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Ease of Doing Business in

Zambia

Zambia Download Profile (1728.2KB, pdf)
Region Sub-Saharan Africa
Income Category Lower middle income
Population 16,211,767
GNI Per Capita (US$) 1,490
City covered Lusaka

190

1

DB 2017 Rank

1

100

DB 2017 DTF (% points)

  • local_library
  • group
Topics DB 2017 Rank DB 2016 Rank info_outline Change in Rank DB 2017 DTF (% points) info_outline DB 2016 DTF (% points) info_outline Change in DTF (% points) info_outline
Overall 98 94 down
4
60.54 60.77 down
0.23
Starting a Business 105 96 down
9
84.95 84.88 up
0.07
Dealing with Construction Permits 78 67 down
11
70.85 71.62 down
0.77
Getting Electricity 153 109 down
44
49.86 62.25 down
12.39
Registering Property 145 170 up
25
49.00 40.61 up
8.39
Getting Credit 20 19 down
1
75.00 75.00
-
Protecting Minority Investors 87 85 down
2
53.33 53.33
-
Paying Taxes 58 56 down
2
80.16 79.94 up
0.22
Trading across Borders 161 161
-
46.99 46.99
-
Enforcing Contracts 135 133 down
2
49.89 49.89
-
Resolving Insolvency 83 89 up
6
45.36 43.18 up
2.18

Positive= Doing Business reform making it easier to do business.Negative= Change making it more difficult to do business.

DB 2017 Rank:

83

DB 2016 Rank:

89

Change in Rank:

up6

DB 2017 DTF (% points):

45.36

DB 2016 DTF (% points):

43.18

Change in DTF (% points):

up2.18

Indicator Zambia Sub-Saharan Africa OECD high income
Recovery rate (cents on the dollar) info_outline 49.4 20.1 73.0
Time (years) info_outline 1 3.0 1.7
Cost (% of estate) info_outline 9 23.1 9.1
Outcome (0 as piecemeal sale and 1 as going concern) info_outline 0 .. ..
Strength of insolvency framework index (0-16) info_outline 6 6.2 12.1
  • Indicator Explanation Answer
    Recovery rate (cents on the dollar) 49.4
    Proceeding Banks are much more prone to engage a mortgage action (foreclosure) than to appoint or ask for the court appointment of a receiver. This is because foreclosures are very straight forward. By contrast, if you appoint a receiver, it is much more likely that the proceedings will be contested (e.g. whether the receiver is fulfilling its tasks, appointment of the receiver itself). The secured creditor has 2 options: go to the commercial court or to the general court. The commercial court is much faster because they follow fast-track procedures. foreclosure
    Outcome The hotel will stop operating and Mirage assets will be sold piecemeal in a public auction conducted by the BizBank appointed lawyer upon the completion of the foreclosure proceeding. piecemeal sale
    Time (in years) The foreclosure procedure until BizBank is repaid some or all of the money owed to it takes approximate 1 year in total. After Mirage's default, it will take 3 months until the status conference where the judge verifies that all the required documents are in the file. Then, it will take 3-6 months to schedule a hearing. After the hearing, the judgement will be orally pronounced and will be issued in a written form in 3 months. The judgment usually incorporates a grace period (30-90 days) for the debtor to pay. After 8 to 11 months, you can enforce the judgment and as the real estate sector is in a booming period, so it is easy and fast to sell and find a buyer. The sale will be advertised in the newspaper by the bailiff and bids will be submitted and negotiated with the bank, which can be done in 1 month. In the case of an appeal, the process could take up to one more year but appeals are quite unusual. 1.0
    Cost (% of estate) The costs associated with the case would amount to approximately 9% of the value of the debtor's estate. Main component of the cost is the attorney fees (up to 5%), auctioneer fee (up to 5%) and court or government fees (1%). If BizBank appoints a lawyer to conduct the auction, no auctioneer fee will be added, but attorney fee will increase. 9.0
    Answer Score
    Strength of insolvency framework index (0-16) 6.0
    Commencement of proceedings index (0-3) 2.0
    What procedures are available to a DEBTOR when commencing insolvency proceedings? (b) Debtor may file for liquidation only 0.5
    Does the insolvency framework allow a CREDITOR to file for insolvency of the debtor? (b) Yes, but a creditor may file for liquidation only 0.5
    What basis for commencement of the insolvency proceedings is allowed under the insolvency framework? (a) Debtor is generally unable to pay its debts as they mature 1.0
    Management of debtor's assets index (0-6) 2.0
    Does the insolvency framework allow the continuation of contracts supplying essential goods and services to the debtor? No 0.0
    Does the insolvency framework allow the rejection by the debtor of overly burdensome contracts? Yes 1.0
    Does the insolvency framework allow avoidance of preferential transactions? Yes 1.0
    Does the insolvency framework allow avoidance of undervalued transactions? No 0.0
    Does the insolvency framework provide for the possibility of the debtor obtaining credit after commencement of insolvency proceedings? No 0.0
    Does the insolvency framework assign priority to post-commencement credit? (c) No priority is assigned to post-commencement creditors 0.0
    Reorganization proceedings index (0-3) 0.0
    Which creditors vote on the proposed reorganization plan? N/A 0.0
    Does the insolvency framework require that dissenting creditors in reorganization receive at least as much as what they would obtain in a liquidation? No 0.0
    Are the creditors devided into classes for the purposes of voting on the reorganization plan, does each class vote separately and are creditors in the same class treated equally? No 0.0
    Creditor participation index (0-4) 2.0
    Does the insolvency framework require approval by the creditors for selection or appointment of the insolvency representative? No 0.0
    Does the insolvency framework require approval by the creditors for sale of substantial assets of the debtor? Yes 1.0
    Does the insolvency framework provide that a creditor has the right to request information from the insolvency representative? No 0.0
    Does the insolvency framework provide that a creditor has the right to object to decisions accepting or rejecting creditors' claims? Yes 1.0

Note: Even if the economy’s legal framework includes provisions related to insolvency proceedings (liquidation or reorganization), the economy receives 0 points for the strength of insolvency framework index, if time, cost and outcome indicators are recorded as “no practice”.