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Labour Market, Job Reintegration, Regulation of Labour, Setting Up a Business, Bank- and Credit-System
Most of the people who hold a trade certificate or diplomas in various fields are not employed due to the fact that the country is politically not stable. Corruption is a serious problem in Zambia. It has gone to an extend that qualified people are not finding jobs according to their qualification.
Many companies have employed workers that are qualified in various fields. But the economy is very bad and most of the people are living below the poverty line and companies cannot really meet the workers' needs. But just to keep employees in the line of production, in Zambia there is a big gap between the rich and the poor. The situation is more like the rich are getting richer and the poor are getting poorer.
Unemployment situation is just the same as poverty. Chances of getting a good job in Zambia are very small .Its best for an individual to accept what ever is out there and not to look at the qualification. Otherwise one can wait for a long time.
Corruption in Zambia has contributed to unemployment situation and the demand for the employees by economic sector is not easily noticed. Even if they advertise for jobs in national newspapers, that's just for formality purpose. Otherwise it is best to go through the Ministry of Labour, though chances of getting jobs with good working conditions are very small.
Economically the most interesting companies in Zambia are the power supply company (ZESCO) and Telecommunication company (ZAMTEL). They employ many people every year, mostly casual workers and qualified workers.
This so happens that these two companies turn to discharge some workers, all because of the HIV / AIDS pandemic, it has really effected the economic sector. A lot of workers die every year. Hence these two companies are always employing. HIV / AIDS has affected the production level in many companies in Zambia.
Information by Ministry of Labour
In Zambia for a person to be recognized as a Zambian national, he or she should have a national registration card (NRC) and this should be collected at the age of 16.
The Ministry of Labour has power to settle disputes between the employer and the employee. It also has power to fix conditions of services for a company that not laid its conditions. It also gives guidelines on benefits for an employee (retrenchments, retirement, discharge, dismissal).
Above all, it has the power to find jobs for job seekers and it is the main returnee organization in Zambia. All the private employment agencies register with the Ministry of Labour to carry out their duties and they pay a certain fee. Private employment agencies in Zambia lay down their condition of services as required by Ministry of Labour.
Job seekers do not get any financial support from government in Zambia. There are no conditions and terms for financial support for job seekers since this support is not provided for. There are no insurance policies for job seekers.
Vacancies are usually announced in newspapers, radios, television, web-site, posters, bill boards, handouts and at times just verbally passed on from one person to another.
Times of Zambia, Daily Mail, The Post, Lowdown, Sunday Mail, The Monitor, Trendsetters
In terms of position wanted, normally the name of the company or institution that is looking for employees is clearly announced, its location and at times its mission statement and objectives are also stated.
Then the position to be filled is mentioned together with the required qualifications of an individual applying for the job are lined, years of experience if necessary, previous employers and referees.
Costs for announcements vary from one media institution to the other. For example, in Times of Zambia classified small ads of ten (10) words minimum cost K 6,374 with each additional five words or part costing K 3,187. Zambia Daily Mail charges K 5,182 for classified small ads of ten (10) words and K 209.676 for each ear piece.
Zambia National Broadcasting Corporation (ZNBC) advertising rates are:
Radio rates for spot advertising:
Prime time
60 seconds = K 98, 445
15 seconds = K 49,223
‘A’ Time
60 seconds = K 54,712
15 seconds = K 27,355
TV rate for spot advertising:
Prime News
60 seconds = K 1, 200, 000
15 seconds = K 449,802
Prime +
60 seconds = K 756,431
15 seconds = K 175,705
Off Prime
60 seconds = K 317, 819
15 seconds = K 99,651
Most of the companies in Zambia are looking for qualified workers. Workers that are able to communicate in English are highly qualified.
In Zambia there are both public and private Employment agencies.
Public agencies are called Labour Offices and Employment Exchange falling under the Department of Labour in the Ministry of Labour and Social Security.
