions are no more restrictive on foreign banks than on domestically owned banks.  Although the banking system, dominated by foreign-owned 
banks for most of the review period, 
demonstrated strong signs of soundness and profitability, banks have invested in short-term lending, rather than in long-term lending to the private sector.  Only a few large corporations and a few SMEs have access to credit and only 
15% of Zambia's adu lt population have a bank 
account.  
25. Since 2002, despite the existence of 
competition in mobile and internet services, Zambia has continued to fall behind regional 
standards in terms of providing access to competitive telecommunications services to its 
citizens and businesses.  With only three lines per 100 people, Zambia's fixed-line teledensity 
remains at half the average in sub-Saharan 
Africa.  To promote Zambia's international 
competitiveness, the Government is removing barriers to entry in the sector by reducing international gateway lic ence fees to regional 
averages.  Fixed lines are currently provided 
by the state operator Zamtel, which remains 
100% publicly owned.  Although there is no foreign investment in the sector, private and foreign ownership are pe rmitted, in principle, 
based on a policy that at least 30% of equity must be domestically owned. In contrast, the 
liberalized mobile-phone sector boomed 
during the review period with competition between the three providers resulting in major improvements in coverage  and quality together 
with significantly lower prices.  As a result, 
the total subscriber base  has registered strong 
growth, increasing from 2.4 million in 2006 to 3.5 million by 2008.   
26. Tourism is becoming an increasingly 
important foreign-exchange earner and is seen by the Government as having good potential 
for diversifying the Zambian economy and 
attaining broad-based economic growth.  However, during the period under review, the number of tourist arrivals only increased by 33%, from 577,000 in 2003 to 769,000 in 
2008, while tourism receipts rose from 
US$148.8 million to US$200 million.  Recognizing that investment in tourism has been stifled by unpredictable and cumbersome licensing and administrative requirements to 
open and operate a tourism business, the 
Government has started to simplify and streamline the licensing system.  It is also considering how to rationalize the domestic tax system and prevent wasteful tax competition with other countries in the region.  
The corporate tax, at 35%, is higher than the 
level in competing countries, such as Botswana (15%), and South Africa, Tanzania, and Zimbabwe (30%).  Similarly, the VAT at 16% is higher than in competing countries 
(10% in Botswana), as are customs and excise 
duties on tourism inputs (petrol is three-times more expensive in Zambia than in South WT/TPR/S/219 Trade Policy Review 
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Africa, and wine is four-times more 
expensive).  Tourism is  in general excluded 
from tax incentives provided to non-traditional goods exporters, such as the reduced corporate 
tax (15%), accentuating existing regional 
inequalities in the development of tourism. 
(5) A
ID FOR TRADE  
27. Zambia has been at the forefront of 
aid-for-trade discussions and represented the 
LDCs in the Aid-for-Trade Task Force 
pursuant to the Hong Kong Ministerial Declaration.  Zambia has identified its priority areas of intervention to improve its capacity to benefit from trade expansion and integration into the world economy.  These are:  network 
infrastructure (power, water, telecoms);  
export diversification and cross-border infrastructure.  Regarding the latter, Zambia's technical-assistance needs include alleviating high transportation costs,  improving customs 
administration, reducing border clearance 
procedures, upgrading road and rail networks, and reducing transport costs;  integrating border agencies and  training for officials.  
28. Facilitating trade is a major challenge. 
Transport costs are high, partly because 
Zambia is landlocked, but also because of 
inefficiencies and structural weaknesses in the transport network with about 75% of the rural road network in poor condition.  High costs and above-average transit delays lead to lower 
production and trading levels, which in turn 
limits the potential to raise GDP growth rates. To help deal with this, a significant recent aid for trade initiative, the North-South Corridor project, aims to reduce the time taken and, 
consequently, the costs of road and rail 
transport, and promises to be of considerable benefit to Zambia. 29. Zambia continues to benefit from a 
high level of development assistance from its development partners.  Total aid flows to Zambia in 2007 were US$556 million,  
equivalent to 4.9% of GDP.  Zambia has 
received a significantly increasing amount of aid for trade, at an annual average of US$168 million between 2002 and 2005.  WTO trade-related technical assistance 
continues to be important in enhancing 
Zambia's integration into the multilateral trading system via technical assistance and capacity building programmes to help Zambia implement its obligations in various areas. 
(6) O
UTLOOK  
30. The country's continued dependence 
on copper earnings means economic growth will decline from the levels of the past six years when Zambia benefited from the high international price of copper.  If the global 
slowdown is relatively short-lived, and should 
strong world demand for copper pick up, Zambia’s economic prospects could be more favourable, provided that macroeconomic stability is maintained and progress on structural reforms is made to diversify the 
economy and reduce dependence on natural 
resources.  On the other hand, strongly declining prices would increase investor caution regarding reinvestments or new investments;  the value of exports would fall, 
causing the current account deficit to increase 
and thereby exerting downward pressure on the kwacha;  and government finances could be adversely affected as tax revenue from the mining sector would decline.