2021 Q1 PR JOURNAL by American Chamber of Commerce in Zambia

AMCHAM POLICY REVIEW ISSUE NO. 1

JAN - MARCH REVIEW

FEATURES

QUARTER 1 ARTICLE

Macroeconomic Impact of COVID-19

Trading under the AfCFTA

Legislation summary of 2020

Cyber Security & Cyber Crime Bill Symposium

ABOUT AMCHAM

The American Chamber of Commerce in Zambia, established in 2011, is the apex bi-lateral Chamber synergizing Zambian-US Trade and investment relations. The Chamber aims to serve American citizens and American controlled companies doing business in Zambia, as well as Zambian businesses already, or seeking to become involved in trade with the United States. AmCham Zambia continues to achieve Its goals & objectives by establishing a network of forums for sharing information, exchanging ideas and interacting with relevant American and Zambian policy makers. The principle pillars of AmCham Zambia are; Advocacy, Investments, Business linkages, Networking & Thought Leadership. It is the ultimate goal of the Chamber to increase commerce and trade between the United States and Zambia by promoting the interests of its members and Gathering and disseminating information on trade and investment. The American Chamber of Commerce in Zambia | Phone: +260 975 028 026, +260 955 689 301 | Email: info@amchamzambia.com | Website: www.amchamzambia.comAddress: The Works| Latitude 15| Leopards Lane| Kabulonga| Lusaka | Zambia Connect with us on LinkedIn! | "Like" us on Facebook!

2021 Q1 AmCham Policy Review

A WORD FROM OUR PRESIDENT Dear Members and Partners, As President of the Board of Directors for AMCHAM Zambia and on behalf of the entire Chamber, I am delighted to welcome you to our first issue of the Policy Review journal. We wish to also thank you for taking time to read through our quarterly journal and we believe that you will find the information in this publication worthwhile. The essence of this publication is to amplify our advocacy efforts, as this issue highlights the various policies that affect businesses and their operations, directly and indirectly. In doing so, this journal outlines the relevant policy changes and introductions that were made throughout the year, 2020. In addition to this, the journal also outlines some key economic indicators and relevant forecasts pertaining to the governance and economy of the nation. We hope this policy summary acts as a useful reference and guide, as we all attempt to conform to the new norms and adjustments for the rest of 2021. Further to this initial publication, our aim as a Chamber is to make this journal more insightful in the coming quarters with several new initiatives, so please be on the lookout for this. Lowani Chibesakunda, PRESIDENT, American Chamber of Commerce in Zambia.

2021 Q1 AmCham Policy Review

CONTENTS Assessment of the macroeconomic impact of COVID-19 in 2020 2021 Amcham Economic Outlook Policy Prescriptions Trading Under the AfCFTA Cyber Security & Cyber Crime Bill Symposium Legislation Summary of 2020 Relevant Acts of Parliament Currently in Parliament

2021 Q1 AmCham Policy Review

ASSESSMENT OF THE MACROECONOMIC IMPACT OF COVID-19

2020 was marked by overall declined national economic activity as reflected in; company shutdowns, job and income losses, declining business output, and a notable weakening in consumer demand. Further, electricity load shedding, and rising production costs, associated with high energy tariffs, continued to weigh on growth.

2021 Q1 AmCham Policy Review

AMCHAM ECONOMIC OUTLOOK POLICY PRESCRIPTIONS

On the Image Above From Left to Right; Ms Florence Muleya, CEO of the Zambian Association of Manufactures, Mr Trevor Simumba, a Senior International Development Economist, Dr Austin Mwape, Chairperson on the Zambia National Advisory Board on Impact Investment and My Humphrey Mulenga, Senior Partner at Deloitte.

On January 28th, 2021, The American Chamber of Commerce in Zambia hosted an Economic Outlook virtual panel discussion at the Corner Café. The discussion was focused around the economic environment of the country in light of the underlying factors affecting the nation. This discussion was made possible through the sponsorship of High Fly Tours. The salient discussion points included; Zambia’s Debt situation, the hiring of Lazard to manage the debt settlement process and its effects on Zambia. The high rate of inflation, the high currency exchange rate and how the

nation can bring these economic indicators down. How Zambia can benefit from the African Free Trade Area (AFTA). Government’s takeover of Mopani and the implications that follow. The Economic recovery plan. These and more questions and concerns were addressed in this panel discussion. Ultimately, some key policy prescriptions were for the Zambian government to formulate an agreement with the IMF in order to find a solution to the pressing national debt situation.Additionally, it was prescribed that, local debt be paid off to

2021 Q1 AmCham Policy Review

local suppliers and manufactures, in order to stimulate economic activity, increase production and exportations, and bring down the rate of inflation as well as the currency exchange rate. While government was encouraged to stimulate economic growth, an emphasis was placed on the quality of this growth and the creation of opportunities that improve the collective standards of living within the nation.