Department of Labour
P.O. Box 32186, Lusaka
Fax: 260-01- 235172
Labour Office and Employment Exchange is found in each district to help in the recruitment of workers in the public and private sectors and ensures that labour laws are adhered to in all sectors of employment
What happens normally is that job seekers go to these offices and leave their names, educational and professional qualifications and contact addresses. In the like manner, prospective employers from both public and private sectors go to the same offices to present their requirements so that the labour officers can help them identify the workers they want. At times job seekers, especially casual workers, wait for prospective employers at these offices.
The necessary documents that are required for a job seeker to register with the labour department at Ministry of Labour are:
All these requirements should be photocopies and the original copies are required at the time you commerce.
In Lusaka when applying for a job, one needs to go straight the Labour Department, but in other parts of the country, for instance Kabwe, Mukushi, Choma etc. they have an office that is under the Ministry of Labour called the Employment Exchange Office. When a person is looking for a job in mines, medical papers are required at the Employment Exchange Office.
Address of parastatal employment agencies:
Mr. A Munkanta
Principal Labour Officer
Department of Labour
Box 30184, Lusaka.
Private Employment Agencies have to register with the Labour Department before they can offer their service. They cannot carry out their duties without a certificate from the Ministry of Labour. With the Private Employment Agencies the process is to look for a person who is looking for a job to register with them. At the end of the day he/she will get a good job with good working environment and services. The services are not free; one needs to pay a fee of US$ 5 average.
There are also a number of private job placement agencies such as:
Private agencies have clients who they service regularly in terms of recruitment of qualified personnel. These agencies are from time to time asked by their clients to search for a certain category of professionals. In turn the agencies advertise the positions on behalf of the clients for job seekers to apply. After receiving applications the agencies, together with their clients, select suitable candidates and maintain data banks of job seekers. These agencies charge for their services.
In Lusaka, one of the main effective agency is situated at Kamwala called Job Connections Ltd. It offers the best services. The necessary documents required to register with them are:
All the particulars have to be approved with the lawyer or commissioner of oaths. There is a fee for the approval of the copies by a lawyer.
Job connection limited (private) Employment Agency:
Ground floor
Kambendekela house
Dedan Kimathi Road
BOX 33826, Lusaka.
The main Returnee Organization
Ministry of labour
Box 30184, Lusaka.
The private and parastatal employment agencies have contributed a great deal in employing job seekers every year in Zambia. Having registered with the agencies you are assured of working. In situation where the company has no contract, the Ministry of Labour in Zambia has power to lay down a contract, it also guide lines on benefits. The Ministry of Labour has the power to advice the employers on what is expected from them and also the employees.
When a company has drawn the employment contract, it has to bring it to the Ministry of Labour for approval, because certain companies have drawn unfair contracts.
In Zambia the Ministry of Labour has powers to fix minimum condition of services for a company. As for this the minimum working hours per week should not be more than 48 hours, this is for workers in Zambia. But reality looks different: Security Officers are expected to work for more hours.
The minimum wage is based on degree and position, but an employer should not pay less than minimum wage of K 400 per hour (about US$ 0,05 per hour). But with a qualified employee, salary is quit reasonable.
The Ministry of Labour has the right to advice employers on taxation and holiday entitlement. The more salary an employee gets the more taxi he pays. Since in 1992 no one has ever been exempted from paying tax; every employer has to pay tax.
Holiday entitlement in Zambia is the minimum of two days per month worked, should not be less than two days for every employee.
The Ministry of Labour gives out guidelines for benefits, retrenchments, dismissals, retirements and discharges. When a person is older than 55 years, he/she has to retire. Early retirement is between 45 and 55 and the person has been saving for at least 10 years.
A retired employee should get an average 3-months-basic-salary per year served. A retrenched employee should get an average 2-months-basic-salary per year served. Medical discharged should get an average at 3-months-basic-salary per year served.
The Ministry of Labour has to make sure that all the companies in Zambia carry out their duties well and that the condition of services are followed. Any unfair treatment to employees is reported at the Industrial Relations Court through the Ministry of Labour. The relations court settles disputes between the employer and the employee.
