Business in AfricaWHEC J Jagathesan

WORLD HINDU ECONOMIC FORUM Opportunities for Hindu Businesses in Africa
Dato J Jegathesan # CEO : JJ ISHWARA CONNECT Malaysia # Exco : Malaysia South South Agency (MASSA) # Deputy DG Malaysian Industrial Development Authority (MIDA) (Rtd) # Sr. Economic Advisor to Japanese Government JICA (Japan International Cooperation Agency) for their Asia Africa Business Linkages strategy: Focus on Zambia) ( 2006 to mid 2012)
WHEF 2013 @ Bangkok : Strengthening Economy, Shaping Future
WORLD HINDU ECONOMIC FORUM What are my credentials to speak about Africa?
1990 : Set up the Zimbabwean Investment Centre. (4 months) (Re. Commonwealth Sec. London) 1991 : Set up the Tanzanian Investment Centre. (4 months). (Re. UNDP) For several years directed by my than PM Dr Mahathir Mohd and other International Agencies I visited and briefed the Cabinets of Governments of Namibia, Uganda, Tanzania, Senegal etc on Malaysias Economic Miracle 2006 to 2012 : focus on Zambia through JICA
WORLD HINDU ECONOMIC FORUM

AFRICA IS NOT ONE NATION : IT IS NOT A
MONOLETHIC ECONOMIC OR POLITICAL BLOCK. 54 Nations make up Africa
Many paint Africa with one brush Only 20% of African Nations are in any conflict the other 80% are stable and wanting to improve the welfare of their Nations Negative get all the publicity

UN Economic Commission for Africa : African Economic Outlook 2013 :
The continents economic outlook for 2013 and 2014 is promising. Africas economy is projected to grow by 4.8% in 2013 and accelerate further to 5.3% in 2014.
The main sources of dynamism : the expansion of agricultural production growth in services rise in oil production and mining.
External financial flows into Africa hit a record in 2012 and are expected to top USD 200 billion in 2013. This highlights the growing importance of investment, official development aid and remittances to a continent on the move.
Malaysian Media report : 30th July..: Malaysians Need to take heed of whats going on in Africa : Our Companies have sunk US$ 19billion into the continent. World Bank reports 5 out of the 10 fastest growing economies in 2012 were from Africa
North African countries remain tense, while people in many sub-Saharan states worry about jobs and the cost of living.
ONE SUCH SUB SAHARAN STATE : ZAMBIA

In 2010, the World Bank named Zambia one of the world's fastest economically reformed countries. The Common Market for Eastern and Southern Africa (COMESA) is headquartered in Lusaka

Population: 12 million (est. ). 55% living in urban areas. Rural areas are sparsely populated Population growth rate: 3.1 % per annum
Languages: English (official language). 7 main out of 73 local languages Currency: Zambian Kwacha ( US$1 = 5.44 Kwacha)
Unemployment and underemployment in urban areas are serious problems, while most rural Zambians are subsistence farmers

Zambian politics take place in a framework of a Presidential Representative Democratic Republic, whereby the President of Zambia is both head of state and head of government in a pluriform multi-party system.
30 years : No conflict. Two years ago elections.Model for Africa on peaceful transition of Power Zambian Investment Agency : a One Stop help Center for Investors

INVESTMENT OPPORTUNITIES IN ZAMBIA 1) Agricultural Sector : Large Scale Agriculture or Animal husbandryabundant and fertile land. Cotton, Sugar Cane, many Vegetable products i.e. Sorghum, Wheat, coffee, tea , beans etc Agricultural LAND in certain areas can be obtained at US$ 100/= per HECTARE

2) Manufacturing Sector : This sector is yet to be developed to its full potentialnot just for Domestic Market needs But to supply the Regional Common Markets Viz: a) SADAC : Southern African Development Community b) COMESA: Common Market for Eastern and Southern Africa Total Population: 580 million*
WORLD HINDU ECONOMIC FORUM SADAC
The Protocol intends to further liberalise intra-regional trade by creating mutually beneficial trade arrangements, thereby improving investment and productivity in the region. It advocates that Member States eliminate barriers to trade, ease customs procedures, harmonise trade policies based on international standards, and prohibit unfair business practices.

COMESA: Common Market for Eastern and Southern Africa

3) MANUFACTURING POTENTIAL : Not necessarily Greenfield Manufacturing Projects. Many Indigenous & Indian Zambians have manufacturing operationsBUT much of it is outdated machines and Equipment. Strangely many have little contacts with the Potential that ASIA has to offer. Best bet: Seek out existing Zambian manufacturers seeking to EXPAND, DIVERSIFY OR SET UP NEW PROJECTS and start with them.
Same strategy for other African Nations.


The following incentives are available investors investing not less than $500,000 in approved Priority sector. A corporate tax of 0% for an initial period of 5 years from the first year profits are made. For years 6 to 8 corporate tax will be paid on 50% of profits and in year 9 to 10 on 75% of the profits. Dividends shall be exempted from tax for 5 years from the year of first declaration.