Finally, it was also prescribed that policies that facilitate a private sector driven economy be clarified and that forensic audit investigations be conducted in order to tackle the issues of corruption and reduce the discretion of bureaucrats. You can visit our Facebook page to watch the full discussion.

2021 Q1 AmCham Policy Review

TRADING UNDER THE AFCFTA cooperation over product standards and regulations, protections for infant industries and general exceptions, trade remedies, facilitation and transit and technical assistance capacity-building and cooperation.

By Kenisha Mwangase

The African Continental Free Trade Area (AfCFTA) is a trade initiative for an African economic, investment and customs community as proposed under the 1991 Abuja Treaty of the African Economic Community (AEC), an organization under the African Union (AU). The AfCFTA engulfs a market of 1.2 billion people and GDP of $2.5 trillion, across all 55 member states of the AU, making it the world’s largest free trade area since the formation of the World Trade Organisation (WTO). The AfCFTA is however only in effect in the 35 AU states that have ratified the agreement. The key trade features of the AfCFTA include protocols on trade in goods and services, protocols on dispute settlements and phase 2 negotiations. The protocol on trade in goods includes the elimination non-tariff barriers as well as the elimination of duties and quantitative restrictions on imports, with imports being treated no less favorably than domestic products. The protocol on trade in goods also accounts for the cooperation of customs authorities,

Meanwhile, the protocol on trade includes; transparency of service regulations, mutual recognition of standards, licensing and certification of services suppliers, progressive liberalization of services sectors and provisions for general and security exceptions, with a requirement for service suppliers being treated no less favorably than domestic suppliers in liberalized sectors. Through its protocols, the AfCFTA provides business opportunities that enhance industrialization in Africa in line with the AU's Agenda 2063: The Africa We Want. For example, The elimination of tariffs on intra-African trade encourages businesses to trade within the continent by removing the average 6.1% tariff businesses face when they export within Africa than when they export outside. Moreover, the UN's Economic Commission for Africa (ECA) estimates a potential intra-African trade boost of 52.3% facilitated by the elimination of import duties through AfCFTA protocols. The Boosting Intra-African Trade (BIAT) Action Plan is the principal accompanying measure for AfCFTA. It outlines the areas in which investments are required, such as trade information and access to finance,

2021 Q1 AmCham Policy Review

to ensure that all African countries can benefit from AfCFTA. . While African countries that are relatively more industrialized such as Nigeria are well placed to take advantage of the opportunities for manufactured goods, lessindustrialized countries such asZambia can also benefit from linking into regional value chains. These regional value chains involve larger industries sourcing their supplies from smaller industries across borders. AfCFTA makes the formation of regional value chains easier by reducing trade costs and facilitating investment. The formation of regional value chains through AfCFTA protocols further promotes small and medium-sized enterprises, by facilitating the input supply to larger regional corporations, that possess the capacity to export. Before exporting cars overseas, for example, large automobile manufacturers in South Africa source inputs, including leather for seats from Botswana and fabrics from Lesotho, under the preferential Southern African Customs Union trading regime. This may also provide a stepping stone for small and medium sized enterprises to eventually expand into the overseas markets In order to create an equal trading advantage, the AfCFTA also accounts for the cost of being landlocked, which includes higher costs of freight and unpredictable transit times. As such, the AfCFTA is set to include provisions on trade facilitation, transit and customs cooperation for landlocked nations such as Zambia.

Less-industrialized countries can also benefit from the implementation of the program for the Accelerated Industrial Development of Africa; domestic investments in education and training can ensure the necessary complementary skills as well as the implementation of the African Mining Vision which complements the AfCFTA by helping resourced based economies to strategically diversify their exports into other African Markets. Additionally, agricultural focused economies can also gain from a widened market demand. With the perishable nature of many agricultural products, agricultural focused economies stand to benefit from improvements in customs clearance times and logistics that are expected of AfCFTA. Last but not least, the AfCFTA resolution acknowledges the reciprocity with Regional Economic Communities (RECs) and the potential for incoherence. As such, it is stipulated that countries involved in other RECs, Trading Arrangements and Custom Unions, which have attained among themselves higher levels of regional integration than under the AfCFTA shall maintain such higher levels among themselves. However, RECs that have achieved the levels of integration necessary to form customs unions will submit common market access offers for trade in goods. In the long run, as the level of continental integration deepens, the trade-related functions of RECs are expected to be consolidated at the continental level of the AfCFTA:

2021 Q1 AmCham Policy Review

CYBER SECURITY & CYBER CRIME BILL SYMPOSIUM

On the Image Above From Left to Right; Ms Chansa Mwila, Senior Programs Manager at the American Chamber of commerce in Zambia, Mr Mafipe Chunga, Associate Director at KPMG, Mrs Linda Kasonde, founder of LCK chambers and Mr Leonard Mwanza, CEO at Bankers Association of Zambia.