The establishment of a particular business will depend on a person or partners, if they have enough resources to start everything and if the business has a chance to be profitable. Some entrepreneurs go through training and some are just capable of handling business affairs and are experienced. Vocational training in Zambia offers courses for entrepreneurs (entrepreneurship).
A person planning to set up business in Zambia should first establish himself, meaning that:
The necessary contacts for business starters are:
Currently a project called Social Safety Net organises seminars and workshops for people who would like to start businesses especially those who have been or are about to be retired from both public and private sectors. Participation to most of these seminars is free unless where an organisation requests for a tailor made workshop/seminar for its members.
For some one to appreciate the suitability of legal forms of a company or a kind of business and financial framework, he/her needs expert legal and business advice. Zambia Investment Centre provides valuable literature and advice on such issues.
Partners can be found by either through advertising or by contacting Zambia Investment Centre. Alternatively one can contact the following associations:
The role of these association is to promote development by encouraging and supporting up coming business persons.
The first thing one has to do if he/she waits of business in Zambia is to have his/her company/business name registered the by the Registrar of Patents and companies or, if it is already registered somewhere, incorporated in Zambia. Registration is not free: If an entrepreneur is registering a name of the company he has to pay K 19,500 (about US$ 4) and buy a form at K 5,000.
Investors also require Investment Certificate. To get this Certificate they are required to complete a standard application form and submit it to the Investment Centre.
The following should accompany the application.
Once an application has been approved, a fee of K 7,670,000 inclusive of VAT at 15.5 % must be paid by the investor before collecting the investment certificate.
Applications are considered by the board on a monthly basis.
Applications for an investment certificate in the manufacturing sector required proof that application for a manufacturing licence has been made with relevant authorities. Local councils are responsible for the issuance of Manufacturer’s licences and application for them must be supported by the following documents.
Application for an investment certificate in some sectors of the economy require proof that application for subsidiary permits/authorisation from relevant institutions or ministries have been lodged. The following sectors normally require secondary licences in addition of the investment certificate:
For most projects, authorisation from the Environmental Council of Zambia may also be required.
Environmental Council of Zambia
P.O. Box 35131
Corner Suez and Church Roads
Plot number 6975, Ridgeway Area, Lusaka
Tel.: 260-1-254130/1
Fax: 260-1-254164/254023
E-Mail: ecz@necz.org.zm
Website:
http://www.necz.org.zm/
All the registration of the company is done at the Ministry of Commerce Industry. The ministry also assists by giving the company a trading license through the city council. City councils are there in all parts of the country to make it easier for the formation of companies where the entrepreneur lives.
Under the Company Act in the law of Zambia, every person doing business should have the trading license of the city council. Firstly, he/she has to register with the Ministry of Commerce and Industry. The Ministry of Commerce and Industry is concerned with the operations of every company in Zambia, either limited company or public limited company (PLC).
A company has to prepare an Article of Association through a lawyer. If not, the Ministry of Commerce and Industry has an Article of Association accepted by the law of Zambia. The Article of Association shows the regulations on how a company is run. It also shows the administration of the company, the share of capital and profit, arbitration etc.
A memorandum and the Articles of Association have to be prepared by companies limited by shares and have to be approved by the Ministry of Commerce and Industry.
The certificate of incorporate is issued to a private company to start running as for this certificate, you go to the ministry and buy forms at K 15,000 almost 3 Dollars. After filling the form it should be signed and stamped by the person in top authority at the Ministry of Commerce and Industry.
Other fees to be paid before forming a company are:
Running a business, one has to access the market, otherwise in Lusaka buying or renting business property is quite costly.
Regulations concerning the protection of trademarks and patents are enforced by the
Ministry of Trade, Commerce and Industry
P.O. Box 31968 or 34373, Lusaka
Officials at the above mentioned Ministry are always ready to help those who want to know more about patents and legal trademarks protection.
