President Lungu: International investors should not dictate terms when investing in Africa

Zambian president Edgar Lungu says while it is good to have international investors, the west should not dictate the terms when they engage with Africa on trade.

This comes at a time where the World Trade Organisation is facing challenges after the US President Donald Trump lambasted the organisation.

Many believe it is time for international investors to look to Africa as an alternative market. In July 2019 African leaders adopted the implementation program for the African Continental Free Trade. However infrastructure will be key for the continent to integrate.

Video: One day Zambia will have a Tonga President, but it won’t be HH – Lungu

Speaking to journalists in Livingstone today, President Lungu said UPND leader Hakainde Hichilema would never be elected President.

“We should unite because we are one…I love Tongas, they love me but only one man is messing up everything. Now you ask yourself, what’s so special [about him]? We will one day have a Tonga President but certainly not the current aspirant,” President Lungu said.

SA court ruling has no teeth in Zambia

The ruling of the South African High Court over the Konkola Copper Mines (KCM) liquidation process will not halt the process currently going in the country, the Zambian government has said.

This is because foreign court judgments are not binding in Zambia, especially in the absence of a reciprocal enforcement agreement protocol.

The South African High Court this morning granted Vedanta Resources an urgent interim interdict against Konkola Copper Mines (KCM) minority shareholder, ZCCM Investment Holdings Plc.

However, the Zambian government has said the Gauteng High Court or any court in South Africa has no power or jurisdiction over Zambian courts.

Mines minister Richard Musukwa, who addressed the media at State House in the company of justice minister Given Lubinda and Attorney General Likando Kalaluka, said state lawyers had been advised to appeal the matter.

He said the ruling by the South African court had no bearing at the moment because it was not registered in Zambia.

Musukwa further said Kalaluka would travel to South Africa to join the appeal to protect the integrity of Zambian courts.

And a legal expert explained that an attempt to enforce such judgment requires that an application to register it in Zambia is commenced in the High Court.

“It for this reason that in their statement to the Media,  Vedanta has directed that the Judgment should not be circulated in Zambia as this will be tantamount to contempt of the on-going court process in Zambia,” the legal expert said.

Credit: Zambia Reports

Zambia takes on mining giants – announces new tax

The following excerpt was originally published by Business Day on 21 May 2019, written by Mathews Muyembe.

“The time is long overdue for Lusaka to stand firm in the face of intimidation tactics from mining giants grown accustomed to the state’s largesse”

Next month, Zambia’s newest mining tax regime will enter into force. According to claims circulated by multinational mining houses that dominate the country’s sector, the new legislation will spark “mass layoffs” and threaten a collapse of the nation’s economy.

But if we really want to have an honest debate about mining and social development, any objective examination of the numbers indicates precisely the opposite outcome.

The new tax regime, first announced by finance minister Margaret Mwanakatwe last September, aims to shore up Zambia’s foreign currency reserves and rein in debt to put the country on a path toward fiscal stability. With the IMF warning that Zambia’s fiscal deficit and debt load will preclude the country from aid programmes, the urgency of this long overdue reform cannot be overstated.

Mineral resources are non-renewable. Zambia’s copper deposits will not be around forever, and ensuring that the revenue from its extraction reaches the Zambian people is paramount. Accordingly, Lusaka is set to implement a 1.5 percentage-point increase in mineral royalty taxes, currently ranging from 4%-6%, with a ceiling of 10% only when copper prices exceed $7,500 per ton. These royalties remain far below the rates of comparable copper exporting countries.

Credit: Zambia Mining

Zambia’s economy overcomes the odds

Zambia Economy

African economies are primed to be ranked among the fastest growing in the world in 2019. According to the International Monetary Fund (IMF), projections for the region’s economic growth next year has been bumped up to 3.5% – 4% from earlier projections of 3% growth. If you set aside Angola, Nigeria, and South Africa, the region’s projected growth rate jumps to 5.7%.

Among those nations primed for growth is Zambia, which thanks to the steady rebound of commodity prices, an improvement in the global economy and improved capital market access, enjoyed 5% growth in the third quarter of 2018, up a half-point from a year earlier. Still, as many analysts express concern over the country’s management of debt, a fiscal consolidation programme has boosted confidence, resulting in improving medium and long-term forecasts for the country’s potential growth with President Edgar Lungu at the helm.

But Zambia is not quite out of the woods yet. Debt remains high, there’s an ongoing tax row with the mining industry, and the political opposition complains of rough treatment. So the question is, can Zambia’s reputation for resilience and stability continue to hold through this difficult period?

I recently had an opportunity of interacting with Christopher Mvunga, Zambia’s Deputy Secretary to Cabinet, to get his views on how the economy is performing and see what challenges may lay ahead for the Southern African nation.

Credit: Forbes