Evaluating the lacuna in the legal framework for foreign direct investment in Zambia

Abstract

The legal framework governing Foreign Direct Investment (FDI) in Zambia, primarily outlined in the Investment Trade and Business Development Act, faces critical shortcomings that impede the optimal utilization of FDI, thereby obstructing sustained economic progress. Despite acknowledging FDI's potential as a catalyst for economic advancement, the current legal structure inadequately addresses key challenges, such as limited absorptive capacity, deficient infrastructure, and policy gaps. This deficiency in the legal apparatus fails to sufficiently confront the multifaceted impact of FDI on local industries, income distribution, and societal welfare, revealing an overarching need for comprehensive evaluation and restructuring within the existing legal framework. The insufficiency of examination regarding FDI's influence on local industries and its socioeconomic ramifications exacerbates the inadequacies present in the legal setup. Recognizing this urgency, this study emphasizes the critical necessity to identify and rectify the deficiencies entrenched within the law governing FDI in Zambia. The objective is to construct a more enabling and comprehensive legal framework that not only maximizes the advantages of FDI but also fosters the nation's socio-economic transformation. By addressing these lacunae, the intention is to propel Zambia towards sustained economic growth, leveraging FDI as a strategic instrument for national development.