Different banks offer different conditions regarding the opening and maintenance of business accounts. Initial deposits, transactions and overdraft fees vary from bank to bank though most of them require the following for a business/company account to be opened:
As already mentioned, initial deposits vary depending on the type of business/ company, the account and bank chosen. It can be as low as K 500,000 or as high as K 40, 000,000.
Office accommodation can be found through newspaper and radio/television advertisements. Individual landlords and real estates agents advertise residential houses, ware houses, office spaces or blocks for rent or for outright purchase.
A contract for rent should clearly spell-out terms of agreement, i.e. intervals at which payment should be made (e.g. monthly, quarterly or; annually); the one to be responsible for repairs and maintenance of the building and the penalties for breaching the contract by either parties.
One can purchase a building through cash payment; getting a mortgage / loan from a bank or a building society or by agreeing with the vendor that the purchaser should settle the bill in installments.
There is no problem in the first arrangement. In case of the second and third arrangements, there is need for the contract to state the terms of agreement regarding the period within which the mortgage/loan or the debt has to be redeemed, and the penalties for breaching the contract by either parties.
The average rent for a reasonable office space in the peripheries of central business districts of most cities is K 1,5 million per month. The average cost for a four (4) bedrooms house, which can be converted into office accommodation, in some low density areas in Lusaka is K 200,000,000.
The Ministry of Finance and National Planning is responsible for the formulation of tax policy in Zambia and the implementing agency is the Zambia Revenue Authority (ZRA).
The tax year (charge year) runs from 1st April to 31st March of the following year. The ZRA requires that annual tax returns including accounts and supporting schedules are submitted on or before 30th September in respect of the tax year ended 31st March of the same calendar year. There are penalties for late submission of tax returns on or before the stipulated date.
The principal taxes include direct taxes (notably corporate tax, Pay-As-You-Earn, other personal income), Customs and excise duties, Value Added Tax (VAT), property transfer tax and mineral royalty (Mines and Minerals Act 1995).
Corporate Tax
| Companies listed on Lusaka Stock Exchange | 33 % |
| Farming and Exports of Non-traditional products | 15 % |
| Manufacture of Chemical fertiliser | 15 % |
| Mining companies | 25 % |
| All other companies | 35 % |
| Banking and financial Institutions up to K 250 million profit |
35 % |
| Banking and financial Institutions above K 250 million profit |
45 % |
Withholding Taxes
This tax is withheld at source for interest, dividends, capital gains, rents and government bonds. Income from these sources it taxed at 15 %.
Mineral Royalty Tax
Royalty levied on the gross value of natural resources, such as base or precious metals, industrial minerals at 2 % and gemstones is levied at 5 %.
Personal Income Tax
Personal income tax is levied in the range of 10 to 30 %.
Chargeable Income per annum
First K 1,920,000 @ 0 %
Excess above K 1,920,000@ 30 %
Employers are required to register and operate a Pay-As-You-Earn (PAYE) Scheme under which they are required to deduct the appropriate tax from the emoluments of liable employees and remit the tax to the Zambia Revenue Authority. The employer is under a legal obligation to deduct such tax and remit it to ZRA.
Customs Duty
Customs duty is levied on the value of imported goods as follows:
The only exception are goods originating in the COMESA countries, which are duty free on a reciprocal basis.
Value Added Tax (VAT)
VAT is levied at 17.5 %. Some specified goods and services are zero-rated or exempt.
Registration for VAT purposes is mandatory for every dealer in or supplier of standard rated and zero-rated goods and services, as defined in the VAT Act No. 4 of 1995 (which replaced sales tax), whose taxable turnover exceeds K30 million per annum or K7.5 million per quarter (three months). Voluntary registration is acceptable for dealers whose turnover falls below the stipulated minimum turnover.
Registered suppliers or dealers are required to submit VAT returns monthly within 21 days of the prescribed accounting period unless they have been allowed the option for extended tax period. Late or failure to submit returns, including nil returns, attracts penalties.