Capital Expenditure on improvement or for the upgrading of infrastructure shall qualify for improvement allowance of 100% of such expenditure.
Suspended Customs Duty to zero for 5 years on most machinery and equipment. Import VAT exemptions on imported inputs targeted at production for exports.

. Tax Incentives to set up value added leather products companies based on either imported hides or locally available hides Importation of inputs especially chemicals for tanning hides and skins are zero ratedalso possibly zero rating importation of shoe components in order to encourage the manufacture of leather goods Importation of inputs especially chemicals for tanning hides and skins are zero rated

Cotton and Copper : Zambia a major producer of Cotton and Copper BUT 90 % exported raw in the form of unprocessed Copper (ingots) and Cotton (Lint) Processing these for exports is a priority and attracts incentives Likewisepotential for processing of Honey, Neem , Cashew nuts , Ground nuts etc.

EDUCATION Potential: Made a Priority Economic Sector entitled to Incentives as for Manufacturing.
VISION: to make Zambia a education Hub for Sub Saharan Africa
University Education and Colleges of Education The demand for admission: Annually about 100,000 pupils complete High School and an additional 300,000 leave the school system at Grades 7, 9 and 12 levels. (This is increasing annually)
Of those that completed high school, more than 30,000 obtained the minimum entry requirements of Public Universities but these only had a combined absorption capacity of about 16,000 .
Technical and Vocational Training In the Technical Education, Vocational and Entrepreneurship Training (TEVET) sub-sector, the annual enrolment capacity is 32,911 . (Slowly increases annually) Out of the 400,000 learners that are eligible to enter TEVET institutions only about 14,000 learners are enrolled annually
This gives an absorption rate of only 3.5 percent Access to TEVET services by the potential and eligible population (i.e. labour population in age group 15 to 49 years) is currently at less than 13%, whereas the average range for middle income economies is between 20% and 30%
MEDICAL Potential: Made a Priority Economic Sector entitled to Incentives as for Manufacturing
VISION : To make Zambia a regional centre of excellence for private sector driven Medical, Pharmaceutical and Dental services

Government spends annually K6 billion (approx US$ 1 billion) for Zambian citizens seeking specialist treatment abroad. Approx 120 cancer patients and 110 Zambians open heart surgery patients per year await overseas treatment. South Africa, with the best medical/health facilities/services in the region, is an expensive provider...and those who can afford go to India.
There are only 7 pharmaceutical companies producing 5% of the essential drugs locally. 50 trading companies import 95%
Most of the essential drugs are still imported


JNN Newsflash : NRB Pharma Ltd of India has just last month broken ground in Zambia for a US10 /= Pharmaceutical operation (they did not attend this eventBUT saw the potential) Health sector made a Priority industry, to help reduce the doctor patient ratio in Zambia (at present it is 1:15,000 as opposed to WHO recommended ratio of 1:5000)

The government will be encouraging the following facilities to be set up to make Zambia a centre of excellence for the Medical/Health sector: Surgery
Orthopedics, Neurosurgery, Cardiac Surgery, Head and Neck surgery, Plastic Surgery, Minimally invasive surgery/Laparoscopic surgery, Organ Transplant Surgery (Renal Transplant), Traumatology/Emergency Medicine, Paediatric Surgery , Obstetrics & Gynaecology Assisted Reproduction; in-vitro fertilization, Tubo-Plasty, Laparascopic/endoscopic surgery. Obstetric/Maternal Services and Neonatal ICU
Medicine
Emergency medicine, Renal unit/dialysis, Cardiology, Endocrinology. Respiratory Medicine, Gastro-Enterology/Endoscopy, Neurology

Pediatrics Hospital for sick children with Medical and surgical services Rehabilitation Centres Occupational Therapy Physio-therapy Speech therapy Stroke rehabilitation Diagnostic Centers Imaging; CT, MRI, ultrasound, Angiography Laboratory; Haematogy, Biochemistry, Hormononal Assay, Serum drug levels, blood gasses, tumour markers, genetic and tissue typing, DNA analysis, Virology, Microbiology

The Zambian ministry of health says at least 40,000 nurses are needed but the country has to make do with just half. Malaysian Hospital seeking JV: US$ 15 mill. cost : Seeking 70% Partner (??? Status)
SERVICE SECTOR : Potential
1) Super Markets & Department stores: Packed to Capacity BUT every product (mostly from Asia) 3 to 5 times higher than Malaysia. POTENTIAL: for a Major Asian Super Market: direct imports from Asia.
CONSTRUCTION POTENTIAL : Great Shortage of low cost, medium and high cost homes.
MULTI FACILITY ECONOMIC ZONES (MFEZ)

Construction of MFEZ and Industrial parks attract same Tax Holiday as Manufacturing.
Tourism: Hotels , Game Parks and Tourist Resort Complexes:
NORTH LUANGWA NATIONAL PARK
Example of one Park covers 144,000 km2 of land
WEST LUNGA NATIONAL PARK
Existing Accommodation Facilities in the Parks
New Kalala Lodge near Kafue National Park
Kasaba Bay Lodge in Nsumbu National Park Hotel Intercontinental - Lusaka
Mfuwe Lodge in South Luangwa National Park
Nkamba Bay Lodge Nsumbu National Park
Potential for Tourism Development
TATA (Taj) has only One (?) hotel in Africa and it is in Lusaka City. That and other Hotels VERY EXPENSIVE. Shortage of Hotels and Lodges all over Zambia. Same Tax Holidays as Manufacturing.
WONDER OF THE WORLD : VICTORIA FALLS
WORLD HINDU ECONOMIC FORUM Potential for Tourist Resort Complex near Victoria Falls
An Asian Zambian has a 50 acre site upriver from Victoria Falls . Riverfront of Zambezi River. Two years ago: seeking a JV partner to develop a Tourist cum Education at the site. INTERESTED? Can follow up.

