ZAMBIA
Zambian Property at a Glance
Investing in Commercial Property in Zambia
BY ALEXANDRA BURGER
Z
ambia has enjoyed a long period of political
stability and has experienced five multi-party
elections since 1991. Zambia has a British
Style parliamentary democracy, elections are held
every five years and the presidency is limited by the
constitution to stay for two five year terms.
Zambia’s real Growth Domestic Product (GDP)
growth has been robust and is projected to increase
to 7.4% in 2016 while inflation is expected to
decrease. The growth in real GDP is largely a
result in the growth in mining (with copper as the
mainstay), manufacturing, construction, transport,
communications and energy. The Government
has continued to strengthen fiscal governance and
democratic processes and is making an effort to
widen the tax base. The government’s focus is on job
creation with the plan to create 200 000 decent jobs
per annum. (Source AfDB,OECD,UNDP)
Zambia is both a member of the Common Market
for Eastern and Southern Africa (COMESA)
and the South African Development Community
(SADC). It thus enjoys duty free access to two
key African markets. Zambia’s financial sector is
relatively small but is the fastest growing, which
accounted for 7% in 2014.
The government’s increased allocation for
infrastructure for road projects and increased
industrialisation, through the promotion of industrial
parks and multi-faceted economic zones in key areas
will drive construction and development.
The economic performance has improved urban
areas but the rural areas have been left behind with
poverty at over 60%. An estimated 11.5 Million
people are concentrated in a few urban zones along
the main transportation corridors.
Despite the improvements, there are still concerns
about widespread corruption. Similarly, the judicial
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Offshore Handbook 2016
system is suffering under government influence and
inefficiency. Concerns have been raised over the
courts inexperience in commercial, and contract and
law enforcement.
Zambia has a system of capital allowances that
provides for deductions in ascertaining income which
are calculated on qualifying capital expenditure
which is most supportive to industrial development
and less so to commercial development. Industrial
buildings have an investment allowance of 10%, an
initial allowance of 10% and an annual wear and tear
allowance of 5%. Other commercial buildings have
an annual wear and tear allowance of 2%.
“Zambia’s real Growth Domestic
Product (GDP) growth has been
robust and is projected to increase
to 7.4% in 2016 while inflation is
expected to decrease.
The increased Property Transfer Tax