Input VAT can be claimed within a period of three years from the date of the tax invoice or other documentary evidence. The period of time within which input VAT, incurred prior to the date of registration for VAT purposes, can be claimed is three months.
Double Taxation Agreements
The countries that Zambia has signed Double Taxation Agreements with are; Denmark, Finland, France, Germany, India, Ireland, Italy, Japan, Kenya, Netherlands, Norway, South Kingdom and the United States of America.
Though it is not obligatory for people to insure their business, it is advisable that business starters – including the established ones – should cover their businesses and equipment against risks such as accidents.
There are a number of insurance companies which provide a number of policies such as life, pensions, motor vehicle, house hold goods, equipment, buildings, transportation etc insurance covers. Premiums vary from company to company depending on age/value of the person/ item being insured.
Some of the Insurance companies are:
Good and reliable staff can be found through advertising and checking with Labour Offices and Employment Exchanges. One can employ people on either permanent or part-time/ contract basis.
Ministry Labour and Social Security
Lusaka district Labour Office & Employment Exchange
P.O.Box 30184, Boma
Personal and social expenditure for employees should be calculated on the basis of salary, pension, medical and education allowances, gratuity and leave pay.
It is a legal requirement that termination of employment for any person should follow the laid down procedure in the labour laws. Due notice and reasons why one’s employment has to be terminated should be given.
Employees in each sector of the economy have legal voices in the name of trade union.
The government through the Ministry of Labour and Social Security has formulated a policy to restructure the social protection system in Zambia to complement the economic reform programme which has been running since 1991. The present administration of Social Security policy is rather fragmented as evidenced by the multiplication of providers without a central co-ordinating framework.
Currently, Zambia has four (4) Statutory Social Security Schemes alongside a number of privately run pension schemes. These are:
Membership to this scheme is compulsory for all regularly employed persons including the civil servants and local authority employees. The contributions to the scheme are paid at the rate of 10 % of ones total gross earnings up to a ceiling of 4 x National Average Earnings shared equally between employee and employer. The scheme provides retirement pension, invalidity and survivors benefits together with an ex-gratis funeral grant. The minimum monthly pension is 20 % of the National Average Earnings. The pensionable age for both males and females is 55. A member who does not meet the minimum eligibility criteria for receipt of a pension is entitled to a lump sum made up for the employee and employer’s contribution plus interest calculated on his un-indexed contributions.
The Civil Service (Local conditions) Pensions Board was established in 1968 defined as funded benefits scheme for permanent pensionable staff in government departments.
Contribution are payable by the employer (Government) and members at the rate of 7.25 % of pensionable earnings.
The fund is designed to provide income protection in event of retirement at age 55, permanent invalidity and survivorship. Apart from paying pensions and gratuity (lump sums) to 55 years old retirees, the fund acts as a paying agent for government with regard to death and early retirement cases.
The Local Authorities Superannuation Fund was established in 1954. The Fund covers employees of all local authorities. Contributions to the scheme are at the rate of 23 % of earnings by employers and 10 percent by employees. The scheme provides protection against retirement, invalidity and survivorship.
This scheme provides injury protection to all workers in several industries in both private and public sector except Police and the armed forces. Contributions are assessed on the claims experience of each industrial sector and range from 1.889 to 3.73 percent of insurable earnings.
In 2000 this fund was merged with the Pneumoconiosis Control Fund to administer benefits payable for occupational diseases contracted in scheduled areas, mostly covering mining activities.
There are also numerous schemes run by various insurance companies with largest being the Zambia State Insurance Corporation covering about 20,000 Employees.
The next largest is the Mukuba Pension Trustees Ltd for employees in the copper mines. In all about 30 to 35 % of all formal sector employees are covered by private pensions funds as addition cover. The other one is Saturnia Regina Pension Trust Limited.
