VIII.  Trade and Project Financing

 The Banking Sector

 Zambia has a commercial banking sector composed of private
 international banks, private domestic banks, and parastatal
 banks.  The international banks include Barclays, Standard
 Chartered, Stanbic, and Meridien Bank.  In addition Citibank and
 Equator bank do Corporate banking in Zambia.  Until recently,
 merchant banking was illegal.  Since it has been legalized
 several banks have added merchant banking to their activities
 and a new merchant bank, Cavmont, has been established.  The
 banking sector is supervised by the Bank of Zambia which is also
 the Central bank, which is under the supervision of the Ministry
 of Finance.


 Foreign Exchange Controls

 In February of 1994 the Exchange control act was repealed and
 there are no longer controls on moving money in or out of
 Zambia.  Money may be held in Zambia in local or foreign
 currency and freely transferred out of the country or held
 offshore.  Amounts over USD 5,000 carried in or out physically
 in cash or travellers checks must be declared.


 General Financing Available

 Domestic finance for nearly any purpose is in short supply.
 Very high real interest rates of 30-50 percent make medium or
 long term borrowing unfeasible.  Short term borrowing is
 available, but expensive.  Many businesses seek finance outside
 the country in hard currency at lower interest rates but this
 can be difficult to obtain.


 Export Finance

 The letter of credit is the most common method of payment used
 for Zambian imports.  In general companies find it very
 difficult to finance their imports and seek credit arrangements,
 but businesses considering offering their exports on credit
 should make a very careful check of the bona fides and finances
 of Zambian companies before doing so.  Many parastatals are
 notorious for delinquencies and there are many 'Briefcase"
 private companies who offer impressive looking credentials with
 little to back them up.


 Export Financing and Insurance

 U.S. Eximbank offers neither finance nor insurance in Zambia.
 Domestic finance for imports is available only on a short term
 basis from commercial banks.  Insurance is generally not
 available.


 Project Financing

 Project financing is almost always through bilateral and
 multilateral agencies.  Generally a donor agency identifies a
 need and then designs a project.  It is relatively rare for a
 commercial project to be put forward for donor financing.  OPIC
 financing and insurance is available for U.S. investments in
 Zambia.  The International Finance Corporation and the Common
 Wealth Development corporation both offer finance for projects
 in Zambia.


 Multilateral Development Banks:

 The African Development Bank (AFDB), headquartered in Abidjan,
 Cote d'Ivoire, is an international financial institution created
 by Africans in 1963 to promote the economic and social
 development of its member African countries.  Founded with
 initial capital resources of USD 250 million, it has authorized
 capital today of over USD 22.3 billion.  The bank belongs to the
 African Development Bank Group (ADBG) which also includes the
 African Development Fund (ADF) and the Nigerian Trust Fund
 (NTF). The AFDB makes loans to development projects in 51
 countries in Africa.  The ADB provides development financing on
 concessionary terms to the poorer African member countries.  The
 NTF was established by the Government of Nigeria in 1976 to
 assist in the development efforts of the poorer ADB members.

 The ADFB has 21 non-regional members.  The United States joined
 in 1982.

 CONTACTS:
 U.S. Department of Commerce Liaison Office
 to the U.S. Executive Directors Office
 African Development Bank
 Ave. Joseph Anoma
 01 B.P. 1387 Abidjan 01, Cote D'Ivoire
 Tele: (225) 21-46-16
 Fax:  (225) 22-24-37

 Office of Multilateral Development Banks
 U.S. & Foreign Commercial Service
 U.S. Department of Commerce
 Room H-1107
 Washington, D.C.  20230
 Tele:  (202) 482-3399
 Fax:   (202) 273-0927

 The International Bank for Reconstruction and Development
 (IBRD), a member of the World Bank group makes long-term loans
 at market- related rates primarily to developing nations.  The
 International Development Agency (IDA), the soft loan window of
 the World Bank, lends to the poorest of the development
 countries.  Both the IBRD and IDA work to promote broadly based
 economic growth and frequently focuses on structural adjustment,
 sectoral reform and individual project lending and operate under
 the same set of procurement guidelines.  Typically the World
 Bank does not finance the entire cost of a project.  Rather, it
 finances the components of a project purchased with foreign
 exchange, which on average is about 40 per cent of the total
 project cost.  Each project may cover a wide variety of sectors
 and can involve anywhere from one to hundreds of separate
 contracts providing export business opportunities for suppliers
 worldwide.

 CONTACTS:
 U.S. Department of Commerce
 Liaison to the U.S. Executive Directors Office
 International Bank for Reconstruction and Development
 1818 H. St., NW
 Washington D.C.  20433
 Tele:  (202) 458-0118
 Fax:   (202) 477-2967

 Office of Multilateral Development Banks
 U.S. Foreign Commercial Service
 U.S. Department of Commerce
 Room H-1107
 Washington D.C.  20230
 Tele:  (202) 482-3399
 Fax:   (202) 273-0927

 List of Banks with Correspondent U.S. Banking Arrangements:

 Barclays Bank
 Standard Chartered
 Meridien
 Stanbic