RECOMMENDATION TO THE WORLD HINDU ECONOMIC COUNCIL
ORGANIZE A FACT FINDING MISSION TO ZAMBIA. SEE FOR YOURSELVES THE POTENTIAL
JJIC ISHWARA CONNECT : if approached will be prepared to help.


TIME too short for more! Thanks for the Opportunity to share .
J. JEGATHESAN (JAGADEESAN) JJ Ishwara Connect - Malaysia E mail: jjegaic@gmail.com
Mobile phone in KL : +6 012 321 2030
E mail
jjegaic@gmail.com

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WORLD HINDU ECONOMIC FORUM Opportunities for Hindu Businesses in Africa

WORLD HINDU ECONOMIC FORUM

WORLD HINDU ECONOMIC FORUM

WORLD HINDU ECONOMIC FORUM

WORLD HINDU ECONOMIC FORUM

WHEF 2013 @ Bangkok : Strengthening Economy, Shaping Future

WORLD HINDU ECONOMIC FORUM

ONE SUCH SUB SAHARAN STATE : ZAMBIA

WHEF 2013 @ Bangkok : Strengthening Economy, Shaping Future

WORLD HINDU ECONOMIC FORUM

WHEF 2013 @ Bangkok : Strengthening Economy, Shaping Future

WORLD HINDU ECONOMIC FORUM

WORLD HINDU ECONOMIC FORUM

WORLD HINDU ECONOMIC FORUM

WORLD HINDU ECONOMIC FORUM

WHEF 2013 @ Bangkok : Strengthening Economy, Shaping Future

WORLD HINDU ECONOMIC FORUM SADAC

WHEF 2013 @ Bangkok : Strengthening Economy, Shaping Future

WORLD HINDU ECONOMIC FORUM

WHEF 2013 @ Bangkok : Strengthening Economy, Shaping Future

WORLD HINDU ECONOMIC FORUM

Same strategy for other African Nations.

WORLD HINDU ECONOMIC FORUM

WORLD HINDU ECONOMIC FORUM

WORLD HINDU ECONOMIC FORUM

WHEF 2013 @ Bangkok : Strengthening Economy, Shaping Future

WORLD HINDU ECONOMIC FORUM

WORLD HINDU ECONOMIC FORUM

WORLD HINDU ECONOMIC FORUM

WORLD HINDU ECONOMIC FORUM

WORLD HINDU ECONOMIC FORUM

WORLD HINDU ECONOMIC FORUM

WORLD HINDU ECONOMIC FORUM

WORLD HINDU ECONOMIC FORUM

Most of the essential drugs are still imported

WORLD HINDU ECONOMIC FORUM

WORLD HINDU ECONOMIC FORUM

WHEF 2013 @ Bangkok : Strengthening Economy, Shaping Future

WORLD HINDU ECONOMIC FORUM

WHEF 2013 @ Bangkok : Strengthening Economy, Shaping Future

WORLD HINDU ECONOMIC FORUM

WHEF 2013 @ Bangkok : Strengthening Economy, Shaping Future

WORLD HINDU ECONOMIC FORUM

SERVICE SECTOR : Potential

WORLD HINDU ECONOMIC FORUM

MULTI FACILITY ECONOMIC ZONES (MFEZ)

WORLD HINDU ECONOMIC FORUM

Tourism: Hotels , Game Parks and Tourist Resort Complexes:

WHEF 2013 @ Bangkok : Strengthening Economy, Shaping Future

NORTH LUANGWA NATIONAL PARK

Example of one Park covers 144,000 km2 of land

WEST LUNGA NATIONAL PARK

Existing Accommodation Facilities in the Parks

New Kalala Lodge near Kafue National Park

Kasaba Bay Lodge in Nsumbu National Park Hotel Intercontinental - Lusaka

Mfuwe Lodge in South Luangwa National Park

Nkamba Bay Lodge Nsumbu National Park

Potential for Tourism Development

WONDER OF THE WORLD : VICTORIA FALLS

WORLD HINDU ECONOMIC FORUM

JJIC ISHWARA CONNECT : if approached will be prepared to help.

WORLD HINDU ECONOMIC FORUM

J. JEGATHESAN (JAGADEESAN) JJ Ishwara Connect - Malaysia E mail: jjegaic@gmail.com

Mobile phone in KL : +6 012 321 2030