Currently the be benefit structures as provided for in various social security schemes are different. The benefits formulae for the same contingencies differ from scheme to scheme and this problem is compounded further in cases of civil servants who belong to different schemes (depending on when they joined) where they are subjected to different benefit computation and contribution rates.
In the beginning, there are start-up costs. However the costs in the Start-Up phase of business are unique in some ways because they include one-time only costs (or larger expenditures because you are establishing accounts, etc.).
Some one-time only expenses include
Other costs will remain with you and you should plan on them being constant companions. These include:
In Zambia the establishment for saving and lending money is done by banks. We have public and private lendors. The main bank institutions in Zambia are Barclays Bank, Standard Chartered, Indo-Zambia Bank, Zambia National Commercial Bank (ZANACO),City Bank, New Capital Bank and National Savings Bank.
Most of the people in Zambia are banking with ZANACO in that it is a public institution and there are no service charges. The minimum operating balance is K 50,000 which is almost US$ 15.
When opening an account with ZANACO, you will need to show evidence of your identity such as (NRC) national registration card (or a valid passport if you are not a Zambia citizen) and two passport size photos. The more you save the more you earn.
Most of the people with a stable income and good business bank with Barclays Bank. It is one of the most respected banks in the world trusted by millions of people to take good care of their money. In Zambia the high rate savings account from Barclays is a high interest earning savings account with a difference. Barclays Bank is known to have a high rate Savings account. The more you save the more you earn. There is a minimum opening balance of K 4,000,000 (almost US$ 800) on this account. The minimum operating balance is K 750,000 which is almost US$ 150. If the balance goes below the minimum operating balance, a minimum fee may be charged. All payments are made in Zambian Kwacha in cleared funds during normal banking hours. The rate of interest at Barclays Bank for each interest period subsequent to the first shall be notified to the borrower not less than seven days before the commencement of each interest period. The customer has instant access to his/her money, he/she can withdraw from the account from any Barclays branch.
Most of the interesting big companies in Zambia Bank with Barclays Bank. One of these companies is ZESCO Ltd (Zambia Electricity Supply Corporation). That is were the Direct Debit and Credit Clearing comes from (DDACC). Zesco customers (Electricity Company) with bank accounts can pay their electricity bills directly from their Bank accounts. And customers must have a Zambian Kwacha Bank account.
Barclays Bank Of Zambia Ltd
Managing Director
Kafue House Cairo Road
P.O. Box 31936
Lusaka
Standard Chartered has quite the same conditions as Barclays Bank. The opening balance is K 750,000 (almost 150 US$). They only differ in the interest rates.
Branches Of Barclays & Standard Chartered Bank are all over the country.
The Micro Banker Trust offers Micro Credits for Micro Finance Projects. To obtain this credit, you must be a group of 10 and above registered with the registrar of society. There has to be a business account. 25 % of the loan you would want to obtain in the account. The money is given as a lamp sum of money to the group. The time for approval is 2 weeks.
Micro Banker Trust
Roma Township Plot 57
Barclays is one of the banks in Zambia that helps in small scale businesses. It has credit program assisting entrepreneurs in their businesses. The bank lends money to entrepreneurs. All the payments received by the bank in respect of the loan is credited and only when the payment is received in cleared funds. Barclays Bank does request from the borrower to provide particulars of insurance. All proceeds received by the bank in respect of any claim made under the insurance will be applied by the banks in repayment of the loan.
Barclays Bank
Mutaba House Cnr Cairo Rd & Katondo Rds
P.O. Box 31416, Lusaka
Tel.: 260-1-224720
Tel.: 260-1-224732
Fax: 260-1-224724
Development Bank of Zambia (DBZ)
Development Hse Katond Rd
P.O. Box 33955, Lusaka.
Tel.: 260-1-228576-8
Tel.: 260-1-228580
Fax: 260-1-222821
Self-Help Housing Loans assist groups of ten or more low-income families build their own homes by providing materials and the skilled labor they cannot furnish themselves. The families must agree to work together until all homes are finished.
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