On March 18th, 2021, The American Chamber of Commerce in Zambia successfully hosted a Cyber Security and Cyber Crime Bill Symposium. The symposium was focused around the Cyber Security and Cyber Crime Bill, which is currently in its third reading in the national assembly and awaiting assent from the President. The symposium was made possible through the sponsorship of Prudential Zambia, PWC and Southern Sun Hotel. SALIENT DISCUSSION POINTS; 1. The Bill’s infringement on constitutional human rights and freedoms such as the right to privacy, freedom of expression, freedom to information and media freedom.

2. The Bill’s relevance to offshore cybercrimes and threats 3. The feasibility, capacity and security of the large data collection storage system and the secure channels required for the bill to be put into practice. 4. The Bills lack of specificity and vague definitions for key terms that constitute cyber-threats and/or crimes. 5. The controls and powers of regulators and the ‘Minister’ referenced in the Bill. 6. The auditing and compliance implications of the Bill for local and foreign businesses across different industry sectors.

2021 Q1 AmCham Policy Review

7. The Bills compliance to international standards of cyber security regulations such as the AU’s Malabo convention stipulations. Zambia. Following a fruitful discussion, it was prescribed that the Bill’s assent be refuted so as to account for, and rectify the necessary provisions that raise constitutional and security concern, in order to better protect the citizens of the nation. With many concerns raised on human rights and freedoms, it was proposed for the Bill to be re-amended in order to do away with infringing

provisions of the Bill, such as sections 29 and 54, to name a few. It was also prescribed that the controls and powers of the regulators be clearly stipulated in an amendment of the bill in order to curb the abuse of power by regulating officers. Moreover, a call to specify the 'Minister' in reference was also made owing to accountability and curbing the potential abuse of government resources. Finally, government was also strongly urged to to reconsider the bills provisions with regards to legal search and seizure of cyber spaces.

2021 Q1 AmCham Policy Review

LEGISLATION SUMMARY Relevant 2020 Acts of Parliament

2021 Q1 AmCham Policy Review

CURRENTLY IN PARLIAMENT Please note that the following bills are under discussion in the National Assembly for the year 2021. 1. The Electoral Process (Amendment) Bill, 2021 2. The Zambia Institute for Tourism and Hospitality Studies (Amendment) Bill, 2021 3. The Zambia Chartered Institute of Logistics and Transport (Amendment) Bill, 2021 4. The Engineering Institution of Zambia (Amendment) Bill, 2021 5. The Zambia Institute of Marketing (Amendment) Bill, 2021 6. The Urban and Regional Planners (Amendment) Bill, 2021 7. The Accountants (Amendment) Bill, 2021 8. The Higher Education (Amendment) Bill, 2021 9. The Rural Electrification (Amendment) Bill, 2021 10. The National Heritage Conservation Commission (Amendment) Bill, 2021 11. The Examination Council of Zambia (Amendment) Bill, 2021 12. The Zambia Law Development Commission (Amendment) Bill, 2021 13. The Zambia Institute of Advanced Legal Education (Amendment) Bill, 2021 14. The Zambia Revenue Authority (Amendment) Bill, 2021 15. The Zambia Institute of Diplomacy and International Studies (Amendment) Bill, 2021 16. The Tropical Diseases Research Center (Amendment) Bill, 2021 17. The Service Commissions (Amendment) Bill, 2021 18. The Public Service Pensions (Amendment) Bill, 2021 19. The Petroleum (Exploration and Production) (Amendment) Bill, 2021 20. The National Institute of Public Administration (Amendment) Bill, 2021 21. The National HIV/AIDS/STI's/TB Council (Amendment) Bill, 2021 22. The Control of Goods (Amendment) Bill, 2021 23. The Compensation Fund (Amendment) Bill, 2021 24. The Citizen Economic Empowerment (Amendment) Bill, 2021 25. The Public-Private Partnership (Amendment) Bill, 2021 26. The Health Professions (Amendment) Bill, 2021 27. The Cyber Security and Cyber Crimes Bill, 2021 28. The Legal Aid Bill, 2021

2021 Q1 AmCham Policy Review

Prepared By Kenisha Mwangase - (Policy Research & Communications), with the support of Daniel Chibutu (Business Development) and Chansa Mwila (Senior Programs Manager) Other Contributors; Bwalya Mulenga Taizya S.A. Munyenyembe

2021 Q1 AmCham Policy Review