Zambia Positions Agrifood Sector for Investment

Zambia is positioning itself as a regional agrifood powerhouse, leveraging the United Nations Food and Agriculture Organization's (FAO) Hand-in-Hand Initiative to attract institutional investment into agriculture, processing, and export infrastructure. The programme, launched in partnership with the Zambian government, signals a strategic pivot toward commercial-scale farming and downstream value chains—moving beyond subsistence production into competitive export markets.

The Hand-in-Hand Initiative is a data-driven FAO mechanism designed to accelerate agricultural growth in developing economies by de-risking investments through technical assessment, bankability studies, and institutional alignment. Zambia's inclusion positions the country to compete for diaspora capital, impact funds, and agribusiness multinationals seeking entry into Southern African commodity chains.

## Why is Zambia attractive for agrifood investment right now?

Zambia holds significant natural advantages: 42 million hectares of arable land (only 20% currently utilized), abundant water resources, and strategic proximity to regional markets in southern Africa. The country produces 3.5 million metric tonnes of maize annually, positioning it as a regional surplus producer. However, post-harvest losses exceed 30%—creating immediate opportunity for cold-chain infrastructure, milling, and storage facilities. Government policy reform, including reduced input subsidies and trade liberalisation under the African Continental Free Trade Area (AfCFTA), has lowered barriers to foreign participation.

Additionally, Zambia's currency stabilisation (ZMW trading near 27-28 per USD in 2025) has restored investor confidence after years of volatility. The World Bank's latest Doing Business rankings show incremental improvements in agricultural licensing and land tenure security—critical for long-term agribusiness commitments.

## What sectors does Hand-in-Hand prioritise?

The FAO framework targets three interconnected value chains: **staple grains** (maize, wheat, pulses), **high-value horticulture** (vegetables, fruits for export), and **animal protein** (beef, dairy, poultry). Secondary opportunities exist in agro-processing—aquaculture feed, animal supplements, and milling equipment. The initiative also emphasises climate-smart agriculture, recognising Zambia's exposure to drought cycles (El Niño effects impacted harvests in 2023–24).

Early bankable projects include cooperative-led irrigation schemes in the Southern Province, smallholder maize aggregation platforms, and export-grade vegetable production corridors near Lusaka and Livingstone. The FAO estimates potential for $1.8–$2.2 billion in capital mobilisation over five years if governance and land-tenure frameworks strengthen.

## How do foreign investors access these opportunities?

The Hand-in-Hand Initiative operates through a three-step funnel: (1) FAO-validated investment profiles published on the Ministry of Agriculture portal, (2) matchmaking with development finance institutions (AfDB, IFC, CDC Group), and (3) direct negotiation with district government and farmer organisations. Diaspora investors and impact funds can enter via cooperatives or outgrower schemes, which reduce execution risk. Agricultural Special Economic Zones (SEZs) in Southern and Eastern provinces offer tax incentives—10-year corporate tax holidays on qualifying agribusiness enterprises.

Risk factors remain: land-title disputes, inconsistent policy enforcement, and infrastructure gaps (rural electricity, road networks) require due diligence. Currency controls, though relaxed, can still constrain dividend repatriation during fiscal stress.

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