With a population of around 12 million inhabitants, Zambia
is a landlocked country in the southern of Africa bordering Zimbabwe, Angola, DR Congo, Malawi, Mozambique, Tanzania and Namibia.
The performance of the Zambian economy has improved markedly over recent years, reflecting sound macro-economic policies and a favourable external environment, the average annual real GDP growth rate is 4.9 per cent over the past 7 years, in contrast with the early period of reform in 1991-1998 when GDP growth averaged 0.1 percent annually. For the first time in more than 20 years, Real GDP growth reached 6.3% in 2007 and is expected to be slightly higher this year. Average growth over the past 5 years was 5.7%, aided by the fast pace in construction, telecommunications and tourism.
Mining is the country's biggest export earner, but it contributes a relatively small amount to overall GDP, at less than 10% of real GDP. However, many other sectors of the economy are geared toward serving the mining sector. For example, much of the largest segment of GDP by factor cost, namely services, is related to the mining sector. In addition, the mining industry is an important consumer of local manufactured goods.
The combination of privatisation and surging international prices has provided a dramatic boost to copper mining in Zambia
over the past few years. In real terms, the mining sector grew by almost 50% between 2001 and 2005.
Annual copper production in Zambia is expected to reach 600,000 tonnes during the next two to three years, a level last reached in the 1980s. Copper and cobalt account for 90% of mining production and around 65% of exports, with the mines concentrated in the Copper belt region bordering the mineral rich Katanga province in the Democratic Republic of Congo (DRC). Zambia
is among the most liberal banking regulations in Southern Africa, Zambian banks function efficiently. There are over ten operational commercial banks, including majority-foreign-owned banks such as Barclays of the UK, Citibank of the US, Stanbic (part of Standard Bank of South Africa) and Standard Chartered (also UK-based). Zambia
top income tax rate and the top corporate tax rate are both 35 percent. Other taxes include a value-added tax (VAT) and a property transfer tax. In the most recent year, overall tax revenue as a percentage of GDP was 16.1 percent. Tax collection has improved.